BT's billion pound ecommerce pledge

BT tries to breathe new life into B2B (with a little help from Oracle)
Written by Graham Hayday, Contributor

BT tries to breathe new life into B2B (with a little help from Oracle)

BT is hoping to prove that B2B ecommerce is alive and well by introducing some changes to its e-marketplace offering which it says will grow the amount of business going through it from £100m in 2001 to more than £1bn within the next two years. The telco today said it was fully committed to the e-marketplace model, even though some analysts - and even the companies which helped fuel the hype in the first place - claim B2B (business-to-business) ecommerce won't deliver on its early promise. Commerce One - one of the leading vendors in the e-procurement space - has laid off nearly 70 per cent of its workforce in the past year, while Barclays has shut its B2B exchange altogether. Ariba once touted itself as an e-marketplace specialist and made nearly all of its money from the business, but now calls itself an "enterprise spend management" company and only gets around 20 per cent of its revenues from that source. B2B transactions still dwarf those made in the business-to-consumer (B2C) space in monetary terms, thanks largely to the huge sums being put through online exchanges by companies in the automotive and oil industries, but the B2C market is growing at a much faster rate. However, BT thinks it can drive the adoption of e-procurement by addressing some of the major challenges facing potential users of online marketplaces, such as technical complexity. A key element of BT's approach is a strategic partnership with Oracle, whose ebusiness applications will form the basis of the new central trading platform, called BT Transact. Organisations using Oracle's buying application join those on Commerce One, PeopleSoft and SAP platforms, who are already able to integrate with BT's e-marketplace. The offering is aimed at larger organisations with 500 or more employees. When asked if the target of £1bn worth of business come 2004 was ambitious, Dr Bola Oshisanwo, head of BT Transact, told silicon.com: "In two, three, four years' time, everyone will be buying goods and services from their desktop. The target isn't really ambitious. Every organisation has a need for paper, pens, chairs and so on. For example, BT itself spends over £1bn on indirect procurement every year. All we need is to get the business of a couple of companies of that size, and the target seems very reachable." Catherine Hawley, senior vice president of applications hosting at BT Ignite, added: "While e-enabling the supply chain is acknowledged as the ecommerce segment with the most promise, many of the possible cost savings and efficiencies have yet to be realised. "We believe that the true value of e-marketplaces lies in their ability to connect a wide trading community - only when large numbers of buyers and suppliers are brought together can users realise the full potential of their investment," she said.
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