key questions answered in this chapter: what are the four stages to the evolution of b2b...

Key questions answered in this chapter: What are the four stages to the evolution of B2B

capabilities? What are the three categories of B2B? Describe the four major steps of the B2B sell-

side evolution. Describe the major challenges to implementing

systems for indirect e-procurement. Describe the major challenges to implementing

systems for Net marketplaces or Net exchanges.

September 2001 Chapter 10: B2B Grows Up

Lower administrative costs Lower search costs for buyers Reduce inventory costs by increasing competition among

suppliers Lower transaction costs by eliminating paperwork and

automating parts of the procurement process Increased production flexibility by ensuring delivery of parts

“just in time” Improve quality of products by increasing cooperation among

buyers and sellers and reducing quality issues Decrease product cycle time by sharing designs and production

schedules with suppliers Increase opportunities for collaborating with suppliers and

distributors. Create greater price transparency – the ability to see the actual

buy and sell prices in a market


1. Broadcast- A business creates a Web page to provide fundamental information to the customer (how to contact the company, company financial information, and product and services offered by the company)

2. Interact- The company enables information to flow in both directions (from the organization to the customer and back), Examples: Having the technology to allow a customer to email the company, establishing a web-based customer service system


3. Transact- Take, manage, and support commerce transactions with customers using the Internet

4. Collaborate- The Web-based gathering of information to generate forecasts to be utilized by the company and its trading partners


1. B2B Sell-side Solution- Selling products to other businesses via the Internet

2. Indirect E-Procurement- The Web-based purchase of non-strategic products and services

3. Net Marketplaces and Net Exchanges- Created to provide Web-based capabilities that facilitate the interaction and exchange of commerce transactions between buyers, sellers, and other trading partners



Exhibit 10-1: The B2B Sell-Side Solutions Activities


Exhibit 10-2: Indirect e-Procurement Activities


Exhibit 10-3: Net Marketplace and Net Exchange Activities

Content Management- Allows the organization to create, aggregate, store, maintain, and present the content contained and presented on its website (text, pictures, graphics, and sound)

Catalog Management- Enables an organization to load and manage a Web-based catalog

Order Processing and Fulfillment- Allows users to place online orders and the capability for the company to accurately provide the product/service

Customer Relationship Management- Support online customers



Exhibit 10-4: The Evolved Sell-Side Solutions Activities

Content Ownership- Identifying the source of different content and creating a single point of contact and responsibility for the site content

Customer Data Access and Visibility- Utilizing internal applications to present accurate information to support the Web-based interface

Channel Integration- Organizations must integrate the sales channel with other channels in order to provide adequate customer service

Systems Integration- Integrate the Web-based system with the back-office systems in real time


Requisitioning- Allows a buyer to create a purchase request for products/services

Control and Approval- After the purchase, the system allows the organization to define and configure spending limits for individual buyers or companies and approve purchases based on those pre-determined monetary parameters

Transaction Processing- Creates purchase orders to be sent to the suppliers


Receiving and Exception Processing- Allows the buying organization to record receipt of goods/services

Financial and Payment Processing- Applications that facilitate the payment process, allow the buyer to purchase merchandise using a credit card or corporate purchasing card



Exhibit 10-5: Indirect or MRO e-Procurement

Strategic Sourcing- Determining where e-procurement is most needed within an organization, in order to maximize the initial benefits of the implementation (prioritize)

Adoption and Compliance- Ensuring that purchasing agents and employees are utilizing the new technology

Catalog Content Management- The process of making sure that the catalog is properly maintained in a timely manner


Supplier Integration- The buying organization and supplier must determine the business process for business document exchange (purchase orders, advanced shipping notices, and invoices)

Back-Office Integration- The E-procurement system needs to integrate with purchasing, inventory and warehousing, invoicing, and the planning requirements departments


Organizations realized point-to-point interaction with trading partners was not cost effective in all relationships, such as non-strategic partnering

E-procurement vendors created an online marketplace where existing buyers and suppliers could exchange catalog information and transact commerce without the time, effort, and money required in point-to-point interaction

Net marketplaces and Net exchanges enabled a many-to-many (buyers-to-suppliers) model



Exhibit 10-6: Net Marketplaces and Net Exchanges

1. Commerce Capabilities- Provide the ability for products and services to be purchased and sold in the Net marketplace

Catalog Management- Allows the operator to define, populate, and maintain a marketplace catalog with all the products and services available

Price Discovery- Determine the buying or selling price of a product/service. There are two categories of price discovery:


Fixed: Allows the supplier to assign a set price for a particular item

Dynamic: The buyer and supplier negotiate a price where a fixed price may not exist, Examples: negotiated exchanges, auction/reverse auction, bid/ask exchange

2. Content Management Capabilities- The storage, management, and presentation of non-catalog content for users of the Net marketplace Types of content include: documents, text,

pictures, sound, and video


3. Community Capabilities- Provides discussion forums, online chat, and instant messaging, which can be utilized to enhance customer support and/or to develop third-party services for various critical processes, such as converting currency transactions in real time


Catalog Content Management- Acquiring and maintaining all aspects of catalog content

Internationalization- The capability for a user to facilitate commerce across geographical boundaries from anywhere in the world

Business Model- Develop a business model that provides enough value to the trading partners to justify the effort and costs associated with participation

Adoption and Liquidity- Attracting and retaining buyers and sellers


key questions answered in this chapter: what are the four stages to the evolution of b2b...

Documents

b2b sell

categories of b2b

evolution of b2b capabilities

webbased capabilities

content management

company financial information

web page

site content customer