The way businesses transact with one another is transforming. This presents an opportunity for vendors to develop innovative solutions that meet the needs of the modern B2B landscape.
The Emergence of a New Transaction Ecosystem
After decades of paper-based dominance, business-to-business (B2B) transactions are digitalizing and digitally transforming. e-Invoices and digital networks are streamlining accounts payable and receivable processes, enhancing efficiency and accuracy. Transactions are becoming enriched with data, especially to display sustainability-related information.
Spurred by new regulation, digital-first thinking, and good corporate governance, these developments are changing how businesses collaborate and transact with one another. Vendors have the opportunity to seize the moment and develop innovative solutions that meet the needs and requirements of today’s B2B landscape.
Transformation Drivers
What’s driving the transformation of business transactions? What is the future of the transaction?
Some 70% of businesses regard e-invoicing as an opportunity that goes beyond compliance and can unlock benefits like greater efficiency and faster payments.
According to IDC, regulations, digitalization, and sustainability are the three primary drivers of B2B transformation.
- Regulation: The introduction of e-invoicing regulations is accelerating the shift toward digital processes in B2B interactions. European and global businesses will need to adopt new technologies and workflows to ensure compliance with current and future regulations. The EU is already mandating the use of e-invoicing in business-to-government (B2G) transactions through Directive 2014/55/EU. The directive aims to streamline public procurement processes, reduce administrative loads, and improve transparency. Countries like Italy and Hungary already require e-invoicing for B2B transactions. Other member states like Germany are steadily advancing their frameworks for eventual legislation.
- Digitalization: Digitalization is the process of converting analogue data into digital formats. Automation and AI tools are helping organizations digitalize and transform the way they handle external transactions, increasing the accuracy, speed, and real-time visibility of transactions.
- Sustainability: The environmental impact of delivering products and services accumulates along the value chain. For most European organizations, much of the environmental impact of their products occurs upstream in their supply chains. European organizations are now beginning to record ESG (environmental, social, and governance) data associated with their purchases. Invoices will start to feature financial and ESG data, with ESG metrics specific to individual products.
“New transaction ecosystems will make B2B transactions faster, more secure, and efficient while enhancing transparency and compliance.”
Tom Seal, Senior Research Manager, IDC
IDC’s Recommendations
The digital transformation journey, while indeed complex, unlocks a future of frictionless information sharing between businesses. The transition to business networks presents a prime opportunity for vendors.
The Future of B2B Transactions is Digital
- Organizations that share an increasing amount of data with their customers will require a new array of data from vendors to track sustainability performance.
- Much of the new data that will be shared among organizations will follow the existing transaction pathway. However, this pathway must be updated to meet new demands.
Transactions Will be Data-Rich
- e-Invoicing and other pressures will compel organizations to move beyond “paper thinking” during the 2020s.
- A new transaction ecosystem will evolve, enabling organizations to build a transaction workflow that meets the needs of their industries, operations, and legislative requirements.
Network-Enabled
- Future transactions will rarely be point to point. Rather, they will typically occur over a platform or network.
- The future will be a network of networks, rather than an array of competing networks.
What It Means for Vendors
- Beyond complying with legislation, application vendors must develop strategies that help them thrive within the new transaction ecosystem.
- Application vendors have an opportunity to win the race to be the conduit for new data flows, capitalizing on the growth opportunities they represent.
- Every application vendor must think about their networks or network connectivity. Network access will be critical but equally commoditized.
Conclusion
The new transaction ecosystem offers significant benefits, and organizations will increasingly rely on vendors to provide the necessary expertise and solutions to unlock these advantages. For tech vendors, the future of e-invoicing and B2B transactions is not just about compliance — it’s about leading digital transformation and setting new standards of efficiency and sustainability in the industry.
Watch out for Part 2 of our Blog Series on e-Invoicing in the coming weeks.
Ready to elevate your solutions and empower your teams? Contact us for a deeper dive on how IDC can help.