B2B benefits? Business still waiting and hoping

It's somewhat of a waiting game, but organisations are still clinging to the hope that B2B exchanges will deliver some benefits.

A recent study by Giga Information Group and Booz Allen Hamilton has revealed that most enterprises are still waiting to reap benefits from business-to-business exchanges. In fact, more than half of the 60 companies that were surveyed for the study reported that exchanges have not met their expectations so far, while an additional one-third of companies said that exchanges had only "somewhat" lived up to expectations.

One Australian IT manager who wished to remain anonymous agreed that few enterprises are finding B2B exchanges to be a big dollar saver at present, adding that his organisation isn't likely to move to an exchange within the next three years, unless a significant business efficiency reason is uncovered.

According to IDC, the value transactions facilitated through local e-marketplaces during 2000 was $289.2 million, accounting for only 5 per cent of total B2B transactions. Andrew Bartels, vice president of Giga, believes that this is largely due to organisations transcending the hype and facing the nuts and bolts of the exchange model.

"The exchanges by and large have taken some time to get going," he said. "Companies now realise that exchanges are not panaceas and that hooking up to them is not exactly 'plug and play'."

Similarly, enthusiasm to join an exchange has waned, with few organisations jumping on the B2B bandwagon. According to IDC, only 6.1 per cent of organisations are participating in e-marketplaces as a buyer, while 16.6 per cent have joined as a seller.

Brooke Galloway, program manager of Internet and e-commerce at IDC, said the four most commonly cited reasons that organisations were not getting involved in e-marketplaces centred on the market's immaturity. Galloway noted these reasons included limited product offerings, the lack of an applicable marketplace, an immature model or simply because organisations hadn't thought about it.

Despite this, both IDC and Giga predict a boom in B2B exchanges over the next few years. Bartels outlined that the Giga study revealed "a great deal of hope and indeed expectations that exchanges will deliver benefits moving forward", with many organisations still looking for exchanges to make inter-business transactions and collaboration cheaper, easier and more effective.

IDC envisions a similar future, predicting that e-marketplaces will account for 45 per cent of all B2B transactions by 2005, with the value of transactions sky-rocketing to around $US57,362 million. A recent IDC study also revealed that 37.8 per cent of Australian organisations are currently planning to become e-marketplace members or are interested in increasing their involvement in them. According to Galloway, this can be seen as a sign of satisfaction among members and confidence among prospective members in the effectiveness and benefits of e-marketplaces.

* Heather Harreld contributed to this story.

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