Global B2B eCommerce Adoption: The Business Perspective

Introduction

• Context for global B2B eCommerce 
• What is driving adoption of global B2B eCommerce? 
• What companies are looking for in B2B  
• eCommerce solutions, and why? 
• Issues and forecasts for global adoption

Context

• B2B eCommerce is complex and contract based  
• B2B supply and distribution chains are international 
• Buy-side, or procurement focus in this presentation

Complexity of Contract eCommerce

Complexity of Procurement Cycle

Market Magnitude

Contract-based goods commerce represents approximately $13 trillion of business in the US, and $52 trillion globally


- US Goods Commerce ($ Trillions) -

Sources: CAPS Procurement Survey Ratios, U.S. Department of Commerce data and Morgan Stanley analysis


What Companies Want


Communications & Hi Tech Industry Spending Benchmarks

Sources: CAPS Procurement Survey Ratios, Accenture and Ozro Analysis


Company Spend Analysis

Continuous Improvement



eCommerce Virtuous Circle

Why

• Companies spend 5% of revenues managing contracts 
• eCommerce software can cut this to 1% - 2.5% 
• eCommerce software can also reduce total purchase costs as much as 30%, and sourcing cycle times 50% 
• Direct materials savings flow through COGS; even small savings create significant impact on profitability

Significant Savings

Sources: CAPS, The Wacth Group, GS Research estimates

Issues in Global Adoption

• Internet access and infrastructure 
• IT infrastructure 
• Payment processing 
• Security concerns 
• Competitiveness 
• ‘Red Herrings’

International Timing, by Region

Worldwide eCommerce Growth

Summary

• Countries that have invested in competitiveness will lead global adoption  
• 86% of Singapore’s exports sold to computing and electronics industry/US supply chains 
• eCommerce hyper growth in 2002 
• .3% of Turkey’s exports tied to US supply chains 
• eCommerce ramps in 2006 
• ‘Red Herrings’ stall supporting policies 
• Tax collection 
• Customs 
• Security 
• Financial controls 
• Money talks in B2B…