Farmers hope to reap benefits of B2B trade

The first online trading hub for the UK farming community, which went live last week, has been heralded by analysts as the...

The first online trading hub for the UK farming community, which went live last week, has been heralded by analysts as the beginning of a new era for business-to-business (B2B) e-marketplaces.

Analyst group Gartner said the First 4 Farming Hub (F4F), which will include more than 50% (by volume) of the UK's agricultural suppliers, differs significantly from early e-marketplaces, many of which failed or have had to scale down their operations.

Investment from financial institutions into the farming hub also marks a break from previous B2B marketplaces, which often struggled to gain mass appeal, Gartner said.

"The way F4F has been funded and developed breaks new ground and points to the dawn of a new era for B2B e-marketplaces," said Andy Kyte, an e-commerce analyst at Gartner.

"F4F's initial users are among the financial investors, along with a number of banks," he added. "Because it involves consortia of diverse businesses, F4F has firmer financial and technology bases than many of the e-marketplaces that started in 2000."

Phase one of F4F, which was developed by a technology consortium headed by Progress Software, will enable the farming community to exchange electronic documents, such as orders, invoices and credit notes. Phase two, due to launch before the 2002 harvest, will provide an industry portal for farmers to find information and to trade with suppliers via a browser or e-mail.

Nick Evans, managing director of F4F, is confident the new e-marketplace has the momentum to succeed. "F4F has secured financial and trading commitment from some of the largest players in the agricultural industry, thereby ensuring critical mass and sustainability for a minimum five-year period," he said.

Kyte said F4F seems to have learned from the mistakes of the early B2B e-marketplaces, such as Covisint. The B2B exchange for the automobile industry is funded purely by auto manufacturers, which, he suggested, narrows its appeal to a specific sector.

In addition, Kyte said, F4F does not rely on one software supplier for most of the technology requirements - something that has not proved feasible in the past.

"F4F will likely have a more realistic and informed business plan than the overly-optimistic plans of 2000 and therefore has a better chance of succeeding," Kyte concluded.

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