In the emerging world of e-business the ability to plug in and link new business partners, suppliers, customers, employees and business processes will become increasingly critical to global competitiveness.
IT departments and data centre managers will experience severe pressure to extend the data centre domain to include server farms and security processes. Mainframe-centric IT departments may have particular problems, as tried and tested techniques that have worked successfully in centralised operations are not always appropriate in a distributed server environment.
Within the time frame of Vision 2010 it is expected that:
The advent of e-procurement and the wide range of e-commerce tools available have set a number of challenges to those organisations that, as members of government or public bodies, are subject to the regulation imposed by the EU Public Procurement Regulations.
The original regulations sought to ensure fair and equal treatment for all suppliers and potential suppliers when tendering for business to public bodies. This required all participants to adhere to strict procedures, each designed to ensure equal access to contracts for all potential suppliers, irrespective of nationality.
The emergence of e-procurement has had, and is likely to continue to have, major and profound effects on the speed of operation that business is required to offer. The legislative process has found it difficult to maintain momentum in modifications to the legislation. Consequently many of the activities such as auctions and other more innovative processes are so far not available to public bodies. As this monograph is written the EU legislators are considering how the process might be modified without any return to the restrictive practices that existed prior to the ratification of the Treaty of Rome. New and innovative processes will be approved. This is likely to have the effect of increasing their competitiveness, although without a completely robust approach and the adoption of modern technology it is unlikely that public bodies will enjoy the same level of freedom of choice open to those operating in the private sector.
UK companies are failing to adopt online billing, a technology that could streamline invoicing and settlement, largely because of the success of direct debit and BACS, low Internet usage and security concerns.
Electronic bill presentment and payment (EBPP) is expected to become a major element of e-business by 2005 [Ovum 2000] but even so, the UK is expected to lag behind the US, Germany and Japan.
E-marketplaces bring together multiple buyers and suppliers in trading communities. They will be key to the development of B2B e-commerce because they allow the real time exchange of information, goods and money.
Although there are many variations, two main types of e-marketplaces are evolving:
Market places provide single interfaces for both buyers and sellers to carry out business transactions without having to configure specific trading relationships or support data protocol interchanges. The protocols supported include:
The growth of e-marketplaces will inevitably attract the interest of regulators, as there are legitimate concerns as to how they are set up (especially verticals), who owns them, how they are run, and how they are funded.
SMEs will increasingly use e-marketplaces primarily to build purchasing leverage. Their support for 'many to many' trading relationships using open architectural standards forms a simple, cost-effective entry to e-business for even the smallest organisation.
E-procurement will become a key element in future business strategy and will have a profound impact on the structure and positioning of purchasing within the organisation. It provides a coherent approach to corporate procurement and a most effective tool for deploying best practice, resulting in:
E-procurement is divided into two main areas - 'buy-side' functions enabling existing processes to be more effective, and 'marketplace' functions enabling access to new suppliers and new methods of trading.
Most importantly, it releases buyers for more added value functions by enabling distributed direct ordering by user departments, from corporate contracts. The buyer is no longer the 'corporate policeman' but the relationship manager for those functions the organisation has chosen to obtain from outside.
As e-business matures, the future will be no less challenging than the past. Entering e-commerce is expensive and may lead to extensive business reorganisation, new collaborations with suppliers - and even with potential competitors. Future challenges will include emerging tax and legislative issues, catalogue and content management, web-hosting, outsourcing and the selection of ESPs, international standards, and the substantial risk of choosing the wrong option.
Major competitors are in talks to combine their e-trade directories E-Speak (HP) and UDDI (IBM, Microsoft ARIBA), and Microsoft has unveiled Microsoft.NET - its vision of realising the next generation Internet. To complete the picture, there is the possibility of integrating the Internet and Customer Relationship Management (e-CRM) that offers exciting (and frightening) possibilities for customer attraction and retention.
Despite the hype and the attraction of working in a highly innovative new medium, the reality remains that sustained success will be based on the traditional business values of integrity, reliability and exceptional customer service, not on the technology deployed.
Copyright Partnership Sourcing Ltd 2001. All rights reserved.