Rising to the challenge of meeting marketplace needs

Ian Leader, technology director at paper specialist PaperX.com, warns marketplaces are all different, have customers with...

Ian Leader, technology director at paper specialist PaperX.com, warns marketplaces are all different, have customers with different needs, and so need to offer a variety of services

E-marketplaces are different, both from traditional businesses and from each other. They offer new business models, have the capacity to transform industry structures, and are often very different in style and culture to the traditional industries they serve. As companies, they may be Internet pureplays funded by venture capitalists, industry initiatives launched by powerful consortiums of brick- and-mortar companies or spin-offs from single companies. They can be buyer-centric, seller- centric, neutral, or a combination of the three.

E-marketplaces are very varied, across and within industry verticals, yet almost all external parties from vendors to clients mistakenly regard all e-marketplaces as the same.

There is a belief among many technology vendors that they understand marketplaces. They may understand the technology and the common models, but they rarely understand a specific market - the industry in which business operates. This can lead to frustration, trying to explain their preconceptions are wrong. Many clients have also formed an impression of marketplaces based on B2C sites such as QXL or e-bay. They don't recognise, for example, that there are alternatives to auction-based systems and many ways of charging for services.

Leading e-marketplaces are listening to customers and developing new models to better meet client needs. The communication challenge is huge. Clients in many industries do not think at the pace of Internet development and overcoming this requires explanation. Conventional wisdom and analyst reports say that e-hubs will need e-services to survive. A formidable list of "standard" services is usually rolled out, starting with logistics and electronic payment, followed by credit insurance, financial services, paperless invoicing, training, e-mail, helpdesks, and sometimes e-marketing consultancy and implementation. The analysts are right - e-marketplaces must offerclients complete solutions, not just transaction platforms, but there is no standard e-service.

PaperX, for example, does not provide logistics or offer payments through its platform since many industry players already have extensive logistics networks in place. However, credit insurance has fairly low penetration because it has traditionally been done on an expensive portfolio basis. The e-marketplace offers the opportunity to re-invent credit insurance by offering it on a cost-effective, transaction-by-transaction basis. Such an innovation will add value to our marketplace, but may be completely inappropriate for other vertical markets.

E-services do not have to be icons on Web sites. Research shows that the service buyers and sellers really want is integration, both to us and to each other, so that's where we are focusing the technology effort.

Offering an e-service almost always involves partnerships. Building the offering with partners is not just a technology challenge. Partners, particularly in Europe, often haven't defined the service they will provide, and ask us what customers want. The customers have not yet fully grasped the potential of e-hub services and come back with helpful questions like, "What is available?" It is the e-market-maker in the middle trying to put the package together who often has to come up with the concepts.

The different e-business solutions and the move to offering application service provider-style services alongside the core e-marketplace simply adds to the complexity of the task facing the technology director. It is no longer a case of defining and building the technology. New demands mean interfacing extensively with clients, managing technology partnerships, and working closely with service providers.

The importance of communicating frequent developments in our product and service portfolio means taking a close interest in marketing.

The e-business world has to contend with a mountain of information and hidden somewhere is the valuable data to accurately guide the business and technology development speedily along the path to profitability.

What is it like to be a technology director in an e-marketplace today? You could say it never rains or pours, but it frequently floods. They are pulled in every direction. There are investors wanting to know how quick and how cheap solutions will be delivered. Then there are clients needing help analysing the potential of e-commerce, sales and marketing colleagues wanting input into myriad events and programmes, and vendors trying to keep us updated with their latest technology developments. In addition, there are partners struggling to define and build the services around the e-hub and the development team trying to keep up with the constantly changing priorities and technology.

The most pragmatic approach to the role is to focus on priorities and acknowledge that everything cannot be perfect first time round - but having a strong trustworthy team you can delegate to is essential.

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