chapter 7 business-to-business e-commerce. copyright © 2003, addison-wesley b2b e-commerce...

Chapter 7

Business-to-BusinessE-Commerce

Copyright © 2003, Addison-Wesley

B2B E-Commerce

Inter-corporate communication Exchange business information

between trading partners Supply chain focus

Improve efficiency of transactions Between different business entities


Figure 7.2 A real-world supply chain is very complex.

Wal-MartFrito Lay

Supplier B

Supplier A

Procter &Gamble

Supplier E

Customer C

Customer D

Customer B

Customer A

Customer E


Visualizing the Supply Chain

A river analogy Source – raw materials

Upstream Flow direction – downstream Tributaries – suppliers Destination – customers

Downstream Series of linked processes

Value chain – within organization Supply chain – links value chains


Interorganizational Systems (IOS)

Information system shared by two or more enterprises

Requires Compatible information technology Compatible infrastructures

Difficult to achieve Initially limited to large firms


Figure 7.4 Early IOSs required custom software.

C to AMiddleware

B to AMiddleware

B to CMiddleware

A to CMiddleware

C to BMiddleware

A to BMiddleware

Company A

Company CCompany B

Custom software is very expensive


Figure 7.5 Some potential benefits of an inter-organizational system.

Faster transactions Lower cost

transactions Fewer transaction

errors Reduced cycle time Reduced inventory Increased information

flow Increased customer

satisfaction Improved cash flows

Early examples EFT EDI

Still, limited to large organizations


Interconnectivity

Private leased network Expensive Not easily scalable Highly secure and reliable

Value-added network (VAN) Semiprivate intermediary service Less expensive but still costly Scalable Less secure and less reliable


Figure 7.7 Connecting through the Internet.

Public bandwidth Advantages

Inexpensive Highly scalable

Drawbacks Inconsistent Weak security

CompanyA

CompanyF

CompanyE

CompanyD

CompanyB

CompanyC

The Internet


Figure 7.8 A VPN utilizes a secure tunnel to cross the Internet.

VPN Public network Tunneling Encryption

Advantages Low cost Good security Scalable

Encrypt andencapsulate

Encrypt andencapsulate

Company A Company B

The tunnel

The Internet


Figure 7.10 Selecting a connectivity option.

Option

Secure private networkValue added networkVirtual private networkPublic network

CostExchangevolume

Tradingpartners

Securityneed

Scalability

**********

**********

******

*********

*****

**********

Companysize**********

Legend*****

MeaningHigh/large/manyLow/small/few


Early Supply Chain Integration

American Airlines Sabre Online, real-time reservation services

Ticket agents Travel agents

Still in use Baxter Healthcare

Direct ordering of hospital supplies Wal-Mart inventory management

Driven by point-of-sale data collection


Figure 7.11 EDI

Standard syntax ANSI X.12 EDIFACT

Two conversions InternalEDI EDIinternal

Highly scalable Templates Web-based EDI

still in use

EDI to InternalMiddleware

Internal to EDIMiddleware





Company A

Company C

Company B

EDI


Figure 7.12 An extranet.

WAN Links intranets Standards

Client/server TCP/IP Web server Browser

Security issues

Company Aintranet

Businesspartnerintranet

SupplierintranetTelecommuter

(Personal firewall)

Extranet


XML

Extension to HTML Special tags to mark data fields

Data structure, syntax, data type XML-enabled middleware can

Extract data values from document Create dynamic Web pages

XML is extensible Add and register new XML schema


Figure 7.14 The XML code for a set of customer order data.

XML Tags

<?xml version="2.0"?><order>

<salesperson>John Doe</salesperson><item>Acme rocket engine</item><quantity>4</quantity><date>

<month>12</month><day>13</day><year>2002</year>

</date><customer>Harry Potter</customer>

</order>

Equivalent Data Structure

OrderSalespersonItemQuantityDate

MonthDayYear

Customer


B2B Software and Services

E-procurement Buy-side Sell-side

Electronic invoice presentment and payment (EIPP) Exchange of invoices and payments

EFT Resembles IBPP Significant cost reduction potential


More Software and Services

Logistics integrators Right stuff, right place, right time

Customer relationship management (CRM) Data on customer interactions Data warehouse Data mining


Figure 7.16 Supply chain management intermediaries.

Category Supplier Product

Planning and Forecasting I2 TechnologiesManugisticsSAP

TradeMatrixNetWorksAPO

Purchasing AribaCommerce OneOracleRightWorks

Ariba SourcingMarketSetSupply Chain ExchangeeProcurement

Factory scheduling BaanOracleQADSAP

Baan SCSDiscrete ManufacturingSupply Chain OptimizerAPO

Order tracking EXE TechnologiesManhattan AssociatesOptum

eFulfillmentMA FulfillTradeStream

Market research andProduct design

Agile SoftwareMatrixOnePTCSAP

Agile AnywhereeMatrixWindchillMySAP PLM

Source: Thompson Financial and E-Business 2.0, May 2001, page 85.


B2B E-Marketplaces

Similar to enterprise portal Categories

Commodity e-marketplace Business services e-marketplace

Financial services and process support Integration services e-marketplace

Facilitates process-to-process integration Vertical and horizontal e-

marketplaces

chapter 7 business-to-business e-commerce. copyright © 2003, addison-wesley b2b e-commerce...

Documents