By Sarah Zimmerman
Imagine the time savings and accuracy benefits of scheduling your management software to check for manufacturer price updates automatically or alert you of discontinued styles. Picture submitting one or more purchase orders (POs) instantly and receiving their expected ship dates and reference numbers within a few seconds. These are just a few of the advantages offered by today’s B2B software capabilities, according to Don Kilbourne, vice president of sales for Pacific Solutions.

So, how is B2B technology changing the industry?

Cathy Welsh, operations manager of CDMS, said during its early stages, B2B was known as EDI, and the same basic transactions that are being used today were passed between supplier and customer through use of a VAN (value-added network) rather than the Internet, which began being used in 2002.

B2B is simply an acronym for business to business electronic commerce, Kilbourne explained. “Most of us are familiar with electronic commerce today, especially if we have used Pay Pal, eBay or purchased anything over the Internet, which are similar examples of Business to Consumer e-commerce.”

Mike Fitzgerald, president of M-Vision Software, described B2B as a set of industry-wide standards that enable dealers and suppliers to do business electronically. He said B2B software interprets those standards and allows business documents such as invoices, purchase orders and price catalogs to be sent and received via the Internet. “B2B software allows dealers to take advantage of the tremendous cost savings and efficiency improvements offered through the electronic transfer of information.”

B2B time

Chad Ogden, CEO of QFloors, listed pricing and product description downloads, electronic ordering, electronic order confirmation, shipping confirmations and vendor invoicing as some primary B2B benefits. He noted B2B gives a flooring professional a competitive edge above the guy down the road, because it allows him to do more with less overhead, less cost and fewer resources. “At this time of economic slowdown, the money and time savings allowed by B2B technology can be the differentiating factor leading to financial success or failure. B2B fosters greater all-around efficiency.”

Maria Cauchon, media services director of RFMS, also pointed to the improvement of overall efficiency provided by B2B software. She said dealers who use B2B can price their floors and create bids accurately based on the latest cost information, which has been downloaded electronically. This helps preserve gross margins on the selling side, she noted, and improves job cost and sales commission accuracy by using the correct cost information—all of which is done in a matter of hours rather than days.

Continuing to count time, Dev O’Reilly, president and CEO of RollMaster, asked, “How many man hours does a business spend updating product catalogs and cost sheets delivered by mail?” He said there is no question B2B delivers significant efficiencies and cost savings to every trading partner. “Consider the time spent re-pricing the retail showroom; consider the margin lost through pricing errors; consider the time spent placing orders over the phone; consider the potential misunderstandings; consider the time required to compare the vendor acknowledgement to the purchase order.”

Also finding time to be the answer, Pacific Solutions’ Kilbourne said B2B introduces dramatic savings in staff time and increases the level of accuracy. “B2B essentially becomes a time generator for the dealer. Less time spent processing and matching paper records means more time spent working on the business, improving processes and customer service. And, I think many dealers would agree, these days time really is the ultimate currency.”

M-Vision’s Fitzgerald said B2B benefits are most fully realized when transactions are incorporated into an automated process. “This means a direct reduction in operating costs and an increase in bottom-line profits for both dealers and suppliers. A question every dealer should ask is, ‘What percentage of my transactions could be handled electronically?’” He noted the businesses implementing B2B strategies are enjoying substantial cost reductions, increased efficiency and improved profits.

B2B compliancy and the future

QFloors’ Ogden warned it is important to note not all businesses—flooring software providers, manufacturers or distributors—are equal in their B2B offerings. “For example, one manufacturer may provide all the B2B functions, while another may only have pricing downloads available at this time, yet both refer to themselves as B2B compliant.” Therefore, he noted the importance of asking vendor partners specifically what B2B features they have currently available, what they plan to offer in the future and the timetable for rolling out such features as more companies get on board and availability increases.

So, where is B2B software headed as 2008 approaches?

“The biggest news in B2B today is the number of active suppliers that are now trading transactions,” Welsh said. “Next year shows promise as more distributors and manufacturers are working on the B2B transactions and should be on board.”

She added the FCB2B (Floor Covering B2B) Association is enjoying its second year and continues to grow. “We need the assistance of every flooring dealer to put the pressure on any member of the supply chain to participate in B2B. The more companies that participate, the more profitable and efficient we all become.”

A year ago there were 11 suppliers on board with B2B, noted RFMS’ Cauchon. Today, there are 18 and several more in testing. She said over the next 12 months it is expected that 30 suppliers will be offering B2B to dealers. “The B2B community is absolutely determined and committed to work collaboratively to move this initiative forward.”

O’Reilly agreed the adoption of the B2B standard by the industry as a whole is the greatest development to date, and the key to success is increasing participation among industry members. He also pointed to future developments such as continued transaction set expansion and offering more Web-based tools at a lower cost.

Kilbourne said not only can the industry expect an increase in the number of distributors and manufacturers that offer full B2B data access in the coming months, but also an expansion of the scope of information available from them. “Product family relationships so dealers know which tile SKUs to use together, related adhesives for certain materials, adhesive spread rates and other material specs; the scope is broadening nicely for everyone.”