ECT455/HCI513 E-Commerce Web Site Engineering

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ECT455/HCI513 E-Commerce Web Site Engineering

• B2B E-Commerce

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Agenda

• Market News
• B2B e-commerce
• Supply Chain Management
• EDI, XML, Internet Solutions
• Business Models

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B2B E-Commerce

• Global B2B revenues to grow from 282 billion in
  2000, to 4.3 trillion by 2005, the bulk of B2B
  transactions will be made in the US.
• Compound annual growth rate (CAGR) of 73 in US,
  91 in Europe, and 109 in Asia
• lower costs, shorter cycle time, quicker
  response, and global markets

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B2B Value Proposition

• Reduced cost of selling
• Reduced order processing costs
• Improved service levels for low-volume customers
• Higher quality information for customers
• Accurate information

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Porters Framework

• Generic Strategies
• Competitive Strategy, The Free Press, 1980
• Forces that shape business strategy
• Value Chain analysis
• Industry and Competitive Analysis

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The Value Chain Firms Perspective
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The Value Chain Industry Perspective
Supplier
OL
Manufacturer
IL
OL

Distributor
IL
OL
Suppliers
Manufacturer
Distributors
Customers
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Porters Industry and Competitive Analysis (ICA)
Barriers to Entry
Bargaining Power of Channels End Users
Bargaining Power Of Suppliers
Competitive Intensity
Threat of Substitute Products or Services
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What is a Supply Chain?

• A business process that links a company with its
  manufacturers, assemblers, distributors, shipping
  companies, retailers and consumers
• To develop and deliver products as one "virtual"
  organization of pooled skills and resources.
• To obtain benefits by streamlining the movement
  of manufactured goods from the production line
  into the customers
• Improve efficiency or effectiveness by redesign,
  disintermediation, and reintermediation

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Two Views of Supply Chain

• Push-based Model "build-to-stock"
• A tradition approach
• The merchandise is pushed into the customer's
  hands
• Pull-based Model "build-to-order"
• A demand-driven model -- the customer initiates
  the supply chain
• More compelling and more suitable for Internet
  Commerce

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Push-based Supply Chain

• Manufacturer --gt Retail Distribution Center --gt
  Retail Store --gt Consumers
• Manufacturer
• Financial and marketing-driven forecast
• Master scheduling
• Replenishment based on distribution center
  inventory
• Manual purse order and invoicing
• Retail Distribution Center
• Order point based on warehouse inventory and
  historical forecasts
• Deals, promotions, and forward buying
• Retail Stores
• Order point based on shelf inventory and
  forecasts
• Promotions and Manual entry of items to be
  reordered

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Pull-based Supply Chain

• Consumers --gt Retail Stores --gt Retail
  Distribution Center --gt Manufacturer
• Retail Stores
• POS data collection
• Perpetual inventory checks
• Automatic replenishment using EDI services
• Retail Distribution Center
• Automatic replenishment
• Shipping container marking
• Cross-dock receiving
• EDI services

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Approaches to SCM

• Traditional EDI uses a value-added network or VAN
• A closed network that includes all members of a
  production process
• Internet based EDI, E-Commerce Relying on VAI
  (Value-Added Internet Service Providers, e.g.,
  ATT, IBM, AOL)
• XML (eXtensible Markup Language)
• Improves the compatibility between disparate
  systems, creating new

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B2B Models

• Firm-based Models
• Sell-side (1-to-many), Cisco
• Buy-side (many-to-1) , GE
• Many-to-Many Marketplaces Exchange and catalog
  models
• Vertical vs. Horizontal Marketplaces
• Virtual Service Industries in B2B
• Travel, Real estate, electronic payments, online
  financing and online trading, Logistics

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Sellers/suppliers
Buyers
Sell Side 1M eg. Cisco
Buy Side M1 e.g., GE
Buyers
Public or Private Markeplaces MM Catalogs
(Newark in One) Exchanges, Houstonstreet
Sellers suppliers
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Firm-based modelSell side B2B One to Many

• Delivers a Web-based, private-trading sales
  channel over an extranet to business customers
• The seller can be a manufacturer, or a
  distributor
• Architecture similar to B2C
• Similar technology
• Sell by electronic catalogues, auction, or by
  contract
• Differences in commerce value chain

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Firm-based Model Direct sale form Catalogue

• Benefits
• Reduced order processing costs
• Speeds the ordering cycle
• Reduce errors in ordering and product
  configuration
• Reduced buyers search costs
• Customize products
• Different prices to different customers
  (personalization, customization)
• Improve service levels for low-volume customers
• Provide higher-quality information for customers

• Limitations
• Channel conflicts with existing distribution
  systems
• EDI (if used) is costly and could limit the
  participation

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Cisco Connection Online

• Services offered?
• E-Commerce value chain application?
• Benefits to Cisco?
• Benefits to customers?

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B2B Commerce Value Chain--different from B2C

• Attract Advertising Marketing
• merchandising and branding
• become a p referred vendor
• Interact Catalogs
• Searching capability for large electronic catalog
• Customized catalogs -- special part number and
  pricing
• Security Requirements

• Act Order Processing
• Approval Workflow
• Delegation
• Act Payment
• Purchase Order, Procurement Cards, EFT
• Act Fulfillment
• Predefined ship-to address and order aggregation
• React Customer Service
• Training, Software maintenance, tech support

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Firm-Based Model Buy-Side Many to one,
E-Procurement

• Two types of purchases (what are purchased)
• Direct materials production materials go
  directly to the manufacture or assembly of a
  product or the creation of a service. Their use
  is scheduled, purchased in volume at
  pre-negotiated price
• Indirect materials used in maintenance, repairs,
  and operations (MRO), nonproduction materials

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E-Procurement

• Procurement management the coordination of all
  the activities pertaining to purchasing goods and
  services for an organization
• Inefficiencies in procurement management of
  indirect materials MRO aggregation of
  catalogues
• Reverse Auction for procurement of direct
  materials, e.g.. GE, GM, RFP process

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E-Procurement Basic Features of MRO Systems
(Catalog Based)

• Administration -- for non-technical persons
• Catalogue Support -- multiple catalogues from
  different suppliers
• Enterprise Integration-- tight integration into
  existing enterprise processes
• Localization-- multi lingual purchaser catalogues
  with local prices and products
• Reporting tools
• Automated workflow

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B2B Procurement Reverse Auction

• Bidding and RFQ, RFP process
• Buyers prepare bidding project information Post
  the project for bid on the secured portal
  Identify potential suppliers Invite supplier to
  bid on projects
• Suppliers submit electronic bids for projects
• Buyers evaluate the bides and may negotiate
  (electronically) to achieve the best deal
• Buyers award a contract to the bidders that best
  meet the requirements
• Value Proposition
• Reduced costs, time, and staff involved in the
  procurement process
• Invoices reconcile with Purchase orders
• Lower the bid.

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Traditional EDI vs. Internet Enabled EDI (VAI)

• Standardized transfer of electronic documentation
  (Two Standards ANSI x.12 vs. EDIFACT)
• Manage supply and distribution relationships
  application or transaction based emphasize
  efficiency (purchase orders and invoices)
• Limitations
• Costly Proprietary VANs
• Participation sometimes through coercion and
  pressure
• Compatibility issue
• limited impact on process change
• VAI
• Common standards Flat pricing Security
• Easy/cheap access Infrastructure

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Why XML is Successful

• XML is a text format, can be processed by
  text-oriented tools
• Extensible to specific an industry or domain
• Neutral, an open source tool
• Easy to implement
• Interoperable across different platforms

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XML and B2B

• Improve compatibility between disparate systems
• Allows parties to exchange structured data over
  the Internet. XML tags define the meaning of data
  (catalogue) and business processes
• XML also supports Unicode that enables the
  display and exchange of most of the world's
  written languages.
• Benefits Reduce costs, competitive advantage,
  strengthen relationships with trading partners
  (processes)
• Simplifies application architecturea uniform
  framework

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RossettaNet

• Industry standards
• A consortium of more than 400 companies in
  information technology, electronic components and
  semiconductor manufacturing
• Businuess and technical dictionary
• RNIF provides XML exchange protocols between
  trading parterns
• PIP (Partner Interface Process) an XML based
  dialog between trading partners that implement a
  business process

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ebXML

• Sponsored by UN/CEFACT
• Provide an open infrastructure to lower the
  barriers to entry for electronic business
• Created an architecture
• Collaboration protocol profile (CPP) about the
  business process
• CPA Collaboration protocol agreement
• Business Process
• Goals cost reduction in data exchange, support
  collaboration

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ebXML Process
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