InformationWeek
Defining The Business Value Of Technology
December 7, 1998
 Print this story |
continued...page 2 of 3
Other considerations include a flexible client interface and high usability. Since sell-side applications typically reach customers outside the company, you need to give them the option of selecting HTML interfaces that run well in any browser or over slower connection speeds. The application should require no training and should provide customer self-help if possible. You might also want products that let you incorporate personalization, target marketing, branding, cross-selling, up-selling, and substitute selling within your commerce application.
Software products for sell-side applications include IBM Net.Commerce; Open Market Transact and LiveCommerce; Microsoft Site Server Commerce Edition; and Netscape SellerXpert. These vendors target seller organizations as well as hosting services that use the software to provide commerce capabilities to their business customers.
The offerings from Microsoft and IBM are toolkits, which means that you'll need experienced developers to create your applications. Microsoft's product makes sense if you have Microsoft-savvy developers. IBM's strength is that it has features that make it easier for business users participate in development, although using some of the applications' functionality requires C-level programming.
Open Market and Netscape's offerings are packaged applications that let less-technical individuals get the application up and running. Netscape's SellerXpert features good EDI capabilities, making it a good choice for organizations that have already implemented EDI solutions. Open Market's architecture is conducive not only for business use, but also for use by Internet service providers and commerce service providers that supply hosting or outsourcing services.
Solutions For Buying
Another key business-to-business commerce application is buy-side or corporate procurement. Such uses let companies build applications that internal personnel can use for procurement. Buy-side applications provide a central point of control for procurement, helping organizations to manage spending and acquisition more efficiently, negotiate more competitive prices with vendors, and save time and money.
For example, a large insurance company could build an intranet site that would let executive assistants purchase office supplies for their areas. The application could provide a generic list of products and services from which users can select what they need, or it could provide an aggregation of catalogs from multiple vendors. The application could then place the order with the lowest-priced vendor or determine if the necessary goods have already been purchased and can be delivered from another location.
Most products focus on buying indirect goods--products and services that won't critically hamper your business if you don't receive them on time, such as office supplies. Procurement of direct goods--such as raw materials for discrete manufacturing operations--is often handled by enterprise resource planning systems and dedicated procurement personnel.
A big consideration for buy-side applications is whether they are usable. Buyers are often infrequent users who are internal to your company, so look for products that let you build rich, functional interfaces using technologies such as Java on the client side. In addition, the system should be able to capture all purchasing activities, which will prevent employees from going outside the system for purchasing. You may even want to integrate your expense-reporting system into your buy-side application, providing total central control on all spending.
Of the vendors supplying tools for buy-side commerce, Ariba Technologies Inc. focuses only on buy-side applications and provides a rich feature set for these kinds of applications. Ariba, Netscape, and Trade'ex focus heavily on occasional users by providing easy-to-use interfaces. Microsoft provides a sample buy-side application, but making it fit your needs may require extensive custom development. Connect Inc.'s core competency comes from the company's integration services and its ability to roll customer-focused features into the underlying technology.
Buyers And Sellers
Marketplace solutions are a relative newcomer to E-commerce, and very few online marketplaces exist today. Marketplace applications create a virtual community that brings together multiple suppliers and buyers. In this case, the marketplace provider supplies the application infrastructures that let multiple parties transact business. This application type is more prevalent in the business-to-consumer market (for example, eBay's online auctions), but is now starting to appear in the business-to-business sector.
Such communities create secondary markets that make sense for specific vertical industries, such as steel, chemicals, or plastics. For example, a steel vendor can use a marketplace provider such as MetalSite to sell steel to a community of interested buyers. Such sites allow for many-to-many relationships, and the marketplace provider will probably collect a fee on every transaction.
In addition, marketplaces can be used for auctions, creating a market for excess inventory that might otherwise go to waste.
Another example is a large franchise such as a fast-food chain. This company can set up a marketplace in which all franchises act as buyers, and all suppliers of napkins, beef, and other products act as sellers. The parent company can create a marketplace application to facilitate buying and selling while maintaining control over the marketplace itself.
One of the key factors to keep in mind while evaluating marketplace applications is the protection of buyer-seller relationships. For example, many customers may have negotiated private contracts with particular sellers--and the contract price must be protected from other buyers and sellers, something that can be a challenge in a marketplace environment. In addition, a marketplace application may need to support secure contract negotiations among buyers and sellers.
continued...page 3
return to page 1
Back to Labs
Send Us Your Feedback
Top of the Page
Featured Microsite
