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Working Models of B2B: Business Information Exchanges
By Alexis Gutzman
June 20, 2000

Now that we''ve established the kind of B2B marketplace that doesn''t work, it''s time to investigate what is working to bring value to businesses. With the promise of enormous cost savings projected by all the analysts, businesses need to find the right model of B2B e-commerce to capitalize on the promised benefits.

There are three models of marketplaces into which most B2B exchanges fall. I''m going to be discussing them all in this space over the next few weeks. They are: business information exchanges; server-based exchanges; and client-based exchanges. Today, we''ll be focusing on business information exchanges.

Business Information Exchanges: Cementing Relationships
A Business Information Exchange is probably the most integrated model of marketplace. It''s also the least "new economy" of all three styles. Rather than creating a new marketplace, this model seeks to automate and integrate existing business systems and processes, such as procurement. Unlike the much-hyped B2B exchanges, this model doesn''t seek to play matchmaker between buyers and sellers, but to facilitate and expedite transactions that are taking place between trading partners.

One Night Stand B2B: An Idea Whose Time Will Never Come
Some of the hype surrounding B2B is about the dynamic relationships that are supposedly going to be formed and dissolved in the new economy. A thought-provoking article in the May 2000 issue of eAI Journal uses the analogy of water molecules where bonds are continuously formed then broken between hydrogen and oxygen. However, while it sounds intriguing, is this the kind of relationship businesses want? Would any business trade a long-term relationship with a reliable supplier for a "one-night stand" with a supplier it will never do business with again? Why would a business that creates one of these bonds and is satisfied with the results of the transaction not return to that supplier?

In short, I don''t think this is the kind of relationship that most businesses want with their trading partners, any more than this is what consumers want. Merchants want loyal customers, and with the exception of "sweepstakes addicts" - who will give away all their personal information for the chance to win something - most customers want to find merchants they like and trust who give them a good value, to return to again and again.

For most merchants, procuring raw materials is too important to be trusted to an unknown trading partner. The use of the word "partner" in the expression makes it clear that the supplier-purchaser relationship is just that: a relationship.

ASPs: Where the Action Is
If you read this column much, you know I''m no fan of homegrown solutions - which are often obsolete by the time they''re in beta -, or on proprietary standards. The space to watch in quick-to-market solutions is, as ever, the application service providers (ASPs). Two that are satisfying the needs of businesses to integrate their business processes with those of their trading partners are ECOutlook.com and Viquity.com.

ECOutlook.com: Facilitating Information Exchange
"While the 90''s was all about implementing ERP systems, in the first decade this century, the race will be to connect ERP systems," claims Peter Burke, Director of Business Development for ECOutlook.com. That is exactly what ECOutlook.com does. Working with all sizes of clients from very large companies like BASF, Bristol-Myers Squibb, and Ciba Vision to their smallest suppliers, they focus on integrating the data from suppliers with purchasers.

Capitalizing on the industry expertise and experience with the full range of ERP (enterprise resource planning) systems of their own staff of technical experts, they provide data mapping from their clients'' ERP systems into their own systems, then back to their clients'' systems. This means that all their clients can communicate with each other and share data in an automated way via Web forms, secure transfer of data, or automated real-time data transfer, depending on the requirements of the suppliers and purchasers. Business rules prevent bad data from making its way into the ERP systems of any clients. Of course, they''re not trying to develop any new relationships, just integrate the massive ERP systems of companies that are already doing business together. Consequently, not all their clients will communicate with each other -- clients will communicate with trading partners who are also clients.

Viquity: The Esperanto of Business Communications
Do you remember the buzz about Esperanto, the language that was going to become the international language because it wasn''t the native language of any particular country? According to Sam Hickman, Director of Marketing for Viquity, its solution creates that language for B2B communications. In a manner similar to the ECOutlook.com solution, Viquity interfaces data and processes of different trading partners to its own system, then translates them out again, essentially acting as a universal hub for business transactions. Business rules enhance the integration, ensuring that human intervention can occur before problems are transferred from one company''s ERP system to another. Any company that''s integrated with Viquity is able to communicate seamlessly with any other, which means that if a large company undergoes the process of integrating with Viquity, then it can work with one or all of its own partners, once they integrate with Viquity, without any additional work. "Point-to-point is a dead end," suggests Hickman.

The Viquity solution scales well for trading partners of all sizes. It also creates incentive for companies that have already integrated with Viquity to work together, since their connection is already established to the "hub" -- no additional effort on the part of the IT department is required. The acquisition of additional business partners with which to exchange data becomes a business decision, instead of an IT-resources decision. The Viquity solution can also offer participants data for real-time metrics about the effectiveness of their relationships with all their trading partners in the network, which they can use to make subsequent decisions about future trades.

The Standardization We''ve All Been Waiting For?
Is this the future of standardization? Perhaps. Rather than waiting for industry standards like RosettaNet to develop, ECOutlook.com and Viquity have grabbed the reins and created their own format-less format, into which they can convert anyone else''s data.

What about compliance with RosettaNet standards or any others once they''re hammered out? Both these companies can work with RosettaNet standards, however, the strength of their solutions lies in the fact that no standardization is necessary for their clients. They''ll continue to offer the seamless integration, Web forms, and business rules that businesses will require to work with each other.

And about the waiting . . . you won''t have to do much once you''ve signed with either company, because the implementation cycle is 6 weeks to 4 months. That''s not too bad, even when you''re operating on Internet time.

Alexis D. Gutzman is an E-commerce Technology Author and Consultant and author of The HTML 4 Bible, FrontPage 2000 Answers!, and ColdFusion 4 for Dummies. Her newest book, The E-commerce Arsenal:12 Technologies You Need to Prevail in the Digital Arena will be out in October. She can be reached at agutzman@internet.com

 



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