While most business-to-business companies are focused on e-commerce in their digital enablement efforts, there are some very interesting things going on with cloud-based technologies in the back office that should not be overlooked.

Management consultants McKinsey & Co. highlighted this opportunity in their paper Maximizing the Value of G&A, contending that organizations should aggressively identify and eliminate non-value-add back-office general and administrative activities in order to remain competitive. We all know that competitive pressures are on the rise and any opportunity to improve net margins in a cost-effective way is important to consider.

Linda Taddonio,
founding partner,
IQAcceleration

Some of these opportunities are highlighted in a paper written by the World Economic Forum, titled The Future of FinTech: A Paradigm Shift in Small Business Finance, where they observed that “the global financial crisis of 2007-2008, coupled with higher regulation and capital costs for loans to small and mid-sized enterprises … has created a plethora of disruptors in the FinTech area who, with their innovative ways to originate, assess credit risk and fund SME loans, have provided alternative ways for SMEs to secure funding for their growth.” These opportunities apply to both the buyer and the seller and dovetail into the assertions from McKinsey.

So, from outsourcing accounts payable functions for managing travel and processing expense reports, to outsourcing accounts receivable activities for trade credit and the elimination of days of sales outstanding to improve cash flow, there are some very attractive ways for companies to now lower their operating costs, streamline their G&A functions, and provide more superior customer experiences for back-office operations than ever before.

Here are some interesting parallels we can draw to ask some provocative questions:

• If Rocket Mortgage can approve a mortgage in minutes online, why can’t a buyer be granted a line of trade credit in minutes?
• If consumers can manage all of their household payments electronically through their bank, why can’t a business buyer manage all of their payments electronically as well?
• If the fees for accepting credit cards are generally below 4%, why can’t buyers access trade credit with similar ease of use where sellers pay the same 4% or less for immediate payment and assume the same level of risk?

Favorable answers to these questions may be coming faster than you thin—so don’t overlook the back-office in your transformation efforts!

Linda Taddonio is founding partner of IQ Acceleration Inc., a consulting firm that helps manufacturers and distributors develop digital business strategies and operations. She is also a founder of Insite Software, a provider of e-commerce software for manufacturers and distributors.