From Competition to Consensus

Behind the Scenes

Tradeplace officially launched in December 2001, but even before the hub's debut the manufacturers were working to bring their trading partners onboard with the initiative. Part of this evangelization process involved explaining the need for, and benefits of, the hub as a single point of entry to all the manufacturers.

Perhaps even more important to the midsize and smaller retailers was the low cost of entry and the brief implementation times necessary to begin using the system. In fact, the cost to the retailers and distributors was (and still is) nil, and using the Web portal to access the manufacturer's system to check availability or place orders required only registration on the Tradeplace Web site to get started.

Marie acknowledges that some customers were leery of the time and resources that would be necessary to move to system-to-system integration. "But they started to realize that we are talking about something that is really a very short time. The integration can be done, basically, in a month, with a minimum number of resources."

In addition, Tradeplace has helped its retailers along by providing an onramp kit, a lightweight set of sample code that partners can download to help them get through the necessary integration steps. Trisha Gross, vice president of marketing and client relations at Hubspan, explains that the kit helps the partners with enveloping and communications, the hardest part of getting integrated.

The Long Road

Since its launch in seven European countries in 2001, more than 11,000 users have registered with Tradeplace to use the browser-based solution, and the hub, which is available in multiple languages and has expanded to encompass retailers in 15 countries. At present, 55 trading partners have established or are in discussions to establish system-to-system connections with the hub via XML, Tradeplace's second phase. Other examples of transaction types that will be released within the year for this phase are delivery notes, an electronic billing process and sell-out data, which alerts the manufacturers when a product is purchased so they can better forecast production.

Additionally, Marie said the fourth phase is scheduled to roll out in Belgium by the end of July or September, and it will consist of a common portal platform that includes a library of diagrams and listings of spare parts.

Marie and Minacci did not discuss how much Tradeplace's founders had invested in creating the hub, although they emphasized the manufacturers' strategy of going with an ASP was to keep initial investments to a minimum. The bottom line, they said, was that the return on investment was sufficiently self-evident — in terms of sharing the cost of the integration platform, improving efficiencies in distribution and enhancing customer service — that the manufacturers' top executives agreed to fund the project. And because the initial investment in the hub was relatively low for each participant, Tradeplace has been able to focus on steady, gradual growth in its user base rather than feeling pressure to push for the kind of explosive increases in participants that seemed to doom so many of yesteryear's over-marketed, under-utilized e-marketplaces.

As far as lessons that other companies might take from the Tradeplace project, Hubspan's Gross says the Europeans' experience demonstrates a fundamental truth of which many companies often seem to lose sight: If you're going to implement a new technology that affects your trading partners, make sure from the get-go that your partners can handle that technology, too. "Ease of adoption, not only for yourself, but for your partner community, is critical," she advises. For example, the TradeXML language that Hubspan developed for the Tradeplace implementation lowered the barrier to integration with the hub by taking a minimalist approach, reducing the complexity "to the lowest common denominator of technology," as Gross puts it.