The case describes the manner in which SciQuest.

com's B2B e-marketplace was developed and

the system architecture of this e-marketplace. It also explains how the company implemented an
operations fulfillment solution in the marketplace and the benefits derived from it.

B2B e-marketplaces alter the structure of buyer–seller trading networks.

SciQuest was founded by Peyton Anderson (Anderson), Scott Andrews and Keith Gunter in
Research Triangle Park, North Carolina in 1995. Before opening its online store, SciQuest
conducted a survey of the audience its web site planned to target.

The company first launched an informational web site and product-sourcing service in 1995. The
web site allowed users to access a comprehensive online database of scientific products and
suppliers with a powerful search engine.

SciQuest generated its revenues from scientific vendors who paid an annual subscription fee for
inclusion in the database.

SciQuest is the global leader in helping academic and research-centric organizations realize the
potential of strategic procurement. The company's specialized knowledge, on-demand software,
and services-first approach empower more than 100 of the best-known academic,
pharmaceutical, biotechnology and research organizations to manage spend, drive ROI, and
advance their critical missions. SciQuest's strategic procurement solutions are strengthened by a
deep understanding of the higher education and research environments combined with a broad
supplier network for everything from lab equipment to office supplies to services. The
company's intuitive, online shopping experience and diverse supplier offerings are proven to
increase user and contract adoption. Through software-as-a-service (SaaS) deployment,
organizations can quickly implement the right eprocurement solution, whether it's a robust
shopping platform for existing eprocurement tools or to fully enable all aspects of purchasing
from sourcing to settlement.

The Need
In the mid 1990s, scientific products industry experts began realizing that the traditional supply
chain had not been addressing the needs of scientists, purchasing professionals and suppliers.
Scientists had to continuously develop new applications and test new theories.
This required forecasting of the quantities of chemicals and other supplies and the kind of
equipment they would need. They sometimes had an immediate need for critical items that were
highly technical, which they had never purchased before.

Most of the time, they had to purchase them from new and different suppliers. This involved
going through several catalogs of the size of huge telephone directories. Purchasing professionals
were also frustrated with the traditional paper-based product ordering process that required
manual preparation of purchase orders and order tracking.
Scientists sent their requisitions to purchasing professionals, who placed their orders with several
suppliers by phone, fax and e-mail. This multi-step manual process was highly susceptible to
errors.

According to a survey1, each requisition cost $107 for orders processed manually, while
processing an order through an online procurement system cost only $30 in 1999. To overcome
these limitations of the traditional supply chain for scientific products and to meet the needs of
scientists’ , e-commerce seemed to offer the best solution. Realising this , SciQuest.com, a
wbsite offering a wide range of services to scientists and purchasing professionals, launched a
B2B e-marketplace in 1998. The B2B e-marketplace offered scientific and laboratory products
used by pharmaceutical, clinical, biotechnology, industrial and education organizations
worldwide.

ANALYSIS

Measures taken( technologies used) to implement the B2B e-market place & its benefits :

SciQuest entered into technological partnerships with leading software solution providers like
IBM, Oracle, Ariba and Commerce One.

In September 1998, SciQuest implemented the OBI compliant Net.commerce solution. The B2B
e-marketplace was developed using WebSphere Commerce Suite and DB2 Universal
Database for AIX. WebSphere Application Server was used to develop applications that
supported the company’s back end business process.

DB2 (Web – ready database) consolidated and stored information on more than one million
items, for approximately 600 vendors. It also stores SciQuest’s business-critical information,
vendor information and customer purchase histories for tracking orders.This enabled SciQuest to
eliminate much of its customers’ procurement paperwork.It gave a one stop solution for all of
their laboratory needs. Was able to reduce transaction costs and increase the value of the average
order by allowing customers to purchase from a single vendor.

SciQuest introduced a training program to help its customer service representatives learn how to
use PureEcommerce.

PureEcommmerce enabled SciQuest to effectively manage every single line item even when it
was disconnected from its supplier base. It also helped to manage customer relationships through
reverse logistics, order personalization and tracking capabilities. PureEcommmerce integrated
thousands of suppliers ( small, medium and large suppliers ) with SciQuest’s marketplace and
supported thousands of transactions per day. The software also had the ability to keep a check on
the sale of substances which could be used to make bombs or drugs.
The software helped SciQuest to cut the order processing costs by 50 percent, and reduced the
problems the company faced due to the increasing number of customers.

Autions : Lotus Domino and Lotus Notes helped to launch an online auction facility in early
2000.This facility helped customers to submit bids for used and refurbished laboratory
equipment.

OUTCOME

SciQuest attempted to position itself as a vendor neutral partner for both buyers and suppliers. It
secured over 100 enterprise customers and contracts with 850 suppliers around the world by
March 2001.

The company had more than 1.5 million stock-keeping units, ranging from reagent and
antibodies and latex gloves costing 50 cents, to high-end, $20,000 spectrometers.

About 300 transactions were handled through the exchange each day, involving approximately
700 orders to suppliers.