Online hope for SMEs



Steve Weller

Soapbox

Not so long ago, e-business commentators were suggesting that the future was bright for any company that joined...



Steve Weller

Soapbox

Not so long ago, e-business commentators were suggesting that the future was bright for any company that joined the "Net revolution". Yet, of late, industry observers have suggested that multinationals will still be dominant over small to medium enterprises (SMEs) in the online world, using business-to-business (B2B) Internet exchanges to force SMEs' prices down and to reduce their margins.

However, there's no need to be quite so pessimistic. While the e-procurement industry is in its infancy, the take up of trading via online exchanges is expected to rise substantially. And for those SMEs that choose to participate, this will mean access to markets that may currently be unavailableto them.

If you cut through the fog that surrounds e-procurement, the benefits for SMEs are clearly visible. The chance to sell their products and services by bidding on an open B2B exchange system will give them access to larger markets. For example, a small manufacturing company trading in Stockport may actually be able to supply a vital part to Volkswagen faster or cheaper than its usual supplier in Germany. Before Internet exchanges, the chances of such a business relationship being forged would have been very slim.

Many SMEs that have made the move to trading over the Internet have found that while the margin of sales may be lower, the volume of sales is higher - and when the reduced operating costs of online trading are factored in, SMEs can expect to significantly increase their profits.

There is no denying that e-procurement is set to soar, and as more industries turn to online exchanges to carry out their business, it will become necessary for SMEs to join them.

Steve Weller is director of marketing for CGR Solutions

Read more on IT for small and medium-sized enterprises (SME)

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