Teaching Web Business

The predictions for the growth of business-to-business e-commerce are getting ever-loftier.

According to analysts at Goldman Sachs, business-to-business e-commerce will be a US$1.5 trillion market by the year 2004, and many analysts predict that it will rapidly outpace consumer commerce on the Web.

According to researchers at Dataquest, consumer e-commerce will be "only" a US$380 billion market by the year 2003--well below Goldman Sachs' prediction for business-to-business e-commerce.

Getting the message across about what kinds of business can be done on the Web has become a tough but necessary task for those who stand in the middle of Web business transactions.

Cases in Point
Cost savings to businesses that hook up with some of the business-to-business e-commerce providers on the Web come in many different forms. Ariba, one of the better known of these providers, provides a few case studies at its Web site. For example, Cypress Semiconductor, which has about 165,000 employees, recently moved from its traditional purchasing model, in which employees submitted paper requests for office equipment such as new computers, to an electronic, online purchase-request system from Ariba. According to officials at Cypress, with the old, paper-based procedure requests for equipment often sat on managers' desks for long periods, and purchase orders were often filled twice due to poor tracking of orders. Keith Krach, one of Ariba's cofounders, says that many businesses can save from 5 to 25 percent on their operating expenses by using Ariba's electronic procurement instead of paper.

Other case studies are available at PartMiner.com, which facilitates the buying and selling of electronic components on the Internet. One of its partners, Atlas Services, is a US$300-million-a-year distributor of electronic components and computer products. When Atlas gets a bill of materials, from, say, a computer manufacturer, it uses PartMiner to find out which suppliers have components in stock immediately. This was previously a telephone-based, time-consuming effort, says Gerry Fay, director of operations at Atlas. According to Fay, Atlas has saved 15 percent on product-procurement costs--as well as a lot of time--since moving to the Web to fill orders.

Getting the Message Across
The rise of business-to-business e-commerce is also sending some of the middlemen and women toward new multimedia applications. For example, VerticalNet recently formed an alliance with ZillaCast.com to provide Webcasting and streaming video to VerticalNet's business-to-business buyers. Participants in VerticalNet's "business communities" will be able to design their own videos showcasing products and services and view streaming videos from other product and service providers.

Part of the challenge for business-to-business e-commerce providers is getting businesses to understand what kinds of procedures they can move to the Web. Case studies published on the Web are a growing resource for getting this message across. In addition to Ariba, PartMiner, and VerticalNet, e-Steel, MicroStrategy and other players have included case studies in their Web sites, incorporating video- and audio-based demonstrations of how real businesses are exchanging products and services with other businesses on the Web. At MicroStrategy's Web site there are even online courses with streaming video and audio on how to move business-to-business exchanges to the Web.