Not only does it mean lower prices and a greater share of the marketplace, it also engenders a sense of participation that brings improved customer and partnership loyalty. EDI was set up to communicate data between suppliers and retailers like supermarkets where suppliers replenish stocks in high volumes. EDI uses bar-code cash registers, complex databases and intranets to provide basic information about transactions but is not very adaptable to changing market conditions. It is based on proprietary and very expensive technology rather than open standards and thus locks suppliers and retailers into a closed-loop. Customers are excluded from the loop.
Internet technology is open to everybody.
It is cheap to set up and run and is global. Best of all the flexibility and open standards give great latitude in creating new business models. Formerly isolated information domains, like logistics, manufacturing, finance, procurement, and human resources can talk to each other and to equivalent systems in other companies, giving and getting information as needed, when needed. IBM s Internet Division chief Wladawsky Berger says, A quantum leap in collaboration with partners and customers is now possible. The British Safeway supermarket constructed a web-based integrated value chain.