eFE COLUMN — MYTHILI RAMESH, Head, Wipro01Markets

Evolving e-marketplaces and tomorrow’s world

Sue Zeidler in Los Angeles

Slowly but surely, we have watched information technology pervade every aspect of our life. While intranets and concepts like knowledge management still have to become an integral part of corporate culture in India, e-mail and personal computers are undoubtedly here to stay. Even as the early grasp of basic commands help us invent new languages and increase the importance of computers, we watch the evolution of the e-marketplace.
In its most basic form, the e-marketplace was a corporate brochure in cyberspace. The concept of e-commerce was an advancement on that. But with the ‘touch and feel’ factor counter-balancing the ‘easy buy’ feature, there was not enough of an incentive to make the switch from offline to online buying.

The question was: where was that killer application that gave individuals and businesses the advantage that they would not get in the offline world? eBay ‘trail-blazed’ the way in the B2C space, offering online auctions that built communities of people with similar interests. Will e-procurement replicate the feat in the B2B space?
Analysts have a positive outlook one-procurement. According to Durlacher Research, the B2B market in the Euro-15 will grow from $76 billion in 2000 to $1.272 billion in 2004.

Gartner predicts that the roughly 800 e-marketplaces of today will grow to about 3,000 over the next three years, followed by a period of tremendous consolidation. This need to stay ahead in the race has perhaps extended the definition of the e-marketplace.

e-Marketplaces cannot afford to remain mere venues for exchange. It has to develop into a service that provides a strategic dimension to the procurement function. The typical reverse auction at 01Markets brings in reports of cost and time savings. But, like most success stories, these are not random events but are products of meticulous planning and research.

e-Procurement analysts advise clients on the solution that fits in with their purchase requirements. There is collaboration in the client’s preparation of the RFQ. This is supplemented by a round of vendor screening before the auction.

Gartner predicts that the most successful marketplaces will be the ones that can facilitate existing relationships. The e-marketplaces of today have definitely gone beyond being just corporate brochures. With less than two years in the business, we find many corporate leaders opting for this method of procurement. These are great wins and augur well for e-procurement.

Analysts point out that as the industry matures, product differentiation will become minimal. However, the experience and service that companies provide customers will still differ. This is where e-marketplaces that grow into service solution providers have the advantage. There is the realisation that in tomorrow’s world, solutions will have to keep up with the current offering of dynamic content and prices.

This reflects a critical shift in the scope, scale and attitude of operations in the e-marketplace. It is both an acknowledgement of the power of online trading and an unleashing of its potential. And in the years to come, this could represent the way in which businesses transact.