BOSTON CONSULTING GROUP, Boston, has released a study showing that business-to-business e-commerce in the U.S. will grow from $1.2 trillion this year to $4.8 trillion in transaction value by 2004. While B2B continues to grow rapidly, price negotiations and on-line collaboration have yet to migrate on-line in a significant way, the report said. The findings, based on survey responses from more than 260 buyers, sellers and e-marketplaces, as well as in-depth interviews, show that despite a high level of on-line penetration, the vast majority of transactions will be ordering and replenishment, and not price negotiations. "B2B e-commerce is advancing quickly in terms of penetrating the total procurement market, but at the same time remains fairly immature in its development," said Andy Blackburn, vice president, Boston Consulting Group. "By 2004, on-line purchasing will represent 40% of total purchasing, however only 11% of all purchases will involve on-line price negotiations. For many companies, negotiating prices on-line is a necessary first step toward broader and deeper buyer-seller collaborations on-line." Jim Andrews, another Boston Consulting Group vice president, commented, "In the near term, B2B e-commerce may not be as disruptive to many traditional buyer-supplier relationships as originally thought. Almost half of the companies surveyed find that off-line communication is almost always needed to complete on-line transactions. Suppliers will continue to send sales staff to court buyers, and buyers will continue to demand personal commitments from their suppliers. One emerging message is -- don't sell your golf clubs."
items ranging from corned beef to office stationery. Three retailers were involved in the pilot auctions: Tesco, Royal Ahold and Target. The auctions were the first live tests of the WWRE's new technology, created in partnership with IBM, Ariba and i2 to provide the technology platform for the Exchange.
CVS, Woonsocket, R.I., said it has implemented a B2B commerce platform from Ariba, Mountain View, Calif., and is conducting live transactions. CVS is using Ariba Buyer to improve management of supply purchasing for its stores, distribution centers and store support center here. More than 150 CVS users have been trained on the Ariba application and over 100 orders have been electronically placed to preferred suppliers. The three phase implementation is expected to be completed by the end of September 2000. "Through Ariba Buyer, CVS expects to significantly reduce its operating costs by leveraging our spending and supplier relationships while reducing one-off purchasing," said Ann Langlois, vice president. strategic sourcing and procurement, CVS.
