Ten years ago, many people didn't know what ``e-commerce'' was. Now, it is a term less used and somewhat taken for granted.
A loose definition: conducting business on the Internet. However, it may range from providing a Web site for information to a complex, closed arrangement that allows transactions from various suppliers. It also may be an auction.
Whatever the definition, it is a way business is conducted.
``It's really `business as usual' now,'' said Gary Brown, director of e-commerce and business information systems for BASF Corp.
Tim O'Brien, vice president of the Americas for GE Plastics, agreed: ``Things that we used to do in person, can now be done electronically.''
Others said that as more and more items could be looked at as commodities, it provided common ground for purchases and allowed for their exchange online.
Looking back, Donald Goodwin, president of Technomic International Inc, a Chicago-based market and competitive analysis firm, said e-commerce ``used to be like the Wild West.'' At one point, there were dozens of new companies and consultants available to tell companies how to approach e-commerce.
``There's not much mystery to it anymore. The consultants are out of business because they did their jobs too well,'' he said.
Take reverse auctions, for example. In the early days, according to Goodwin, companies would get all sorts of bids on projects. Some were 40-50 percent less than material costs. He said that the companies were finding scams or situations where the bid was a far cry from the specifications of the project. That led to more screening and pre-qualifying so that bids are on equal footing.
``Now it is far more organized. Users are smarter. It used to be supplier-dominated, and the major benefit for five to 10 years was to the supplier. Now, the user seems to control all the different transactions,'' Goodwin said.
One of the big players in the early days was Omnexus, which tried to be an electronic procurement marketplace. Among its initial stakeholders were five big resin companies, and the company consumed more than $100 million of investor money in its three-year run.
``Omnexus was a tremendous idea staffed by tremendous people and eventually tremendous technology - but ahead of its time,'' said David Jukes, now chief executive officer of Univar Ireland, UK and Distrupol Europe.
In an e-mail, Jukes, who was a vice president at Omnexus, said the company's shareholders all had different reasons for investing in Omnexus.
``Huge sums of money were burned in trying to build a business model for a world that wasn't ready and to solve a problem that wasn't really there.
``In the end, everybody involved in the project learned a tremendous amount. And for me, personally, it was an amazing ride,'' he said.
Investors pulled the plug in December 2003. Some of its parts were sold off - Paris-based SpecialChem SA bought the online service.
One of the survivors of the Omnexus marketplace was the transaction hub Elemica Inc. The Wayne, Pa., firm had formed an alliance with Omnexus in December 2001. At that time, the idea was for both to work to build hub-to-hub connectivity.
In March 2006, Elemica reported that it was maintaining a trend of doubling volume about every six months, and that it had been profitable for the last six months of 2005. It reported that its transaction value had exceeded $35 billion.
Elemica, which was established five years ago by 22 leading chemical companies, bills itself as a neutral information network for order processing and supply-chain management of contract and repeat transactions.
Here's a look at how some companies have adapted to e-commerce:
GE Plastics boosts its online orders
The switchover to online use was quite dramatic for Pittsfield, Mass.-based GE Plastics in 2000.
The company had $100 million in online sales in 1999, but that was changed forever in 2000 when that number hit $1.2 billion, 12 times what it had done the year before.
``I think timing was a big part. It was the peak of the Internet cycle and there was a consistent effort to push customers to the Web. We made the Web site easier and we included past history and patterns,'' said O'Brien, a 21-year veteran at GE.
He said the changeover was company-driven and company-wide, and the biggest reason was to increase productivity. It was also a way to get cost out of the system.
He said GE made a big push in 2000 to get customers online and provided incentives to its sales force to encourage its use.
Now, he said, using the Internet is part of everyday life.
``Whether it is getting soccer schedules or whatever, [it] requires you to be computer literate. More and more functions make use of the Web,'' O'Brien said.
The company is supplying its customers with much more information online. Not only are invoices and electronic file cards electronic, but there are productivity tools, material and color selection guides, and inventory management tools.
O'Brien said the Internet has not replaced the personal call, but requires that fewer calls be made. Information is now at the fingertips with a computer.
He cited as an example color matching. It used to be a physical process, bringing the wanted color to site and then matching it. Now, you click on and digitally match the color.
``That may not eliminate a physical call to the customer, but now it's one call rather than five,'' he said, noting a similar change with material selection
``The engineers are pretty computer-savvy now. They can do a lot of prep work on the Web. So if face-to-face time is needed, it is on a narrower topic,'' he said.
GE Plastics even has taken steps to lessen the language barrier. The company conducts e-commerce in eight languages other than English - Spanish, Portuguese, French, Italian, German, Japanese, Chinese and Korean.
Online, the firm has been using the order.geplastics.com URL as well as GE Polymerland. Customers can access their history, trends and all sorts of information to make ordering easier.
BASF's e-commerce keeps on expanding
BASF Corp. has been involved with e-commerce since the mid-1990s, according to Brown. He said the company's push to the Web has been driven by the customer.
Brown said that in North America, sales for BASF via e-commerce jumped in 2006 to 40 percent of total sales. Just a few years ago, in 2004, the figure was 18 percent.
He said the drive for e-commerce at BASF started in nonplastics areas.
``In 1999 BASF made the decision to see what e-commerce was all about. They set up a formal group and a strategy,'' Brown said.
He said the group's focus at the start was on cutting costs for BASF and for its customers. As e-commerce progressed, the focus changed to ease of use.
``The change is now to more information and collaboration,'' he noted.
Brown said: ``Not a day goes by that I don't get a customer who calls and says, `I need more information. Is there a way I can get it without bugging you guys?' We now push them through the portal to get it.''
He said growth in e-commerce is changing as customers get more information quickly and then ask for it even quicker.
Brown said the plastics side of the BASF business was a driver in 2003-05 in the shift to better use the Web.
``Our plastics business helped drive it and they were the first to reach 30-40 percent of e-business share.''
Brown said BASF has a portal for small, low-volume customers, while high-volume customers can use Elemica, which offers order management systems for customers and suppliers. BASF also offers its WorldAccount portal, which is available in 11 languages. It has more than 15,000 registered users in more than 90 countries.