Here's a potential service for Kenya which I think would make very good sense. It's just speculation of course, but imagine how a bid messaging agent that they've alluded to with eBay would work for a TradeXchange user. I suppose it's a question of security and certainly it's not very important to do this with a cell phone.
Regards, Mark
GM looks to cut costs with Net purchasing
By Bloomberg News
Special to CNET News.com
November 22, 1999, 7:55 a.m. PT
DETROIT--General Motors said the Internet-based purchasing system it is developing with software provider Commerce One will generate "significant" cost reductions next year.
GM and Commerce One this month created a "TradeXchange" through which the automaker and many other companies will scan the world continuously for low bids from suppliers. They'll accept or reject them instantly via computer, instead of traditional methods based on paper and human interactions.
The agreement with Commerce One was reached in less than three weeks, GM purchasing chief Harold Kutner said. That reflects the speed at which business-to-business transactions are migrating to the Internet and GM's own determination to make decisions faster, executives said. One analyst estimates GM could save as much as $500 million next year.
"We used to go through committee after committee, making decisions based on the most perfect data set we could get," said Mark Hogan, group vice president for GM's Internet unit. "Now we're ... realizing that being out there first is very important."
The TradeXchange, announced Nov. 2, will start to generate "significant" savings as early as next month, Kutner said. He wouldn't quantify the savings other than to say they'll help GM's purchasing operations trim costs by $1 billion every year for the foreseeable future. GM now spends $86 billion annually on parts, materials and services.
Savings from the Internet-based system could reach $500 million next year and add 50 cents to projected earnings of $8.95 a share, said David Garrity, a Dresdner Kleinwort Benson analyst. The long-term potential is much greater, he said.
GM shares fell 0.06 to 69.75 at Friday's close, while Walnut Creek, Calif.-based Commerce One rose 4.69 to close at 328.69.
Internet-based trading among companies totaled $43 billion in 1998, according to Forrester Research, a Cambridge, Mass., market research company. By 2003, it will soar to $1.3 trillion, dwarfing an anticipated $108 billion in Internet-based trading between companies and consumers, Forrester said.
Internet-based trading cuts purchasing costs mainly because it magnifies the volume-based leverage that buyers bring to bear on individual suppliers. In the TradeXchange, GM and dozens of other buyers will be reacting simultaneously to bids from suppliers.
"We expect to [do] 100 percent of our purchasing around the world through this site by the end of 2001," Kutner said. Future participants are likely to include automakers such as New United Motor Manufacturing and Suzuki Motors, and major GM suppliers like Delphi Automotive Systems and Magna International, he said. Additional participants will be other Commerce One customers such as British Telecommunications, Wells Fargo and the Eastman Chemical.
"It's something a lot closer to a stock exchange than a traditional buying situation," said Adrian Slywotzky, vice president of Mercer Management Consulting in New York.
GM announced its TradeXchange the same day Ford Motor and Oracle unveiled a joint venture called AutoXchange to run Ford's purchasing operations over the Internet.
GM's Internet-based purchasing system will be up and running about six months faster than Ford's, Garrity said. In addition, it will deliver bigger cost savings because it allows the participation of outside companies like British Telecommunications, instead of just Ford and its suppliers, said Bruce Temkin, an analyst at Forrester research.
Software developed by Commerce One "is much farther along in bringing many buyers together with many sellers," Temkin said.
GM's new purchasing system is part of a wide-ranging Internet strategy. The company expects 10 percent of its vehicles to be ordered over the Internet "in the not too distant future," up from less than 1 percent today, Hogan said.
GM has had discussions with online shopping service Priceline.com about a service that would let consumers bid a price for cars or trucks, Hogan said. It's also had discussions with Microsoft's MSN CarPoint online car-buying service. Hogan said he wouldn't rule out partnerships with either company.
To satisfy buyers who are used to "instant gratification" on the Internet, GM is restructuring itself so it can deliver custom-ordered vehicles "in hours and days vs. weeks and months," Kutner said.
GM will begin installing voice-activated Internet services next year via its Onstar system, which uses satellites to help drivers navigate or summon help. GM expects its Onstar service to grow to 3 million subscribers in the next few years, up from 100,000 now, Hogan said. Monthly subscription fees for Onstar could range as high as $40 a month.
The automaker also wants to be more aggressive about trading its name and pieces of its revenue for equity in Internet start-ups.
The TradeXchange will generate fees and other income for Commerce One and GM as it grows. If it reaches unspecified revenue targets, GM will be able to exercise warrants for up to 4.8 million Commerce One shares. Based on Friday's closing price, those shares would be valued at more than $1.5 billion.
"Commerce One is a proven player, and by bringing them mega-volume, we got value for our warrants," Kutner said.
GM is negotiating similar transactions with additional Internet start-ups, some of which aren't in the auto industry, Hogan said. He wouldn't name those companies.
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