Internet improves way small firms can do business

TANEYTOWN, Md. -- Taney Corp., a family-run staircase maker nestled in the Blue Ridge Mountains, is looking forward to the day when it can electronically exchange invoices and purchase orders with its trading partners as easily as big businesses do today.

Thanks to the rising popularity of the Internet, that day may be close at hand.

The Taneytown, Maryland-based small business is carving out a private virtual trading community with its distributors on the global computer network. With the help of a new service from AT&T Corp. called EasyCommerce, Taney has set up a site on the World Wide Web that acts as a gateway to its private network.

Taney sends its distributors electronic mail, product updates and design specifications. Soon, it will give its distributors the software needed to exchange purchase orders and invoices as well.

"This has accelerated the speed we can do business at," said Jeffrey Goschen, chief information officer at Taney. "Since it's all documented, we are able to handle it and work off of it easier. Phone calls are good only to a point."

When an industry association recently changed the building codes for staircases, Taney was able to notify its distributors immediately.

"We cranked the notices out within a day," Goschen said. "Through the Net, people knew instantly."

Most business-to-business electronic commerce today is done over so-called value-added networks, or VANs, based on electronic data interchange -- a decade-old communication protocol that lets businesses exchange purchase orders, invoices, payments and other standard forms electronically.

These private on-line trading communities are essentially exclusive clubs. Members tend to be large corporations, particularly in the retail, transportation and insurance industries, who can afford to spend a typical $300,000 or $400,000 a year for access to a private network, the EDI software and the staff to run the operation. That's more than many small businesses make in a year.

About 90 percent of the 2 million companies suited to business-to- business electronic commerce don't bother because of the cost, estimates General Electric Information Services, a unit of General Electric Co. and the world's largest EDI provider with one-third of the market. GEIS intends to target the remaining 1.9 million companies with on-line trading services that combine portions of the inexpensive Internet with GEIS's own private on-line trading network of 40,000 companies.

One service, called GE TradeWeb, will let small businesses trade with members of GEIS' on-line trading community without having to buy proprietary software -- the first service to do so, according to GEIS. All a small business needs is a computer, Internet browser software and the OK from at least one of the EDI trading partners in GEIS' online community.

The service is scheduled to be available in July in the U.S. and later this year in other countries. GEIS is aiming to keep the average annual cost to a subscriber at about $1,000 a year.

"Our traditional client base has been large Fortune-1000 companies," said Douglas Wolford, general manager of small business initiatives at GEIS's six-month-old Internet unit. "The cost of the technology and the sophistication required to run (EDI) was so intensive that we couldn't offer it to small business. The Internet has removed some of those barriers."

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