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The Slow Uptake
 The
real B-to-B will happen only if traditional companies start using
the Net to procure and sell goods in a big way. Though this is still not
happening as anticipated, they are also slowly falling into line. Apart
from the traditional firms directly getting onto the Net, it is the
virtual exchanges and B-to-B enablers who are creating the hype. The
exchanges are trying to bring in vertical industries on to a single
platform to do transactions, while the enablers are busy educating the
firms about the potential of integrating their processes into the Net.
Says Ajila of indiamarkets.com, "The long-term potential for B-to-B
E-commerce in the country is tremendous, since it offers far more
efficient ways of storing and disseminating information for business use
and transaction fulfilment."
According to E.N. Venkat of IPFonline Ltd,
"Only 20 per cent of the Indian 318 corporations that were recently
surveyed were currently implementing E-commerce in their operations.
However, a total of 58 per cent of Indian CEOs rated E-commerce as crucial
to their growth strategy, anticipating that it would contribute over 17
per cent in annual yearly turnovers within the next five years, and enable
Indian organisations to access international markets."
Explaining the reasons for the slow uptake
of B-to-B market, Vidyadhar Sarfare, director and co-founder of
indiaengineering.com, says: "Our tele-density is still very low as
compared to the other countries. Moreover, private Internet service
providers have been allowed to operate in India only recently. The absence
(till very recently) of cyber laws and digital signature are the other
reasons leading to low adoption rate."
|
indiaengineering.com
On a High Gear |
| indiaengineering.com
is an E-marketplace for industrial products and services providing
end-to-end procurement and disposal solution for the industry.
Companies have posted hundreds of millions worth of procurement
requirements and auctions, which are fulfilled by the market making
team.
The portal offers
a real-time solution wherein MRO buyers can post RFQs to current and
new suppliers. Buyers can fulfil their sporadic requirements using
an extended, logic-based matchmaking proprietary software at any
point of time at less cost and reduce their lead time without piling
up their inventory. The site claims it has fulfilled transactions
worth Rs 80 crore through E-procurement (reverse auction) for major
industry houses like Bharat Forge, Tata Engineering, Atlas Copco,
Mico, Thermax and Kirloskar.
The first-ever
live and dynamic auction was successfully completed on the portal
last month. The auction was conducted for Bharat Forge Ltd for sale
of 184 tons of alloy steel and 9 tons of copper tubes. Multiple
bidders from across the country, who put up bidding deposits of Rs
50,000 each, successfully bid in the live auction to conclude the
transactions in real-time to the tune of Rs 35 lakh for two lots,
while the remaining two lots of Rs 30 lakh value are under
discussion between the buyer and seller. The auction has helped
Bharat Forge realise a higher price for its disposals using the
auction engine. Cashing in on the success of the auction, the site
has lined up auctions for several other firms in the near future.
These firms will use the site as a platform for online auctions of
materials valued at more than Rs 2 crore, claims
indiaengineering.com. |
Challenges on the Way
Says Sarfare, "A few years from now
one would refer to E-business as plain business. In order to deliver
products and services at competitive prices, organisations will be either
forced to adopt these technologies or exit. Big business entities have a
crucial role to play in the success of B-to-B E-commerce. They will be the
guiding and forcing factor for the SMEs (small and medium enterprises) to
take on to the Net. A good example is that of Cisco. It has mandated that
it will deal with its suppliers, dealers and partners only if they are
Web-enabled. Similarly, if all the other major Indian players make it
mandatory in their respective segments, then very soon the supply chain
will be E-driven and this will lead to the growth in the B-to-B market
segment."
The B-to-B E-commerce is happening only
through the exchanges at the moment. Individual companies-big names like
the Tatas through their myvaluechain.com-are trying to activate their
supply chain and do some transactions. But this seems to be very
negligible when compared to the total size of the market. And these major
corporations are not yet willing to join the exchanges, so the minimal
activity of B-to-B E-commerce is restricted to a few pockets only.
|
Site
Hosting
Choosing an
enabler |
| The
only accurate prediction that can be made about the future of
E-business is that it will change. As mergers and acquisitions
continue, and rapid consolidation becomes necessary, outsourcing
will become an increasingly popular way for companies to manage
their Web hosting. There are some minimum standards one should not
do without: A Web hosting infrastructure that offers security-rich,
reliable, scalable features open to new technologies; a network that
is global, fast and highly accessible; proactive and comprehensive
system management; focused, ongoing support; and a seamless
interface to additional services and support. Main features of
general hosting service models are:
Colocation:
It allows you to retain full management responsibility for
day-to-day hosting, while enjoying access to security-enhanced,
reliable data centres and high-bandwidth Internet connectivity. In
collocation, customers typically select and manage their own Web
servers, including the hardware and software costs; up-front
hardware investment; vendor provides 24x7 data centre with redundant
power and security management; vendor provides high-speed Internet
connection and services in an elemental fashion.
Managed
Web hosting: Managed hosting options supplement the basic
data centre space and bandwidth solutions offered by colocation
services, and are intended for customers that need additional
support in mana- gement and operations of their systems. You can
choose from outsourcing a few specialised tasks to shifting all of
your hosting responsibilities to an outside vendor.
Fully
managed hosting: For those companies seeking to outsource
their entire hosting requirements, a fully managed hosting solution
should include everything from firewalls and TCP wrappers to ethical
hacking and incident management.
End-to-end
E-business solutions: This category offers virtually
every advantage you need to support and extend your E-business
success. In an end-to-end business solution the vendor provides: Web
site design; E-business strategy and consulting; customer
intelligence, reporting; customised E-business applications; and
systems integration to the backend databases. |
For B-to-B E-business to catch on,
improvement in infrastructure, bandwidth and change in mindset is called
for. Unless these happen fast, B-to-B might die a premature death, feel
experts.
Venkat of IPFonline sums up succinctly,
"The Indian B-to-B segment is like a smouldering volcano in which
everyone is waiting around to see what will happen, with their fingers on
the 'fastest finger' button. Everyone seems to be waiting of the other
person to hit the button first."
With
Rahul Kumar in Delhi
|
"It'd
be a mistake to expect explosive growth" |
| India's premier
B-to-B infomediary-indiamarkets.com-has created a virtual
marketplace. It is an aggregation of 26 vertical supplier
communities representing over 135 diverse product categories. Rohan
Ajila, CEO, details the need for virtual exchanges.
 Why
is the B-to-B E-commerce not to the expectations generated by
various surveys and reports?
Goldman Sachs projects around Rs
7,000 crore of B-to-B E-commerce in India by 2003. Given the current
growth rates, this target appears realistic. Of course, it would be
a mistake to expect explosive growth.
The transition will be evolutionary
rather than revolutionary, since we are talking of a change in the
traditional mindset and business practices. However, we believe that
the economic benefits of online commerce and its cost saving
potential will result in its growing acceptance.
What is the quantity of
transactions done through your site? And how?
Our site has provided a platform for
the coming together of potential trading partners. So a transaction
is initiated, rather than completed on our site. We generate 150
product inquiries on a daily basis.
What roles do the Web exchanges
offer and why are they becoming prominent for the growth of B-to-B
E-commerce in India?
Very few companies actually have a
well-planned B-to-B strategy. They are making the mistake of
assuming that E-commerce is synonymous with having a Web site, which
is, of course, not true. In an economy like ours, only a few
individual companies would have the wherewithal to invest in B-to-B
infrastructure of their own, which is where E-marketplaces such as
indiamarkets.com come in. These E-marketplaces will provide the
platform for companies, however small, to become E-commerce-enabled.
Simultaneously, some of the large
firms will invest heavily in a B-to-B infrastructure to enhance
their process efficiencies. As a result, vendors and distributors
linked to these large organisations will also be forced into early
adoption of E-commerce. While large companies are definitely looking
at E-commerce probably with the top-down approach or an industry-
sponsored marketplace, they also have the hangover and large bills
on account of the ERP era. Hence some of them are cautious about
investing too much upfront, and this could prove advantageous for
neutral marketplace like ours. |
|
