Business to Business
Exchanges
Jenny Arnold
Supree Mongrolcheep
Matthew Sheets
Melissa Sherer
1
B2B Exchanges

Overview

Case Studies

Conclusion
2
What are B2B exchanges?


B2B exchanges offer digital transaction
services that heighten eBusiness
performance making it safer and more
secure.
The B2B market is composed of websites
were buyers and sellers come together
vertically and horizontally to communicate,
bid, advertise, transact, and procure.
Source:, www.techechange.com/thelibrary /b2bterminology.html, Viewed February 24, 2004.
Source: “An outlook on B2B Commerce”, www.weforum.org, Viewed March 11, 2004
3
B2B Definition




Suppliers
Manufacturers
Wholesalers
Selling to intermediaries rather than
directly to the end customer
Fewer customers
Smaller product ranges
Source: Friesen, G. Bruce, “From B2B to …?” Consulting to Management,Vol. 14, 4, 2003,
pp.27-33.
Source: Angel, Robert, “A new dawn for CRM: This time it’s B2B” Ivey Business Journal Online,
Jul/Aug 2003, pp. 1.
4
B2B’s are the LARGEST
markets known to business!
GDP was $10,480,800,000 in 2002
B2B spending in 2004 estimated to be:
$7,297,300,000
Source: www.cba.hawaii.edu/aspy/aspymkfa.htm, viewed March 11, 2004
Source: http://encarta.msn.com, viewed April 4, 2004
5
B2B e-Commerce Spending
$8,000
$7,000
E-exchange
All other
Total e-commerce
$6,000
$5,000
Value
(billions)
$4,000
$3,000
$2,000
02
20
00
20
99
19
98
19
e
erc
er
m
om
oth
e
l
c
l
ng
e
A
tal
cha
o
x
T
E-e
01
20
$0
04
20
03
20
$1,000
Year
GartnerGroup
Source: www.cba.hawaii.edu/aspy/aspymkfa.htm, viewed March 11, 2004
6
US Annual B2B Sales Projections by Medium,
2000 vs. 2005
$600
$500
Value
(billions)
$400
2000
$300
2005
$200
$100
In
te
rn
et
Ra
di
o
M
ag
az
in
e
Te
le
vi
sio
Ne
n
ws
pa
pe
r
Di
re
ct
M
ai
Te
l
le
ph
on
e
$0
Medium
DRI-WEFA
Source: www.cba.hawaii.edu/aspy/aspymkfa.htm, viewed March 11, 2004
7
Why is B2B bigger?



The value of B2B transactions are bigger
since the goods and services in the making
pass through a lot of hands before they reach
an end consumer.
Big transaction value however does not
always make a difference in the bottom line.
B2B derived efficiencies will be competed
away by companies whose products and
services are uninspired and undifferentiated.
Source: Rodriquez, Edel, “Special Report: Is This All You Can Build with the Net? Think Bigger Enough of this
B2B talk. Use the Net to construct a unique company. How? Ask your customers.” Fortune Magazine,
8
April 17, 2001
B2B versus B2C
B2B a bonanza B2C a bust


B2B startup goals included taking slack
out of the supply chain rather than
stealing customers . Of money poured
into e-business efforts 80% goes to
B2B.
B2C startups lacked good business
models, and often do not receive the
money that B2B exchanges received.
Source: Rodriquez, Edel, “Special Report: Is This All You Can Build with the Net? Think Bigger Enough of this
B2B talk. Use the Net to construct a unique company. How? Ask your customers.” Fortune Magazine,
9
April 17, 2001
Basic B2B information




B2B exchanges may act as a virtual marketplace that
are free of geographic limits.
Certain exchanges allow businesses to find particular
products or suppliers and agree on terms of
transactions online.
Many others allow complete transactions to take
place online. Either way it is easier for buyers or
sellers worldwide to come together on the web.
B2B exchanges make money through charging a
transaction fee (approximately 4%) to buyers and
suppliers.
Source: Campanelli, Melissa, “Trading Places. (business to business exchages)” Entrepreneur. November
2000
10
Types of B2B exchanges

Horizontal B2B marketplaces are for

Vertical marketplaces are used to trade

supplies common to many industries: e.g.
computers or work clothes.
supplies, such as petroleum or agriculture,
that are peculiar to a specific industry.
Source: “B2B for beginners-Definitions and Applications” www.gcis.ca/B2B_beginners.html, Viewed February 29,
2004
11
B2B Benefits

When done correctly….




Cuts transaction costs
Large opportunity for transformation because of
scale and scope
Buyers are able to reduce purchasing costs due to
automation of paperwork.
Online exchanges also introduce buyers to
suppliers that they wouldn’t have traditionally met
from traditional channels.
Source: Friesen, G. Bruce, “From B2B to …?” Consulting to Management,Vol. 14, 4, 2003, pp.27-33.
Source: Campanelli, Melissa, “Trading Places. (business to business exchages)” Entrepreneur. November 2000
12
Benefits of B2B exchanges

Benefits to Buyers
If a customer wants rock
bottom prices he is likely to
prefer a B2B market place,
if he wants a close
relationship with a supplier
because his orders are
large and critical to his core
operations he may prefer
bilateral e-trade


Benefits to Sellers
Gives sellers an
opportunity to retain some
control over their sales
channels while minimizing
service costs
They can take over part of
the value added
processing e.g.
customizing products
Source: Practical guide to selling efficiently on any B2B exchange: www.gcis.ca/B2B _sellers_guide.html
13
Analyzing the B2B Market

3 Elements



Mechanism (info-structure) to support data
exchange
Set of Marketing Processes
Set of institutions to perform these market
processes
Source: Friesen, G. Bruce, “From B2B to …?” Consulting to Management,Vol. 14, 4, 2003,
pp.27-33.
14
Analyzing the B2B Market

Info-structure



Without information and the systems to
gather, store, and redistribute, markets can
not operate
MORE efficient the structure the MORE
efficient the market
Broken down into physical infrastructure
and intangible data
Source: Friesen, G. Bruce, “From B2B to …?” Consulting to Management,Vol. 14, 4, 2003, pp.27-33.
15
Analyzing the B2B Market

Market Processes
Trade versus Context
Trade: activities that buyers and sellers must
undertake to exchange a good or service


Includes: search, authentication, pricing, payment, and
logistics
Context: activities that support the trade process or
make them run more efficiently

Includes: representation, regulation, influence, dispute
resolution, and risk management
Source: Friesen, G. Bruce, “From B2B to …?” Consulting to Management,Vol. 14, 4, 2003, pp.27-33.
16
Analyzing the B2B Market
Institutions:


“ecosystem”

3 Groups
1.
2.
3.
Principals (buyers or sellers) Goods and Services to
exchange
Agents (brokers or traders) Represent principals in
one or more of the market processes
Supporting Cast Members (Bankers, Insurers,
Shippers, etc) Provide highly specialized context
processes to the market
Source: Friesen, G. Bruce, “From B2B to …?” Consulting to Management,Vol. 14, 4, 2003, pp.27-33.
17
Analyzing the B2B Market

Final Thoughts



More than a basic technology platform or
well organized economic process
Web of personal and institutional
relationships
An inefficient market is not uniformly
inefficient….a combination of elements
could be inefficient
Source: Friesen, G. Bruce, “From B2B to …?” Consulting to Management,Vol. 14, 4, 2003, pp.27-33.
18
The Future of B2B exchanges


In 2000, it was estimated that more than half
of B2B trade would take place through
eBusiness networks or eMarketplaces in 2003
In 2000, B2B exchanges were thought to be
growing markets, however there were some
doubts about the future. It was estimated
that market size would be $1.5 trillion in
2004. (five to ten times larger than
estimated B2C markets)
Source: B2B terminology: www.techexchage.com/the library/b2bterminologry.html
Outlook on B2B commerce: www.weforum.org
19
B2B Numbers decrease

2001-1,520 B2B
exchanges
(markets)

2003-180 will be
active (markets)
8.5% survival rate
Source: Friesen, G. Bruce, “From B2B to …?” Consulting to Management,Vol. 14, 4, 2003, pp.27-33.
20
Why are B2B exchanges
struggling?







People are creatures of habit
Money does not ensure success
Prioritizing new features is not easy
Launching at the right time is tricky
Security is critical
Tools for viewing and collaboration are
essential
Movement is toward private exchanges
Source: Wohlers, Terry, “E-Commerce: The Challenges of Creating a B2B exchange” Rapid
Prototyping Journal, Vol. 7,2, 2001, pp. 122.
21
Evaluating B2B Best Practices






Products exchanged – specific or general?
Structure of Exchange – public or private?
Proposed Benefit - Buyer or Seller?
Value-added services - what are current
offerings and future roll-out plans?
How does the exchange derive a profit –
annual fees or transaction commissions?
What role do the members play in the
management of the exchange?
22
Case Studies
World Wide Retail Exchange
Covisint
Steelscreen.com
23
World Wide Retail Exchange
Premier Internet-based B2B
exchange in the retail emarketplace
24
History of the WWRE


The company was founded in March
2000 by 17 international retailers.
The goal was to enable retailers and
manufacturers to eliminate the
inefficiencies of the supply chain by
simplifying, rationalizing, and
automating supply chain processes.
Source: www.wwre.com, viewed March 28, 2004
25
Founding Partners


The founding partners included Albertson's (US), Auchan (France),
Casino (France), CVS (US), Kingfisher (UK), K-Mart (US), Marks
Spencer (UK), Royal Ahold (The Netherlands), Target (US), Tesco
(UK) and Safeway Inc. (US).
At the time, the group operated over 30,000 stores with combined
sales of over $300 Billion.
Source: www.wwre.com, viewed March 28, 2004
26
Founding Principles
The following six principles guide the WWRE's
development and growth:
 Openness
 Commitment to utilizing the best available technology
 Focus on improving efficiency and lowering costs for
the retail industry
 Operation as a neutral company
 Equivalent fee structures for all participants
 Confidentiality of transaction information
Source: www.wwre.com, viewed March 28, 2004
27
Users of the WWRE

Retailers and manufacturers can substantially reduce
costs across product development, e-Procurement,
and supply chain processes in the following
industries:
 Food
 General merchandise
 Textile/home
 Drugstores
Source: www.wwre.com, viewed March 28, 2004
28
Value to Customers/Suppliers







Low-cost product offerings that are robust, scaleable,
integrated, and fully supported
Shared technology investments and outsourced
assets
Ability to access a global membership community and
network with other retailers/manufacturers
Value-added services from a trusted source, at
competitive costs
Participation in collaborative activities
Complex transactions and interactions made easy
through automation
Standard setting benefits for all B2B activities
29
Strength of Membership




Today there are 62 members.
Members have stores in over 130 countries.
$900 Billion in annual sales.
5,000,000 employees.
WWRE has saved over $1 Billion so far!
30
Additional Members
31
WWRE Alliance Partners

As part of its mission, the WWRE seeks to broaden
the suite of offerings to members, thus enhancing
the value of the Exchange. Through the creation of
alliances and partnerships with best-of-breed
providers, innovative services can be introduced to
WWRE members. These offerings also complement
those solutions hosted by the WWRE.
32
WWRE Technology Partners


WWRE teams with providers of technology solutions that
help enable the Exchange to deliver various software,
hardware, connectivity and services to members.
Collectively, these providers work with the Exchange to
bring our members and their trading partners the various
Sourcing and Procurement and Supply Chain
Collaboration solutions and services that the Exchange
offers. WWRE Technology Providers currently power the
underlying application software, systems integration,
customer service helpdesk, application hosting and
integration components.
33
Major Products and Services
of the Exchange

Surplus Goods Exchange (SGE)

Perishable Goods Exchange

Demand Aggregation

Asset Manager
34
Surplus Goods Exchange (SGE)
35
Visagent Marketplace
36
Visagent Trade Screen
37
Why use the SGE?






Sellers do not pay a fee to use the SGE
Buyers pay a small fee, plus transportation
WWRE Buyers: 2.5% + transportation
Other Buyers: 3.5% + transportation
SGE is up to 70-80% less expensive than
other alternatives (like liquidation)
Trading occurs directly between retailers and
suppliers – no intermediaries
Source: www.wwre.com, viewed March 28, 2004
38
Perishable Goods Procurement
39
Problems in Fresh Foods



Grocers spend over 70 cents of every sales
dollar procuring, transporting and
warehousing the products they buy.
Grocers continue to rely on paper, fax, and
phone to manage key business processes.
Studies show a huge percentage of the data
in retail catalogues is wrong and invoices
contain errors.
Source: www.wwre.com, viewed March 28, 2004
40
Agribuys Solution Suite



Order Link – allows a retailer to aggregate demand
information, thus enabling a central buyer to perform
buying activities.
Delivery Link – allows a user to track the product
from the supplier to the receiving warehouse or
store.
Logistics Link – allows a user to take the purchase
order information and build a truckload of compatible
product.
Source: www.wwre.com, viewed March 28, 2004
41
Demand Aggregation
42
Features of Demand Aggregation

Prior to Auction, demand can be aggregated internally and
externally.

Templates can be set up to manage information across divisions
for budgeting.

Suppliers can post production schedules to allow buyers to
group their orders around predefined shipping dates.

Capture and analyze spending patterns.
Price Curves are controlled by the Supplier!
Source: www.wwre.com, viewed March 28, 2004
43
WWRE Order Execution Process
44
Asset Manager
45
Benefits of Asset Manager



Allows for the storage of digital assets in one
location
Efficiently share products, photo images, text,
multimedia, audio and video with business
partners.
Improve communications and response time
for new products with suppliers.
Source: www.wwre.com, viewed March 28, 2004
46
World Wide Retail Exchange
World Wide Retail Exchange
Industry
Products Exchanged
Retail, Food, Healthcare
Mostly General
Private or Public
Private
Proposed Benefit
Buyer & Seller
Value-added Services
Profit Sources
Member’s Role in Management
of the exchange
Asset Management & Demand
Aggregation
Fees and Commissions
Equity Stakes and Governing Board
47
Covisint
The world’s largest B2B exchange
48
What is Covisint


A technology services company whose business to
business applications and communication services
connect the automotive industry. They provide a
common connection to suppliers and customers
based on common business processes.
Covisint enables customers to reduce costs, increase
efficiency, enhance quality, and improve time to
market.
Source: www.covisint.com, Viewed February 26, 2004
49
History of Covisint


Covisint was formed in February 2000 when
Daimler Chrysler, Ford Motor Company, and
General Motors combined efforts to form a
single business-to-business supplier
exchange.
Covisint officially began providing services in
the U.S. on January 1, 2001
Source: www.covisint.com, Viewed February 26, 2004
50
Size of Covisint


Covisint does not have to publicly reveal it’s
financial results since it is owned by the
automakers
As of February 2004:



25,000 registered customer organizations
135,000 active users
Provided services in 96 countries
Source:Butters, Jamie and Jeff Bennett, “Covisint Hits rough patch as business falling flat” December 9,
2002 www.auto.com, viewed March 28, 2004
Source: www.covisint.com, viewed March 28, 2004
51
About Covisint


Covisint is an internet auction site for
auto parts and other supplies.
Plan included making it quicker and
easier for car companies to explain
exactly what they want to buy, gather
bids from suppliers around the world,
and close the best possible deal
Source: Butters, Jamie and Bennett, Jeff, “Covisint hits rough patch as business falling flat”,
December 9, 2002 www.auto.com, viewed March 28, 2004
52
Why is Covisint necessary?


Automotive industry supply chain is
disconnected and flow of information is
constricted.
Information gaps exist between the
value chain resulting in expensive
inefficiencies and unsatisfied customers.
53
Covisint Solution



Covisint Communicate: provides supplier
personnel with access to information they
need to work with the host
Covisint Connect: used to exchange data
between current enterprise applications and
it’s suppliers’ applications.
Covisint Collaborate: Covisint help desk
assistance.
Source: www.covisint.com, Viewed February 26, 2004
54
Covisint Communicate


Allows for industry participants to
access buyer and supplier applications
through one common infrastructure.
Enables companies to achieve a robust
presence by becoming a Trading
Partner, which allows them to better
communicate with their supply chain
Source: www.covisint.com, viewed March 28, 2004
55
Trading Partner’s Page
56
Promised Value to Customers


Covisint Connect provides reliable
delivery of any business document to
any point in the supply chain
Covisint Connect is a new way to
conduct traditional store-and-forward
Electronic Document Interchange (EDI)
57
Promised Value to Suppliers



Cost effective solution to engage smaller
trading partners
Improved data integrity
Affordable electronic communication with
trading partners
58
Covisint Collaborate

Enables suppliers to connect effectively and
efficiently through three phases:

Project Goal and Scope of Work: understanding
project goals and business objects of the
customer.

Supplier Rationalization and Prioritization: work
with individual companies to provide timely and
accurate information

Supplier Recruitment and Status Reporting:
Covisint provided applications that are licensed
to each supplier with an individual contract
Source: www.covisint.com, February 26, 2004
59
Troubles for Covisint



In July 2000, the Federal Trade Commission
(FTC) launched an investigation to explore
the possibility of anti-trust implications.
Since the founders represented a large share
of the auto market their online exchange
could raise anti-trust concerns.
The FTC wanted to make sure that the
arrangement would not allow for the big auto
makers to collude in order to force down
prices.
Source: “Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint Inc.” Centre for
60
Asian Business Cases, ECCH, July 12, 2002
Covisint’s Response




They issued the Antitrust Compliance Policy for
Covisint.
This was designed to provide the officers, directors,
and employees with guidelines for compliance with
the antitrust laws.
Any employee who did not comply with this policy
was subject to discipline which could include a
demotion or dismissal.
Management was also responsible for the conduct
of all employees reporting to them.
Source: www.covisint.com , viewed February 26, 2004
61
The Outcome


On September 11, 2000 Covisint received clearance
from the FTC, because they would be open to
participation for all potential suppliers and would not
be the exclusive vehicle through which automakers
purchased parts.
Since Covisint did not start providing services until
January 2001, they were considered not to be in
business, therefore in the future they may raise antitrust concerns based on how it was going to do
business.
62
The Outcome (cont)


Covisint was the first B2B exchange to be
reviewed by the FTC, and it therefore sparked
debate on how the B2B industry should be
regulated.
The FTC stated that the antitrust analysis of a
B2B exchange will be specific to it’s mission,
structure, it’s particular market
circumstances, procedures, and rules for
organization and operation, and actual
operations and market performance.
Source: “Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint Inc.” Centre for
Asian Business Cases, ECCH, July 12, 2002
63
More Troubles for Covisint




Bogus auctions made suppliers reluctant to sell their
products through Covisint.
Stiff competition from other internet companies
making it difficult to charge needed prices.
Covisint unable to make expected $240 billion in
transaction value every year.
In 2002, Covisint had about $70 million in annual
revenues when it had hoped to have $150 million.
Source: Butters, Jamie and Jeff Bennett, “Covisint hits rough patch as business falling flat” December 9, 2002, www.auto.com, viewed
March 28, 2004
Source: Hamm, Steve, “B2B Isn’t Dead. It’s Learning” Business Week. December 18, 2002
64
Results of Recent Problems



In December 2003, Covisint signed an
agreement with Freemarkets a global supply
management solutions to acquire the
sourcing and services assets of Covisint
Freemarkets will now be positioned as the
premier provider of sourcing technologies and
services to the automotive industry
Freemarkets will provide the auctioning
services for Covisint
Source: “Freemarkets signs agreement to acquire Covisint Auction Services,
www.freemarkets.com, viewed March 28, 2004
65
Covisint
Covisint
Industry
Auto
Products Exchanged
Specific
Private & Public
Private
Proposed Benefit
Buyer & Seller
Value-added Services
Profit Source(s)
Member’s Role in Management of
the Exchange
Connect, Communicate, &
Collaborate
Commissions
Members sit as Board of Directors
66
Steelscreen.com
The Metal Industry
67
Understanding the challenge
Exploiting new technology in an old industry:
“Imagine you have been dating someone for years.
The relationship is blossoming, but one day your
sweetheart informs you that instead of calling, you
should communicate by email. And if you want to
get together, you should arrange that through an
online dating service, where you will competing with
other suitors. That, in essence, is the message that
suppliers of everything from paperclips to
maintenance services got a couple of years ago when
manufacturers eager to try business-to-business, or
B2B, exchanges on the Internet,” says Laird Harrison,
Time Magazine writer.
Source: Harrison, Laird. “B2B Survivors” Time Magazine, December 24, 2001.
68
Steelscreen’s Founding Fathers

Founded in 1999 by group from the European metals
and telecom industries.
Fredrik Ohrn
Financial Manager
David Schelin
CEO
Peter Anderberg
Marketing Manager
Anders Candell
Technical Manager
“Steelscreen’s founders have an extensive knowledge on the metal business,
which guarantees the marketplace really fulfills the needs of the European
companies,” says Mario Vergna, Commercial Director of ILTA INOX.
Source: Subirana, Brian. “STEELSCREEN.com: Challenges in aligning technology and strategy in B2B”
The European Case Clearing House, March 2002.
69
Steelscreen’s Proposition & Goals



Offer a meeting point for buyers and sellers, allowing
them to communicate more efficiently with a trading
tool tailored to the needs of the metals industry.
Become the leading marketplace for the metal
products in Europe, by making the purchase and sale
of metals on the European metals market simpler and
more efficient, through a neutral marketplace.
Also aimed to offer a range of related value-added
services, to be provided by service partners.
Source: Subirana, Brian. “STEELSCREEN.com: Challenges in aligning technology and strategy in B2B” The European Case Clearing
House, March 2002.
70
E-Commerce Trading Models




First Generation: Many Sellers to One
Buyer
Second Generation: One Seller to Many
Buyers
Third Generation: Neutral
“STEELSCREEN.com: Challenges in aligning technology and strategy in B2B” The European Case Clearing
House, March 2002.
71
Third Generation Model:
Benefits for Suppliers

Sell their products with lower operating costs
Needs are satisfied
Transactions processed faster
Gain competitive advantage
Reaches most users
Does not require large IT investments

NO GREAT DISADVANTAGES!





Source: Subirana, Brian. “STEELSCREEN.com: Challenges in aligning technology and strategy in B2B” The European Case Clearing
House, March 2002.
72
Third Generation Model:
Benefits for Buyers

Simplified negotiation process
Needs are satisfied

NO GREAT DISADVANTAGES!

Source: Subirana, Brian. “STEELSCREEN.com: Challenges in aligning technology and strategy
in B2B” The European Case Clearing House, March 2002.
73
$$$$ Revenue Model $$$
Sales Commissions of 0.5 to 1% of
Transaction Value.
Not involved in the actual transactions
between buyer and seller.
No fee charged to purchasing party.
Source: Subirana, Brian. “STEELSCREEN.com: Challenges in aligning technology and strategy
in B2B” The European Case Clearing House, March 2002.
74
Steelscreen’s Members


Spring 2000,Trading on the web started
End of August 2000, more than 700
members had joined.
Source: Subirana, Brian. “STEELSCREEN.com: Challenges in aligning technology and strategy
in B2B” The European Case Clearing House, March 2002.
75
Types of Members




Selling Member: Information and Selling
Buying Member: Information and Purchasing
Buying and Selling Member (wholesalers):
Information, Purchasing and Selling
Associated Member: Information
Steelscreen is an Internet Marketplace providing
buyers and sellers the most efficient market
channel.
Source: Subirana, Brian. “STEELSCREEN.com: Challenges in aligning technology and strategy in B2B” The
European Case Clearing House, March 2002.
76
Why be a member of
Steelscreen?










Cheaper: Fee less than half paid to intermediaries
Faster: Distributed to all potential business partners
Simpler: Inquiries and Offers specified
More Efficient: Reach all members at once
Time Saving: Spend time only with rewarding contacts
Up-to-date: Facts, trends and analyses
Comprehensive: Growing number of services
Independent: Neutral to both sides
European: Standard and languages
Secure: Maximum security
Source: Subirana, Brian. “STEELSCREEN.com: Challenges in aligning technology and strategy in B2B” The
European Case Clearing House, March 2002.
77
One Member’s Thoughts…..
“Trading on Steelscreen gives us several major
advantages. The most important benefit is the ability
to find, evaluate and select the right business
partner. This helps us to avoid risks. In addition, our
goal is to save time and money and make our trading
process more efficient. Steelscreen helps us to
achieve this,” says Mario Vergna, Commercial Director
of ILTA INOX.
Source: www.steelscreen.com, viewed April 2, 2004
78
Steelscreen Exchange
Any metal product is tradable, the more standardized
the easier it is to use the system.
Steelscreen is an Internet Marketplace providing buyers
and sellers the most efficient market channel.
“Anderson Consulting has projected that 40-60% of all
metal produced in the world will be sold via internet
by 2005”.
Source: Subirana, Brian. “STEELSCREEN.com: Challenges in aligning technology and strategy in B2B” The
European Case Clearing House, March 2002.
79
Supplier’s Area:
How to send a Spot Item
Creating a Spot Item
and Product Selection.
Completing and Sending
the Spot Item.
80
Supplier’s Area:
Replying to an Inquiry
81
The Buyer’s Area:
Sending an Inquiry
Creating an Inquiry and
Product Selection.
Completing and
sending the Inquiry.
82
Buyer’s Area:
Replying to a Spot Item
83
Registering Member’s
Standards



Steelscreen offers the most complete database of
standards and alloy information.
A Member can search the database by designation,
chemical composition and mechanical properties.
A member can add their own standards and alloys
and define specific characteristics.
= Saves time, finds products that suit the
member’s needs and products can be
customized to specific characteristics.
Source: Subirana, Brian. “STEELSCREEN.com: Challenges in aligning technology and strategy in B2B” The
European Case Clearing House, March 2002.
84
Standards Tailored to Member’s
Needs
Defining the Standard
85
Standards Tailored to Member’s
Needs cont’d
Completing the Grades
86
Steelscreen
Steelscreen
Industry
Steel
Product Exchanged
Specific
Private & Public
Private
Proposed Benefit
Buyer & Seller
Value-added Services
Profit Source(s)
Member’s Role in Management of
the exchange
Financial Services and Logistics
Commissions on Transactions
None
87
Conclusions
88
Covisint
Industry
Auto
Steelscreen
WWRE
Steel
Retail, Food,
Healthcare
Products Exchanged
Specific
Specific
Mostly
General
Private & Public
Private
Private
Private
Proposed Benefit
Buyer & Seller
Buyer & Seller
Buyer & Seller
Connect,
Communicate &
Collaborate
Financial
Services &
Logistics
Asset Mgmt &
Demand
Aggregation
Commissions
Commissions
on Transactions
Fees &
Commissions
None
Equity Stakes
& Governing
Board
Value-added
Services
Deriving a Profit
Members Role in
Management of the
Exchange
Members sit as
Board of
Directors
Survivors







Covisint-Automotive
Elemica-Chemical
Exostar-Defense
E2Open-Technology
Global Healthcare-Healthcare
Pantellos Group-Utility
Trade-Ranger-Energy
Source: Ulfelder, Steve. “B2B Survivors” Computerworld, Vol 38,5, 2004, pp. 27-28
90
Changing the Focus
“Three years ago, the tech was our raison d’etre. No
longer. We’ve gone from being IT experts to being
purchasing agents,” Trade Ranger CEO, John Wilson.
“In 2000, we thought we’d move faster. We thought
we’d bring people right in to the Net and XML. But
soon we realized we were pushing a rock uphill.
Health care (IT) systems aren’t the most up to
date….People had EDI and didn’t want to change
that. We had to back off our aspirations of making
major changes quickly,” Kevin Ruffe, Chief Operating
Officer with Healthcare Exchange LLC.
Source: Ulfelder, Steve. “B2B Survivors” Computerworld, Vol 38,5, 2004, pp. 27-28
91
How did B2B exchanges survive?


Patience with 5 to 7 year plans (TradeRanger)
Downplayed technology from the outset
(Pantellos Group)
“From the beginning, we knew that it was
about value-added, not just technology,"
Jim Neikirk, CEO.
Never clear as to whether the survivors
will be truly successful.
Source: Ulfelder, Steve. “B2B Survivors” Computerworld, Vol 38,5, 2004, pp. 27-28
92
Questions?
93