Rethinking B2B E-Marketplaces and Mobile Commerce: From Information to Execution

This article investigates the interface between the exchange relationship in the digital economy and the emerging and continuously improving wireless technology. Exchanges become highly relevant when we look at how collaborative processes are performed. A special emphasis is placed on enabling collaboration between multiple business partners. In most cases, companies require standardization of information flows and business processes to be able to collaborate. Here, trading platforms, private and public exchanges will play a much more important role due to their increased ease-of-use (as opposed to EDI for example). The key line of thought is that collaboration is essentially based on information sharing, information sharing enables exception management, exception management relies on near real-time data, and real-time data can be collected through wireless technologies. The key ideas of online marketplaces are discussed along with the evolution and future of exchanges in the digital economy, to help management rethink the exchange relationship in the digital economy. Introduction B2B is about connecting the existing buyer and sellers. It is not a disintermediation play. It is about intelligently implementing Internet technology to improve business processes. The online B2B market across the world is increasing in value rapidly, but there are some hurdles and limitations to be met in the near future. The report, from Strategy Analytics (an international research and consulting firm), notes that s global B2B e-commerce transactions will grow from $226 billion in 2001 to $2.02 trillion in 2006 [Bellomy 2002]. The B2B eCommerce revolution includes eProcurement, B2B exchanges, and business infrastructure relationships. eProcurement involves firms selling supplies, equipment, materials, and services with a streamlined online purchasing function that often eliminates traditional intermediaries, thereby reducing costs and cycle times while offering greater flexibility and responsiveness to changes in demand. Web-based supply chain management networks improve coordination between trading partners by linking a firm's forecasting and production planning systems with its suppliers' and distributors' systems. They can create dramatic savings and quality improvements. B2B exchanges include various categories of market spaces, including vertical market portals ("vortals"), hubs, and various types of auctions. A single Infomediary (industry consortium or 3rd party) brings together many buyers and sellers within a specific vertical market, such as plastics, steel, or industrial chemicals, charging a commission on all transactions. Hundreds of industry-specific exchanges have now been launched, and more are being developed every day. Some of these 'market spaces' operate with posted pricing models, while others employ collaborative negotiated prices, auctions, reverse auctions, Dutch auctions, and other pricing mechanisms. Many are used in spot markets for industrial materials, overstocks, and perishable goods, as well as business services transactions. More important is the development of entirely new eBusiness infrastructure industries. Many firms support online activity by facilitating the interaction between various parties in eCommerce as preferred outsourcers for eBusiness processes. They have become integral to the effective operation of Internet-based activities and may account for the largest source of profits from the future growth of eCommerce. They provide digital content or improve its delivery, bring new customers to websites, finance acquisitions, and provide many other services. They include application services providers, content maximizers, wireless service providers, and payment processors. The key questions addressed in this paper are: What does the exchange landscape look like in the digital economy and what can be inferred from the past to chart the direction and value proposition for the future? This Journal of Electronic Commerce Research, VOL. 3, NO. 2, 2002 Page 87 paper is structured as follows: Following this introduction, we will describe the characteristics and differentiators of online marketplaces followed by the evolution of e-marketplaces. In the next section we conduct an in-depth assessment of e-marketplaces and discuss event management and wireless-enabled exchanges. The concluding section tracks the transforming future of exchanges in the digital economy and provides a summary of the more general lessons, in terms of rethinking the exchange relationship in the digital economy. Online Marketplaces: Characteristics and Differentiators The possible forms of B2B marketplace are point-to-point connections (extranet), or e-marketplaces (Independent Trading Exchange (ITE)). As shown in figure 1, e-marketplaces can be either one-to-many or manyto-many environments. The key pricing mechanisms are fixed/static pricing (i.e., catalog-type/aggregator sales), and dynamic/variable pricing which includes both exchanges and auctions where price is negotiated in real time. An auction is one buyer and many sellers, or one seller and many buyers, whereas an exchange is many buyers and many sellers. However, caution is advised since almost everything is calling itself an exchange. Most are simply catalogs where buyers can search across multiple suppliers. Buyer Auction Exchange Seller Auction Traditional Electronic Relationship S M B