Digital Transformation in B2B Trading

Discussion with Agnès Hugot

Agnès Hugot, a highly experienced professional with a wealth of expertise in digital transformation, platform mechanisms, and B2B trading, has played a pivotal role in shaping strategies for businesses navigating the evolving digital landscape. With years of experience working at the intersection of technology and commerce, Hugot brings a unique perspective on the challenges and opportunities that arise as companies increasingly adopt digital tools to enhance their operations. In this article, Hugot shares her insights into the key shifts in B2B trading, the role of emerging technologies, and the essential strategies for businesses looking to thrive in the digital age.

The Rise of Digital B2B Trading: A Global Differentiator

According to Hugot, “digital B2B trading has become a key differentiator between countries and within sectors”. The gap between leading and lagging players in the market is widening rapidly. Companies that have embraced digital transformation are building super-powerful business models based on platform mechanisms, allowing them to operate beyond geographical boundaries. Conversely, those struggling to address internal demands are facing intense competition from global players, who can now deliver products within a day. As digital transformation evolves, it is reshaping the way B2B companies approach trading and partnerships.

The Core of Digital Transformation: Efficiency and Beyond

“Beyond improving basic efficiency, digital transformation is fundamentally reshaping core B2B trading functions such as order processing, contract management, and invoicing”, Hugot explains. There are three critical aspects to digital trade mechanisms that set digital-native companies apart:

Platform Role: Digital platforms enable businesses to identify and connect with other players in the ecosystem, leveraging platform data and offering financial services like on-demand financing. These platforms enhance collaboration and streamline trade processes. Many companies are now investing in digital platforms that streamline B2B workflows, helping them scale operations and improve data integration across teams.

Fully Digitized Processes: Digital-native companies benefit from highly integrated systems that allow them to process transactions faster and more efficiently than incumbents who are still relying on slow, disconnected systems.

Data-Driven Management: The ability to quickly aggregate and analyze data from multiple sources gives businesses a competitive edge, allowing them to make informed decisions that drive growth and optimize operations.

“Governments are also playing an increasingly active role in digital transformation”, Hugot highlights. Countries like France and Brazil have introduced mandatory digital invoicing platforms to capture VAT and streamline data collection, making the process more efficient and reducing the risk of tax avoidance.

Leveraging Real-Time Data for Growth and Innovation

Data is at the heart of digital transformation in B2B trading. “Real-time data has become a critical tool for optimizing operations and identifying new opportunities for growth and innovation”, Hugot observes. Companies are leveraging this data to not only improve operational efficiency but also to enhance trading strategies. The ability to access real-time information on sales, margins, and customer behavior is transforming how B2B businesses approach trading.

This access to immediate data is essential in today’s fast-paced business environment. As digital tools continue to evolve, the time it takes to gather data and make decisions has drastically reduced, enabling businesses to adapt quickly and stay ahead of the competition. With access to data-driven insights that fuel growth and innovation, companies are finding new ways to stay competitive in a fast-moving market.

Improving Supply Chain Visibility with Digital Tools

Supply chain visibility is a crucial aspect of B2B trading, particularly in global markets. “Digital tools have significantly improved transparency, traceability, and resilience across complex, multi-party supply chains”, Hugot notes. These tools help businesses track goods in real-time, manage inventory more efficiently, and ensure that the supply chain remains flexible and responsive to changing market demands.

Meeting Customer Expectations Through Digital Innovations

Customer expectations in B2B environments are rapidly shifting towards faster, more personalized experiences. Digital innovations in trading platforms are playing a key role in helping companies meet these demands. Platforms are now designed to offer tailored experiences that match the individual needs of customers, from personalized order recommendations to faster, more efficient processing times. “The customer experience is now central to digital transformation strategies, and businesses that fail to meet these expectations risk losing their competitive edge”, Hugot emphasizes.

Emerging Technologies Driving Competitive Advantage

Emerging technologies like AI, machine learning, and blockchain are providing B2B traders with a competitive edge. These technologies allow companies to optimize pricing, anticipate market trends, and enhance trading efficiency. However, it is important to note that blockchain adoption in B2B trading has faced significant challenges, particularly on platforms created by bank consortiums. International projects backed by some of the biggest banks have been unsuccessful. For instance, the European Digital Trade Platform Wetrade, launched by Belgium’s KBC Bank heading a 6 bank consortium in 2017, and the trade finance platform Contour, introduced by ING and HSBC leading a 7 bank consortium in 2019 and based on the Corda blockchain, both ceased operations in 2023. These failures were attributed to their lack of agility, ease of use, and customer focus, highlighting the need for blockchain solutions to prioritize these factors in order to succeed.

These advancements are not just about adopting new tools; “they represent a revolution in how businesses operate”, according to Hugot. AI, automation, and blockchain are empowering companies to enhance their trading strategies and achieve greater operational efficiency, while also enabling them to respond more quickly to changes in the market.

Overcoming Challenges in Digital Transformation

While digital transformation offers numerous benefits, it also comes with its share of challenges, particularly for companies with entrenched processes. “Many B2B companies struggle with legacy systems that are not easily integrated with modern technologies”, Hugot explains. The key to overcoming these challenges lies in adopting an agile approach, focusing on incremental changes, and investing in employee training to ensure that teams are equipped to handle new digital tools.

Companies should also embrace the concept of “no-code” solutions, which allow non-technical teams to build and deploy digital applications without needing programming expertise. This democratization of technology is a game-changer, as it allows businesses to innovate faster and at lower costs.

Key Takeaways for B2B Executives

Digital Platforms are Essential for Global Competitiveness: Businesses that adopt digital trade platforms will be able to expand beyond national boundaries and scale operations more efficiently. The ability to operate in a global marketplace is becoming increasingly essential for success.

Real-Time Data is Crucial: In today’s business environment, immediate access to data is a competitive advantage. Companies need to invest in tools that allow them to collect and analyze data in real time, enabling faster decision-making.

Adapting to Change is Key: The speed of technological advancement means that companies must continually adapt. Leaders should focus on building flexible systems that can quickly incorporate new technologies like AI and blockchain, while also ensuring that teams are equipped to handle the changes.

The Future of B2B Trading

Digital transformation is reshaping the B2B trading landscape in profound ways. From improving efficiency in core functions to enabling real-time data-driven decisions, digital tools are enhancing how companies trade and build partnerships. Emerging technologies like AI, machine learning, and blockchain are providing new opportunities for growth and innovation.

However, the journey is not without challenges. Companies must navigate the complexities of legacy systems and adapt to the fast-paced nature of technological change. “By embracing these transformations, B2B companies can create more resilient, efficient, and customer-centric trading strategies, ensuring long-term success in an increasingly digital world”, Hugot concludes.