GUS Tips on B2B exchange survival

As it turns out, even the savior of the Internet economy needs to be saved. For all the euphoria surrounding B2B e-marketplaces, most are just getting started and are a long way from delivering on the full promise of helping businesses run as efficiently and electronically as possible. Before they can, public exchanges must overcome tremendous obstacles, some technological-regarding things like payment systems and catalogs-and some not-like the reluctance on the part of leery buyers and sellers who don't feel comfortable doing business a whole new way.

E-marketplaces find themselves in a jam today for the simple reason that in early days company executives felt extraordinary pressure to be the "first to market" with an exchange in their particular industry, figuring they would fill in the blanks later.

"There have been more marketplaces built on PowerPoint and Word than there are actually with real code," says Peter Boit, vice president in charge of e-commerce solutions at Microsoft.

In the beginning, the great lure of exchanges was that down the road they would help manufacturers to significantly cut procurement costs. But now the appeal goes way beyond that. It's the notion of having companies so completely integrated that everyone, including customers and suppliers, benefits from having purchasing data communicated up and down the supply chain.

As a result, customers are served better, excess inventory no longer takes up space in warehouses, and the whole manufacturing process is accelerated to respond immediately to customer purchasing patterns.

U.S. Department of Commerce estimates those savings will reach $1 trillion by 2010.

Regardless of whether you're a buyer or seller, you're going to make some critical decisions about participating in B2B exchanges.

Here are some tips for helping you make the right choices:

• Complete Deals Online
• Fix Catalogs So Buyers Can Browse
• Be Nice To Suppliers
• Build Community
• Respect Privacy
• Help Users Manage Risk
• Keep Management Neutral