Strategy 3 Show Them the Money

Jack Kalina, BorgWarner’s CIO, says that when his company’s purchasing organization set out to involve suppliers in B2B trading, BorgWarner had to demonstrate that the value its suppliers would realize would exceed any cost that might be incurred. The $2.7 billion Chicago-based company makes transmissions, systems and components for engines, four-wheel-drive systems and fuel systems for automakers. BorgWarner explained to its suppliers that connecting via GE Global Exchange Service’s TradeWeb exchange would prevent the manual error of transposing part numbers and quantities, which would reduce the number of returns the supplier would have to process or excess inventory concerns.

"Nobody changes a method in business unless there’s a reasonable level of comfort that it’s going to work and that it’s going to be cost-effective," says Kalina. Of BorgWarner’s 800 suppliers of direct materials, 400 are connected via TradeWeb.

Panasonic Industrial creates a value case for its third-party logistics providers that are servicing the OEM customers so that the customers can see what’s to be gained from linking their warehouses to Panasonic Industrial’s ERP system. Sixty-five percent of all of Panasonic Industrial’s orders each year are processed electronically. "I researched the total quantities of offline warehouses, the number of transactions, and the number of entries on orders, deliveries and invoices," says Ken Jeanos, group manager of e-business at the Seacaucus, N.J.-based company. "I then went to our accounting groups and asked how often they find discrepancies that need to be reconciled. I showed these numbers to my customers." Jeanos’s customers couldn’t argue with his math.Jeanos also calculates cost savings from automating business processes. For example, he determined that creating and sending an order and an invoice electronically takes just a half day while doing the same thing manually takes two days. To determine the cost savings associated with that reduction in processing time, Jeanos multiplies administrative costs by the percent of time each month that’s spent on those activities.

Strategy 4 Don’t Forget the End User

Recruiting partners for B2B can resemble selling an IT project inside your organization: You need buy-in from end users as well as executives. "Too many companies devote adoption to senior management," says Sigma-Aldrich’s Johnson. "The reality is, it’s the lower-level people you serve who can really help or hinder your B2B activity," he adds.

While it’s possible to convince purchasing agents and other executives using high-level cost/benefit, risk/reward analyses, such as the ones Jeanos whips up, the key to winning over front-line workers is to understand their needs and curb their fears about technology rendering their job obsolete.