E-marketplaces: a leap into the unknown

E-marketplaces continue to take off, but some companies still don't understand what they've signed up for and others think they...

E-marketplaces continue to take off, but some companies still don't understand what they've signed up for and others think they know but can't grasp the details

David Bicknell

e-business

A pair of Swedish truckers were the toast of the world's fledgling e-marketplaces last week, after the Wall Street Journal reported their business-to-business and wireless Web portal.

The site, Delego.com, offers shippers a 40% discount on deliveries, by electronically re-routing trucks with unused capacity to do extra work. Delego has gone live in Sweden and is likely to be rolled out across Europe within 12 months.

The concept makes sense. Cargo traffic in Europe is racing along at 3% growth a year, and at any one time an estimated 30% of all trucks on roads are empty.

It is the same story in the airline business. Already there are plans to create a spare-parts marketplace that the world's airlines can use when they urgently need maintenance. If a British Airways plane needs a key part while sitting on the tarmac in San Francisco, and United Airlines has plenty of those parts available for its own fleet, it makes sense for the two of them to trade.

No, there's nothing wrong with marketplaces - except that in many cases companies have signed up for them, without having a clue what they're going to use them for and, critically, how the marketplaces are going to function. It is a long way from a glossy announcement of a string of airlines or retailers linking up - with delivery in six months' time (funny how it's always "just" six months).

But, as companies evaluate what their business models really are, what their customers want, and the effect on their supply chains, some may be deciding that they have "married in haste".

Faced with e-business and IT strategists struggling to get on top of an unproved concept, it is hardly surprising that some companies are wondering what they might have got themselves into.

Even for General Motors, Ford and Daimler-Chrysler, two months after announcing their grand plans for an auto-exchange which will buy and sell components on the Web, there is a mystifying lack of detail about how it will operate. There is plenty of hype, but no specifics - and no name either. You'd think they might have got round to sorting that bit out.

What will probably emerge is that, faced with a business model that doesn't reflect the enthusiasm with which they once signed up, some companies will only pay lip-service to how the exchanges operate. They will be members in name only. That could mean that exchange providers seek to ensure that those who put most equity in get most out.

The confusion as companies wrestle with exchanges can only mean a beanfeast for consultants.

If you thought SAP R/3 implementation was bad - and for many companies it was costly, even if there have been success stories - try implementing SAP R/3 again at Web speed. Instead of three years let's go for six months, and let's do it in an area no-one understands, like e-marketplaces.

At the Planet event in Vienna, organised by e-marketplace software company i2, the inevitable corporate video was followed by many words from our sponsors in the form of more corporate film-making which, by the way, you will be paying for as teams of consultants invade your offices.

With enterprise resource planning (ERP) installations consultants went to school on users' systems. It might be an idea to ensure that you're not the guinea pig for e-marketplaces. Let it be some other mug - keep control!

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