E-Procurement Strategies

In the earlier days of B2B e-commerce, companies were happy to have the ability to go to their chosen suppliers' Web sites and place orders. These days, many large corporations are redefining their online procurement strategies and are expecting their suppliers to come to them. In our ongoing dialogue with large companies, Cognitiative, Inc. has found that the more advanced companies are beginning to create their own internal procurement sites -- sites which key suppliers will be required to continually feed with up-to-date, customized information. These data feeds must comply with the customer's unique format and content requirements and will typically be based on industry standards such as XML. Strategically, procurement departments are taking these steps to control maverick spending and to decrease the cost of doing business with key suppliers. Ultimately, suppliers who don't comply may be forced out of the procurement picture -- at least among companies who are taking this procurement direction.

To comprehend how this trend relates to your business, you should meet with your customers and discuss their e-procurement strategy. And do it soon. It will be important to develop a method by which you can address customers' unique requirements without having to treat each as a "one-off" project. It's better to get in front of this trend rather than react to it later.
--Laurie Windham, founder, CEO,
Cognitiative, Inc.
http://www.cognitiative.com

Application Integration
Application integration is probably the core enabler of e-business today. However, many practitioners and enterprises are inclined to view application integration in purely technical terms. This is a fundamental error. Application integration is as much a business as a technical issue, strategy, and subject.

Fundamentally, e-business is about encapsulating business functionality in software applications. But, as in real life, these software applications tend to be specialized. However, a business is a composite of many diverse functions orchestrated by management to work smoothly and, hopefully, seamlessly together to achieve the business purpose of the enterprise. Therefore, an e-business is fundamentally an integration of diverse and dispersed applications.

What to do? Application integration is the methodology and technology of tying all this specialized software functionality together into one seamless system. You want all the applications talking to each other and exchanging data and processes just as humans do when they are collaborating with their diverse and dispersed expertise, talents, and skills.

What's the business purpose? What's the business process connecting together all this disparate functionality? Think of the business first before you think of the middleware technology to connect all the application functionality together. You want your middleware to reflect your business purpose and process. Application integration supports enterprise integration, not the other way around.

You must very clearly understand the underlying business purpose behind, and the business process connecting,
all the applications you're trying to connect before you begin to select the middleware architecture and products you'll use. In other words, design application integration top-down rather than bottom-up.
--Joseph Edozien, Arthur Andersen
http://www.arthurandersen.com

Management Service Providers
Do you want regular statistics and reports analyzing your network performance, but don't want to invest in tools that will be out of date in six months? Do you have an internal network problem that hasn't been fixed due to resource and costing issues? Look no further than the new MSPs...
A new breed of outsourcer is emerging in the IT infrastructure industry -- Management Service Providers (MSPs).

MSPs like Lucent's NetworkCare Business Unit or iSharp manage internal infrastructure problems that occur in applications, networks, databases, systems and e-business architectures. They enable the IT staff to concentrate on more strategic tasks, leaving the MSP to help prevent downtime and improve overall performance. Another reason many companies are turning to MSPs is because they want frequent and detailed reports about their network's performance and don't want their IT support team's time to be taken up with such a necessary, but basic administrative task. The supplier community is so sure that this is a market opportunity that there is now an MSP Association (http://www.mspassociation.org), with some 18 corporate members. Time will tell whether this new outsourcing model will take off—the temptation to hand over the day-to-day running tasks could be just too big to resist for some IT managers.
--Nadia Khair, research analyst,
Ovum Ltd., http://www.ovum.com

Online Auctions
Auctions are only one of many services a marketplace offers. Auctions can be used to sell excess inventory, bring cost down for commodity goods, and explore new market opportunities.

If you're a supplier trying to find a market for your excess inventory, a marketplace could be your ticket. This type of marketplace is very focused and you don't need to invest on infrastructure to be able to use it; like many others, this marketplace is still in its infancy and in most cases, the order fulfillment is done offline. Most marketplaces still don't have deals with logistics providers, so you may have to use your own courier to ship your goods. Sellers have the choice of "English auctions" where the highest bidder wins and "Japanese auctions," where bidding starts low to attract bidders, then the price increases until the number of bidders is reduced to equal the quantity of goods being auctioned. An alternative is a "sealed bid" auction where bidders have a single opportunity to specify the price and quantity.

Buyer-driven or 'reverse' auctions should be used carefully; they can be a convenient way to sell excess inventory or perform price discovery in a new market. These auctions, in fact, let you "put your toes in the water" and do some market testing.

If you're a buyer looking for a very specific item or looking for a bargain price in a bulk deal, a marketplace can help you find it. Say, for example, you're looking for a red screwdriver and you can't source it in any traditional retailer. Niche marketplaces have arisen to meet this type of demand. If you're more interested in a bulk deal instead, you can start a reverse auction, where you ask sellers to bid for the lowest price. Unfortunately, this kind of buyers' heaven isn't likely to last, as there is a limit on how much you can push prices down.
--Paola Bassanese, analyst, Ovum
http://www.ovum.com

Biometrics
While there's been talk for years about biometrics becoming prevalent, it may finally be coming true. The biometrics industry -- whose devices use biological characteristics, like fingerprints and iris patterns, to verify a person's identity -- may finally have its finger on the market's pulse.

Price points of less than US$100 provide the potential of putting biometric readers in a variety of devices, from desktop PCs and laptops to cell phones. Acceptance will be pushed along by Microsoft's plans to integrate biometrics technology into upcoming versions of Windows.

As you develop Web sites, consider the role biometrics may play in securing the identity of the person at the other end of the line. Will this aid in reducing online fraud? The first step is to get agreement on standards and find ways to make the technology usable for the general public. Despite the fact that manufacturers like Dell, Compaq, Acer, and Motorola are either already producing biometric-enhanced products or are in the planning stages, the technology is still geared toward the enterprise user, not the Web surfer at home.

Being aware of the changes and developments in biometrics, particularly as this technology moves into the mainstream market, is essential if you want to take advantage of its advancements for your Web sites.
--Mark Evans,
Deloitte & Touche Technology & Communications Group
http://www.us.deloitte.com