When the boom in CBVMs started, many people expected them to oust their independent counterparts and quickly win control of the field.
No doubt it isn't fair to judge the success or failure of the CBVMs on the basis of early liquidity.
A second flaw in the business strategy of the CBVMs is the failure of some buyers-only consortia to develop robust and attractive value propositions for suppliers-after having told them to conduct all future sales through the marketplace.
Regulatory concerns may be the least of the worries of the CBVMs, for it is now clear that they-like all other B2B enterprises-must earn the business of their founders, their suppliers, and everyone else.
Price transparency and the savings that result from aggregating the expenditures of many companies on a common purchasing platform are not a distinct of CBVMs. Incumbents with efficient purchasing practices can realize comparable price savings on their own, and many forms of price transparency may be detrimental to the competitive position of best-in-class purchasers, whose practices will become transparent to less capable ones.
But CBVMs can provide unique price efficiencies for their members by helping to standardize unnecessarily complex and varied products and services, which they are in a uniquely good position to identify, and by acting as an honest broker in the process of standardization.
Like private marketplaces and some other e-procurement facilities, CBVMs both enable users to automate the requisition-to-pay process and enforce improved compliance measures that can reduce rogue spending.
To make the purchasing process more efficient, CBVMs can help implement uniform standards for transmitting data, for describing products, and for conducting business processes.
This isn't the only kind of risk that CBVMs can divide among their membership.
The fear that many companies feel about sharing information with fellow marketplace participants against which they ordinarily compete is the biggest hurdle facing CBVMs and many other kinds of on-line marketplace.
It is still too early to say whether CBVMs will be able to go much further than these private exchanges in promoting multiparty collaboration.
How are CBVMs trying to encourage the strong commitment that could promote collaboration?