Vendors Wake Up to the Complexity of B2B Commerce in e-Marketplaces

Much of the recent excitement in the B2B commerce space has been around e-Marketplaces and has focused on “dynamic pricing” or “matching” solutions

such as auctions, reverse auctions, and exchanges. These solutions have been used generally in marketplaces that deal with indirect or commodity

goods. However, the move is on to build e-Marketplaces, both at the industry sector and niche level, that will facilitate strategic sourcing

(i.e., for strategic production goods). Hurwitz Group believes that the same solutions that have fueled the growth of some of the e-Marketplaces

may not necessarily be effective when goods are either highly customized, costly, or complex, which is the case with many strategic goods.

Over the last few months, there have been a number of announcements from software companies seeking to address the complexities inherent in the

process of buying or selling complex, costly, or customized product via the e-Marketplace model. Two examples include:

Cambridge, Massachusetts-based TradeAccess Inc. The TradeAccess EcommBuilder(tm) negotiation platform provides a solution, targeted at

e-Market makers and companies, that enables some automation of B2B buying and selling. The solution includes features such as:

• Price list management
• International trade payment methods
• Online RFQ/RFP creation
• Sample ordering
• Online Bill-of-Materials and Master Purchase Agreement creation

Burlington, Massachusetts-based Emptoris, Inc. The Emptoris ePass(tm) solution provides strategic sourcing and RFQ management solutions for

e-Market makers and the global 2000. The solutions includes features such as:

• Complex RFP construction and handling, utilizing intelligent workflow and complex business rules
• The ability to bundle products/services
• Advanced decision-support capabilities built around an optimization engine

THE HURWITZ TAKE

The current e-Marketplace model has been implemented primarily for certain types of goods and services including indirect goods

and some commodities. However, these dynamic pricing/matching systems really just involve bringing two parties together around two variables:

price and availability. B2B trade around goods that are either very costly, highly customized, or complex i.e., the characteristics of many

strategic production goods usually requires an iterative/interactive contract negotiation process that culminates in a legally binding

agreement. Hurwitz Group believes that many of the solutions out there today cannot effectively address the complexity of how strategic goods are

bought and sold. Although B2B e-Commerce can never be totally automated, companies like TradeAccess and Emptoris are taking a step toward

implementing functionality that can help streamline pieces of this process.

© 2000 Hurwitz Group, Inc. All rights reserved.

The Hurwitz Group Inc. can be reached at 508-872-3344

or Hurwitz Group, Inc.