PART II: E-commerce exchanges
In the late 1999/early 2000, after e-markets encountered
hurdles in gaining traction, the press and investment community refocused on
the emerging consortiums. Analysts and industry experts considered that these
consortia would be "the next big thing" in the B2B landscape. By 2000, private
exchanges overtook consortia in terms of favourable media coverage. Analysts
predicted exponential growth in transaction volume and dollars in current and
near-term investments.
Obviously, we cannot consider that e-commerce exchange is the
perfect solution or a total failure. It seems that the answer lies somewhere in
between and varies from company to company. However, we must keep in main that
e-commerce exchanges offers a wide range of benefits such as streamlining of
the supply chain process, time and costs reduction or new customer
acquisition.
The e-commerce exchanges models have to face various
challenges. As a matter of fact, they have to meet high expectations related to
tight budgets and times frames for demonstrating the return on investment.
Firstly, these exchanges are must be built out on new and fast valuable
technologies. Secondly, in order to leverage the exchange technology, key
members must change the way they do business.
It seems that the best collaborative exchanges are the ones,
which are based on sustainable models. However, financial independency from the
founders can only be gained through the continued support of key members
organizations.
1. The three e-commerce exchange models
1.1 Public e-marketplaces
Often funded by venture capitalist, Public e-market places
are independently owned and develop on-line marketplaces. These neutral
e-marketplaces focus on price discovery and clearing. By listing supply and
demand for specific products and services, they try to create a transparent
market. In addition, the quick identification of trading partners and market
pricing help to reduce the cost of purchasing information gathering. 70 percent
of public e-marketplaces have either ceased operations or modified their
business model.
1.2 Industry-sponsored marketplaces or
consortia
Consortia are jointly developed and owned by several industry
suppliers. The functionalities vary from a broad to a narrow scope. For
instance, it can include supply chain forecasting and replenishment for most
purchases or only product development for a single subsystem. It can also deals
with industry standards. Examples: Covisint for the automotive industry and
Exostar for the aerospace industry;
1.3 Private exchanges (PTXs)
Private exchanges are owned by only one industry player. It
is often used to manage, monitor and therefore optimize value chain processes.
Unlike consortia, in order to participate, PTXs require partners to adapt to or
integrate with the owner's technical applications and/or data management
standards(e.g: Boeing, DaimlerChrysler)
Sixty-five consortia have been formed since January 2000. Of
the 65 consortia that have been formed, 7 have already shut down and 14 have
merged or been acquired. However, the leading players in the consortia space
are gaining traction. Their progress can be measured in terms of infrastructure
development or degree and satisfaction of use. The capital invested, the
employees hired, and functionality developed and brought on-line help to
measure the infrastructure development. The equity members and non-equity
members attraction, the transaction volume, and the use of the applications
also helps to evaluate the success of the consortia. These metrics show the
quantifiable evidence of consortia traction.
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