The Pitfalls
While the pundits are bullish about e-marketplaces, it may not be the kind of bull you want to grab by the horns. The technology is still immature; most e-marketplaces are merely online bulletin boards containing e-mail addresses or someone’s phone number ("For a great price call 555-9876"). Many e-marketplaces’ inability to process transactions themselves means most deals must be completed offline, taking the "e" out of e-commerce.

At the moment, this isn’t a problem for most companies. And while these early movers may think auctions and exchanges are a fine way to procure paper clips and pencils, it may be a while before they purchase business critical—and more expensive—direct materials.

Picking a winner may also prove a problem. Most e-marketplaces haven’t reached liquidity—and most probably never will. The only reason a company would abandon their relationship with a trusted supplier in favor of an e-marketplace is major cost savings. But with so many online markets, and so little differentiation, it’s hard to imagine a single site attracting the critical mass of customers needed for actual savings. And the world certainly doesn’t need 52 food e-marketplaces. Getting hooked into the wrong one now might end up costing you more than you save.

Finally, not every company is ready for e-commerce with their regular suppliers, let alone with anonymous trading partners in e-marketplaces. Just to give you an idea, when a procurement manager for a large oil refinery was asked how he used the Internet for purchasing, he replied that he recently bought a book from Amazon.com. Oops!

The Prediction
E-marketplaces will eventually play a role in your business. How big remains to be seen. Feel free to play the field, but be careful which e-marketplace you get into bed with—it might not be there when you wake up.

-Ben Worthen

CRM

The Trendline
How hot is customer relationship management (CRM)? Peoplesoft bought the No. 4 purveyor of CRM software—Vantive—in 1999, and Peoplesoft already gets more revenue from its CRM offering than it does from its flagship human resources software. That should give you some idea.

The Promise
The area is hot because the promise is big: Know thy customer in a deeper (read: more profitable) way. Depending which vendor you listen to, CRM products analyze customer lifetime profitability and purchasing patterns, identify market segments and opportunities, coordinate customer contact channels, corral sales leads, measure service quality, improve brand loyalty, and turn lead into gold (though that last module costs extra).

The Pitfalls
Unfortunately for CRM, relationship management is an oxymoron. Customers don’t want to feel "managed" any more than spouses or friends do.