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TechData warns against e-business hype

Managing director Steve Lockie says that a better understanding of the intricacies of e-business is essential for the Middle East region, following independently-conducted research.

Computer 2000/Tech Data sounded a harsh warning to those regional businesses evaluating the business-to-business (B2B) value of e-commerce.

Steve Lockie, the company's managing director for the Middle East said that there is a danger that a lack of real understanding of the requirements of successful e-business could mean a danger for local businesses.

"B2B is great, it has the potential to deliver enormous power to businesses. But only when it follows on from a sound understanding of the basic need to get goods across to buyers. I'm not sure that many of the region’s many B2B portal launches have conducted 'due diligence' here before they have announced grand initiatives. The question that many businesses in the region must be asking right now is: 'can these portals deliver the goods?' and I believe the answer today is unclear in the main," said Lockie.

Lockie’s comments are based on extensive independent research that Computer 2000/Tech Data has conducted among resellers of IT-related products across the GCC market, as well as further research conducted among regional media designed to find out what media make of the 'B2B fever' gripping the market today.

The findings show that regional resellers have key concerns regarding the physical movement of goods, with order processing and delivery times cited by the vast majority of regional resellers as being too long. At the same time, pan-regional media are 'suspicious' in the main of B2B portal launches following a tranche of 'B2B Portal' announcements, according to the media survey conducted for the company among reporters in the UAE, Jordan and Lebanon.

"Put the results of these two surveys together, and you have a perfect example of a market where the noise has preceded service availability by an appreciable time factor," says Lockie. "I have seen sites that are set up to deliver computer products via an auction process that have totally neglected the need for logistics service level agreements and in some cases even simple delivery time to be part of the bidding process. That, in the real world, is insanity. There is a reality check required here: people buy IT products to schedule before price. A cheap router, microprocessor or software package that can’t be delivered on time has zero value," said Lockie.

"Many of today's Middle East B2B sites are technically superb, and are a real achievement and movement forwards. But there has to be a realistic delivery infrastructure in place before the B2B market can truly start to move forwards from the announcement phase to a delivery of services phase," he added.

The majority of resellers active in the regional IT market are focused on 'enterprise' or large corporate sales, according to the Computer 2000/Tech Data research. Over 60% of the resellers in the Gulf's IT market are focused on this market. Enterprise customers typically require tight delivery schedules to meet the needs of business-critical implementation projects. "Can you meet that schedule? Can you deliver on a 24-hour or 'on the day' basis?" said Lockie. "If you can't, you don't have the basics sorted out, and you don't have a true B2B offering until you can focus on that delivery capability. Key regional IT markets today are being offered delivery times of 4-10 days or worse, and even if transaction costs are lower, that isn't what B2B is about. There's a need to go 'back to basics' in the market today."

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