Your B2B Solution Might Already Be Under Your Nose

This time, the Internet revolution isn't focused on selling books, bidding for collectibles online or even organizing the Web for mass consumption. Instead, the driving force is companies looking for creative new ways to conduct e-business with a whole world of existing and yet-to-be discovered partners that aren't limited by geography, existing personal nal factors.

Analysts see a huge boom in the making. Forrester Research estimates that the trade of goods between businesses over the Internet will generate $1.3 trillion by 2003. Some flashy startups have attracted most of the press in this space, but many established vendors of software other than transactional applications that have been lumped under the umbrella of knowledge management are experiencing growth through the B2B trend.

The reason for this shift is simple. Under the covers of most successful B2B initiatives are tools and technologies that so-called KM products and approaches helped to pioneer. The familiar product categories of business intelligence (BI) analytics, content and document management systems, enterprise portals, business process management and collaboration environments are the engines behind this more complex form of e-commerce.

"Knowledge management is a huge part of e-business, especially in the B2B space," says Larry Hawes, an analyst with the Delphi Group of Boston. "The first rush in this market was to figure out the transaction piece of B2B e-commerce, but now companies are starting to realize the content and context pieces are just as important." Like the B2B market overall, this tools segment--which focuses on areas such as business analysis, content management, e-infrastructure (mostly XML-based), e-procurement and e-services--is hot. According to the Delphi Group, the sector was worth $5 billion in 1999 and will double in size this year and again next year.

Analyze This

For so-called dot-com companies, the amount of data generated by their electronic interactions with customers, suppliers and partners is rich but overwhelming. Consequently, businesses such as, and are using analytical and BI tools to help them better understand their e-commerce processes, such as which practices work on their sites and which suppliers are the most efficient.

The options are more extensive for traditional companies that find ways to maximize their existing BI investments. In doing so, they can gain greater understanding of their own sales, inventory and offline and online processes and extend that valuable knowledge to their partners and customers. (See the sidebar)

"Companies from both ends of the spectrum--like AutoNation and Envoy Freight, for example--are taking what used to be inside analysis and turning that into a B2B-type application they can charge for," says John Schroeder, executive vice president of products and services for KM software vendor Brio Technology in Palo Alto, Calif. "Things that used to be cost items, like data warehouses, are being transformed into profit centers."

This emerging activity has spurred well-known vendors such as Brio and Business Objects to reposition and overhaul their products as they roll out applications optimized for the Web and for extranets. Meanwhile, newer players including DataSage (acquired by Vignette), Epiphany (which purchased Internet CRM leader Octane) and Genesis are pushing the envelope with product lines built from the ground up to support the mining of e-commerce data. Other major players in this field include Broadbase and Microstrategy. The products differ from traditional KM analytic tools in their ability to analyze data generated by interactions with Web sites; they use this data to see which portions of sites are most successful, how people are using areas of the site and so on (though they use data mining and OLAP to do so).

"For business goals such as mass customization or one-to-one marketing to be realized, the ability to collect and leverage information about individual customers or well-defined segments will be critical," says Henry Morris, an analyst with International Data Corp. in Framingham, Mass. "Epiphany, for example, recognizes that each customer interaction must leverage the customer information base."

Documents to Content
Another element of knowledge management systems under transformation is document management. Amie White, another IDC analyst, predicts that this product category will disappear as a discrete entity within five years; it is morphing into what's called content management. While document management has dealt with archiving, maintaining and protecting the integrity of an organization's unstructured data, content management goes further in helping companies to reuse all that information within internal, public-facing and extranet Web sites. This type of leverage is crucial in the fast-moving, increasingly content-driven world of e-business.

"It makes sense for an organization to have its content in one media so that it can have multiple uses, which is part of what content management lets you do," says Jeffrey Engelmann, vice president of business development for InterWoven in Sunnyvale, Calif., which makes the content management system TeamSite. "Just as importantly, this type of system lets you link knowledge sources together so customers can do self-service things while getting a richer view and experience."

In addition, leading-edge content management systems from companies such as eBusiness Technologies, Interleaf (acquired by BroadVision) and Vignette are engineered so content can be presented in formats appropriate for particular devices and types of connection. From an e-business perspective, this means customers or suppliers can do business with their partners--at least on a limited basis--at any time from anywhere. These companies are also building personalization capabilities into their products through partnerships or acquisition or by developing their own technologies.

Doors to the New
Portals sit at the intersection of content and e-business processes. They can function as a window to any online destination, whether an online marketplace, an extranet site or a corporate intranet. Around these functions is a framework of business process management that combines desktop access to multiple applications such as customer relationship management (CRM), workflow and collaboration systems.

For example, this spring Open Text launched both a personalized interface for its LiveLink product and, an online trading marketplace and community. "Our customers are interested in sharing knowledge and collaborating in a business-to-business environment," says Dan Latendre, vice president of marketing and business development for in Waterloo, Ontario, Canada. "Companies are also interested in adding value around the transaction, which requires knowledge gathering and an understanding of business processes that are taking place online." In addition, Epicentric, Viador, Webridge and Plumtree recently unveiled products aimed at companies building B2B portals. Customer-facing content and CRM is another aspect of e-business that is getting attention. A growing segment of software companies that the Delphi Group has labeled as e-services vendors is arising to help both conventional and online businesses build knowledge bases and applications. First Wave, Octane, Prime Response and SilkNet (which recently merged with Kana Communications) are among the leaders in this field.

Everybody's Talking
Many consider collaboration to be the glue that will unite online trading communities and exchanges by making these environments more interactive. Industry analysts are starting to refer to this development as c-business, and companies such as IntraLink and Intraspect, which provide online collaborative sites for the financial and legal industries, are helping to define it.

"In this setting, we're not talking about chat or instant messaging. We're talking about creating places on the Internet where people can work," says Jim Pflaging, president and CEO of Intraspect in Los Altos, Calif. "Businesses have to make sure they can create high-fidelity relationships with other companies, and collaboration is a way to do that."

Keeping a level head is imperative in this crazy e-era. First, no matter how fabulous a product or technology may seem, it is just a tool. As always, people are the catalyst in any successful venture, whether an internal knowledge-sharing program or a B2B marketplace launch.

Second, companies must look at their e-business strategies as part of a larger knowledge-building mission that is closely related to their core competencies and market differentiation. IDC recently identified "knowledge capital" categories including market capital, creative capital, loyalty capital, brand capital and intellectual capital.

"Companies run into problems when they just think about e-business and try to get content up in a hurry," warns Scott J. Smith, managing partner at IBM Global Services in Armonk, N.Y. "E-business has made people forget about the first wave of knowledge management, when we learned that the tools don't always work and that you need a rich collaborative environment that makes everything go, from online trading networks to internal knowledge management initiatives."

Third, a company doesn't need to toss out everything it has ever learned, open an online exchange and plan an IPO. On the contrary, taking a hard look at how e-business products and practices can help to streamline existing business is a logical place to start. There might be more efficient ways of conducting transactions with partners or suppliers using the Internet, or it may be that an industry-wide trading exchange really suits a company's market ecosystem.

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