ELC 200

1
ELC 200

• DAY 18

2
Agenda

• Assignment 6 Due
• Quiz 3 will be on April 8
• Change from April 5
• Chap 8-12
• 15 M/C (60 Points), 4 Short Essay (40 Points)
• Extra credit --- What is the derivation of the
  name cookie used by Internet Browsers?
• Start discussion on B2B eCommerce

3
Chapter 11Business-to-Business E-Commerce
4
OBJECTIVES

• What is B2B E-Commerce?
• B2B Models
• B2B Building Blocks
• B2B Integration Challenges
• B2B Tools EDI
• Beyond B2B

5
WHATS B2B E-COMMERCE?

• B2B
• Both sellers and buyers are business
  organizations
• Involves complex procurement, manufacturing,
  planning collaboration, payment terms and
  performance agreements

6
B2B ENTITIES
Selling Company
Intermediating Service Provider
Buying Company
ERP
JIT Deliverer
ERP
7
B2B ENTITIES (cont.)

• Purchasing Company
• Focus on procurement in terms of reduced purchase
  prices and cycle time
• Selling Company
• Focus on marketing and sales
• Intermediating Service Provider
• Focus on ensuring order fulfillment
• JIT Deliverer
• Focus on just-in-time delivery

8
B2B ENTITIES (cont.)

• Web-based Platform
• Focus on Internet, intranet, and extranet
• Tools of B2B
• Focus on Electronic Data Interchange and software
  agents
• Back-End Technical Support
• Focus on Enterprise Resource Planning

9
B2B VS. B2C
B2C B2B
How connection is set up Consumer-to-system Business-to-business
Types of relationship Placing orders Executing payments Fulfilling orders Browsing of merchants catalog Sending feedback Online procurement Tracking order status Executing payments Managing promotions, returns, and catalog info Fulfilling orders
10
B2B VS. B2C (Contd)
B2C B2B
Nature of control Unidirectional Unidirectional to peer-to-peer
Level of needs-based segmentation Moderate to low Sharper than B2C
Sales complexity Moderate Complex
11
ADVANTAGES

• Save money on purchases that are negotiated
  instantly
• Replacing earlier purchasing bureaucracy with
  online links improves efficiency
• Just-in-time environment minimizes inventory
  sitting in the warehouse

12
DRAWBACKS

• Suppliers have to work with big technology
  integration issues with the rest of suppliers in
  the exchange
• Antitrust violations may result
• Open Web Exchange but keep prices and trade
  secrets of all suppliers confidential
• FTC Guidelines

13
SUPPLY CHAIN

• Process of moving goods from customer order
  through the raw materials, supply, production,
  and the distribution of products to the customer
• Benefits
• Reduced inventory, higher sales, improved ability
  to customize products for different business
  buyers, and reduced production cost

14
B2B MODELS

• Buyer-oriented B2B
• A buyer uses the internet by opening a
  marketplace on its own server and opening the
  window for suppliers to do the bidding
• Supplier-oriented B2B
• A supplier invites customers to order product via
  its electronic market store

15
ELECTRONIC AUCTIONS

• Reduce procurement costs
• Maximize return on excess merchandise
• Types
• Forward auction
• Reverse auction
• Internet exchange

16
FORWARD AUCTION

• One seller entertains bids from many buyers
• Allows the seller to post products or services
  they want to sell via its auction website
• Payment and fulfillment is handled through normal
  electronic channels
• Ideal where demand and supply are unpredictable,
  and there is a timing factor to unload the
  merchandise

17
REVERSE AUCTION

• Used to solicit bids where lowest bidder wins
• Typical of large corporate buying
• Tends to drive down prices and expand buyers
  zone of choice among suppliers

18
INTERNET EXCHANGE AUCTION

• Involves many buyers and sellers who trade bids
  and offers until there is an agreement to
  exchange product for payment
• A third party operates the exchange
• Responsible for quality assurance and prompt
  delivery of the goods

19
INTERNET EXCHANGE AUCTION (Contd)

• Revolves around an electronic intermediary
  company that establishes an exchange market where
  buyers and sellers can make deals

20
B2B BUILDING BLOCKS

• Application Server
• B2B Integration Server
• Personalization Software
• Content Management Facility
• E-Commerce Package
• Security
• Quality of Service

21
B2B INTEGRATION CHALLENGE

• B2B Integration
• Deals with spanning independent businesses, each
  with its own set of applications and users
• Interoperates with heterogeneous systems without
  being tied to one specific system technology

22
B2B INTEGRATION

• Solutions
• Via a Web site as a front-end for information
  sharing among partners
• Extract information from one partners
  application convert it into a format amenable for
  transmission via EDI
• For two companies to use common technology to
  coordinate data exchange
• XML

23
ELC 200

• DAY 19

24
Agenda

• Assignment 6 Corrected
• 9 As, 5 Bs and 5 non-submits
• Assignment 7 is on last Slide
• Quiz 3 will be on April 8
• Change from April 5
• Chap 8-12
• 15 M/C (60 Points), 4 Short Essay (40 Points)
• Extra credit --- What is the derivation of the
  name cookie used by Internet Browsers?
• Finish discussion on B2B eCommerce

25
Cycle of AP Transaction
26
B2B TOOLS EDI

• Allows one computer system to communicate
  business information with another computer system
  in a standardized electronic form
• Computer-to-computer transfer of business
  information
• http//www.ginniemae.gov/training/edi101/sld001.ht
  m

27
Source www.ti.com/sc/docs/ scedi/new/batson.htm
28
COMPONENTS OF EDI

• Interbusiness
• Transmission of data between businesses
• Computer-to-computer
• Data communication from one computer to another
• Standard transactions
• Replace standard business forms
• Standard format
• Agreed upon format between partners

29
ADVANTAGES

• Cost reduction and time-saving
• Improved B2B problem resolution
• Accuracy with integrity

30
DRAWBACKS

• Unpopular
• Expensive
• Point-to-point
• Requires expensive VAN networking
• Estimated EDIOutPostSM Costs
• 2233.75 Monthly
• 26805.00 Yearly
• Not easy to use, learn, or implement

31
EDI JUSTIFICATION

• Volume of data
• Frequency of document transmission and reception
• Content sensitivity
• Time sensitivity

32
FINANCIAL EDI

• Electronic transmission of payments between a
  payee and a payer via their respective banks
• Allows businesses to replace labor-intensive
  activities of collecting, disbursing and
  processing payments
• Improves certainty of payment flows
• Examples
• EFT
• Electronic Funds Transfer
• ACH
• Automated Clearing House
• More in Chapter 15

33
BEYOND B2B

• A2Z Approach
• Connect all the links of value chain via
  partnership
• The link would be turned from physical
  connections to digital ones
• Clear visibility of each stage of business process

34
Assignment 7

• I have decided to add one more assignment (9
  total)
• I will drop the lowest assignment score of the
  nine (leaving 8 scores)
• Assignment 7 is on Ethics
• Due April 8
• Complete the following
• Grey Matters in Computer Ethics.doc

35
Chapter 11Business-to-Business E-Commerce