B to B ECommerce

1
B to B E-Commerce

• Session to cover
• What is B to B?
• B to C lessons
• B to B opportunities
• E-Procurement and benefits
• Traditional EDI versus Internet Procurement
  Systems
• Procurement strategy and the role of Portals
• Portal case studies Mention of projects Stoke
  Enterprise Services (JCW team) are involved in
  National case studies

2
What is B to B?

• Electronic commerce is the use of internet
  technologies to conduct business transactions
• Much media attention has been paid to business to
  consumer transactions but in this session we are
  going to pay attention to the business to
  business transactions
• The latest statistics point to B to B being the
  real growth opportunity over the next decade
• The UK Government is frenetic in this area

3
B to C lessons

• Online Shopping geared to saving on prices
• e2save
• bigsave
• letsbuyit.com
• The latter is unusual in that it encourages
  consumers to group together to force down the
  price by buying in bulk.

4
B to B rules of the game

• Old rules of stocking and distribution do not
  apply
• There is a new market framework - here is local
  example of a potato farmer who has broken away
  from the supermarket chain and now is open for
  business(and consumers) to buy on-line
• Spuds online!

5
B to B opportunities

• On-line catalogues
• save printing put the catalogue on the web
• re-badging electronic data interchange(EDI) - web
  EDI
• Back office supply chain automation to cope with
  the orders generated from an E-Commerce site
• improving procurement
• buying costs money
• not just the items but the admin to create the
  order
• has to be in proportion the value of items
• if it currently costs 5 to order a box of
  staples worth 1 then this is crazy
• e-procurement may help to bring down costs

6
E-Commerce Procurement

• We are particularly interested in the automation
  of the procurement chain - product selection,
  order placement(purchasing), tracking and
  delivery details
• The premise is that businesses can save time and
  money by buying on the internet
• A growing number of things that a business would
  source through traditional means are now
  available online - are there benefits?

7
E-Procurement issues

• What questions need to be asked by a firm
  contemplating an E-Procurement solution?
• How can we integrate our suppliers?
• Does it need to be a real time operation?
• Do the firm wish to use global buying
• Can the firm business processes cope? (supply
  time lags may be reduced)
• Do we pass on efficiency gains to the customer?

8
E-Procurement issues

• Do Buyers and sellers share an identical model of
  the business being transacted?
• Do buyer and seller know each others goals and
  expectations?
• Effect on the purchasing professionals within the
  organisations and their suppliers
• The model is a Purchase-centric commerce systems
• Example offering Ariba - Operating Resource
  Management

9
E-Procurement Examples

• Supply chain of on-line providers of day to day
  items for businesses -
• Office supplies - Viking-direct or netstationers
• Signs and labels - Safetyshop
• Office furniture - Space2
• Computers - gw2k

10
E-Procurement benefits

• With buying on the web comparison of suppliers
  prices is possible online - this is useful is
  securing the best price
• The Cost Reduction Partnership allows users to
  check the prices of all sorts of items

11
E-Procurement benefits

• Strategic purchase by using
• aggregate buying
• volume discounts from suppliers
• lowered transactions costs through use of the
  internet for core products and non-core products
• Recent research by Warwick Uni suggests
  E-Commerce is 50 cheaper than equivalent manual
  process!

12
E-Procurement benefits

• Admin cheaper - automated validation of
  pre-approved spending budgets for individuals or
  departments
• Fewer people processing each order
• Takes less time
• So, overall admin costs significantly lower(a
  third lower?)
• Question to gather from a firm
• what is their average cost of processing an item
• JCW finds that in most cases they dont know
• But it gets them thinking.!

13
E-Procurement benefits

• Other ads include integration within the firm and
  sharing information with other businesses -
• production plans
• Inventory levels
• Pricing policies
• Delivery Schedule
• The example industrial sectors in the practical
  are now doing all of the above

14
Procurement Standards

• Open Buying on the Internet (OBI)
• OBI interested in end users as well as specialist
  buyers
• The Institute of Purchasing and Supply

15
EDI or Web B to B?

• EDI has made a name for itself among large
  companies over the 1990s for direct goods
  procurement.
• Recently, however, its use in this area has been
  threatened by business-to-business e-commerce
• Web-enabled procurement systems are seen by some
  as a powerful competitor to EDI.
• Web-enabled procurement systems are cheaper,
  easier to use
• JCW conclusion we are starting to see a
  migration from EDI to Internet Procurement systems

16
Advantage of Internet Procurement Systems

• EDI has been the domain of the large company as
  they cost so much to put together - Internet
  procurement systems are much cheaper and
  therefore do not preclude Small/Medium
  enterprises(SMEs)
• EDI is somewhat private but internet is
  global(public) and so creates access to new
  suppliers and trading networks
• allows all aspects of the purchasing process to
  be tracked with all suppliers,
• breaks down the barriers of access for global
  suppliers.

17
Example EDI solution

• Pandesic
• real-time management of inventory
• stock replenishment
• warehouse
• shipping and product returns
• Try to identify costs along the supply chain

18
Procurement Strategy

• JCW has performed consultancy in this area and
  the B to B issues are included in the E-Commerce
  framework document we looked at earlier in the
  course
• It is commonsense that before embarking on a
  E-Procurement solution a firm needs to have a
  strategy and a map of the stages it is trying to
  achieve
• Example map and strategic notes (courtesy of
  PriceWaterhouse)

19
Firms with E-Procurement systems

• Warner Lambert went live in Oct 99 - uses
  CommerceOne software
• BT aiming for 95 net purchasing - from July 2000
  BT will not deal with firms that cannot deal with
  it via the Internet
• Boots
• Virgin Atlantic

20
UK Government

• http//www.ogc.gov.uk/frame_home.htm
• Aim of UK Govt to use E-Procurement as much as
  possible by 2005
• Gcat - the UK government catalogue of authorised
  IT products
• See practical link - Govt launch of website on
  5/12/00

21
DIY E-Procurement project

• JCW advises you will need
• End user Web interface
• Enterprise Requirements Planning software or
  E-procurement package (see vendors)
• Integration with other computer systems(data
  integration)
• Collated suppliers catalogues available real
  time
• Software to monitor progress of order(tracking)

22
Vendors

• Walker
• CommerceOne - Buysite software
• Lotus Domino Merchant 2.0
• Microsoft Commerce Interchange Pipeline(CIP)
• Global Fulfillment
• HubShop
• Consolidated Commerce
• Belmin Group
• Intradeonline
• SAP

23
Internet Portals

• What is a portal?
• Synonymous with gateway, for a WWW site that is a
  starting site for users to connect to or as an
  network site. There are two types - General and
  Niche
• General portals include Yahoo, Excite, Netscape,
  Lycos, CNET, Microsoft Network, and America
  Online's AOL.com
• Niche portals include Garden.com (for gardeners),
  Fool.com (for investors), and Build-Online.com
  for builders

24
Which portal model?

• A portal can be either a business to business
  portal model
• or
• A business to consumer portal model
• or
• Mixture of both

25
What is the role of a portal?

• Provide channelled/focused information rather
  than lists of 1,000s of sites related to a key
  word as provided by traditional search engines
• One could argue that search engines are dead -
  not only do they not index all the pages on the
  web but also out of date which raises the
  question...
• Are search engines useful? - it is frustrating to
  trawl through irrelevant information on search
  engines. The internet is full of junk as well as
  a gold which can be mined
• Portals represent an alternative to search engines

26
What is the role of a portal?

• Promote a sense of community
• example Oilonline for the Oil industry
• Promote business networking/practices
• example Globalcontinuity
• Provide a sales channel
• example BtoByellowpages
• example handbag.com
• For other portals see VerticalNet

27
Portal projects involving JCW

• JCW involved via Ceramics Industry Forum with
  West Midlands E-portal - see 2westmidlands.com
• this is a B to B site. We are currently deciding
  what to fill out the ceramics sector with(see
  left hand side of front page of site)
• next project is develop a B to C version
• JCW also involved with a niche portal for the
  local ceramic industry - see www.ceramicscapital.c
  o.uk
• Aim? To act a focal point for the myriad of
  ceramic manufacturers in the Potteries region -
  encourage them to network and also a site for the
  consumer to visit which offers more than a
  directory listing

28
Portals developed by local firms

• Lexico Exporter - a firm based on Keele
  University science park. This portal is a niche
  exporting portal.
• eSupply-Chain - a firm based in Madeley. This
  portal is a niche portal aimed at helping
  businesses to develop their supply chain

29
Portals developed nationally

• Eseeworld - This recently launched portal
  provides access to more than 5,500 websites
• Reported on 3/12/00 - Nomura are backing an
  online business to business website for the pubs
  and leisure industry - see noticeboard for more
  details
• Fantasitc revolutionary portal using map
  technology from map.net