Interesting article.Found this on another board.
Bodes well for SCS.
The real buzz on B2B
by Jim Carroll - Monday, March 20, 2000
In the ever-evolving world of Internet hype, the acronym B2B, for business-to-business commerce, is now all the rage.
The sudden prominence of B2B has come about at the same time that the on-line shopping bubble has deflated. People are realizing that the on-line retail revolution isn't all it was cracked up to be, particularly when one recent survey observed that in 10 years, about 7 per cent of total global retail sales may occur via the Internet. That's a big number -- we're talking billions of dollars of transactions. But it is also a small number, as it means that 93 per cent of future consumer purchases will occur in traditional stores and shopping malls.
On the other hand, the hype about B2B will turn out to be real -- it is going to be huge. Over the next 10 years, we are going to see trillions of dollars in economic transactions between organizations move over to the Internet.
Unfortunately, the intense focus on B2B is leading people to quickly lose perspective on what is really happening. Media reports tend to examine just two aspects of B2B: high-profile Internet stocks -- basically, companies that help to build B2B e-commerce networks; and a few "vertical industry networks" such as Chemdex (https://www.chemdex.com),, Metalsite (https://www.metalsite.net)) or Build.Net (https://www.buildnet.com).. Certainly these are all important, in that they are leading to significant restructuring within various industries. Studying them can give you a bit of insight into B2B, but keep in mind that they are only part of the action.
The real B2B buzz is this: companies worldwide are in the early stages of a process that will see a gradual shift from paper-based transactions to those that occur through the Internet. It's a huge undertaking that will require five to 10 years to unfold, and is of a complexity and scope that dwarfs anything done with the Internet so far.
With the exception of a few industries, ours is still very much a paper-based economy. Think about the interaction that occurs between most corporations today: there's a tremendous amount of paper that flows back and forth -- purchase orders, invoices, cheques, documents and contracts.
B2B commerce will slowly change that. The ubiquity of the Internet means that we have an opportunity to migrate this inter-organization paper-pushing over to the electronic world. This is done by linking the transaction systems that drive a business -- inventory, purchase order, accounts payable and receivable, project management, document database and others -- to a Web site. By doing so, the information within these systems is made available to your business associates, customers and trading partners. It lets them transact directly with your systems, with the benefit to both parties consisting of significant cost savings and efficiencies.
Yet it is a massively complex undertaking, and in effect, we need to bring back that "dirty word" used with abandon in the 1980s: re-engineering. After all, we are talking about large scale change to the procedures that companies have used to interact with the outside world for decades. That means B2B is a far larger process, and hence a far bigger opportunity, than anyone ever imagined.
Jim Carroll is co-author of Light Bulbs to Yottabits: How to Profit by Understanding the Internet of the Future, and can be reached by E-mail at jcarroll@jimcarroll.com