According to Martin Fisk, managing director of Streamlink, it is important in considering c-commerce to distinguish between transaction management and "design" (for want of a better word) work. Most B2B companies focus on transaction management, even when they talk about collaboration, Fisk says. "On the one side, it means that transactions are structured and automated (no humans) such that changes in (say) a delivery date can ripple across all downstream or upstream suppliers," Fisk says. "On the other side, it is trying to provide some structure to essentially human interaction and decision-making - the sort of thing that the Web and proprietary technologies like Lotus Notes have been good at for years.
"From a purely technical perspective, these two approaches require vastly different technologies: on the one side, systems integration largely delivered through structured messaging (using, in the old days, EDI or the more modern ebXML equivalent); and on the other side, the Web."
Chain 'Em Down
"One of the main constraints on your e-procurement implementation will be supplier readiness," Don Cassagranda, project director of the New Zealand Dairy Board, and IBM supply chain management senior consultant Trevor Cameron told the recent Smart 2001 conference in Sydney. "You must constantly talk to suppliers during the business case development, lest you make recommendations on procurement categories that cannot be met because the supplier is not e-enabled."
The authors point out that from the supplier's perspective:
The supplier is being subjected to different e-procurement connectivity requests from a range of customers, large and small.
The supplier has technologies that are different from its customers.
The cost of providing connectivity independently to each of those customers is extremely high.
Each of those customers wants a different catalogue format, with different information and different language.
The e-procurement portals only want suppliers' business if the supplier provides a price that is lower than currently supplied to its leading customers.
The e-procurement portals want to disintermediate the customer relationships that currently exist between the supplier and its customer.
The e-procurement portals will want to establish greater competition and disintermediate the sole supplier relationships that currently exist in order to drive down the prices.
The cost of smaller deliveries to the customer will increase. The net effect for suppliers, the authors point out, is significantly increased costs, and costs that will be passed on to your business. But they say the issues will start to be resolved over the next 12 months as those who deal directly with suppliers achieve first to market advantage and drive technology for their competitors. They predict the emergence of a low-cost enabling technology that will allow connectivity through the Internet by smaller companies direct to their customers and customer catalogues, bypassing the procurement portals.
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