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Time Is Now For Mid-Size B2B Firms

By Paul A. Greenberg
Nov 16, 1999 12:00 AM PT

Despite the fact that media attention to the explosive growth of e-commerce has largely focused upon the new synergy between consumers and e-tailers, the real success stories may be in the business-to-business sector.

Time Is Now For Mid-Size B2B Firms

While e-tailers struggle to steady themselves financially, B2B operations are realizing revenues beyond their own expectations. According to Massachusetts-based Forrester Research, Inc., B2B online sales reached $43 billion (US$) in 1998, while business to consumer sales totaled a mere $7.8 billion.

Even with the current surge in consumerism on the Internet, consumer sales will likely reach only $108 billion by 2003, in contrast to B2B sales of over $1.3 trillion.

For skeptics who doubted the future of online product suppliers, one need look no further than GM and Ford's disclosures that all of their supply trade will now be conducted online.

Timing Is Everything

Still, many mid-size firms could be left out of the evolution of e-commerce if they are not timely in their approach. Buyers in most industries are attracted to online sales simply because it streamlines the corporate purchasing process and therefore has the potential to reduce the cost of a sale.

With that concept in mind, thousands of companies are making the move to online suppliers every day. Those suppliers that wait until next year to debut their own sites may be too late. The big players are already up and running.

So what is holding some mid-size companies back? First, medium size businesses often leave the innovating to the big players, and then react by creating a facsimile of what they have seen. Unfortunately, slow and steady does not win the race in e-business, and innovation is key.

Second, medium-size businesses often have limited resources, and a venture into something as seemingly risky as online business may not seem prudent to many.

If prudence is a virtue in traditional business, it may ring the death knell in e-commerce. Unfortunately for some, the decision not to go online may just come down to a lack of investment muscle.

Where's The Edge?

With the proliferation of new businesses going online from all ends of the earth, businesses will need a competitive edge. According to John Sviokla, a digital strategist for Diamond Technology Partners, Inc., in Chicago, Illinois, it may come down to originality.

The companies that make it big, Sviokla says, will likely be those that can offer their online customers ways to do something they couldn't do offline. Sviokla calls these innovations "killer apps."

Indeed, "killer" applications and a timely entrance into the market may be the key to online success for businesses large and small.

As Andrew Bartels of the Giga Information Group says, "Mid-size companies must plan now for rapid electronic commerce adoption by finding their niche markets and building their infrastructure and brand recognition accordingly."

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