In the early days of the internet, business-to-business (B2B) ecommerce was hailed as the future of business transactions. Despite the popularity of brands like Amazon, many believed that B2B would revolutionize the way businesses operate. Covisint, an auto-exchange projected to handle approximately $750 billion in goods annually, was often cited as an example of the potential of B2B. However, the once-promising sector is now viewed with skepticism and even disdain by many business professionals.
B2B ecommerce was once seen as a game-changer, with the potential to save businesses significant amounts of money. For instance, if Covisint could save automakers just 10% on procurement, the savings would be substantial. However, the optimism surrounding B2B ecommerce has faded, and it is now often dismissed as a false economy. Some even blame it for the economic downturn.
Interestingly, there is less criticism of mass-market e-tailing, an area of ecommerce that has shown consistent signs of weakness. Executives do not express the same level of contempt for platforms like Expedia, eBay, or Amazon.com as they do for online exchanges or supply chain management solutions. Yet, a significant number of the failed dot coms come from the world of consumer-based ecommerce.
Despite the negative perception, B2B ecommerce continues to show signs of success and potential for future growth. While consumer e-tailing has had some success stories, many of these are specialty sites catering to niche markets. These sites often fly under the radar and are generally admired when noticed.
The disdain is reserved for B2B ecommerce, which is still expected to live up to its transformative promise eventually. Ironically, the same executives who criticize B2B are actively implementing e-business systems in their companies to assist with logistics, supply chain analytics, inventory management, design collaboration, web-based conferencing, reverse auctions, customer relationship management, indirect procurement, and spot purchases.
The negativity towards B2B ecommerce can be attributed to the audacity and arrogance of young internet entrepreneurs. These dot coms appeared in virtually every business sector, claiming they would revolutionize the industry, despite their lack of industry experience. Their audacity was rewarded with high IPO results, and they were valued higher than traditional industry stalwarts.
However, the arrogance of the dot coms is now a thing of the past, and the responsibility of implementing the transformation now falls on the traditional companies. These companies are now purchasing B2B solutions from former colleagues rather than inexperienced whiz-kids.
Despite their victory over the dot coms, the disdain for B2B persists among executives. This is likely due to the resentment over the fact that the inexperienced entrepreneurs almost took over their industries.
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