E-Commerce for Mid-Market Companies

B2B e-commerce poses unique challenges for mid- market companies. Those that undertake such projects are often doing so at the behest of their much larger customers (think Wal-Mart pushing RFID chips), and not because they’re trying to improve their own market position, says Bill Swanton, vice president of research with AMR Research. Nevertheless, he adds, mid-market companies have the most to gain from B2B e-commerce, so they should consider ways to automate as much of their trading as they can.

“Mid-market companies have an opportunity to fundamentally change the operating costs associated with their customer and supplier relationships,” says Swanton. The trick is to find an approach to B2B trading that won’t burden them with application development. After all, most don’t have large staffs, Swanton notes, and the people they have are probably focused on bigger projects, like consolidating their ERP systems.

Swanton sees two options: Companies can build their own B2B trading platforms, or outsource to a trading hub like GSX, SupplyWorks or E2Open. For companies that are building their own platforms, he suggests they stick with technology they already have to minimize development costs. For example, if a company is running Oracle ERP, he recommends implementing Oracle’s iSupplier Portal product to share purchase orders, delivery information and payment status with suppliers. A company should also favor a platform that the majority of its trading partners will be able to use, whether that’s a portal, EDI or XML.

The other option is to outsource to a vendor that operates a trading hub. These vendors serve as intermediaries between buyers and suppliers, helping to automate transactions for technologically unsophisticated trading partners. They can turn faxes into EDI or XML and vice versa, for example, so that their customers don’t have to bother with data translation. In this way, mid-market companies get all the benefits of automated trading without having to do it themselves.

Copyright © 2006 IDG Communications, Inc.

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