"If it did work it would be brilliant" could become the catchphrase of the business-to-business (B2B) world. The line comes from a sketch by TV comics Armstrong and Miller which is set in a cosmetics factory. Someone proposes manufacturing a syringe which sucks the age from people so that they never grow old. The sensible character points out that it would not work, to which the boss gives the above reply.
The promises which emanated from the B2B sector just two years ago all look a little hollow now. The same goes for "Add 20 per cent to your bottom line", "Make money from your suppliers trading over your network" and "Streamline your supply chain and integrate with your customers so that all of your business can be conducted in the electronic world".
Now the industry is concentrating on the more practical aspects of supply chain and customer relationship management, it is no longer talking about eroding suppliers' margins.
Everyone in the industry is suffering. UK B2B supplier Infobank recently reported a turnover of £2.7m and a loss of £26.7m. The losses cost the chief executive and chairman their jobs, and the company is facing a huge restructure. This suggests that in B2B there is a lot more blood to be spilt.
Infobank was building its business on being a product company aimed at the higher end of the SME market. Its next move is to focus on the corporate market, aiming for fewer bigger customers. There are rumours of possible relocation to the US.
So what is going wrong? At the top end, the corporate world is an obvious target for B2B because it will have an existing supplier base that can be made more efficient. And big companies are likely to have more clout with their suppliers and their customers, enabling them to be more persuasive when it comes to pushing them into a B2B world.
This is very attractive, but B2B exchanges can be complex. It also appears that B2B companies are starting to lose the argument.
Last year B2B was the hottest thing since SANs, but now the analysts are saying it is not vast public exchanges that will make money, but private exchanges. Again, this points the future firmly in the direction of the big companies which are hoping for a 'trickle-down'.
Another threat to the B2B premise is companies selling e-procurement solutions, which also undermines B2B companies. E-procurement can mean something as easy as putting an electronic catalogue online. They can be deployed relatively quickly and don't involve endless negotiations with suppliers or customers, and can deliver quick returns.
But for B2B to really work it needs consultancy, high levels of expertise and complete commitment from the client.
In the cosmetics company they set about manufacturing the syringe. Sales for the first week were huge. Of course if it didn't work disaster would follow, but if it did, it would be brilliant.
B2B does work, and it is brilliant. But it is time to end the hype and to concentrate on delivering the goods.
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