But in the process, suppliers are getting squeezed. In the same survey, 77 percent of respondents said trading over the Web provided fewer advantages than other B2B trading mechanisms like EDI. For instance, CompTIA found that manually inputting information from an ERP system into a portal can take as much as 90 minutes while the same process using EDI takes just five minutes. It also increases the possibility of errors, such as mistyped product numbers and quantities, that don’t occur when systems communicate through EDI.

Although standardizing on one trading platform sounds sensible in theory (who wouldn’t want to reduce their costs and their technical complexity?), the idea that buyers could force their trading partners to dump EDI strikes some CIOs and e-commerce experts as preposterous. Abandoning EDI "is a giant step backwards," says Ranga Jayaraman, CIO of Hitachi Global Storage Technologies, a $4.2 billion disk driver maker. "It doesn’t make sense," says Steve Phillips, CIO of Avent, an $11.1 billion electronics manufacturer and distributor. "If you already have EDI set up, the cost of switching is prohibitive."

Not only that, but it could be bad for business. Forcing suppliers to the Web could cost buyers in the long run, as suppliers pass their increased costs back up the supply chain, according to Bill Swanton, vice president of research with AMR Research. Furthermore, one platform can’t realistically support every trading partner and every business process. "We usually give our clients a shortlist of five different solutions for getting their trading partners onboard electronically, including a portal, file transfer, XML, EDI and Web services," says Benoit Lheureux, a research director in Gartner’s architecture and infrastructure group. "That way, they cover their bases and will be a good company to do business with because they’re not being myopic."

In other words, for the foreseeable future, most companies will have to operate a hybrid trading environment and make the best of it. For OEMs, this means resisting the urge to drop EDI because it’s so entrenched in the supply chain. For suppliers, it means compromising with customers, perhaps by using third-party B2B integration providers to send and receive information. For both, it means the challenge of finding other ways to control costs by building a system for converting data from one format to another or by outsourcing this work to someone else.

Great Web Hopes

To understand why manufacturers are so enthusiastic about portals, it helps to recall the beginning of e-commerce. And the beginning of e-commerce was EDI. Back in the 1960s, EDI was a revolutionary technology—the first standard way of exchanging data about orders, shipments and financial transactions. It promised to make manufacturing supply chains more efficient through automation of paper-based processes. And to a large extent it succeeded.