B2B Digital Target: 50 Percent.

50 Percent.

That's what an increasing number of B2B CEOs are putting forth as their goal for a percent of total company revenue that is transacted digitally. 

In some cases, it's a BHAG (Big Hairy Audacious Goal) meant to set the bar high for employees.  Other leaders are already fully committed. Grainger's CEO has already stated this goal publicly and invested in a complete digital transformation, including new offices for Grainger's digital team in downtown Chicago. 

Whatever the maturity level and commitment, it's clear that 50 Percent is where the bar is being set for the future of B2B digital Business. 

THREE REASONS WHY:

• Boards of Directors - They are increasingly asking CEOs "what are we doing about digital?" and expecting strategic business answers and plans.
• Customers - The consumerization of B2B is here.  B2B customers expect the same ease of finding and buying products/services on the job as they do at home. And, this is an increasingly important factor in customers' decision about with whom they do business.
• Financial - Self-service and self-sale offer significant cost efficiencies in both delivery and growth opportunities. Even 2-3% or a few dollars of savings quickly become quite significant as digital continues to expand in high-volume areas of interactions.

WHAT WILL IT TAKE?

This is the core question CEOs are asking digital leaders.  And many are struggling to find the answer.  It's not like B2B companies have just been sitting on their hands...Forrester projects B2B online revenue to reach $560B by the end of 2013.  But these companies also realize that the efforts and approaches most B2B companies have employed to date will not get them to the 50 Percent target.

Three of the biggest areas of change all center around current focus areas that must evolve:

• Marketing -- Digital is often seen as primarily a marketing, communications or sales support tool.  This one-way mentality misses the opportunities to create new engagement and value for customers.
• Transactional -- The majority of digital investments today are in initiatives that are directly related to a purchase.  This makes sense because these investments are easier to justify and deliver returns more quickly.  But customers spend only 5% of their time making a purchase, so clearly companies need to think more broadly about customer interactions.
• Technology -- Companies have a history of buying a new technology to solve a business problem.  Today, an increasing number of leaders (especially IT leadership) are recognizing that technology enables digital business capabilities, and should not be the starting point or primary focus. 

Of course, all of the above remain critical for success...but companies are realizing that these are parts of a greater whole...an ecosystem if you will...that is needed to fundamentally perform at an entirely new level.

LEAPING TO 50 PERCENT

Many companies start planning for 50 Percent by trying to figure out out how to scale their existing organization.  This is often unsuccessful for a couple of reasons: 

1. The capacity and capabilities needed in the future are often dramatically different and won't map well to existing organizational structures and processes.
2. People. Silos, sandboxes, personalities, fear of change and human nature quickly make it difficult to have the required dispassionate conversations about tomorrow without interpersonal or political implications.

Instead, we recommend that companies follow a simple approach that starts with the end in mind to prioritize strategic planning and then work backward to define the path forward (a maturity model) to reach 50 Percent.

1. Strategy: Clearly define your (digital) business strategy...what 50 percent would look like for your organization
2. Capabilities: Clearly define what your organization will need to do operationally to deliver 50 Percent and the functional elements of each.  Capabilities might include eCommerce Operations, Business Intelligence, Brand & Experience, and Enterprise Program Management.  These are not technologies...they are people and processes.  Keep in mind these capabilities will need to be highly integrated beyond the digital team.
3. Roles & Responsibilities: For each of the capabilities, articulate the types of roles required to deliver that capability.  So, eCommerce Operations might include roles like Demand Management Manager, Product Content Manager, Director of Sales Support, Inventory Director, Sales Liaison, etc.
4. People: The previous steps will help provide the foundation for a more reasoned discussion about current resources, operational maturity and appropriate milestones, adoption (especially by sales) and timing to guide growth.

50 Percent is likely a BHAG for most companies today. For some companies that tomorrow may never come.  But there's little doubt that the growth and success of B2B organizations will continue to be increasingly influenced and driven by digital capabilities.  And with the ongoing acceleration in the pace and scale of change of digital, the runway to get ready is getting shorter.