Business Benefits

With no multilingual phone calls or faxes required, no written purchase orders, invoices or shipping notices to lose and the entire process taking place on the Internet, business-to-business electronic commerce has been a boon to companies. It eliminates extra charges for handling an order over a special long-distance data network - a process that, until a few years ago, would have been the only way to conduct business electronically .

''If there is indeed a new economy,'' says Robert Shaw, Internet strategy and policy advisor at the International Telecommunication Union, ''then it is built upon electronic trading of goods and services.''

On-line commerce is having even greater repercussions for businesses than for consumers. In 1998, American companies tallied $43 billion worth of sales to one another over the Internet.

According to Mr. Shaw, the leading area for business-to-business e-commerce at the moment is in the sale of information technology equipment, software and the sale of financial information. Web processing is starting to expand in different directions, however.

Companies are finding, for example, that cost reductions can be incurred by using what is called voice over Internet protocol (VoIP), a networking system that enables voice and data to travel along the same line. Traditional voice-only lines can therefore be eliminated, and voice and fax traffic moved along with data over low-cost data network lines.

Texas Instruments is one company that sees the potential of VoIP. It has bought Telogy Networks Inc., a software communications company, in a bid to gain ground in the VoIP equipment field. TI, the biggest maker of the semiconductors used in cellular telephones, will bundle its chips with Telogy's software, which compresses data for rapid transmission over networks, in a package sold to communications hardware makers.

Other companies are realizing that e-commerce can be used to establish or expand channels of distribution. General Electric, for example, uses an Internet-based interface to bid on-line for component contracts. Conducting more than $1 billion worth of Web-based business annually, GE reports that its procurement cycle has been halved.

Julia Clerk