Experts Warn of Challenges in B-to-B

PALM DESERT, CALIF. (06/23/2000) - A raft of challenges await information technology leaders who seek to take advantage of business-to-business e-commerce and electronic marketplaces, said a panel of CIOs speaking on the topic at Computerworld's Premier 100 IT Leadership Conference here this week.

For one thing, much of the emerging technology used to support digital relationships among business partners and customers "is unstable," said Bruce Carver, vice president of information management and technology at The Reynolds & Reynolds Co., a Dayton, Ohio-based IT provider for the automotive industry.

As far as the technology used to support e-commerce initiatives, "if you look under the covers at the technology [they're] using, what's under the covers is not something you want to sleep with," Carver said.

On the business side, creating electronic marketplaces can require working through a decades-old mentality of fending off bitter rivals to work together to achieve common objectives, such as generating the kind of liquidity needed to make an electronic marketplace succeed.

"When we looked at [business-to-consumer e-commerce], there wasn't much interest by senior management to sell competitive products on our site," said Robert Schwartz, vice president and CIO at Matsushita Electric Corporation of America (Panasonic). But in the electronics industry, said Schwartz, "there's a lot of cross-selling. Sometimes we're competitors, and sometimes we're suppliers to each other. That's really where the industry has moved to - to ‘co-opetition.'"CIOs have also quickly discovered that in electronic marketplaces, "neutrality is the key" to gaining acceptance by suppliers and customers, said John Keast, CIO and chief technology officer at NetworkOil Inc., a Houston-based global Internet exchange for oil services and equipment.

Kathy Brittain-White learned that lesson the hard way. Brittain-White, who is CIO at US$26 billion Cardinal Health Inc., told fellow IT leaders at the conference about how her company tried - and failed - to convince competitors such as McKesson Corp., analysts and customers that could act as a neutral site for buying and selling health care products. Instead, Cardinal is now in discussions about creating an exchange that would be run by a neutral third party.

Peter Burrows, chief technology officer at Reebok International Ltd. in Stoughton, Massachusetts, said manufacturers such as his company "have to decide whether to partner with an e-tailer or a brick-and-mortar retailer" or spend millions of dollars to create an online shopping site "and compete with your [distribution] customers."

"The question is, do you lead or follow [in e-commerce]?" Schwartz said.

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