More Glitter Than Gold in B2B Portals

As optimistic reports from research firms hail the revenue potential of the fast-growing business-to-business (B2B) market, companies in nearly every industry are launching slick new Internet portals -- but many have failed thus far to rise above the functionality of plain old Web sites.

Businesses are scrambling to identify themselves as "Internet companies" -- complete with new portals in the latest fashion colors -- for one compelling reason. Research analysts indicate that in the next few years B2B revenues will far overshadow the take of today's profit-dry business-to-consumer (B2C) industry.

Market Projections Dazzle Investors

The latest report from GartnerGroup projects that worldwide B2B e-commerce revenues will reach $7.29 trillion (US$) by 2004, a number that increases its appeal for investors who have been feeling a bit shaky about the lack of profit in B2C ventures and are hungry for something with stronger potential for their portfolios.

The Internet is now awash with portals for the B2B sale and exchange of all manner of goods and services including banking, advertising, telecommunications, industrial goods, agricultural equipment, steel and supply chain car parts.

Traffic Still Slow in the B2B Lane

As the list of new portals continues to lengthen, it is nevertheless becoming increasingly clear that a portal launch does not necessarily augur immediate B2B success . Customers are not flocking to the portals as quickly as expected and even those who make the trip are often unwilling or unable to make transactions.

Jerry Jasinowski, president of the National Association of Manufacturers (NAM), said that in a recent survey of 2,500 manufacturers, 68 percent of those responding said their companies are not using electronic commerce as a forum for business transactions.

"The prospects for robust B2B Internet-based communication, distribution and service are extremely promising," he observed. "But our survey shows that most manufacturing companies are still at a rather basic level when it comes to integrating the Web into their corporate business activities. While 80 percent claim they have a Web site, the vast majority offer only an information storefront. Furthermore, only 10 percent say that their current business process technology systems are fully automated."

Slapdash Sites Clutter the Bandwagon

Many of the new portals are nothing but dressed-up Web sites with an array of bells and whistles designed to mask the fact that they are simply not yet ready to do serious business. According to Forrester Research, they often ignore customer goals and fail to meet the basic requirements of a good user experience.

Forrester came to this conclusion after grading 30 B2B portals and finding that every one of them failed basic tests for value, ease and reliability. "Major problems included missing content, meager function and frequent errors -- weaknesses that thwart users as they pursue typical goals," the report said.

It is clear that B2B portals are here to stay, but whether they will persist with anything like their original personalities intact is less evident. For some companies, huge losses due to marketing and infrastructure costs mean that profits are still a long way off.

For a select few, B2B portals may be rabbit holes leading to fantastic new e-commerce wonderlands, but for the vast majority the plumbing might be a tad overcomplicated.