If we look back over the 5 years or so of B2B trading over the Internet, we can see a number of trends and drivers that have pushed this forwards. The early initiatives centred on three areas; Netmarkets with their attempts to bring large numbers of buyers and sellers to a single centralized hub; Big business procurement particularly aimed at reducing MRO costs; And online catalogues and ordering from the larger suppliers.
Each of these only had part of the picture and with the benefit of hindsight some of their flaws are now becoming more obvious. In the mean time, many of the early solution providers and implementations have built up significant momentum making it hard to switch courses in mid stream. Two issues stand out. The problems surrounding bringing the suppliers, and their catalogues, into the arena has led to a series of approaches such as "Punch Out" and catalogue aggregation hubs, that look a little like band aids over a missing leg. The other is the need to support existing trading relationships and contracts that have led to the idea of the "Private Trading Network". Even though this is still a many to many problem, the dominant companies in each industry niche are being encouraged to build and fund the development of their own trading hub using the same technology but usually limiting trades to ones they are involved in. This faces exactly the same problems that the independent and consortia hubs faced in bringing in suppliers.
Predicting the future is always hard, but it seems to me that the B2B industry has to face up to the need to connect many organizations together on a more or less permanent basis while supporting the existing relationships. This is the de-centralized approach where organizations treat each other as peers. At the high end, this will mean finding ways to directly connect the ERP systems of pairs of organizations together. The news this week from Oracle and SAP and their continuing success suggest that at least at the top end B2B is becoming dominated by the ERP providers. They have one huge advantage over any new company, that they are already embedded in the organization. So we should be looking to these vendors to solve this problem.
For the mid and low end suppliers, there are plenty of technologies out there to build web catalogue and ordering systems from hosted shopping carts to e-Commerce servers. Right now, few of these have the capability to integrate tightly with buyers. This has to be done in a way that let's the supplier maintain control of their data and have a say in the approach. It's still not clear who is going to provide the solutions to make this happen, but Microsoft has to be a good bet.
So if there's a trend here that will change the game, I think it's de- centralized connectivity and a move away from the aggregating hub. Or to put it another way "Export is as important as import".
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Each of these only had part of the picture and with the benefit of hindsight some of their flaws are now becoming more obvious. In the mean time, many of the early solution providers and implementations have built up significant momentum making it hard to switch courses in mid stream. Two issues stand out. The problems surrounding bringing the suppliers, and their catalogues, into the arena has led to a series of approaches such as "Punch Out" and catalogue aggregation hubs, that look a little like band aids over a missing leg. The other is the need to support existing trading relationships and contracts that have led to the idea of the "Private Trading Network". Even though this is still a many to many problem, the dominant companies in each industry niche are being encouraged to build and fund the development of their own trading hub using the same technology but usually limiting trades to ones they are involved in. This faces exactly the same problems that the independent and consortia hubs faced in bringing in suppliers.
Predicting the future is always hard, but it seems to me that the B2B industry has to face up to the need to connect many organizations together on a more or less permanent basis while supporting the existing relationships. This is the de-centralized approach where organizations treat each other as peers. At the high end, this will mean finding ways to directly connect the ERP systems of pairs of organizations together. The news this week from Oracle and SAP and their continuing success suggest that at least at the top end B2B is becoming dominated by the ERP providers. They have one huge advantage over any new company, that they are already embedded in the organization. So we should be looking to these vendors to solve this problem.
For the mid and low end suppliers, there are plenty of technologies out there to build web catalogue and ordering systems from hosted shopping carts to e-Commerce servers. Right now, few of these have the capability to integrate tightly with buyers. This has to be done in a way that let's the supplier maintain control of their data and have a say in the approach. It's still not clear who is going to provide the solutions to make this happen, but Microsoft has to be a good bet.
So if there's a trend here that will change the game, I think it's de- centralized connectivity and a move away from the aggregating hub. Or to put it another way "Export is as important as import".
[ << Web Services ] [ Hubs and Markets >> ]
[ 0 comments ] [ G ] [ # ]