PUBLIC B2B EXCHANGES

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CHAPTER 6
PUBLIC B2B EXCHANGES
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B2B Electronic exchanges

• Public e-marketplaces (public exchanges
• Trading venues open to all interested parties and
  
• Usually ran be third parties (market maker)
• Exchanges
• A many to many electronic trading community.
• 50 of all B2B activities
• 3,000,000,000 in transactions

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Classification of Exchanges

• Sourcing strategies
• Systematic sourcing Purchasing done in long-term
  supplier-buyer relationships
• Spot Sourcing Unplanned purchases made as the
  need arises

• Types of Materials
• Direct -Materials used in the production of a
  product
• Vertical Exchange An exchange whose members
  are in one industry or industry segment
• Indirect- Material used to support production
  (ex. Office supplies)
• Horizontal Exchanges Exchanges that handle
  materials traded in several different industries

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Dynamic Pricing

• A rapid movement of prices up and down - over
  time, and possibly across customers, as a result
  of supply and demand
• Examples stock exchanges, auctions
• FIVE STEPS
• A company lists a buy or sell bud
• Buyers and sellers see bids and offers but may
  not see who is doing the buying or selling
• Buyers and sellers interact in real time with
  bids and offers
• A deal is struck when there is an exact match
  between buyer and seller offers
• The deal is consummated, and delivery and payment
  are arranged
• Third Parties provide support services
• Credit verifications
• Quality assurance, insurance
• Order fulfillment, delivery

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Ownership, Governance and Organization

• Ownership
• An industry giant
• A neutral entrepreneur third party intermediary
• The consortia (or co-p) several industry players
  get together
• Governance
• Governed by guidelines rules
• Fees
• Rules - fairness assurance ,contracts,
• Security
• Organization (page 252)
• Include Following Elements
• Membership
• Site Access and Security
• Services

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B2B Exchanges Gains

• Buyer
• One-stop shopping
• Search / comparison shopping
• Volume discounts
• 24/7 ordering
• 1-order for multi suppliers
• New suppliers
• Easy reordering
• Less Maverick buying

• Sellers
• New sales channel
• No physical store needed
• Reduce ordering errors
• Sell 24/7
• Little cost for new customers
• Promote the bus.
• Outlet for surplus
• Global

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B2B Portals

• Are information portals for business. The buyers
  can hyperlink to sellers sites to complete their
  trades.
• Thomas Register
• Teamed with GE to create TPN Register, a portal
  that facilitates business transactions for MROs
• Alibaba.com
• The Database
• Horizontal information portal
• Reverse auctions
• Features and services
• Free e-mail, e-mail alerts, news, member can
  create a company Web page
• Revenue model
• Low operational cost
• Vortals
• B2B portals that focus on a single industry or
  industry segment vertical portals

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Third-Party Exchanges

• Characteristics
• Neutral 3rd party
• Financial viability difficulty
• Like a portal but also matches buyer to sellers
• Examples
• The Supplier Aggregation
• Virtual distributors standardize, index, and
  aggregate suppliers catalogs or content
• make this content available to buyers in a
  centralized location
• The Buyer Aggregation
• Buyers RFQs are aggregated and ten linked to a
  pool of suppliers that are automatically notified
  of the RFQs
• Suitability of Third-Party Exchanges
• Fragmented Markets
• Large number of both buyers and sellers
• Seller-concentrated Markets
• Several large companies sell to a very large
  number of buyers
• Buyer-concentrated Markets
• Several large companies do most of he buying from
  a large number of suppliers

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Consortium Trading Exchanges

• CTE is an exchange formed and operated by a group
  of major companies.
• Success Factors
• Size
• Elasticity- the measure of the incremental
  spending by buyers as a result of the savings
  generated
• Standardization
• Smooth inefficiencies in the supply chain
• Types
• Purchasing-oriented, vertical
• Most popular
• Purchasing-oriented, horizontal
• Selling-oriented, vertical
• Selling-oriented, horizontal

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Dynamic Trading

• Exchange trading that occurs in situations when
  prices are bring determined by supply and demand
• Matching
• The matching of the sellers price with the buyers
  bids.
• An example of matching supply and demand is the
  stock market
• Auctions
• Several arrangements for auctions
• An exchange offers auction services as one of its
  many activities
• An exchange is fully dedicated to auctions

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Comparing Major B2B Many-to-ManyModels

• Good Test Essay
• Page 265

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Building and Integrating Marketplaces and
Exchanges

• Integration Issue
• External Communications requires
• Web/client access
• Data exchange
• Direct application integration
• Shared procedures
• Process and Information Coordination in
  Integration
• How to coordinate external communications with
  internal information systems
• System and Information Management in Integration

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Managing Exchanges

• Revenue Models
• Transaction fees
• Fee for service
• Membership fees
• Advertisement fees
• Networks of Exchanges
• With increasing number of vertical and horizontal
  exchanges, it is logical to think about
  connecting them
• Centralized Management
• families of exchanges managed jointly

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Networks of Exchanges

• Large corp. who work with several exchanges would
  like to see
• Exchanges connected seamlessly
• Standardized log-on, fulfilling orders, service
  charges.

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Critical Success Factors

• What determines if an exchange will survive
• Early Liquidity
• Earlier a business reaches the necessary
  liquidity, the better is chances for survival
• The Right Owners
• The Right Governance
• Good management and effective operations and
  rules are critical
• Openness
• Must be open to all, from both organizational and
  technological perspectives
• A Full Range of Services

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Communication Networks and Extranets

• Internet
• A public, global communications network that
  provides direct connectivity to anyone over a
  local area network (LAN) via Internet service
  provider or directly via an ISP
• Intranets
• A corporate LAN or wide area network that uses
  Internet technology and is secured behind a
  companys firewalls
• Extranets
• Network that uses a virtual private network to
  link intranets in different locations over the
  Internet
• Virtual private network a network that creates
  tunnels of secured data flows, using cryptography
  and authorization algorithms, to provide secure
  transport of private communications over the
  public Internet
• Access is usually limited by agreements, strictly
  controlled, and is available only to authorized
  personnel

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Extranet Benefits

• Enhanced Communications
• Productivity Enhancements
• Just-in-time information delivery
• Business Enhancements
• Faster time to market
• Lower design production cost
• Improved customer relationships
• Cost Reduction
• Fewer errors
• Improved comparison shopping
• Reduced travel and meeting costs
• Elimination of paper
• Information Delivery
• Low-cost publishing
• Standard delivery system

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Implementation Issues

• Private vs. Public Exchanges
• Problems with Public Exchanges
• Transaction Fees
• Sharing Information
• Cost Savings
• Monetary saving may not be attractive enough
• Recruiting Suppliers
• Too Many Exchanges
• Supply Chain Improvements

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• Software Agents
• Can provide real-time, tighter integration
  between buyers and sellers and facilitate
  management of multiple trading partners and their
  transactions across multiple virtual industry
  exchanges
• Disintermediation
• Exchanges could replace many traditional B2B
  intermediaries

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Evaluating Exchanges

• Companies need to carefully evaluate which
  exchanges work best for them
• Evaluate the gain or savings from using the
  exchange
• Determine the viability of the exchange is it
  stable
• Is there a long-term relational contract
• Research the membership and board members
• Revue the revenue model

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Support Services

• Directory Services and Search Engines
• Partner Relationship Management
• Business strategy that focuses on providing
  comprehensive quality service for business
  partners
• Other B2B Services
• Trust services
• Trademark and domain names
• Digital photos
• Global business communities
• Client matching
• E-business rating sites
• Promotion programs
• Encryption sites
• Web-research services

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CHAPTER 7
Intrabusiness, E-Government, C2C, E-Learning
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Intrabusiness

• Intrabusiness EC E-Commerce activities conducted
  within an organization
• Between a business and its employees (B2E)
• Between units within the business
• Among employees in the same business
• 90 of U.S. Corps have intranet

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Business-to-employee

• Business-to-employee intrabusiness in which an
  organization delivers products or services to its
  employees
• Training Education
• Corporation's Electronic office supply catalogs
• Employees purchase companys merchandise at a
  discount
• Companys informs the employees by the intranet
• Employees communicates to each other (grapevine
  electronically)
• Fringe benefits, classes by the intranet

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Other Intranet Usages

• Activities Between Units within a Business
• Strategic business unites that sell or buy
  materials, products and services from each other
• Business Intelligence
• Public Service
• Corporate Information
• Customer Service
• Publish Companys newspaper

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Intranets

• Defined - A corporate LAN or wide area network
  (WAN) that uses Internet technology and is
  secured behind a companys firewalls designed to
  serve the internal informational need of a
  company
• Examples
• Managers can
• View Resumes
• Business plans
• Corporate regulations procedures
• Retrieve financial information
• Notify employees of meetings

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Building, Functionality and Application

• Building a company needs Web servers, browsers,
  Web publishing tools, back-end databases, TCP/IP
  networks (LAN or WAN), and firewalls
• Functionalities (List on page 296)
• Application Areas
• Search and access to documents, personalized
  information, enhanced knowledge sharing,
  individual decision making, software
  distribution, document management, project
  management, training, enhanced transaction
  delivery, paperless information delivery,
  employees control their own information. (List
  on page 297)

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Enterprise (corporate) Portals

• Corporate Portals and Intranets
• A gateway for entering a corporate Web site,
  enabling communication, and access to company
  information
• Corporate Portal Applications
• Pg. 299
• Developing portals
• Intranet/Portal Example Cadence Design Systems
• The business challenge/EDA
• The Solution/ Intranet and Portal Technology
• Evolution from tools-oriented model to software
  and consulting services

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E-Government

• Government-to-Citizens E-government category
  that includes all the interactions between a
  government and its citizens
• Electronic Benefits Transfer
• 1993 U.S. government launched an initiative to
  develop a nationwide EBT system to deliver
  government benefits electronically

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• Government-to-Business includes interactions
  between governments and businesses (government
  selling to businesses and providing them with
  services, and businesses selling products and
  services to government)
• E-Procurement
• Basically reverse auctions
• E-Auctions

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• Government-to-Governmnet includes activities
  within governmnet units and those between
  governments
• Intelink
• Procurement at GSA
• Federal Case Registry
• Procuremnet Marketing and Access Network

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• Government-to-Employees includes activities and
  services between governmnet units and their
  emplyees

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Implementing E-Government

• The Transformation Process
• Stage 1 Information Publishing/ Dissemination
• Stage2Official Two-Way Transactions
• Stage 3Multipurpose Portals
• Stage 4Portal Personalization
• Stage 5 Clustering of Common Services
• Stage 6 Full Integration and Enterprise
  Transformation

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Implementation Issues

• Transformation Speed
• The speed at which the government moves from
  stage 1 to stage 6 is usually very slow
• G2B Implementation
• Easier than implementation of G2C
• Security Issues
• Governments are concerned about maintaining the
  security and privacy of citizens data

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• Non-Internet E-Government
• Today, E-Government is associated with the
  Internet,. However, governments have been using
  other networks, especially internal ones, to
  improve government operations for over 15 years.

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Customer-To-Customer E-Commerce

• E-commerce in which both the buyer and th seller
  are individuals (not businesses) involves
  activities such as auctions and classified ads
• Classified Ads
• Internet-based ads have several advantages over
  newspaper
• Personal Services
• Many personal services are available on the
  Internet
• Exchanges
• Several C2C exchanges
• May be consumer-to-consumer bartering exchanges
  or consumer exchanges

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Peer-to-Peer Networks and Applications

• Peer-to-Peer a network architecture in which
  each workstation has similar capabilities the
  networked peer share data and processing with
  each other directly rather than through a central
  server
• Characteristics page 313
• Consumer-to-Consumer
• Napster/ file sharing
• Intrabusiness Applications
• To facilitate internal collaboration
• Business-to-Business Applications
• Using P2P as a basis for speeding up business
  transactions
• Business-to-Consumer Applications
• Marketing andadvertisement

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Online Publishing and E-Books

• Online Publishing the electronic delivery of
  newspapers, magazines, books, news, music,
  videos, and other digitizable information over
  the Internet
• APPROACHES AND METHODS
• Online-archive Approach
• New-medium Approach
• Publishing-intermediation Approach
• Dynamic Approach

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• Content Providers and Distributors
• Those who provide and distribute content online
• Publishing of Music, Videos, Games, and
  Entertainment
• Edutainment the combination of education and
  entertainment, often through games
• Electronic Books
• E-Book a book in digital form that can be read
  on a computer screen

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E-Learning and Knowledge Management and
Dissemination

• E-Learning The online delivery of information
  for purposed of education, training, knowledge,
  management, or performance management
• Challenges
• The mindset of how learning typically takes
  place, to make learning more interactive and
  engaging
• Benefits
• Great equalizer, provides new set of tools, used
  in business environment
• Drawbacks
• Need for instructor retraining, Equipment need
  and support services, Lack of face-to-face
  interaction and campus life, Assessment,
  Maintenance and updating, Protection of
  intellectual property, Computer literacy, Student
  retention

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• Virtual Teaching and Online Universities
• Distance learning formal education that takes
  place off campus, usually, but not always,
  through online resources
• Virtual University an online university from
  which students take classes from home or other
  off-site location via the Internet
• Online Training
• Many organizations are using online training on a
  large scale

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• Knowledge Management
• Knowledge management the process of capturing or
  creating knowledge, storing it, updating it
  constantly, and interpreting and using it
  whenever necessary
• Knowledge Base the repository for an
  enterprises accumulated knowledge
• Online Advice And Consulting
• Medical advice
• Management Consulting
• Legal Advice
• Gurus
• Financial Advice

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