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Marketplaces Will Be Slaves To 'Demand Chain'


By Matthew G. Nelson
InformationWeek
May 8, 2000 02:30 PM

Physics has its uncertainly principle, and now, so does the new economy: "The act of creation must go hand in hand with the inability to predict what you are going to create," according to Thomas Koulopoulos, president of the Delphi Group. Delivering the opening keynote speech of the Delphi Group e-Summit in San Diego on Monday, Koulopoulos addressed the process of creation, and how business-to-business marketplaces will shape a new market economy, something he called the X-economy.

The X-economy has five tenets, he said:

-- New generations of Internet users will expect highly filtered information and the ability to extract value from that information.

--Move it or lose it. Latency, the luxury of sedately contemplating opportunities and one's reactions to those opportunities, is dead. In a time-based X-economy, the greatest value will come from coordinating an ever-increasing volume of opportunities with an ever-decreasing duration of the opportunities.

-- The X-economy will be a community, not merely a market, requiring business-to-business marketplaces to foster a sense of trust, intimacy, and reliability.

-- A demand chain, not a supply chain, will drive the X-economy. This will force "liquidity" upon marketplaces. Koulopoulos said that "liquidity causes the product or service to morph to fit the demand."

-- Brand loyalty is so 1999. Businesses must demonstrate loyalty to customers by knowing and quickly fulfilling their needs.

The role of marketplaces themselves will change, he said, from that of a me-too fad to a critical business operation. Profitability of marketplaces aside, they will become part of the cost of doing business. "This is not a payback play, it's a pressure play," Koulopoulos said.


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