Edifecs Survey Reveals Bottleneck Constricting B2B E-Commerce Growth
Companies taking nearly 3.5 months
to complete even single process with
one online partner
BELLEVUE, WA (November 13, 2000) --
A new national e-commerce survey released
today by Edifecs (www.edifecs.com),
a provider of business-to-business
(B2B) technology solutions and services
driving the global adoption of e-commerce,
reveals critical barriers to realizing
optimistic industry forecasts for
overall B2B growth.
The study shows that the single biggest
bottleneck to widespread adoption
of B2B e-commerce is manual enablement,
or the process of preparing a company,
its internal systems, and its trading
partners to begin conducting transactions
over all of its trading networks.
The study, Solving the B2B
Ramp-up Challenge: Key to Realizing
Widespread B2B Adoption, based
on data from nearly 400 e-commerce
managers from a cross-section of companies,
discloses that it is taking an average
of three months to ramp up just one
electronic process with a single trading
partner. Companies queried have plans
to greatly expand their B2B initiatives,
but are currently able to transact
only a tiny percentage of their business
with a small percentage of their trading
partners.
B2B, by definition, is all
about communities, but trading communities
on the Internet, whether they're
part of an exchange or a private network,
are taking far too long to get off
the ground, said Edifecs CEO
Sunny Singh. For B2B communities
to prosper-to really attain
the kinds of benefits everyone is
talking about-they must comprise
hundreds or thousands of participants
actively collaborating with each other.
This is the scenario that
research firms and analysts have in
mind when they come up with their
B2B growth estimates. Unfortunately,
because the enablement challenge is
so stiff, there's a considerable
hill to climb before reality catches
up with projections, he said.
Little progress made:
The survey findings show that, regardless
of a company's size, experience
with B2B e-commerce, or trading-partner
base, equally little progress has
been made in moving beyond even a
small subset of possible functions
in the B2B arena:
· 56 percent of companies surveyed
currently conduct B2B operations with
less than one-fourth of their trading
partner base.
· 77 percent currently conduct
fewer than 15 processes electronically
with their partners.
· 45 percent exchange fewer
than 5,000 electronic transactions
a month.
Dramatic growth planned:
However, respondents expect this situation
to change dramatically in the coming
years:
Almost 50 percent expect to trade
electronically with more than three-fourths
of their partner base. Nearly 40 percent
plan to conduct more than 25 processes
electronically, and just over half
expect to execute more than 50,000
electronic transactions each month.
Solving the bottleneck:
The reality of these plans, the survey
discloses, will be compromised unless
companies can find a solution to automate
their enablement problem. Enablement
encompasses nine major steps that
must be completed before a company
can begin trading electronically.
These steps are grouped in three distinct
phases, each of which currently requires
a significant investment of time and
resources by trading partners:
· B2B Preparation is the groundwork
phase that must be done when a company
decides to embrace B2B. Encompassing
activities for defining the business
issues surrounding B2B, both internally
and with one's trading partners,
this phase takes an average of 188
person-days to complete, according
to survey participants.
· B2B Ramp-up consists of
five steps associated with establishing
an electronic-trading arrangement
for a single process with one trading
partner: defining the trading partner
agreement; setting up internal systems
for electronic trading; developing
the specifications that guide the
electronic communications between
the companies' systems; testing
the systems; and going live.
Survey participants said this phase,
which must be completed each time
a company sets up a new trading relationship,
takes an average of 95 person-days
to complete.
· Community Extension involves
adding new trading partners to an
established electronic-trading community
and analyzing its performance to continuously
improve its operations. Survey participants
reported this phase takes an average
of 132 days to complete.
Why XML can't help:
Many companies believe that eXtensible
Markup Language, or XML, is a panacea
for enablement. Indeed, 45 percent
of companies in the Edifecs survey
that are not currently engaging in
e-commerce believe XML can help them
in enablement, along with 40 percent
that currently are engaging in e-commerce
but haven't used XML.
Experience, however, reveals otherwise:
Of the companies in the survey that
have used XML, 51 percent said XML
either had no impact on their enablement
activities or actually made the process
more difficult. XML and the
Internet don't impact the overall
process of enablement – it's
still necessary to complete the same
steps of preparation, ramp-up, and
community extension, said Singh.
However, eventual widespread
adoption of XML will further increase
the need for automated enablement.
The study was conducted in September
2000 through extensive survey forms
and phone interviews.
Complementary copies of Solving
the B2B Ramp-up Challenge: Key to
Realizing Widespread B2B Adoption
can be downloaded at http://www.edifecs.com.
About Edifecs
Edifecs (www.edifecs.com) is dedicated
to expediting
business-to-business e-commerce through
two primary product lines: its CommerceDesk
partner-enablement system, designed
to automate and accelerate the deployment
of trading networks, and its Business
Collaboration Services, which optimize
value-net business models by providing
collaboration-modeling services to
supply-chain partnerships.
Founded in 1996, Edifecs serves an
installed base of more than 1,000
customers including Boeing, Microsoft,
IBM, Eastman Kodak and Dura Automotive.
The company partners with numerous
B2B providers such as GE Global eXchange
Services, iPlanet and Sterling Commerce,
and is a technology-solution partner
for more than 30 industry consortia
including RosettaNet, CompTIA, and
the Supply Chain Council. Based in
Bellevue, Washington, Edifecs is privately
held, with investment from GE Global
eXchange Services.
Contact:
Edifecs Public Relations
pr@edifecs.com
425-895-3020
Edifecs and CommerceDesk are registered
trademarks of Edifecs. All other company
and product names are the property
of their respective owners.
