Comparison shopping
Virtual Marketplace tools will make it easier for prospective sellers and buyers to look one another over before committing.
No one enjoys shopping for insurance. There are so many plans, so many repetitive forms to fill out. Couldn't somebody create a Web site that lets you compare competing products and ask questions about the ones that seem promising? That is the goal of Virtual Marketplace. Buying simple goods like books electronically is easy. But securing more complex products and services such as insurance or banking requires questions and answers about price, quality, customer service and more -- a dialogue thus far difficult to accomplish online. Virtual Marketplace, or ViMP, is a set of tools a company can use to create a Web site to market its own products, to allow buying and selling among its own divisions, or to serve as an intermediary for other industries.
The tools are being developed in a "first-of-a-kind" project between the e-business solutions (EBS) group at IBM's Zurich Research Laboratory and a major global financial services company. "The company has so many products that it can't just hand a potential customer a huge catalog and say, 'Here, what do you want?'" explains Simon Field at EBS. Nor can the company afford to explain numerous offerings to each customer. "ViMP will be a smart matchmaker that reduces the time required for both sides to reach a deal," Field says.
Sellers provide the marketplace with standardized product information, which is distributed across a network of "matchmaker" systems. Buyers accessing the marketplace Web site fill in a standardized form. The first matchmaker does a series of comparisons and presents a buyer with a set of the most appropriate options.
BUILDING TRUST
The buyer can select the most suitable ones and enter into further dialogue stages on successive tiers of matchmaker systems. To begin with, the buyer provides some basic information, such as name, address and level of insurance desired. If the information is satisfactory, the sellers ask more detailed, more personal questions, such as number of dependents and annual income. Customers continue as long
as they are comfortable providing answers. Gradually, the parties conclude whether they want to commit to a transaction.
This way, buyers do not have to divulge personal data until they are confident the product might be right, and sellers do not have to unveil prices or competitive details until they are confident the buyer is qualified. And thanks to the distributed architecture, the more commercially sensitive information is handled inside the sellers' systems environments, typically with connections to existing legacy systems. Buyers don't waste time investigating inappropriate products; sellers don't waste effort on unsuitable customers.
The ViMP project is now in prototype and is being shown to insurance clients. EBS is also involved as technical leader of a two-year project called CrossFlow, which is developing a solution for outsourcing business processes to business partners. The project, which began in September 1998, is funded by the European Union's Esprit research program with support from the Swiss Federal Office of Education and Science. It will address business scenarios provided by KPN (the Dutch postal service) and AGF Irish Life, which outsources part of its auto insurance claims processing.
Applying ViMP to the results of the CrossFlow project will produce a solution for the Virtual Enterprise, where partnerships can be formed dynamically as the need arises. With ViMP, the company outsourcing a task will not even need to specify the subcontractor. It will simply post the task on a ViMP matchmaker and wait for one of several possible subcontractors to place a winning bid and come back later with a 'done' signal and a bill.
Field says the ViMP work is forcing researchers to solve some general e-commerce problems. One is creating a "flexible catalog" that helps customers compare similar products with many features and options. For complex products, cheapest is not necessarily best. The catalog will help users define their priorities and explore a wide range of offerings.
If ViMP succeeds, industries might be able to create more narrowly targeted products. "For example," Field says, "auto insurers could provide specialized products they can't afford to sell in the traditional way, such as policies for people over 50 who drive safe cars. And they will be able to change prices by the hour."
Mark Fischetti is a freelance writer who lives in Lenox, Massachusetts.
