South West businesses in the market for online trading

Issue date: 25 April 2005

Issue date: 21/04/05

Proof that British businesses, including those in the South West, are receiving significant benefits from using online marketplaces, including the reduction of operating costs and improved trading relationships, has been revealed by new research carried out by Bristol Business School, part of the University of the West of England.

The study, which was carried out for the Chartered Institute of Purchasing & Supply (CIPS) and supported by BT and Oracle, examined the value of online marketplaces for suppliers and buyers.

Key findings showed that UK businesses have been able to use emarketplaces to reduce the time spent on order discrepancy by 69 per cent. It has also reduced the time in creating complex product and service catalogues by 65 per cent.

The research revealed that a main benefit of an e-marketplaces for buying organisations was the ability to be more strategic in their relationships with suppliers. Some 22% of respondents said that emarketplaces had improved the relationship with suppliers. In terms of the benefits for suppliers, the study highlighted that the main reason that they join an online trading hub is to be seen actively supporting their customers, followed by increased customer retention. Another key benefit from the suppliers’ perspective was the reduction in customer order errors. The biggest concern for suppliers is the fact that there is no one marketplace they can join, or single format they can work with, that supports all buyers.

Mohammed Saad, Head of School of Operations Management at Bristol Business School, said: “From past research we have carried out at the School, the experience of emarketplaces over the past five years has been largely a challenging one. The perception has been heavily tarnished by the whole era, with some highly publicised failures.

“This latest survey is great news for the B2B e-commerce market. It shows that users are prepared to acknowledge, perhaps for the first time, that online marketplaces deliver significant savings in terms of efficiencies. This is also allowing companies to concentrate on more strategic issues that hit the bottom line, such as strong customer and supplier management.”

Bristol Business School has just embarked on a new research project, I-Innovate, which is funded by Oracle, the Office of Government Commerce and the Chartered Institute of Purchasing and Supply. This will explore innovation in purchasing and the greater strategic role for the discipline, partly through the use of information technology.

For further press information, please contact:
Chris Lawrance, JBP Public Relations, (0117) 9073400.

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