Trust drives c-commerce
Relationships—not technology—central to c-commerce, contends analyst firm
Mary Stearns Sgarioto, Senior Editor -- Manufacturing Business Technology, 6/1/2001 6:00:00 AM
While it sounds a lot more like "Oprah" than analyst talk, experts believe that building trust and relationships is crucial to success in collaborative commerce (c-commerce). This emphasis on understanding collaborative supply chain relationships was a key theme espoused by Stamford, Conn.-based information technology (IT) analyst firm Gartner at its c-commerce summit held April 17-19 in Chicago.
"C-commerce is all about relationships, not technology," says Yvonne Genovese, Gartner research director, collaborative commerce group.
C-commerce, according to Gartner, is the set of electronically enabled collaborative interactions between an enterprise, its suppliers, customers, trading partners, and employees. While it involves an array of Internet technologies and Web-based applications, c-commerce can't be separated from relationship management issues.
One such issue is that both risks and costs accompany collaboration. "Choosing a partner usually means limiting access to many others, and often has resulted in the unintended creation of a new rival," says Genovese.
Success factors
Genovese believes buyers and sellers engage in extended relationships because they expect that the gains from collaboration and greater interdependency outweigh the benefits of relying on market mechanisms. For example, a manufacturer might slash its bidders' list—reducing some of the competition among its suppliers—but the manufacturer also may believe this will be compensated for by greater support and participation from the suppliers that remain.
"Extended relationships are not a panacea, but they can be a powerful strategy when the right conditions exist—conditions that depend on many elements coming together—human, business, and technological," Genovese says.
Perhaps the biggest obstacle to collaboration is transforming a company's internal culture, says Genovese. "Type A companies—the leading edge companies—already are doing collaboration. And Type B companies—the followers—will act only after they've seen the success of the Type As. The Type C companies—the laggards—will only proceed once they've seen the success of the Type Bs."
Genovese says one way to build trust is to learn from the Type A companies that are practicing c-commerce now. According to Gartner research, by 2004, leading-edge enterprises will have developed robust collaboration, linking multiple trading partners and business processes.
Technology as enabler
Of course, even though c-commerce is about relationship building, not just more technology, plenty of technology exists to foster a collaborative environment. Some of the well-known options being used include electronic chat boards, video and audio conferencing, and real-time polling/surveys.
Enterprise portals, which use Web technologies to open up enterprise information to authorized trading partners, also are seen as supportive of c-commerce. According to Gartner, portals tend to improve partner loyalty and can be quick to implement, leading to a rapid return-on-investment (ROI).
John Webb, a vice president with PeopleSoft, a Pleasanton, Calif.-based e-Business and enterprise applications vendor, concurs on the benefits of portals. "Companies today want quick ROI, not long, protracted projects," Webb says. "This, and applications with collaborative capabilities is key."
The ability of private, Internet-based trade exchanges—which often incorporate customer-facing portal functions—to support collaboration with customers and suppliers is one reason private exchanges are gaining favor over public exchanges that—at least in their earlier incarnations—tend to focus on low-cost spot buying and reverse auctions. "Price isn't everything," says Webb.
While Genovese is keen on supply chain relationships, she notes that an enterprise's willingness to adopt new technology ultimately can influence its relationships. "If an enterprise does not change with the market—for example, by adopting e-commerce or c-commerce—then its relationships will fail," Genovese says.
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