Carrot? Stick? Both? Maybe neither when it comes to automating small partners.
Automating partners, especially small partners, is trickier than large ones. Not because of the technology hurdles involved, but because altering their behaviors is harder. If you can make it happen though, it can pay off in terms of lower costs, which translate into higher margins and a greater return on your investment in B2B Integration. Below are some proven tips for getting smaller partners to move in the direction of automation.
Traditional methods still dominate
According to IBM’s 2013 research, 23% to 32% percent of B2B transactions are still going through traditional “manual” channels (phone, fax, paper and e-mail). And typically it is the small and medium sized businesses that are more likely to use manual methods. Together this creates room for increased efficiencies through automation if you can push past the mental barriers to enabling automation that many small organizations with limited resources have.
Put yourself in their shoes
Small and medium business (SMB) partners are commonly pretty reluctant to change. But they have legitimate reasons. Many do not have sophisticated IT infrastructure and resources. They may have little or no dedicated technology staff. Changes that seem simple from a large-scale corporate perspective can appear prohibitively expensive to them. The key is to see things from the SMB perspective, and try and develop simple changes that provide benefit to them as well as you.
Incentives vs. mandates
Changing behaviors and processes is harder than changing technology. Typically, behaviors will only change when you offer something of value to encourage the change you want your trading partner to make. Though they may be small partners, they are your partners, and have the capacity to impact your business and your reputation. You shouldn’t shake the big stick of a requirement or a mandate, unless you have no alternative or at least include some incentive.
It becomes a question of what behavioral change you want your small manual partners to make, and then determining a sufficient benefit for them. The more you ask your partners to change the way they do business, the greater the associated benefit you need to provide.
Often, the first benefit that companies arrive at is the carrot — a discount, rarely thinking beyond that initial tactic. But a discount is paid out of your profits and affects your bottom line, so additional thought is warranted. Be creative and tie it to their business and circumstances.
Some companies have been successful using:
- Better payment terms
- Improved or guaranteed delivery/promise dates
- Increased visibility into the larger order/supply chain
Small changes that are easy for your partner to implement can mean big savings and efficiencies for you. For example, asking your partners who fax orders to switch their fax number to one that goes through a fax-to-EDI conversion service is a small change—all they have to do is put a new number in their fax machine’s memory and/or change the fax form. For you, it means eliminating the costly and time-consuming manual processing on your end.
- Find the smallest change to behavior/process your customer can make to meet your goals of automation.
- Know what’s in it for them. Craft a compelling benefit message to answer their question of “why should I change the way I do business?”
- Educate your partners. What you want to do, why and how they will benefit to set expectations.
- Walk them through the process. Even small changes seem larger when you are on your own.
For any business, large or small, the biggest challenges are not technical—they are those based in process and behavior. You can ask for small changes in behavior, but not large ones. The upside is that now, technology enables small behavior changes to turn into automated processes.