While it is true that in a few years, e-business has gone from concept to undeniable reality, the real value that has been promised by this new wave - such as cost savings, revenue growth and customer satisfaction - has not been truly forthcoming from a supplier`s point of view.
It`s a good thing we didn`t base our entire business model on the new technology, otherwise we would have been in big trouble.
Paddy Nicholson, MD, Nicholson Corporate Stationers
The e-marketplace arena has been on South African radar screens for the past couple of years, and while the buyers who use the e-marketplaces seem to be happy, the suppliers` reactions are not so magnanimous.
"We have had varying levels of success, depending on which marketplace we use," says Ronnie Oeschger, GM for Xerox Office Supplies.
"I think the big problem is that at present, there is not enough trust across the market. There remain many customers out there who are still wary of using the Internet as a bona fide business tool."
Paddy Nicholson, MD of Nicholson Corporate Stationers, agrees that the move towards electronic trade has proved somewhat traumatic.
"It has been quite an expensive exercise for us, because we had to switch from a DOS-based system to a Windows-based architecture; a change that naturally costs money.
"Even more important is the fact that we had enormous problems with the switch. In business, you tend to take it for granted that when you change to a new system, everything will work perfectly, but this was not the case.
"It has taken us nearly two years to get to the point where the system is working properly for us, so it`s a good thing we didn`t base our entire business model on the new technology, otherwise we would have been in big trouble," he says.
[CHART]Waltons, one of the first suppliers to be tempted by the e-marketplace, found the switch to the electronic format to be difficult but also useful in a number of ways.
"We had to readjust our business processes, which was a costly procedure, but at the same time, we were also able to identify faults within the company that this readjustment helped us to clear up," says Waltons` e-commerce manager, Juliana Baroni.
"While the shift to the e-marketplace model has not really helped us to grow our business, we are now at the forefront of an arena which is growing rapidly. Being e-enabled is fast becoming a criteria among corporates when tenders go out, so we certainly needed to make the change."
She says Waltons is not really the one trying to get people to trade electronically; rather, it is a demand from the buying industry, which they have had to comply with in order to keep their customers happy.
"It is a wonderful initiative for buyers, but it is not so great for suppliers," agrees Oeschger. "We are in this arena chiefly because it has become a necessity in order to appease the corporate buyers.
"I feel that e-marketplaces haven`t really taken off as well as they promised to in the blueprint stage. That is not to say they won`t take off in the future; I just don`t think SA is ready for them yet."
He believes that until such time as the country`s bandwidth problems can be sorted out and the technology is improved, suppliers, in particular, will not see the true value of these marketplaces.
Baroni, however, believes that the market is growing steadily although she concurs that bandwidth is a massive problem for the South African market.
"The major e-marketplace players - like Sasol and FirstRand - have gone the whole hog with their e-enablement strategy, and there are quite a number of smaller and medium-sized businesses that use our buying system.
We are in this arena chiefly because it has become a necessity in order to appease the corporate buyers.
Ronnie Oeschger, GM, Xerox Office Supplies
"Every month we can see that the number of companies using e-procurement systems is increasing."
According to Baroni, one of the major problems with e-marketplaces initially was that the system of supplier identification was based on a US model that didn`t work in SA.
"The ID system was modelled around the concept that Waltons is one company - which is apparently the way it works in the US - but here it is not exactly the case, as we have different depots for different regions, so they couldn`t be classified under one ID.
"When we first approached [e-marketplace operators] with the problem, they thought we were being ridiculous, but as more suppliers came on board and had the same problem, they realised they had to work out a new system of identification."
Oeschger says the exposure Xerox gets is good, but in the main, the disadvantages outweigh the advantages.
"I`ve found that we`ve lost the face-to-face contact with our clients, and with it, the ability to grow our business in the way that only personal communication can.
"That said - and considering that e-marketplaces are effectively still in their infancy - I do believe that as the industry becomes more serious about this issue and begins to truly focus on ironing out the problems that affect it, the concept will ultimately take off."
Nicholson notes that although it has been a huge learning curve, often beset by problems, the major advantage to being in from the beginning is that now his company has a foot in the door with some clients that it otherwise would have missed out on.
"Unfortunately, at present, the marketplace is too transparent from a supplier`s point of view. Customers can see all the catalogues and thus pick and choose the cheapest products from each - instead of buying in bulk from one supplier - meaning that although they score, we will lose out.
"However, once suppliers get the business model right - it is still evolving at the moment - you will see that this is the way of the future, and those who were in at the beginning will be the big winners in the end."
Baroni agrees: "We cannot afford to lose the customer base we have developed, and we cannot afford to be left behind either, even if the technology isn`t quite where it should be at the moment.
At present, the marketplace is too transparent from a supplier`s point of view. ... However, once suppliers get the business model right, you will see that this is the way of the future.
Juliana Baroni, e-commerce manager, Waltons`
"The hardest thing is going to be to keep ahead of the pack. If you sit back and don`t ride with the changes and developments, you`re going to be in trouble.
"I certainly don`t see us going backwards from here, as I can already see how much things have changed in the past two years. The e-marketplace concept may, in the future, evolve into something very different from where we are today, but it is definitely not going to go away."
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