Chapter 12 : BusinessOriented ECommerce

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Chapter 12 Business-Oriented E-Commerce

• Week 7

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Outline

• Features of B2B E-commerce
• Business Models
• Integration

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Projection Growth of B2B E-Commerce
Billons of dollars
1999
2001
2002
2003
2004
2000
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Main features of B2B EC

• High volumes of goods traded
• High net value of goods traded
• Multiple forms of electronic payment
• Other payment methods permitted
• Prior agreements or contracts between the
  partners
• Higher level of information exchange between the
  different trading partners

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B2B Business Models
Three basic types of models 1. A
buyer-oriented e-commerce system 2. A
seller-oriented e-commerce system 3. A virtual
market place (VMP) with multiple buyers and
multiple sellers.
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E-Procurement and Buy side EC Systems

• Buyer-oriented e-commerce business models
• suitable for large corporations
• they include
• Intra-company activities
• Inter-company activities
• Next slide shows the schematic diagram of a
  Buy-side EC system

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Schematic of Buy SideE-Commerce System
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Purchasing Using a Buy Side E-Commerce System
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E-Procurement and Buy side EC Systems

• Buy Side E-commerce system
• corporation does not have to physically go out
  there searching for suppliers
• they come to the corporation once it has signaled
  its potential needs.
• all transactions are electronically handled.

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Internal Activities in Procurement Process
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Sell side EC Systems

• Sell Side E-commerce systems
• producing or marketing products to a large number
  of small and large corporations.
• one (supplier) to many (buyers) system.
• example Dell and Cisco -- permit customization
  by the configuration which the buyer wishes to
  purchase.

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Sell side EC Systems

• The Sell Side E-commerce system should provide
• product catalog
• product configuration (if applicable)
• business roles to allow automation of approval
  and ordering
• customer service
• fulfilment and shipping
• accounts receivable/invoicing and electronic
  payment
• monitoring of order status and account history

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Sell-Side E-commerce System
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Connections in Sell-Side E-Commerce Systems
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Virtual Markets

• Provides a meeting place for many vendors and
  many buyers
• Digital Marketplaces, Infomediaries, Vertical
  Portals, Intermediary Oriented Marketplaces and
  Digital Exchanges
• The most successful virtual markets are highly
  focused and address a specific sector of
  industry.
• Examples of these include
• Boeings PART System
• Chemdex.com
• IPowerB2B.com

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Architecture of a Typical Virtual Market System
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Collaborative Supply Chain Management (SCM)

• Information is exchanged is between two partners
  to allow a purchase to take place.
• For corporations
• it is important to not only optimize a single
  purchase segment between two parties
• interaction between parties upstream of the
  purchase.

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Collaborative Supply Chain Management in
Manufacturing Processes
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B2B EC communication using XML technology

• Supply chain management system (SCM) integration
  between different companies is important
• Suppose a merchandiser in a department store
  (Company A) decides to place a purchase order
  (PO) to one of his/her suppliers (Company B)
  automatically via the Internet using XML format.
• However, the databases involved for the
  applications being used in both companies
  "Purchasing System " for Company A and "Sale
  System" for Company B) might not be the same, in
  terms of database structure and type of database
  systems.

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B2B EC communication using XML technology

• In order to provide B2B trading utilizing
  automatic data transfer, one can use XML
  technology
• The main problem
• making different systems in each company capable
  of interoperation with each other
• one needs to address how automation of the
  updating of databases can be achieved in both
  companies

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B2B EC Components in SCM System
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B2B EC Solution Based on XML Technology