If you don't know what is meant by "chaord" you can get a basic clue in this post: Chaordic Organizations

Trade Exchanges are usually managed and operated on SaaS (Software as a Service) platforms these days. There are a number of providers to choose from. In this pondering post I want to describe how this system is a "chaordic" one, and dig into the benefits and drawbacks of such a system. Let's see where it goes, shall we?

 First, what are the layers, or "players" in the system? If we get a grip on that maybe we can make sense of the mess.

  • The internet, with all it's physical parts, networks construction, the stuff that makes it work in general. There are many parts (businesses) involved to make it work. We won't worry about it's detail here, but to say that modern trade exchanges run on the internet.

 

  • The Exchange Platform Provider (EPP). This is the lowest level we will work closely with. The EPP is the company who develops and sells use of Trade Exchange Management software to various and numerous Trade Exchange Operators. Although there are stand-alone software providers as well, we are interested in those who include interaction capabilities between their customers. EPPs provide the SaaS platforms the exchanges subscribe to and use to provide services to the end users.

 

  • The Trade Exchange Operator (TEO). This is the layer in our Chaordic System that produces the value to end users. The TEO is typically a small business that subscribes to the SaaS of an EPP, and is the EPP's customer. The Trade Exchange provides bank-like accounting and transaction processing services to users, often a marketplace where users can advertise items for sale to other users where they can click-and-buy. These transactions are debited to the buyer's account and credited to the seller's account.

 

  • The End User is typically a Small or Medium Business Enterprise (SME) that subscribes to the services of the TEO. Most trade exchanges refer to the end users as Members, so I probably will as well, although I think it's better to think of them as simply Users.

 Keep in mind that all of these entities are trying to make money. They are in it to earn a living or something like that. They are competing on their own "layer" with each other for the business of the next lower layer. Yet, they do better when they also cooperate with their competition. This is true at the User level, and is critically important at the TEO level. At the time of this writing there is minimal cooperation between EPPs, but the lower level participants can and do deal across platforms on their own using other methods.

 There are many perspectives to view this situation from. I think it is important to attempt to "use the eyes" of at least the User, the TEO and the EPP, at least if I'm going to participate as any of those roles. Let's start with the User  Perspective.