Sunday, December 11, 2011

History of Ecommerce part 03

Slower than Expected Growth

By the end of the 1980s there were high expectations for EDI, and analysts repeatedly made predictions of unprecedented growth. It was widely agreed that only one per cent of potential users had implemented EDI and the number of users was predicted to double every year. It was said that no-one could stay in business without EDI.



For some reason, though, the growth never matched expectations. The new business 'revolution' was only taking off at a modest pace. There are a number of reasons for this, but the most often cited is that international standards have taken a long time to be developed to a level where they match business requirements.

More practical reasons were also to blame. For a start, the process was too complicated for many would be users. Although there were some off-the-shelf EDI packages, integrating them with iii-house systems (such as accounts) could prove very expensive. As a result, those who did invest in EDI did not always gain benefits. A large retail company could benefit by purchasing from its (multifold) suppliers, but this does not always benefit those suppliers. Unless they have integrated their EDI application and their order processing system, then they will probably have printed out the orders for processing. Someone in that position was unlikely to be introducing EDI to their own suppliers further down the supply chain.

By the early 1990s, EDI had reached a respectable level of awareness among businesses. There were a few newsletters and magazines dedicated to it, conferences and exhibitions, the odd article in a national paper. X.400, another internationally agreed standard for the exchange of E-mail (and other data types), had a similar (perhaps lower) level of publicity. Then came the Internet.

The Internet

You will already be aware that the growth of the Internet has been phenomenal. In February 2000. an Irish consultancy firm, Nua, estimated the number of Internet users worldwide to be 276 million. Of these, 136 million were in the United States and Canada, 72 million in Europe (with 14 million in the UK, and }'2 million in Germany), and 55 million in the AsiaPacific region.

The global figure is a huge increase on the 115 million that Nua estimated were online in April 1998. and the US Computer Industry Almanac predicts that the number of Internet users worldwide will have grown to 720 million by the end of 2005.

However, it is interesting to note how much more popular media attention has been given to 'the Net' than was ever afforded EDI. Is it because it is available globally, or because it is easy of use, or as a result of major industry players such as Microsoft and Novell developing interfaces to it?

All of these have had an impact. Perhaps the most significant factor, though, is that the Internet offers a range of messaging techniques, all of which work rapidly. The standards used to make it work are not all ratified by international standards bodies, but they do work. The factor of not having to wait for standards to be agreed has surely accelerated the growth in the number of Internet users.

An equally significant factor is that, with the existing level of awareness of E-commerce practices, the Internet can easily be identified by companies as a means of exchanging business data. It is a phenomenally well-advertised medium which offers access to a range of business applications:
  • FTP;
  • E-mail;
  • Voice-mail;
  • conference;
  • bulletin boards;
  • marketing;
  • advertising;
  • credit card transfer;
  • EDI;
  • on-line catalogues;
  • stockbroking;
  • many, many more.
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