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Business-to-Business the "invisible" giant

November 1998

disponibile anche in Italiano

  Giancarlo Livraghi
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  I’ve been convinced for a long time (like most other people discussing these issues) that the fastest growth area for "electronic commerce" would be business-to-business. But... where is it? Yes, there are a few success stories, but we are told about the same examples over and over again... is that all?

The answer may be simple: it’s there, but we can’t see it. We may be looking in the wrong direction. Many business-to-business relations can be managed very effectively online without using a website.

There may be also a language problem. My impression is that in American business language "commerce" can mean any transaction, even if it isn’t selling but managing suppliers, even if it’s organizing logistics and not distribution. In the part of the world where I live, "commercial" activities are understood as selling, and e-commerce is seen even more restrictively as offering goods or services on a website. That can lead to all sorts of misunderstandings. I think it would be less confusing if we simply called it e-business. And we understood, once and for all, that there’s much more to online marketing than simply putting a catalog or a price list on a website.

In a recent interview,  Vint Cerf said: The real tidal wave in electronic commerce will be in large-scale corporate transactions. I expect developments here will have a great impact on the world’s economy. Once industrial giants like General Motors, Mitsubishi begin to link with their vendors and suppliers over the Internet, look for electronic commerce to really take off.

We already know of several interesting case history. Such as General Electric saving millions with online management of bids from its suppliers. Or Boeing setting up a fully integrated "paperless" system for a new airplane, but missing deadlines and losing orders because it had failed to establish a strong enough bind of trust with its suppliers, that hadn’t been making the necessary investments. There is a strong lesson for all in this example.

But this is not only for very big companies. Let’s imagine, for instance, that a company makes machinery to manufacture, say, chocolate bars. It’s nor a small company, but much smaller than many of its customers. However... if (as fits its own needs as well as those of its clients) that company sets up an integrated online maintenance and upgrading system for industrial equipment, why couldn’t it become the global reference point for that industry? And it doesn’t matter where its is. If major European airlines have their accounting systems in Bagalore, why can’t some of the largest factories worldwide be serviced from any small town anywhere?

And why should it be a single company? There are communities around the world that, in their own field, are as strong a Silicon Valley in electronics. For instance, in Italy, the technologies supporting the fashion business, or the manufacturing and distribution of tiles that are in the bathrooms of new hotels in China, or of the best eyeglass frames in the world... etcetera, in many and very different fields, from high tech to arts and crafts. Why should any of these communities be setting up a website or wasting money on banners?

There could be countless examples. The substance is simple. If online communication strategies were based on the needs of enterprises, big or small, instead of standardized formulas that don’t fit anyone, we could discover a large, rich and growing market for e-business. "Invisible" only if we look for it where it was never supposed to be.


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