Intermediation in Electronic Commerce

1
Intermediation in Electronic Commerce
Professor Segev
November 17, 1998
2
Outline

• Another Look at E-commerce Architecture and
  E-Markets
• Intermediation
• Intermediation Supply Chain Examples
• Intermediation Procurement Example

3
Electronic Market Model Architecture
Agreement
Settlement
Information
Support Phase
Phase
Phase
Phase
Business
Business Model
View
Process
Market Transactions and Business Scenarios
View
Services View
Electronic Product Catalog
Electronic Contracting
Payments/ Logistics
Customer Support


Infrastructure View
Communications E-Commerce Infrastructure
t
Market Trans actions
4
The Market Place Revolution
Supplier

• Business models for dynamic business-to-business
  EC?
• What services have to be provided in specific
  electronic markets?
• What are the technological foundations?

Electronic Markets and Brokerage Services for
E-Commerce
Catalog Aggregation
Software Dist License Management
Bargaining
Auctions and Bidding
TTP Services
Billing Accounting
Yellow Pages
Decision Support
Ratings, Statistics ...
Purchasing Department
5
Example Office-Ace extended its market
penetration potential by enabling a direct
customer interface
?
Benefits

• Initial value increase is 7 to 10 from supply
  chain efficiency and customer convenience
• Creates potential in distributing other products
  and linking other value chains for access to new
  markets

Office-Ace Products
Wholesaler (30)
Dealer (3000)
Original Supply Chain
Customers
Dealer (300)
National warehouse JV
Office-Ace Products
New Value Chain
Customers
?
Source of this slide A.T. Kearney Experience in
Japan
Infomediary
Office Ace is the major shareholder in the
joint venture with wholesalers
6
Procurement Environment is Changing
Business Technology Models
Internal
Processes
3rd Parties
Contents Aggregators
?
?
Financial Institutions, Logistics,
Shipment, Legal Advice,
Consulting etc.
CONTENTS
. . .
7
B2B Procurement - Buy 300 Desks
Agreement
Settlement
Information
Support Phase
Phase
Phase
Phase
Identify Best Desk
Business
Order Inquiry Replace/Repair Defectives
Negotiate Price/Pay Terms
Delivery and Payment
View
Do a catalog search at EZfind Inc.
Oder/Contract Pay Before Receiving
Process
RMA Authorization Mechanism
Steps of Multi Attribute Bid
View
Multi Attribute Bid Component
Selection/ Contract/Pay Components
RMA Component
Services View
E-Catalog Search Component
Infrastructure View
Communications E-Commerce (Web Servers, Search
Engines?)
t
Market Trans actions
8
Example of Multi-attribute Competitive Bidding

• Competitive bidding combined with decision
  analysis can lead to multiattribute negotiation
  support
• The requisitioner defines preferences for various
  attributes (utility function)
• Bids that best fulfill these preferences are
  winning bids
• Bidding is conducted either in open-cry or sealed
  mode

9
Advantages

• For Requisitioners
• Releases the buyer from having to communicate
  preferences n-times -gt time savings
• The procedure can be used for large number of
  suppliers
• Suppliers can compete against each other in an
  open-cry manner
• For Suppliers
• Not only price matters
• Bidding leads to a more transparent market -
  suppliers can learn more about competitors
  strength and buyers needs
• Access to a large number of new customers through
  trading floors

10
Architecture
Register offerings (1) Notify suppliers (3) Get
information about current bids (4) Provision of
bids (5)
Determine objective and compose RFB (2)
Electronic Broker
Submission/Storage of RFBs Notification of
bidders (and conversation to XML) Provision of
bidding info Submission/Storage of
bids Computation of winning bids (6) Generating
contracts (7)
Buyers Client
Bidder Client
Decision analysis tool Submission of RFBs
Display of RFB in browser Download of bidding
information Decision support for
bidding Submission of Bids