Technoloqu's wake-ufdall

By Thomas J. Westbrook President/c.e.o. World Wide Wood Network, Ltd.

www.wwwood.net

l tith the advancement of Internet technologies over the past couple of years, the lumber and building materials industry was besieged by e-commerce companies promising how their solutions would change the industry forever. The mantra was that those who did not embrace e-commerce immediately would die a certain death. Today, most of those companies have vanished in the same Internet time they were going to deliver, yet others are thriving. So, what does the future hold for e-commerce?

To understand the future, one must understand the present. Responses to a study of the Home Center, Retail and Pro Dealer segment of our industry, conducted in 2000, by World Wide Wood Network. Ltd. and Louisiana State University, indicate that in 1999 only l3%o of the industry was conducting any kind ofbusiness on the Internet. Even so,56Vo of the industry had Web sites, andTlVo of the companies had plans to develop or improve their Web site within the next 12 months. At the same time, 4l%o was willing to transact business on the Internet in the future. These figures show the willingness of the LBM industry to embrace e-commerce in their daily business processes and into the future.

How soon e-commerce adoption occurs, however, is as uncertain as predicting the price of dimension lumber in the future. Today, companies are conducting transactionbased e-commerce through third party exchanges in a very limited manner; typically as a fall back option when they are not finding successful business through traditional channels. However, where the e-commerce solutions and tools go beyond a purely transactional platform, such as integrating with a company's existing business process while providing supply chain and information management options, companies are very willing to adopt e-commerce.

In the short-term (one to five years), as long as the ecommerce providers supply the functionality needed by the industry, e-commerce adoption will increase dramatically. Acceptance today is much higher than last year. We meet and talk with customers daily. We know what they want from e-commerce. Integrating disparate back office systems, transforming, translating and transmitting data and information electronically between trusted trading partners, and providing inventory management, shipping and forecasting capabilities are services presently being requested by the Industry. Initially, these solutions will be provided via a private network of vendors or customers at the request of a particular supplier or customer.

In the long-term (after five years), e-commerce will not even be a term used in the business process; it will be the standard way of doing business. More and more companies are investing in Internet related software and infrastructure. Customers are beginning to demand the ease and efficiency of electronic process throughout the supply chain. Suppliers that want to continue or grow their business are not going to be able to ignore those demands. And, there will be a shift from private networks to the third party exchange format that is struggling today. Customers will not be willing to log in to l0 or 20 different suppliers' private networks to do business each day; they will force consolidation of information to a few industry-accepted exchanges.

The dot-com era may be dead, but e-commerce is not. Those companies that believe they can ignore the opportunities that Internet technologies can deliver will wake up one day to find that their competitors have gained a significant market advantage over them. The only question will be whether they will recover.

Time to take the first steps

By Hank Matthy Sr. Vice President-Sales Vensvss Commercial Systems www.versyss.com

I I ow widespread will e-commerce become in the lumber and building material industry in the coming years?

This is a question that challenges all of us who must look into the future of our industry so we can formulate our business plans that will provide the products and services to manage your businesses more profitably. The youthful enthusiasm for e-commerce and all of its promise has evolved to a more conservative approach when it comes to the use of e-commerce. One fact is certain. E-commerce is here to stay because it will be the most effective way to meet the new challenges that we face every year in processing our information in a timely and accurate manner.

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