Alexander Kazak: B2B commodity market - are sales doomed without a client service?

Alexander, you have been engaged in operational management for more than 12 years, of which the last 3 years, including in projects related to the commodity business. What service does the B2B buyer choose today?

Let me immediately make a reservation that we will discuss non-food products, because food has slightly different standards and requirements. Agreed. Let's start with psychology. Individuals who buy on marketplaces are indignant if the delivery of their order is extended by one day relative to the declared period. And this despite the fact that most orders are delivered the next day after registration, as well as to the point of issue of orders (PVZ), which is no more than 10-15 minutes walk from the location convenient for the buyer. If the seller on the marketplace indicates the delivery date - 10-15 days from the date of checkout - in a significant number of cases the order will not be made despite the fact that the price may be 30-50% lower.

Conclusion: the client wants the goods "here and now" and is often ready to overpay for such a service.

According to Data Insight reports, according to the results of 2023, Russia is one of the TOP-10 countries in the world in terms of the main indicators of e-commerce:

• 1 place in terms of online retail sales growth (+ 36%);
• 7th place (4.6%) in terms of the share of Internet trade in the country's GDP;
• 9th place ($92 billion) in terms of online sales.

Having formed stable patterns of personal purchases on the Internet, buyers automatically formed requirements for the customer service and in the B2B sector. Receiving a super service at home, the buyer wants the same at work - he requires his B2B order "here and now." And since sales managers are the same people who also buy on marketplaces and also consider an order with delivery tomorrow the norm, they broadcast to their management the position of the client, without even trying to work out this objection. What happens next - quite understandably - the management of supplier companies is forced to find resources to meet the rapidly increased customer requests. And everything would not be so difficult if these issues could be resolved with money - you put additional costs in the price and calmly work further. However, in fact, everything is much more complicated.

Even in the era of digitalization and active development of AI, the movement of physical objects in space is also strongly (and possibly even stronger, as a person becomes less and less responsible for the IT infrastructure), influenced by the human factor.

But, of course, this is not a reason to "give up." Moreover, I see this as a huge opportunity for the formation of a PTC, due to which you can rebuild from competitors. Optimally formed, focused on development, team and permanent improvement of business processes - are able to cope with emerging challenges.

Alexander, how do changes in the requirements of B2B customers for the service affect the structure of commodity B2B companies?

In my opinion, the main thing is a change in the ratio of the staff of the sales department and the operating department, which ensures:

• Sales support (order processing, invoice preparation, specifications, contracts, quotations, claims handling, returns)
• Inventory management
• Timely and accurate assembly of orders by warehouse
• timely delivery of orders to customers.

Even 3-4 years ago, sales departments in B2B sector trading companies were the most numerous. Now there is an increase in the staff of operating departments. Thus, the number gap is narrowing. Of course, there are still a lot of companies that continue to work in the paradigm in which the sales manager both sells and prepares documents, and interacts with the warehouse, and works as a logist. I believe that it will be extremely difficult for such companies to stay alive, unless they completely switch to work with marketplaces, and this is not possible for all B2B suppliers, which is due to the need of B2B customers to work with project documentation, installation supervision, commissioning, service. Marketplaces don't.

Do you think there is any specificity in the automation of operational management?

There is a thesis that it is impossible (or wrong) to try to automate chaos. For a long time I tried to adhere to this rule. But, as often happens, a different angle of view makes it possible to see different aspects of the object of observation.

Why am I doing this? To the fact that with the right approach, the automation process itself can streamline chaos. Let's explain.

Imagine what you have:

• non-ideal (clearly not regulated, working in different ways, depending on the human factor or situation) business process;
• a ready-made, stable IT solution that automates this business process (even though the index of compliance of this solution with your idea of ​ ​ an ideal business process will be 0.8, i.e. most of the business process will be automated in accordance with your idea).

You have a choice:

1. Rush into the abyss of regulating your business process (development, coordination, testing, evaluation of the result, adjustment, coordination, testing...), and "when and if" you still approve the final regulation - start automating it, while it is not a fact that you will find a 100% IT solution that suits you. Most likely, you will have to "finish" the chosen decision for yourself. And what if, during the automation, circumstances require a change in your business process? Our song is good - start first.
2. Implement a ready-made IT solution and adjust your business process according to its logic, while you do not need to regulate anything, since the regulation will be the current algorithm of the implemented IT solution. Often this approach can be faster, more effective and less expensive. In addition, you will have a reinforced concrete argument in working with the resistance of employees - "nothing can be done, such a program." Human adaptability works better in the absence of choice. And most importantly, there are no disputes and disagreements between employees, which is also important, they do not hate each other (as it could be in the event of disagreements in coordinating the regulations, if you chose the first option), but on the contrary, the general "grief" unites them and makes the team more united.
   

In truth, recently I have become somewhat skeptical about total regulation, although this runs counter to the logic of systematization. My attitude is due to the fact that the number of changes that occur per unit of time is constantly growing. As a result, while you adapt regulations to changed conditions, conditions change again. By the way, about regulation - a few weeks ago I was at one networking event, where an entrepreneur who offers his services for preparing regulations held a presentation. As an argument for choosing his services, he mentioned his own company, which has 180 employees and, if I'm not mistaken, 975 regulations. This amused me - it turns out that if we assume that each of the employees of his company performs a unique functionality, then for one position the number of unique regulations will be 5.4 pcs. As we understand, there cannot be 180 unique positions for 180 employees. Let it be 40 (which, in my opinion, so, quite a lot). Then it turns out that there will be more than 24 regulations for one position. This, of course, is nonsense.

What difficulties can you note in terms of IT that B2B vendors have?

I cannot single out anything unique. The main difficulties are typical:

• synchronization of IT systems within the company (CRM, 1C, IP telephony, instant messengers and e-mail, contextual advertising services, metrics and end-to-end analytics);
• Synchronizing company IT systems with contractors' IT systems (e.g. WMS, TMS)
• cleanliness of data.

The latter complexity, in my opinion, is the most dangerous and underestimated in terms of influencing the adoption of correct management decisions. Everything can be perfectly synchronized with you, but if the data is dirty, then there is at least significantly less sense and benefit in this synchronization. If your data is clean, then you can work with it (albeit without automatic synchronization) using a rather simple tool. So - I wish everyone clean data.