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Business/Technology
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Optical Networks I
 
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Role of Internet in
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Technology and
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Security & Trust in
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 Telecom & software
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China & India - major
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Pakistan - IT Markets
 
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Business to Business [ B2B] - Software Applications

by


Salman Minhas
 

First published December 2000
Copyright the-south-asian.com

 

The Internet spawns the possibilities of a new wave of business automation with significant cost savings and efficiencies. This "killer application" is of the scale that Peter Drucker [ the management guru ] mentions societies adopting when a productivity gain of 10 times is possible.

 

The " Killer Application" combines Business -to- Business [ B2B] economies of scale in a combination of the following business functions automation - Electronic Sales & Procurement of supplies for a Business. The functions that are automated are Order Placement, Shipping, Credit History, Online Billing, Settlement, and Collections. XML is used to transfer information in the forms for each of the functions from the buyer to the sellers accounting & information systems.

The large Fortune 200 are in the first wave of such automation and industry leaders [Microsoft, IBM, Oracle, Texas Instruments, Cisco, AMD, Dell, etc] have already adopted the automation and the subsequent benefits from putting electronic catalogs of their sales and their supplies. According to Forrester Research by mid- 2000 only 250 companies had Electronic - Procurement systems in place. About 85 % of US Companies have no E-Procurement systems in place. Oracle has reportedly saved about $ 2 billion, CISCO and Dell also report phenomenal numbers of increased sales and savings.

In the second phase U.S. Military Forces, Government department [ General Services & Administration -GSA, and the small to medium sized businesses will adopt Electronic Procurement systems.

Hotel/ Hospitality Industry The hotel/motel industry is procurement heavy. The average cost of soap, toiletries, in-room coffee, mints, is $15-20. There are 4 million hotel /motel rooms in the U.S.A. The cost savings in automating this e-procurement are substantial.

VISA implemented an ARIBA " Strategic Hub for Operational Processes and Purchasing" or SHOPP an automated purchasing system & process. About 2000 employees from VISA use this Online catalog [ with system controls and spending limits defined for each employee ]. The benefits were as follows :

Purchase Order [P.O.] got out in 30 minutes. [ 3 days in the manual system ]

Cost of P.O. processing was reduced from $ 100 to $ 30.

Time to request & receive was shortened from 7 days to 2 days.

 

British Telecom reported 90% reduction in administrative cost after an E-Procurement solution was implemented using "Commerce One" software.

BSNF railroad [ Burlington Nortern Santa Fe Corporation with Headquarters in Fort Worth, Texas has a total revenue of $ 9 billion and expenses of $ 5 billion. It has 45,000 employees, 5,000 locomotives, and 90,000 freight cars. The existing purchasing system " Millennium" is an EDI based Dun & Bradstreet software. After due diligence BSNF selected "Clarus Corporation" open architecture. The return on investment is reportedly in the 3-digit range.

Other Users:

Some well known names of Companies providing B2B [ especially supply chain management ] solutions are Commerce One, Ariba, I2, IBM, Web Methods, "H.SUPPLY.COM", "WORKS.COM". For electronic Billing in the banking industry "Derivion" which processes annually some 200 million bills including Mastercard and First Union bills, is used by ABN Amro Bank for its bill processing and settlement automation.

Citibank has started using "Web Methods" which is an industry leader in B2B solutions.

Web Methods is the industry leader with clients such as Cisco, Sun Microsystems, Siemens, Motorola, Mitsubishi, Fujitsu, Compaq, Dell, HSBC, Fidelity Investments, ABN Amro, Boeing, Oracle, Ericsson, Cable & Wireless, Ascend, US Air Force, Army, DOD, US GSA, US DOT, etc.

"Billing Zone" is another industry leading product currently in use at ABN Amro.

The facility for electronic signatures which are legal has also come into force in the U.S. through a federal E-SIGN act effective Oct1, 2000.

Some web sites for Buyer/Seller transactions in Electronics are

< www.TheSupply.com> - net market for global semiconductor industry.

< www.Avnet.com > - largest distributor of semiconductors.

< www.fastparts.com> - first B2B [ 1991] net market place for buyers, sellers.

If you type the country name and B2B into the Alta vista search engine, an impressive number of sites are returned in the case of India. Some of the sites that appear promising are

< www.steelexchangeindia.com> mostly steel related vertical site.

< www.india-super-mart.com > commodities related site e.g. spices, etc.

South Asia the B2B market Gap & Opportunity.

There were no Pakistan, Sri Lanka, Nepal or Bangladesh B2B sites in the AltaVista search engine. This reflects an untapped market niche for entrepreneurs wishing to invest and develop trade and business in such a promising area.

For the South Asian countries the respective areas that are of immediate benefit would be for their export industries to be put on web sites. Software packages such as Interwoven or Documentum can be used to manage content. Industry Catalogs and marketing brochures and automated Email can be rapidly developed.

The countries light and heavy industries, textile, knitwear, sports goods, crafts, agricultural commodities such as rice, tea, etc can be increased in their trade export volumes tremendously.

 *****

 

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