B2B networks: platform providers, change yourselves!
More sustainability, innovative digital services and resilient supply chains: Technological platform providers are increasingly meeting the needs of our time with the help of their partners. According to the management consultancy, digital ecosystems are to be expected by 2025 EY generate 30 percent of global revenue.
For a future-proof business network, the classic resellers or implementation experts, the previous pillars of many platforms, are no longer sufficient. Platform providers are accordingly vigorously looking for companies that enrich the network with additional aspects and content. These can be innovative sustainability services as well as new payment and insurance services or logistics solutions for special products.
Take sustainability as an example: in 2015, under the umbrella of the United Nations, the global community committed itself to 17 global sustainability goals. Companies are also responsible for many of them. A study of the Global-e-Sustainability-Initiative comes to the conclusion that more than half of the UN’s 169 targets can only be achieved with the help of digital solutions. Therefore, a partner network must be able to offer exactly such digital services if its customers are involved in supplier or sustainability management or in the Circular economy wants to support.
When it comes to ESG (Environment, Social, Governance), it is particularly clear that B2B networks cannot satisfy the needs of their customers with traditional partners, software houses or independent software vendors (ISV) alone. At the moment, many customers are asking for digital solutions that enable them to meet the due diligence obligations imposed on them by the Supply Chain Due Diligence Act. Companies must use the CO for each of their products and services2– Understand the footprint across the entire supply chain, want to identify and avoid human rights and environmental risks. And: if there is a need for optimization, they want to find better alternatives on their platform.
Financial service providers – FinTechs, banks, insurance companies – are also making platforms more attractive. They too are among the so-called content partners who are now in great demand. Because they can offer new payment services or insurance products on the platform, for example, or step in the breach if small suppliers have to wait for their invoices to be reimbursed over a longer period of time. FinTechs are an additional asset for platforms because their data analysis enables them to forecast behavior and trends within certain industries earlier than others.
Let’s be clear: Technology networks need a new kind of partner. These can be startups, medium-sized companies or corporations. But as different as they may be, they all need compelling reasons to join a platform. A classic reseller or implementation partner has a close relationship with the platform provider due to its business model. This is not the case with the new network partners. The mere opportunity to gain access to new customers is often not enough motivation for them. If platform providers want to win over this new type of partner, they have to set new incentives and think about other recruiting models. You have to deal with their support, processes and data management.
My advice: First of all, you should say goodbye to the “one size fits all” idea. Honestly, this slogan does not go far enough with the previous partners. Some offer implementation services or consulting services, others develop scalable software applications. But just as they cover very different areas of responsibility, they also report different needs to the network.
Service partners need reference architectures and best practices.
Value added resellers need repeatable use cases and often need help in the implementation phase.
Software houses and ISVs want to use the network to open up white space market opportunities – i.e. new customer and sales potential – and to further develop their portfolio.
With the new partners, there are now additional requirements for a platform.
Reconsider your support
When it comes to the need for technical support, the new network partners hardly differ from the traditional implementation partners, from software houses and ISVs. Ultimately, the APIs have to work here and there on both sides.
The situation is different with commercial support. The revenue streams of the new partners are constantly changing, sometimes going up and sometimes down. Platforms have to be able to absorb this – via flexible billing, deferrals, etc. Many B2B networks are certainly developing new framework models for this. You can use this opportunity to re-evaluate existing sales authorizations from partners that you have defined in your partner program. For example, can a Canadian partner within your network offer his service to a German customer without any problems or are the permits tied locally? Networked value creation takes place in digital ecosystems on a global level, which should also be reflected in the set of rules.
Adjust your business model
Anyone who wants to integrate a new type of network partner must be able to develop revenue share models, set up audits and measure transaction values. This can be illustrated well using the example of financial services. Suppose a buyer owes the supplier a million euros. A FinTech company could pay the supplier the amount for a surcharge of three percent and, as an additional service, check the creditworthiness of the companies involved.
However, this also means that the network provider and the partner must know the values of the transaction. Finding a regulation for this is not a trivial matter, as this involves sensitive data. For those who want to expand their network beyond traditional partners, risk management becomes the central component of the strategy. In the future, platform operators will need partners who understand how to avoid fraud and who can evaluate network participants with a view to their credit rating or the corruption index. After all, no platform operator can risk money laundering in his network, for example.
Specify your onboarding
With new partners, the onboarding process must not be limited to the purely technical docking with the integration interfaces. Platform providers need to ensure mutual understanding when measuring transaction volumes. A revenue sharing model should be an integral part of the contract. Of course, you should also clarify in good time which partner has to provide which guarantees and warranties.
Arrange the responsibilities for data management
In business networks, the partners are interested in exchanging information with one another in order to improve their own database and develop new services on this basis. This is particularly true for those partners who now want to bind the platforms to themselves. Open and documented APIs form the technical basis for this. With regard to data protection and data security, however, this also means that platforms need a RACI matrix. RACI stands for Responsible, Accountable, Consulted, Informed and regulates the responsibilities in the network. Data protection and data security thus become a joint task for all those involved.
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