It is easy to understand the fundamental reasoning behind creating a B2B E-Commerce Business Case. The simplest reason is the business case is a way to communicate and sell the value of your B2B E-Commerce project internally. However, best in class B2B companies use their business case for much more than just selling value.
The B2B E-Commerce Business Case is a Key Tool for Success
For those best in class companies, the business case becomes a central tool throughout the lifecyle of the project. Walk the halls of these companies and we hear things like:
- “The business case is the tool that helps us prioritize the features that we are building.” Each feature is evaluated according to how it will affect the business case and the return on investment.
- “The business case provides all of our teams a common language.” Semantics are hard – especially between Marketing and IT. The business case defines the semantics by which the company talks about their e-commerce projects. It helps everyone get on the same page.
- “The b2b e-commerce business case helps us measure our success.” KPIs are built on what the business case stated. Everyone has a common semantic language, so we understand the actual measurements and what they mean. And even how to make them actionable.
Structure of a Business Case
Giving credit to the source, I have used this simple structure for years from Tech Republic.
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Business Case and ROI Calculator
Before you read any further, I would encourage you to first read this article:
Do these 7 things before you start your B2B e-commerce project.
Always written last, the Executive Summary presents the essence of the B2B e-commerce business case, in a condensed format. Pick the most important points that allow for a coherent picture, but strive to keep it concise: it should not be longer than one or two pages. Certainly include objectives, proposed solution, benefits and costs, risks, and key dates.
Describe why the need for e-commerce has come about. Typically, the reason is one of the following:
- E-commerce will generate revenue, cuts costs, or deliver some other benefit
- Competitive pressures – competitors are using e-commerce to take your customers
- New market opportunities
This section can be structured in a few of ways. The first approach is appropriate for cases that deal with correcting a wrong. Describe the current situation and explain what the adverse impact is, be it of a financial nature or otherwise.
The second approach, more suitable for cases that deal with new opportunities or mandatory changes, where the status quo is not necessarily deficient, is to use the following structure:
- Current state. Describe how the world is today.
- Future state. Describe how the world will look tomorrow, when the e-commerce site or new feature is implemented.
The third approach, most appropriate for new opportunities, is to state what the business case is proposing and describe why it is being considered. Why now?
Use the structure that works for your situation.
List several alternatives you considered, complete with benefits and costs, and risk assessment. Show how they align with such considerations as corporate and business unit strategy, vision, current priorities and other factors discussed in the blog I mentioned at the start of this piece.
How many should you list? Three is a good number, five is too many, but never just one.
You should use your judgment and include the appropriate amount of detail so not to overwhelm the reader and yet provide enough information for effective decision making. This is the old “know your audience” maxim, and it rings especially true here.
Always state what the preferred option is and explain why it is preferred.
It’s usually appropriate to provide some ideas on how the implementation of the preferred solution should proceed, to show that you’re presenting not a pipe dream but a carefully thought through solution. Rarely is it necessary to create an exhaustive plan, unless specifically required by the decision makers.
Include all supporting information, such as cost benefit analyses, reference materials, calculations, and charts.
Business Cases Require Great Questions
By asking strategic questions, you uncover the real challenges your organization is facing. Probe for why things are done the way they are, and the history behind different business processes. Click here for an in depth article on how to ask great questions.
Creating a B2B E-Commerce Business Case
I like Math, and believe a great way to visualize and communicate the business case is by using formula. Here is my business case / ROI formula in two simple parts. Two parts because the first is a generic formula that applies to most E-Commerce. The second part truly represents the B2B digital experience . The formula is purposefully simple, to accommodate a number of business models within B2B.
Part 1: For Everyone
Every analyst report talks about how B2B buyers still use Google to research their products. You want to maximize all available and relevant traffic to every piece of content on your site. Not just every page. Every single piece and fragment of relevant content on the site. The website needs to be Search Engine Optimized, and [gulp] most of the time that means moving the catalog from behind the login screen. That doesn’t necessarily mean giving access to pricing and inventory, but make sure the search engines can find the basic product information. Traffic is about building your funnel really really big.
Once the B2B user finds the site, products, and content via search engines, we must direct them to what they are looking for in as few clicks as possible. You don’t know what your customers are looking for (or problem they are trying to solve) and even you knew what they were looking for you don’t know how they want to find it. 70% of people coming to your site want to use a search box. MultiChannel Merchant wrote recently, when asked to cite the top features or functions they would most like from suppliers in the selling process, most business buyers chose enhanced search functionality on their website (60%). Conversion starts with search and navigation and ends with a simple and intuitive transaction. One page checkout, one click checkout, multiple payment methods (invoice, PO, credit card, etc.).
AVERAGE ORDER VALUE (AOV)
A lot has been written about how to increase average order value (AOV). Merchandising, bundles, kits, cross-sell, up-sell, related products and cross reference. AOV is about maximizing the value of the order.
Part 2: The B2B E-Commerce Business Case
In my article The Secret to B2B E-Commerce, I articulate that the biggest difference between B2B and B2C is that the people that visit a B2B site have to be there because it is their job. And B2B users want their job to be easy. If B2B companies give their customers the tools that make their job easier, their customers will come back to the site again and again. Those tools of course include the previous elements of the formula: Google, search and navigation, intuitive transaction, and product relationships. B2B companies should consider giving customers tools that are outside of the purchase funnel such as:
- Order Status and transparency into supply chain
- View, print, download, and pay invoices
- Bill of Materials (BOM), assemblies and sub-assemblies
- View, print, download past orders and products
This is probably the most exciting and most innovative part of B2B E-Commerce. B2B companies should strive to know their customers deeply. They can do that through usability testing, customer interviews, and just visiting them and watching how their customers do their job. Give them the tools to do their job easier and they will come back.
B2B enterprise are complex. They have complex customers, products and systems. It is critical to take the complexity of the business into account when you create the business case. Resources and vendors have a cost. The ERP system plays a significant role in the customer experience. Integrating the ERP systems(s), CRM system(s) and other back end systems is complex and resource intensive. Include all of the cost of integration to your back end systems.
This is a formula, so the b2b e-commerce business case formula should have two sides. The great thing about e-commerce is that most of the time the Return on Investment (ROI) is equal to REVENUE. Sometimes this revenue is channel shift but it can also be about new markets. New markets can take on may different shapes and sizes. A new market could be:
- New industries
- New product lines
- Used products
But it almost always equals revenue.
Use the b2b e-commerce business case as a central tool to sell projects, communicate, and prioritize along the way. This is just a simple formula. Your b2b e-commerce strategy should be unique to you. You may use different words. You may make it more complex by expanding the formula or you may simplify it. Creating a B2B E-Commerce Business Case is vitally important.
Create one, use it, and let me know how it goes.
I talk about part of the business case here: