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Purchasing holds B2B market steady – but i2 doesn't notice

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Purchasing must rank alongside human resources as one of an organisation's most dull activities. But since the New Economy made anything that entails email interesting, purchasing is a hot topic - especially now that they've given it a new acronym - B2B. It's when one company buys stuff off another company. And apparently, despite the huge setbacks, it is going to boom after all.

The latest report from Forrester looks precisely at the topic of purchasing, especially through electronic mediums, and it found hat it is going to have a serious take-off - albeit stuttering on occasions. The study was conducted in association with the US-based National Association of Purchasing Management and it found that nearly 72 per cent of US organisations use the Internet for indirect purchases - a jump of 2 per cent over the previous quarter.

This quarter( in fact 54 per cent of buyers) said that they had used the Internet to make direct purchases too - another increase over the previous quarter, which was 46 per cent. And added to that, there was the surprising figure that buyers sent as much as 9.8% of their direct materials orders over the Internet. That's quite some success.

It's not just plain, old-fashioned online ordering that organisations are doing either. Increasingly they're turning to auctions to harvest their wares and supplies. The report found that 20 per cent of organisations in the US have used auctions to buy products or services - a rise of 5 per cent from the previous quarter.

But it's no all good news. Organisations that buy in large volumes have reported fewer instances of online collaboration - in fact it has dropped by 10 per cent.

This isn't actually a great picture for the B2B movement. Certainly it shows encouraging signs, but a 2 per cent quarter-to-quarter rise isn't quite the revolution that some would have hoped for.

The fact is though that the B2B landscape is a new one and, like the Internet itself, it will take time for organisations to trust and benefit from the options available out there. However, as Forrester notes, it may not be moving as fast as everyone had hoped.

If you cast an eye around the B2B marketplace in fact you can see quite clearly how dire its position is. The new world B2B industry stalwarts are all suffering, that's for certain. The past few weeks have seen very suspect reports creeping out about the likes of Ariba and Ventro. And the rest are getting hammered, or bailed out, by the ERP giants such as SAP, PeopleSoft and Oracle.

I2 yesterday further demonstrated how bad it has got in its financial department by sending 10 per cent of its workforce - almost 600 people - off for early redundancy. This follows bleak financials and the departure of a president of worldwide field operations earlier in the week.

So don't think that B2B market hasn't got a long way to go, because it clearly has.

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