But Web-based business-to-business auctions have changed that. They offer ideal conditions to operate purchasing alliances. If fully developed, they'll likely lead to a global concentration of purchasing power. When that occurs, it will influence how corporate information technology is run because the alliances will realign the management of global logistics.

Already, B2B alliances are forcing corporations to re-examine procurement and sourcing strategies. This kind of turmoil will help bring the CIO into the corporate boardroom to offer advice on how a firm might counter the potential erosion of profit margins when B2B arrangements help lower costs.

But before you plunge into any B2B venture, consider that success will be increasingly dictated by a firm's capacity to use its economic clout to get the lowest possible bids from suppliers.

For example, consider Covisint, the online purchasing consortium just approved by the Federal Trade Commission, representing Ford, GM, DaimlerChrysler, Nissan and Renault. These five firms account for 44% of the cost of goods sold ($379 billion industrywide) and 91% of net profits ($20 billion) of the entire global automobile industry. These firms expect to realize material cost reductions from their adoption of Covisint-based procurement methods because Covisint's economic power will give its members pricing leverage over an estimated 50,000 suppliers. (The FTC and German authorities are still concerned about potential antitrust violations, though.)

If you're the CIO of Honda or Mack Trucks, you'll have to decide whether to adopt the data formats, procurement procedures and information-processing methods, plus a large collection of rules for the conduct of business as defined by Covisint, set up your own B2B site or join some other alliance that would compete against Covisint.

Another example of leverage is the Exostar purchasing consortium of Boeing, Lockheed Martin, Raytheon and BAE in the global aircraft manufacturing industry. These four firms account for 71% of the total cost of goods sold ($96 billion industrywide) and 62% of net profits ($3.6 billion) in the industry.

It seems that many companies are recognizing that they can increase profits by joining in a cutthroat auction market where suppliers will have to rely on pricing and conformity with standard specifications to win business on terms and conditions that a handful of dominant firms will dictate.

IT managers should consider these points:

1. The enormous profit gains that can be achieved through B2B procurement will funnel most new IT investments to B2B ventures while scrapping much of "enterprise" systems that were only recently installed as mostly unsuitable to support B2B interenterprise requirements.

2. Most of the newly announced B2B firms will disappear. Purchasing consortia, dominated by the economics of only a few giant purchasers, will take over.

3. Unless a supplier has a clear-cut economic advantage, preferably technological, smaller companies will have to merge to successfully engage in B2B bidding contests.

4. The economic impact of B2B on global trade will generate negative political and regulatory reaction from governments concerned about their economic sovereignty. Ultimately, politics, not technology, will dictate the scope and power of B2B purchasing consortia. The alarms have been sounded already by the European Community, as well as by a number of Asian nations, concerning the overwhelming U.S. influence in forming B2B ventures.