Today, the majority of Canadian companies starting out in digital commerce are private players in the manufacturing sector. Learn why with Luc Brousseau, National Lead, E-Commerce Center of Excellence, KPMG.

The pandemic is having a major impact on business transformation by accelerating the transition to digital activities. Although we instinctively associate e-commerce with the B2C (Business to Consumer) sectors, lately it is the B2B (Business to Business) manufacturing sector that has stood out.

Getting into e-commerce as a manufacturing company

Before a company in the manufacturing sector starts to think about selling online, it needs to distinguish between its clients and the end customer. However, many manufacturers make the mistake of trying to optimize the transformation of their B2B business to D2C (Direct to Consumer), when in fact the success of a transformation in this sector lies in the company's ability to meet expectations in various distribution networks and develop a transactional platform adapted to the pure B2B environment. By reviewing the business strategy and concentrating more on digitizing the distribution network, manufacturers can grow their revenues and trim some costs.

In terms of scale and complexity, launching a digital B2B channel is similar to creating a new segment or product line. Companies that decide to embark on e-commerce often underestimate the impact that this change will have on their overall business. The successful ones have recognized that implementing a digital channel leads to a broader transformation of their business, and they understand that certain changes will need to be made.

Many people mistakenly believe that a digital transformation is a purely technological undertaking. However, succeeding at this type of project requires considerable strategic thinking, followed by the implementation of a solid business plan (a game plan that clearly identifies the needs). Although the technology plays a key role, it only comes into play once these two prerequisites have been addressed.

Common mistakes to avoid

Replicating the current online business model is not enough to achieve a successful technological implementation. One should never underestimate the transformational impact that implementing a digital B2B channel will have on the company's business and operational model. It is therefore important that all members of management get involved, and that they understand and align their efforts with the objectives.

To increase their chances of success, companies need to assess the impact of the change as a whole, and plan and implement a change management program with the support of a team experienced in digital transformation. This will help avoid additional costs, speed up deployment and increase the chances of a successful project. By working with external consultants who are specialized in the field, businesses can avoid unpleasant surprises and be more efficient in the market.

Main steps for getting a digital commerce project off to a good start

  1. Assess the potential of digital commerce for the company. Does it make sense for the business? With which clients and in which markets?
  2. What is the company's external environment? What are the opportunities and threats?
  3. Management must agree on the objectives and proposals made to clients.
  4. Objectives and decisions concerning, among other things, the market, the client and the product form the basis on which operational changes will need to be planned and implemented.

KPMG can help you develop a game plan for a successful transformation

Our digital commerce and transformation professionals can, among other things, help you:

  • Identify and understand your clients' needs, define how they would like to interact with a digital platform that includes the various features expected, establish customer paths, etc.
  • Evaluate and modify the IT infrastructure, based on the choice of the future digital commerce technology platform and how it will be implemented.
  • Identify the operational changes required and the various business processes on which the changes will have impacts. The supply chain and, in particular, inventory movement will need to be analyzed in detail.
  • Develop a new organizational structure and governance (accountability, risk management, etc.).
  • Develop a change management plan and assess the impacts on the company's staff and organizational culture, and
  • Integrate a performance measurement and incentive plan to ensure success (there is no way to improve what is not evaluated).

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