B2B exchanges fail to deliver

Most companies are disappointed with the performance of business-to-business (B2B) exchanges with nearly half of the respondents reporting that they have “mostly” or “absolutely” failed to meet expectations.

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By  Matthew Southwell Published  December 6, 2001

According to a joint study by Giga Information Group and Booz Allen Hamilton, most companies are disappointed with the performance of business-to-business (B2B) exchanges with nearly half of the respondents reporting that they have “mostly” or “absolutely” failed to meet expectations.

Those surveyed by the analyst groups agreed that organisational changes, such as standardising and developing new procedures, improving and introducing technology systems and introducing integration technology, are needed to capture benefits from exchanges.

However, the Booz Allen/Giga survey also found that, in spite of the challenges, companies expect to conduct the bulk of their direct materials and indirect materials spending through exchanges within three years.

“We found while companies are disappointed with the benefits they’ve gotten from e-marketplaces, they still see great potential for these intermediaries to make inter-business transactions and collaboration easier and more effective,” says Giga vice president, Andrew Bartels.

The greatest potential benefit companies envision is saving money — both in the price of goods they buy and in the cost of the processes for buying and selling. Companies also anticipate savings by collaboratively developing products, planning and forecasting demand, production and logistics with partners and managing their relationships with their customers.

Tim Laseter, vice president, Booz Allen, noted that “the survey results indicate a growing degree of realism on the part of companies, both in terms of the benefits they can – and can’t – achieve through exchanges, and in terms of the work that is required to achieve these benefits."

"Companies now realise that exchanges are not panaceas and that hooking up to them is not exactly ‘plug and play.’ Still, it's clear that companies believe the benefits outweigh the challenges,” he adds.

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