By Helen Trim, Senior Vice President at Coupa Software

Lessons B2B businesses can take from B2C to drive transparency, improve fraud prevention and level the playing field for industry competition

In the past decade, the consumer business space has experienced a revolution like never before — thanks to the power of community intelligence. That is, companies which sell directly to consumers have been able to successfully leverage real-time consumer feedback and data at scale in order to make swift changes, adjust services and improve customer experiences without lag time.

While the trend of sharing community intelligence has flourished for consumer-facing businesses, companies in the B2B space have lagged behind. However, given the immense

value to be gained from industry-wide data sharing, it’s something B2B companies are well placed to implement within their own business environment. Here’s how professional services, including those in highly regulated industries such as finance, can get on board.

The community intelligence revolution

Sharing and analysing anonymised real-time data has been a game-changer in transforming how consumer businesses work. Thanks to the prevalence of such data (and the horsepower to crunch it), consumer-facing businesses have been able to improve how they make business decisions. This strategy is built on the premise that user data in the aggregate powers and optimises the consumer experience, underpinning the decisions a company makes.

Services such as Google Maps use passively collected consumer data to assess traffic on various travel routes, and companies like Amazon and AirBnB rely on consumers giving their reviews so that other users can more reliably make a purchase.

Another example is navigation app, Waze. By leveraging the passive real-time data provided by a broad community of users (drivers) at once, Waze is able to paint an accurate real-time picture of road conditions, delivering the most accurate, up-to-date driving route information to anyone using the app or its technology within another service.

Known as ‘community intelligence’, this real-time data informs companies’ ability to respond quickly and remain agile by continuously course-correcting depending on what the data is saying at any particular time.

For example, Amazon allows customers to leave reviews of the products they’ve purchased, which in turn informs other consumers and helps them plan their spending. The reviews provide a secondary benefit of helping Amazon itself provide better products and services to its customers. A product that performs poorly in reviews, for instance, may be pulled from Amazon’s supply chain.

In general, consumers have been happy to provide this data freely because they trust their privacy will be kept safe, it takes little effort on their part, and they understand the value they gain from it in return.

The use of community intelligence has transformed consumer-facing industries like none other, moving technology and customer service forward in ways that seemed unimaginable just two decades ago.

Applying lessons from the consumer space

Until recently, the use of community intelligence hadn’t been optimised within a B2B context. But, why not? After all, companies cannot rely solely on regulators to help optimise decision making. While membership in trading blocs such as the European Union has provided some standardisation around issues such as suppliers and pricing, many UK companies remain frustrated with the lack of real-time insight needed to accurately evaluate a supplier further afield in, say, Shenzhen, China.

Fortunately, thanks to the application of community intelligence within the B2B business arena, this is starting to change. When multiple companies in a given industry share information around suppliers, vendor pricing, and other industry standards, the result is that all companies within that industry perform better, improving the competitive playing field and raising the stakes for competition within the market.

But won’t sharing information give unfair advantage to one’s competitors? Well, no, and here’s why: it is perfectly feasible for companies to share useful industry information with competitors while keeping proprietary business dealings and trade secrets confidential, and doing so helps the industry as a whole move forward and help the market self-correct.

In addition, technology now exists to provide businesses with transparency on pricing and supplier performance that will likewise help companies make important decisions based on real-time data, resulting in benefits such as cost savings and fraud avoidance.

A key way this is achieved is through benchmarking. For example, CAP COM Federal Credit Union, a New York-based financial services provider, was able to streamline its vendor relationships and generate cost savings by using community intelligence to identify three major suppliers who were transacting electronically with competitors, but still supplying costly and arduous manual invoices to CAP COM. By updating its supplier relationships to electronic channels, CAP COM was able to save time and costly manpower of processing invoices manually.

Community intelligence can also be a huge help when it comes to detecting and eliminating fraud. A leading US hospital, Memorial University Medical Center (real name anonymised), had a long-standing relationship with a supplier of x-ray, CT scan, and MRI testing procedures. However, Memorial University Medical Center (MUMC) realised there was a problem with its supplier when it noticed that other companies had rated the same supplier poorly.

Investigating further, MUMC realised that, based on the reviews from its competitors, this particular supplier was 10 times more likely to have something wrong with its invoices –  from charging too much to double billing. Based on this information, MUMC immediately terminated its contracts with the supplier in question and was able to save $8 million in payments, while finding a better-rated, less expensive supplier to work with.

It is clear that by comparing real-time industry business data, including supplier reviews and like-for-like industry spending budgets, companies can eliminate excess costs and even detect and protect against fraud — which is beneficial to all players within the industry at large.

Smarter together

Sharing intelligence can have powerful implications on how businesses compete. In the future, we will see an increase in businesses voluntarily sharing non-commercially sensitive information in order to gain the same level of transparency and reliability in spend that consumers have come to value and rely upon.

In fact, it’s already happening and we are seeing this play out in the business world across various industries. For example, pharmaceutical companies which compete in one area will work together in a different field where they do not, in order to make discoveries and bring solutions to market that would not be possible without collaboration.

Sharing anonymised data with competitors will be no different to how entertainment companies Amazon Prime and Netflix compete for customers when it comes to content and platform offerings, yet Netflix uses Amazon Web Services’ cloud hosting for its service. Or how Apple has used Samsung, its biggest competitor in the smartphone market, for screens in the iPhone.

We are moving towards a future where all industries, including finance, take on board a new understanding around using community intelligence. This future is one where, increasingly, organisations freely share non-commercially sensitive information that doesn’t compromise proprietary trade secrets or marketing strategies, and by doing so, fosters competitive collaboration that can move industries forward by improving the quality of competition. And in doing so, we can all become ‘smarter together.’