Tracking the flow of e-business

The next hot technology appears to be software that allows companies to track demand from customers, their own inventory and production from suppliers, all in near real-time

SeeCommerce, a small Palo Alto, Calif., company, says its SeeChain suite of products can do that - and respond quickly to changes in the market. It's a story that is grabbing attention and backing from some knowledgeable people.

If Cisco Systems had purchased SeeCommerce's products, it could have avoided inaccurate sales forecasts and getting stuck with $500 million in inventories, says Roger McNamee, one of Silicon Valley's leading venture capitalists and an investor in SeeCommerce.

What may be the next big e-business solution? YES

Karen Peterson, a consultant at Gartner Group, says SeeCommerce is ahead of the competition, including i2 Technologies, Manugistics Group, Oracle, Peregrine Systems, webMethods and other start-ups. SeeCommerce has combined the ability to monitor corporate activity with analytical tools that the other vendors do not yet have, she says.

The Mopar Parts division at DaimlerChrysler began installing SeeCommerce's SeeChain Demand, SeeChain Inventory and SeeChain Supplier modules in April 2000 as a hosted solution to manage the production and distribution of 300,000 different parts.

Jerry Quell, Mopar's senior manager of materials operations planning, says the system allows Mopar to rapidly spot parts shortages, determine which suppliers can fill orders best and route the parts from the nearest suppliers.

Mopar saved $7.5 million in six and a half months, and expects to save $15 million in the first year using the system, Quell says. Even a 1 percent improvement in order fulfillment will save $10 million, he says.

"We can show a 10-to-1 return on investment in the first year," says Paul Albright, SeeCommerce's president. "Nobody else can show that."

Supply chain management, the name for the marketplace in which SeeCommerce competes, will combine with marketplace management, which involves real-time interaction among multiple companies for both front- and back-office applications, Albright says. SeeCommerce is working on some of those applications now.

Financial analysts have been downgrading Ariba, Manugistics, i2 and others in the e-commerce space because of the economic slowdown. Albright, however, says SeeCommerce's business is booming because the payback is so quick.

SeeCommerce's sweet spot has been manufacturers and packaging companies, but Citibank is also using the company's products to manage its portfolio of services in a product life-cycle-type application, and Qwest Communications International is using it to improve customer service.

Ariba recently signed a deal to resell SeeCommerce's products as part of its value chain management platform, which involves everything from the design of products to approval, customer feedback, manufacturing and distribution.

In order for these collaborative management solutions to work, Gartner's Peterson says, companies must be willing to trust one another enough to consider opening their operations to outsiders. High-tech industries are probably more willing to do that than others, she says.