BtoB

Smartest firms will play well with others

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Another year, another buzz-word. This year’s b-to-b candidate: collaboration.

If b-to-b e-commerce in 2000 was about buying and selling—often through e-marketplaces and via Internet-age constructs like reverse auctions and online catalogs—then 2001 looks to be about collaborating with business partners via the Web.

Online collaboration is truly the real deal. Whether it’s retailers partnering with suppliers to keep excess inventory off their shelves or manufacturers working with supply chain partners to get the right parts to the assembly line at the right time, collaboration has the potential to turn companies, and industries, on their heads.

Indeed, some of the biggest business success stories are the result of wonderful feats of collaboration, accomplished in a pre-Net age.

Consider Wal-Mart Stores Inc., which let suppliers into its warehouses to help manage its inventories. Or Dell Computer Corp., which only takes ownership of parts from suppliers once it has a paying order from a customer. Or so-called contract manufacturers—with futuristic names that sound like something out of “The Jetsons,” such as Solectron Corp. and Flextronics Corp.—which run their assembly lines on demand for makers of PCs, electronics and cell phones, coordinating the delivery of all the needed parts on the fly.

Such feats of collaboration will only proliferate now that much of the groundwork for more Web-based collaboration has been laid. In this issue alone, we report on how the retail industry is making a push with so-called CPFR—or collaboration, planning, forecasting and replenishment—tools. Meanwhile, Ariba Inc., poster child for the first round of b-to-b e-commerce, spent more than $2.5 billion to acquire Agile Software Corp., a maker of tools for online b-to-b collaboration.

Is this juggernaut unstoppable? Quite the contrary. The road to online collaboration for most companies will be a bumpy one. Most companies will be deathly afraid to share their demand estimates or sales data with their suppliers. For starters, who knows where this vital information might land? And beyond that, how can a buyer squeeze a bit more discount, or a seller a slightly higher margin, if the parties are laying all their cards on the table?

But smart companies will lay out their cards, because as b-to-b continues to evolve, one primary lesson will continue to become clear: No company can win this game alone. The companies with the best relationships, the ones best at collaboration, will take the prize.

Richard Karpinski is editor at large for BtoB.
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