BT embraces online trading

BT's agressive march towards e-business will see it handling 95 per cent of its purchase orders online and 20 per cent of its tenders through electronic auctions by next month.

The telco will also cut its maintenance supply stocks by 50 per cent, and will run 'virtual' warehouses located at its suppliers.

The company's ambitious strategy was detailed at the Financial Times New Business Paradigm conference last week. BT warned that smaller companies must follow suit, or lose business from giants like BT.

"E-business is not just about big companies. Many services are now available to meet the needs of the smaller business to streamline their processes. But if you don't embrace the changes, you'll be a dinosaur," said Steve Brady, BT's general manager of data and Internet solutions marketing.

Andy Kyte, research director at Gartner Group, described BT's plan as "ambitious" and reiterated Brady's warning.

"It may be BT and its suppliers that are moving to e-business today, but tomorrow it will be the suppliers' suppliers," he said.

Moving fast enough to satisfy ecommerce user demands will represent the biggest IT challenge this year, said Kyte. "IT managers will have to develop a cohesive sourcing strategy. They must decide what they will do in house and what they will selectively look outside the organisation to do."

Gartner says that most companies will get more benefit from renting off the shelf ecommerce applications through application service providers (ASPs) than developing systems in house.

Companies must also have the "vision" to innovate their e-business model to gain competitive advantage.

"There's too much looking at what the US or the competition is doing," said Kyte. "The rules are changed by those that innovate, not by those that copy."

Brady pointed out that communicating the importance of e-business to employees helps develop original business models.

"Once given the opportunity, people in the company are becoming more innovative, and all kinds of enterprising initiatives have been springing up," he added.