E-business shakeout sparks IT opportunity

Overheard at a recent e-business expo in New York: “They should include the 52-week high and low stock price next to vendor listings in this conference catalogue.” Although just an offhand remark, the crack aptly captures growing concerns about the IT industry’s financial woes, now spilling over dramatically into the business-to-business market.

But ultimately, this bloodletting will be beneficial to enterprises, which now can deal with more focused technology providers and even begin to apply price pressure when purchasing software. Furthermore, the grand vision of frictionless e-marketplaces, in which a single company can get the cheapest goods by playing a world of suppliers off one another, seems to have been put on hold.

Now companies can focus on getting their own houses in order. In practice, that means forming tighter links with trusted supply-chain partners and tapping into private exchanges for procurement and certain value-added services.

However, that does not mean public exchanges are a defunct concept – in fact, a number of them continue to grow. But understanding which transactions are appropriate, such as spot-buys of high-volume, low-cost goods, is becoming clearer.

The focus on supply-chain management makes perfect sense, particularly in an economic downturn. Unfortunately, most companies’ supply-chain “houses” need some repairs. A lack of standards and limited functionality and connectivity are hindering the automation that will drive efficiencies and wring out costs.

With any luck, expanded services that address these nuts-and-bolts initiatives, such as catalogue management, will make the e-commerce business case easier to make.

LaMonica writes for InfoWorld (US). He can be reached at martin_lamonica@infoworld.com.