Stanford forum unearths big benefits in B2B outsourcing

According to Stanford University's Global Supply Chain Forum, companies using outsourced B2B solutions experience a return nearly 2.5 times their annual investment. A recent Stanford study sponsored by B2B e-commerce vendor GXS says such strategies garnered a 62-percent increase in customer satisfaction.

“Regardless of industry or company characteristics, the vast majority of respondents had a positive experience in terms of quantifiable benefits with outsourced B2B solutions,” says Barchi Gullai, director of research for the Stanford forum. “There were intangible benefits as well. One company that had undergone numerous mergers and acquisitions said using a single B2B solution made it feel more like a single integrated company with a common vision.”

Ryan Kraudel, senior manager of industry marketing for B2B e-commerce vendor GXS, says the company focuses on what Kraudel calls a supply chain’s Triple A: agility, adaptability, and alignment.

“Tools provided made it possible for companies to offer more value-added services—with a high correlation between ability to offer value-added services and customer satisfaction,” says Gullai.

Increased capabilities offered more flexibility, including Web-based connections that made offerings more attractive to smaller companies and trading partners. “This enabled them to critically differentiate themselves from their competitors,” Gullai explains.

GXS defines B2B e-commerce as the automation of transactions between businesses. This includes both the technical infrastructure and the means to take an electronic file from one system and translate it into the preferred format of a participating trading partner.

“There are considerable technical challenges in supporting a solution with regard to data formats and protocols,” says Ryan Kraudel, GXS senior manager of industry and product marketing. “But there also are the 'people' and 'process' aspects of scaling a solution to thousands of suppliers around the world.”

According to GXS, the ultimate research study goal was to gain greater market understanding.

According to Stanford University’s recent supply chain forum study, regardless of industry or company characteristics, the vast majority of respondents had a positive experience in terms of quantifiable benefits with outsourced B2B solutions.

The need for greater understanding is prompted by GXS's recent growth.

“We've [seen] 20-percent to 30-percent growth year over year for the last three or four years,” says Kraudel. “We wanted an independent third party to assess what's driving the market. ROI included not just cost savings, but top-line business benefits. More than 75 percent reported at least 200 percent ROI.”

Kraudel says GXS focuses on a supply chain's Triple A: agility, adaptability, and alignment. Agility comes in improved management of supply and demand; adaptability involves shifts in strategy in response to sourcing and delivery changes; and alignment involves coordination with trading partners in the supply chain. “That's where the big business benefits are,” concludes Kraudel.