B2B projections remain high despite obstacles

Electronic business-to-business (B2B) sales will reach more than $US5200 billion in 2004 through several different channels, including Internet marketplaces, electronic data interchange (EDI), hybrid EDI/Internet electronic trading networks (ETNs), Internet company-to-company links, extranets and private e-markets, according to Giga Information Group.

Giga had forecast an estimated $US3300 billion in B2B e-commerce sales for 2000, most through traditional EDI networks.

As business-to-business e-commerce matures, there will be no single "magic channel" that meets all companies' needs. The B2B e-commerce market -- which will account for approximately 38 per cent of all B2B sales in 2004 -- will get complicated because there will be a need for a variety of electronic interactions, each with its own set of strengths and weaknesses, particularly in the areas of reliability, security, customisability and cost. Because the lines between traditional EDI and Internet channels are dissolving, companies now have the flexibility to use different e-channels for different customers or supplies based on strategic business goals.

According to Giga, corporations will need to match the right channel to the right customer or supplier. Key strategic relationships, for example, should use more secure and reliable channels, such as private EDI networks or ETNs, Giga found, with the most strategic of these using more customisable channels like extranets. Smaller customers or suppliers could be migrated to lower-cost channels such as Web-based EDI or Internet e-marketplaces.

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