The True Cost of E-Marketplaces

LOWER PRICES ARE THE LURE to e-marketplaces for most companies, but a recent report from Forrester Research warns that those savings don’t come free.

The report, “What Does eMarketplace Buying Cost?” reveals that companies?depending on their level of involvement?could spend anywhere from $5.4 million to $22.9 million integrating themselves into online marketplaces between now and 2005. The costs arise from changing procurement processes, integrating internal systems with the marketplace, buying applications and paying transaction fees.

The hope is that procurement savings will ultimately offset the costs. Respondents to the Forrester study indicated that they hope to save 4 percent in 2001 and as much as 8 percent by 2003, though more than half the executives interviewed noted that they expect some hurdles?such as user resistance?that could cut into those numbers.