Business%20to%20Business%20Exchanges

1
Business to Business Exchanges

• Jenny Arnold
• Supree Mongrolcheep
• Matthew Sheets
• Melissa Sherer

2
B2B Exchanges

• Overview
• Case Studies
• Conclusion

3
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

4
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 its B2B Ivey Business Journal Online,
  Jul/Aug 2003, pp. 1.

5
B2Bs 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
6
GartnerGroup Source www.cba.hawaii.edu/aspy/aspy
mkfa.htm, viewed March 11, 2004
7
DRI-WEFA Source www.cba.hawaii.edu/aspy/aspymkfa
.htm, viewed March 11, 2004
8
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, April 17, 2001

9
B2B versus B2CB2B 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, April 17, 2001

10
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

11
Types of B2B exchanges

• Horizontal B2B marketplaces are for supplies
  common to many industries e.g. computers or
  work clothes.
• Vertical marketplaces are used to trade 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

12
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 wouldnt 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

13
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
14
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.

15
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.

16
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.

17
Analyzing the B2B Market

• Institutions
• ecosystem
• 3 Groups
• 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.

18
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.

19
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

20
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.
21
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.

22
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?

23
Case Studies

• World Wide Retail Exchange
• Covisint
• Steelscreen.com

24
World Wide Retail Exchange

• Premier Internet-based B2B exchange in the retail
  e-marketplace

25
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

26
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

27
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

28
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

29
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

30
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!

31
Additional Members
32
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.

33
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.

34
Major Products and Services of the Exchange

• Surplus Goods Exchange (SGE)
• Perishable Goods Exchange
• Demand Aggregation
• Asset Manager

35
Surplus Goods Exchange (SGE)
36
Visagent Marketplace
37
Visagent Trade Screen
38
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

39
Perishable Goods Procurement
40
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

41
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

42
Demand Aggregation
43
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

44
WWRE Order Execution Process
45
Asset Manager
46
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

47
World Wide Retail Exchange
  World Wide Retail Exchange
Industry Retail, Food, Healthcare
Products Exchanged Mostly General 
Private or Public Private
Proposed Benefit Buyer Seller 
Value-added Services Asset Management Demand Aggregation 
Profit Sources Fees and Commissions
Members Role in Management of the exchange Equity Stakes and Governing Board 
48
Covisint

• The worlds largest B2B exchange

49
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

50
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

51
Size of Covisint

• Covisint does not have to publicly reveal its
  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
• SourceButters, 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

52
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

53
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.

54
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 its
  suppliers applications.
• Covisint Collaborate Covisint help desk
  assistance.
• Source www.covisint.com, Viewed February 26,
  2004

55
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

56
Trading Partners Page
57
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)

58
Promised Value to Suppliers

• Cost effective solution to engage smaller trading
  partners
• Improved data integrity
• Affordable electronic communication with trading
  partners

59
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

60
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
  Asian Business Cases, ECCH, July 12, 2002

61
Covisints 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

62
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 anti-trust concerns based on how it was
  going to do business.

63
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 its mission,
  structure, its 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

64
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 Isnt Dead. Its
  Learning Business Week. December 18, 2002

65
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

66
Covisint
  Covisint
Industry  Auto
Products Exchanged  Specific
Private Public Private
Proposed Benefit Buyer Seller
Value-added Services Connect, Communicate, Collaborate 
Profit Source(s) Commissions
Members Role in Management of the Exchange Members sit as Board of Directors
67
Steelscreen.com

• The Metal Industry

68
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.

69
Steelscreens Founding Fathers

• Founded in 1999 by group from the European metals
  and telecom industries.

Peter Anderberg Marketing Manager
Fredrik Ohrn Financial Manager
David Schelin CEO
Anders Candell Technical Manager
Steelscreens 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.
70
Steelscreens 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.

71
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.

72
Third Generation ModelBenefits 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.

73
Third Generation ModelBenefits 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.

74
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.

75
Steelscreens 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.

76
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.

77
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.

78
One Members 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

79
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.

80
Suppliers AreaHow to send a Spot Item
Creating a Spot Item and Product
Selection. Completing and Sending the Spot Item.
81
Suppliers AreaReplying to an Inquiry
82
The Buyers AreaSending an Inquiry
Creating an Inquiry and Product
Selection. Completing and sending the Inquiry.
83
Buyers Area Replying to a Spot Item
84
Registering Members 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
  members 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.

85
Standards Tailored to Members Needs
Defining the Standard
86
Standards Tailored to Members Needs contd
Completing the Grades
87
Steelscreen
  Steelscreen
Industry  Steel
Product Exchanged  Specific
Private Public Private
Proposed Benefit Buyer Seller
Value-added Services Financial Services and Logistics 
Profit Source(s) Commissions on Transactions
Members Role in Management of the exchange None
88
Conclusions
89
  Covisint Steelscreen WWRE
Industry  Auto Steel  Retail, Food, Healthcare 
Products Exchanged  Specific  Specific  Mostly General
Private Public Private  Private Private 
Proposed Benefit Buyer Seller Buyer Seller Buyer Seller 
Value-added Services Connect, Communicate Collaborate  Financial Services Logistics  Asset Mgmt Demand Aggregation
Deriving a Profit Commissions Commissions on Transactions  Fees Commissions
Members Role in Management of the Exchange Members sit as Board of Directors  None Equity Stakes Governing Board
 
90
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

91
Changing the Focus

• Three years ago, the tech was our raison detre.
  No longer. Weve gone from being IT experts to
  being purchasing agents, Trade Ranger CEO, John
  Wilson.
• In 2000, we thought wed move faster. We
  thought wed bring people right in to the Net and
  XML. But soon we realized we were pushing a rock
  uphill. Health care (IT) systems arent the most
  up to date.People had EDI and didnt 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
• Source 3

92
How did B2B exchanges survive?

• Patience with 5 to 7 year plans (Trade-Ranger)
• 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

93
Questions?