Conflicting goals slowing trading exchange adoption

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Consortium and Independent Trading Exchange operators and their retail end users are conflicted about what each is trying to achieve with exchanges, according to a recent AMR Research survey of the two groups regarding the effectiveness of exchange services.

“Vendors providing exchange services are throwing functionality at users faster than they can absorb it. Exchanges claim users can sequentially implement auctions, e-procurement, and Collaborative Planning, Forecasting, and Replenishment (CPFR) in as little as 10 to 15 months. Exchange users are much more conservative in their rates of adoption,” comments AMR Research. Most users report running pilot projects on single exchange functions for as long as 18 to 24 months before putting them into production; achievement of the projected Return on Investment comes even later.

Exchanges also claim that using their services reduces phoning and faxing between buyers and sellers. But users reported little evidence of this as they continue to use the traditional communication devices to confirm and clarify orders and to satisfy paper trail requirements, reports AMR Research.

But carriers, many of which have become wary of exchanges and their initial impact on commoditizaton of trucking services, should nevertheless be cautious about their dismissal of exchanges.Despite the inherent problems, shippers still see value in the exchange concept. Since no single exchange will satisfy all of their requirements, the common consensus among those surveyed is that the end state will be the use of a combination of exchange services and technology. An integration framework, such as Enterprise Commerce Management (ECM), and a standard for data definitions and synchronization, such as UCCnet, will be required to manage this complex set of services and technology.

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