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24 June, 1998.

Technology Limitations Make Business Process
and Application Integration Difficult For Users

Business-to-business electronic commerce* is at a major crossroads,
according to new research from Ovum, independent analysts in
information technology. The Web delivers exciting new ways of connecting
buyers and sellers, but it also has limitations that affect the nature
and character of commercial relationships. This is partly because the
market is immature - and partly because automated application integration
is a difficult problem. For the market to progress, the enabling
technologies and services have to grow up. These findings come in the
first instalment of a new report, Business-to-Business Electronic
Commerce: Opening the Market.

* Ovum defines business-to-business electronic commerce as the use of
applications and digital communications to support the exchange of
value between organisations - typically, the exchange of goods or
services for payment.

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"There has been a considerable shift in the benefits message for adopting
business-to-business electronic commerce over the past few years, because

enablers have changed," explains Beth Barling, Ovum analyst and co-author
of the report. "Established methods for business-to-business electronic
commerce, such as EDI, focused on operational efficiency through process
integration in established relationships. The new generation has shifted
the focus to competitive product and service differentiation, through the
use of the Web as a 'walk up' information and interaction resource. The
next wave of product and service enablers needs to unite these two
concerns, and support both integration and competition."

"Like the Internet itself, business-to-business electronic commerce on
the Internet has attracted big ideas, in a way that it never did as EDI,"
says Barling. "One of these ideas, which acts as a lure to
business-to-business e-commerce adopters, is that the Internet has the
potential to have radical effects on industry structure and the
interaction between buyers, sellers, and process intermediaries."

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"At the moment, the highest profile business model has to do with
value-added 'match-making'. The Web is ideal for this, because it enables
people to interact with information in a way that facilitates decisions
and actions. However, match-making isn't a game everyone can play - the
best positions are already being grabbed by early adopters. E-commerce
for the rest of us means providing outstanding support for on-going
relationships with distribution channels, and suppliers. Companies
should look at getting the best out of available technologies to do
this," continues Barling.

However, today's solutions have serious limitations - the way the market
will grow in future will depend on whether the next generation of
enablers for business-to-business electronic commerce can overcome these

"One exciting direction for new enablers is the fusion of the extensible
Markup Language with traditional EDI standards. Although traditional EDI
has delivered significant benefits to some businesses, the number of
businesses using EDI for supply chain applications remains relatively
small," says Barling. "Now XML/EDI promises to enable businesses to
extend those benefits to a much wider audience."

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By combining the automated application integration properties of EDI with
the ability of XML to present structured, searchable information via a
Web interface, XML/EDI promises to enable businesses to open up and
extend supply chain applications to non-EDI enabled trading partners over
the Web.

"Although XML has only recently been endorsed as an official world-wide
Web consortium standard, it has already garnered substantial interest
within the IT industry. XML/EDI aims to build on this momentum. At the
moment, XML/EDI is still immature. It is not a solution you can
implement now. Although it points the way to the next generation of
fully integrated supply chain applications, it is not the only emerging
technology competing for this new market," concludes Barling.

About the report
Authored by Beth Barling and Heather Stark, the first instalment of
Business-to-Business Electronic Commerce: Opening the Market is available
immediately from Ovum. This instalment includes analysis of new markets
and roles in business-to-business e-commerce, developments in EDI, as
well as adopter profiles. The second and third instalments will be
delivered during the course of this year. The report costs 1495 in
Europe. More product information is available from Ovum on Tel: +44
171 312 7318.

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About Ovum
Ovum is an independent information technology and telecommunications
analyst group, providing high quality, authoritative information and
advice on key market, technical and regulatory developments. Ovum funds
its own research and accepts no sponsorship from vendors or interest
groups. Ovum's customer base comprises leading blue-chip organisations
including suppliers, users and policy makers worldwide. With offices in
Boston, London and Melbourne, Ovum currently employs 150 staff worldwide.

Note to editors:
An Ovum white paper on Business-to-Business Electronic Commerce: Opening
the Market, is available from Ovum's web site, Ovum press materials including
news releases, white papers and photography are available from Newsdesk,
go to If you would like to use the service on a
regular basis please call Newsdesk on: Tel: +44 (0) 115 940 5300. This
news release and other press information can also be found via The
Source, the IT and telecomms media information service, go to

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For more press information please contact:

In Europe: Lorraine Pitt, senior press officer,
Direct Tel: +44 171 312 7265

Laura Parker, press officer,
Direct Tel: +44 171 312 7238

In the US: D niel Matkovits, press relations manager,
Tel: +1 781 272 6414 Ext.19,

Asia Pacific: Kelly Treacy, press relations co-ordinator,
Tel: +61 3 9699 1246

Laura Parker
Press Officer
0171 312 7238

This press release was distributed by ResponseSource Press Release Wire on behalf of Ovum (formerly known as Informa Telecoms & Media Research) in the following categories: Consumer Technology, Personal Finance, Business & Finance, Computing & Telecoms, for more information visit