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e-Steel Forms Solid IT Foundation

By Beth Stackpole

October 15, 2000 — CIO —

Reader ROI
See how an entrepreneur marshaled forces of IT to realize his business vision
Learn what it takes to link disparate systems in a B2B marketplace
Understand how managing staff can be vital to an exchange project’s success

Michael S. Levin revels in what some might call the extreme. He doesn’t just hike, he climbs mountains, including the Chugach in Alaska and ranges in Wyoming’s Jackson Hole. He doesn’t just sail, he’s a past skipper in the Admiral’s Cup and Southern Ocean Racing Circuit as well as the recipi- ent of the Stamford Yachting Club’s

De Coursey Faeles Trophy. Forget recreational skiing—Levin, who is 50, favors couloirs, the steep cliffs that are no stranger to avalanches. So what’s next for the thrill-seeking Levin? Applying his love of adventure to conquering the rough and tumble world of business-to-business e-commerce.

As chairman and CEO of e-Steel, an online marketplace for the steel industry, Levin’s certainly picked the right place to test his endurance in the face of a challenge. On one hand, the 2-year-old e-Steel (www.e-steel.com) is considered a veteran and one of the more stable players in B2B, which is expected to be the next frontier for blockbuster technology growth in e-business. Its own revenue model calls for e-Steel to receive a fee—paid by the seller—each time a transaction is complete. The company also hopes to boost revenue by building and selling specialized applications for its exchange for specific industries (like automotive) and by selling branded e-Steel applications for other marketplaces.

The fact that e-Steel has a multipronged strategy is key. With investors and pundits still reeling from last spring’s market crash and shakeout among business-to-consumer Internet sites, B2B marketplaces are under the gun to provide value-added services that go far beyond streamlining procurement if they have any hope of long-term survival. The focus now is on integration, or the process of linking an exchange to participating companies’ back-end financial, order entry, inventory and manufacturing systems. The goal: to create a highly automated, online supply chain that delivers such efficiencies as reduced transaction costs, less inventory in the pipeline and improved collaboration, forecasting and scheduling among suppliers, suppliers’ suppliers and so on.

It’s a tough game, and while Levin claims New York City-based e-Steel is certainly ahead of the curve, he admits it is far from a master of integration. "It’s been our total focus in the last few months," says Levin. "Integration is paramount in thinking through all the new developments in the company."

 

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