Chapter 7 Business-to-Business E-Commerce
Copyright © 2003, Addison-Wesley B2B E-Commerce Inter-corporate communication Exchange business information between trading partners Emphasis on Supply chain Improve efficiency of transactions Between different business entities
Copyright © 2003, Addison-Wesley Figure 7.2 A real-world supply chain is very complex.
Copyright © 2003, Addison-Wesley 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
Copyright © 2003, Addison-Wesley Figure 7.3 This chapter discusses B2B e- commerce. Evolutionary Sustainable Most successful form of e-commerce Becoming the way business does business
Copyright © 2003, Addison-Wesley Inter-organizational Systems (IOS) Information system shared by two or more enterprises Requires Compatible information technology Compatible infrastructures Difficult to achieve Initially limited to large firms
Copyright © 2003, Addison-Wesley Figure 7.4 Early IOSs required custom software. Custom software is very expensive
Copyright © 2003, Addison-Wesley 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 (electronic fund transfer) EDI (electronic data interchange) Still, limited to large organizations
Copyright © 2003, Addison-Wesley 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
Copyright © 2003, Addison-Wesley Figure 7.7 Connecting through the Internet. Public bandwidth Advantages Inexpensive Highly scalable Drawbacks Inconsistent Weak security
Copyright © 2003, Addison-Wesley Figure 7.8 A VPN utilizes a secure tunnel to cross the Internet. VPN Public network Tunneling Encryption Advantages Low cost Good security Scalable
Copyright © 2003, Addison-Wesley Figure 7.9 On a VPN, each packet is encapsulated to form a new packet.
Copyright © 2003, Addison-Wesley Figure 7.10 Selecting a connectivity option.
Copyright © 2003, Addison-Wesley 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
Copyright © 2003, Addison-Wesley Figure 7.11 EDI Standard syntax ANSI X.12 EDIFACT Two conversions Internal EDI EDI internal Highly scalable Templates Web-based EDI still in use
Copyright © 2003, Addison-Wesley Figure 7.12 An extranet. WAN Links intranets Standards Client/server TCP/IP Web server Browser Security issues Extranet
Copyright © 2003, Addison-Wesley B2B Software and Services E-procurement Buy-side Sell-side Electronic invoice presentment and payment (EIPP) Exchange of invoices and payments EFT Significant cost reduction potential
Copyright © 2003, Addison-Wesley More Software and Services Logistics integrators Right stuff, right place, right time Customer relationship management (CRM) Data on customer interactions Data warehouse Data mining Important for B2C, even more important for B2B
Copyright © 2003, Addison-Wesley 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