Security fears hurt exchanges

User concerns about security, privacy and data protection are restricting the volume of trade in B2B exchanges both here and overseas.

More than half of the companies surveyed in a Forrester Report just released had reduced online trading volumes as a result of fears about confidentiality.

Australian companies who spoke to Computerworld agreed e-marketplaces hold sensitive member information that could be misused or stolen at anytime.

According to the report Net markets want to disclose member-generated data to facilitate trade and sell it as market statistics and management reports; participants want to keep their data confidential, disclosing to potential partners only what's necessary to make a deal.

Survey respondents also said "full security doesn't exist" and want agreements in place to make e-marketplaces more accountable and liable.

"Companies hold back on Net trade because of legal concerns; to get ahead participants need to push e-marketplaces for contracts that respect confidentiality while balancing security and liability," the report said.

Australian manufacturing company Permasteel plans to utilise e-marketplaces in the next 12 months.

The company's IT administrator, Abhishek, said issues of privacy and confidentiality are critical and was concerned about accountability surrounding transactions.

The monitoring of transactions was also raised in the report, with Forrester recommending the use of auction replay tools to check for collusion, parallelism or price fixing.

Chemical company Huntsman Australia has just posted products on a number of exchanges to "test the waters" with very little response.

The company's e-commerce manager Julian Barrat said Huntsman is still determining whether e-marketplaces are really a viable proposition.

"We recently tested the waters with a few products and the response was poor, but that is partly due to the specialised nature of the chemical industry. We already have high market share and we know our buyers," Barrat said.

"An e-marketplace may help us meet new customers, but it may not be cost-effective so we need to see where it fits. Also most buyers here aren't using exchanges at this stage."

Royal & Sun Alliance IS executive manager John McKibbin is planning to expand the company's electronic business model.

"Like everyone else I am concerned about security and privacy, but it's all about efficiency; if we get a better business model in place we can provide a better service to our customers," McKibbin said.

Neumann Steel's network administrator Kent McFadden said.

"Buying online has led to savings for us in costs, paperwork and labour. I am not concerned about privacy and data protection, because I think there is a level of trust between all the parties involved," he said.

To assist users with electronic commerce Forrester Research has published "The Ten Commandments of Safe Trade", and an e-marketplace contract checklist outlining ways to avoid common legal pitfalls.

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