In the past two years, e-business seems to have permeated every aspect of daily life. In just a short time, both individuals and organizations have embraced Internet technologies to enhance productivity, maximize convenience, and improve communications globally. From banking to shopping to entertaining, the Internet has become integral to daily activities.
For example, just 23 years ago, most individuals went into a financial institution and spoke with a human being to conduct regular banking transactions. Ten years later, individuals began to embrace the ATM machine, which made banking activities more convenient. Today, millions of individuals rely on online banking services to complete a large percentage of their transactions.
The B2B Way
Is the model buyer- or seller-centric? What is the driving force of the business?
The greatest strength of the Internet is its ability to bring together people, governments, and businesses and facilitate the flow of information among them. This is one of the main reasons why business models for business-to-business online marketplaces are expected to succeed.
It’s clear that the Internet is a viable platform for B2B trade. According to Forrester Research Inc. in Cambridge, Massachusetts, a projected $4.9 trillion in business-to-business (B2B) transactions will be made online by 2004.
But private marketplaces being formed by industry leaders represent a more successful model. These real-time supply chains and e-business design systems are phasing out the more expensive and inflexible electronic data interchange networks.
The real surprise here is how hard it is to become profitable. The cost of branding technology is so high that consumers still use a catalog. A Web site is just another channel.