Purists would argue that e-commerce has been around for many years in the form of EDI, or electronic data interchange. It is true that EDI provides process efficiencies by transferring data between different computer systems, but this is not e-commerce in the modern sense.
The first key requirement for e-commerce is a presence on the worldwide web (a web site). This very simple step puts an organisation in touch with 300 million customers. This is the total number of PCs in use today, all of which have the capability of accessing any web site on the Internet.
The next stage is to provide useful information to site visitors, and what better than information about the business, its products, services and people. Going further, it is possible to provide facilities for registering queries and carrying out transactions.
However, the most significant area of development in e-commerce currently is in business-to-business ('B2B') applications, and more particularly in the creation of B2B exchanges, or portals. A B2B exchange is, in effect, a digital marketplace where a number of buyers can 'meet' and then transact business with a range of sellers. At present the most successful are Chemdex and Plastics. Sites such as Net and e-Steel offer facilities for buying and selling commodity goods, advertising capacity and undertaking reverse auctions (where bidders drop their price to win a tender in an online auction) of goods and services.
Laing and a group of industry partners are currently evaluating the potential for establishing a B2B exchange for the UK and European construction markets. To succeed, this exchange has to achieve a certain critical mass of transactions. It would therefore need to serve the needs of all companies in the supply-chain, including design firms, main contractors, specialist and trade sub-contractors, builders merchants, manufacturers and suppliers.
Such digital marketplaces benefit both buyer and supplier alike. For buyers, the ability to access a wider field of potential suppliers creates keener pricing. Conversely, for suppliers it means more tender opportunities. With efficient on-line facilities for searching and sourcing of suppliers, and the ability to complete specification, pre-qualification tendering and ordering via the web, e-commerce can create large efficiency gains.
Industry analysts conservatively estimate that trading in this manner through an industry B2B exchange could result in a reduction in the prime cost of construction by 10%. When combined with efficiencies through integration of back-office systems, savings could increase by 5%.
The key to maximising benefits is to retain key information throughout the procurement life cycle (imagine the drawings automatically being stored in an online operating manual for the building). Portals will provide private communication and provide a repository for standards. And portals will manage accounting and personnel software, meaning that small companies do not need expert staff in-house to manage the systems.
The construction industry has been chosen by the National Computing Centre as the national guinea pig for e-commerce – ahead of all other industries. A great chance for construction to show its true worth to the UK.
Source
Construction Manager
