Supplier Networking

My article Birth Of An Infosphere was about three revolutions taking place on the Internet: disintermediation, ASPs (Application Service Providers), and business exchanges. Two subsequent articles examined disintermediation and the ASP model for software delivery. Here let’s look at the role of business exchanges and supplier networks, and how they apply to corporate recruiting. Recruiting E-Supply Chain A corporate recruiter relies on a complex network of external providers for the various services that go into the recruiting cycle: recruitment ad agencies, executive search firms, temp agencies, and providers for background checking, skills-validation, drug testing and more. Many of these providers market themselves on the Web. The next step, already taken by some, is to actually provide their services online. In most cases, the business model supports this, since the basic commodity is information. A background check, for instance, is entirely an information product. Since the basic commodity is information, efficiency of the service is increased as efficiency of the information flow is increased. The idea of improving a business process by increasing the efficiency of the flow of information is not new. Data Exchange Before the Internet was opened up to commercial traffic, corporations used a technology called EDI (Electronic Data Interchange) to connect to their trading partners and suppliers. EDI exchanged information between companies on a one-to-one basis, typically over dedicated data lines. Setting up an EDI connection involved a high degree of customization, and was capital-intensive, both in physical and intellectual capital. When it worked, however, it began to deliver on the promise of a paperless supply chain. EDI can be credited with successes such as “Just-In-Time” Inventory in the automotive industry. However, EDI’s chief drawbacks were that it was costly to maintain, slow to adapt, and most importantly, resulted in a linear business relationship. From EDI to the Web Many industries have organized vertical portals to bring together the various suppliers in the industry and integrate them into supplier networks. Whereas EDI can be described as one-to-one, supplier networks on the Web are many-to-many. Supplier networks and business-to-business exchanges bring together entire industries. Because they utilize easily accessible Internet technologies, they have a lower cost of entry than EDI. The advantages of computerized supply chain management can be realized more quickly, more cost-effectively and more easily by using open Internet standards to bring together suppliers into business exchanges. The Web provides the foundation for a VPN, a Virtual Private Network through which data can be electronically moved amongst suppliers. In recruiting, this functionality means that candidate information gathered through the front-end of a corporate Career website can not only flow through to the back-end of the recruiter’s hiring management system, but also be fluently shared from that back-end system with key external providers. Linking through the Web this way greatly streamlines the recruiting process. <*SPONSORMESSAGE*> Three E-Business Revolutions Recruiting is affected by all three e-business revolutions discussed in this series of articles. Recruiting on the Web is all about information transfer:

  • It puts the consumer/candidate in direct contact with the corporation, such that both benefit from the resultant disintermediation.
  • Article Continues Below
  • Recruiting has a relatively standard process that can be automated into an ASP. ASPs allow businesses to share the cost of infrastructure, but more importantly for recruiting, they put the corporate recruiter and the consumer/candidate on the same level in terms of access to the candidate database.
  • The recruiting supply chain completes the three-way exchange between corporate recruiters, candidates and suppliers of recruiting services, with the Internet as the common medium.

The implications of the three e-business revolutions are profound. Recruiters should recognize these macro trends and be ready as the three waves combine into a tidal wave!

Yves Lermusi (aka Lermusiaux) is CEO & co-founder of Checkster. Mr. Lermusi is a well known public speaker and a Career and Talent industry commentator. He is often quoted in the leading business media worldwide, including Fortune, The Wall Street Journal, Financial Times, Business Week, and Time Magazine. His articles and commentary are published regularly in online publications and business magazines. Mr. Lermusi was named one of the “100 Most Influential People in the Recruiting Industry” and his blog has been recognized as the best third party blog.