Measuring Economic Impacts of B2B e-Business Basic Modelling Considerations

Overview Theoretical assumptions on impacts Our approach of measurement How to modify the initial model? What is e-Business Results

What is B2B e-Business? 1 E-Business is the machine-readable (and processible) exchange of information which is linked to business processes. Typical content of descriptive data implies information on Product Supplier/ customer Transaction Further processing These informations have to be standardised Typical business processes of every enterprise are: Purchasing, production/ range of products planning and logistics, sales and development. Machine-readable informations are informations which contain descriptive data on content in addition to the processible content of data, informing about the content and the necessary processing steps.

What is B2B e-Business? 2 E-Business therefore is the standardised exchange of information related to business processes which needs standards on several levels: Product/ supplier/ customer standard Catalogue format standard Transmission standard and Integration standard The aim is not only the automation of processes but the integration of information into all relevant process chains within the enterprise and with all partners in the value chain in order to increase transparency and throughput speed and to save transaction, capital and handling cost.

What is the B2B application potential? 1 Critical points for the application potential of B2B are the Complexity/ richness and the reach of information Possibility of decomposition of value chain processes Coverage of strategic or tactical human action (complementary information exchange) vs. automated information exchange

What is the B2B application potential? 2 Complementary information exchange for strategic and tactical human action B2B information exchange Very rich information Information with potentially wide reach

Types of Business Information complementary communication feasible & measurable as B2B simple information very rich information

Batch EDI interchange structure NameTagStatus Service String Advice UNA Conditional Interchange Header UNB Mandatory Group Header UNG Conditional Message Header UNH Mandatory Message Body Message Trailer UNT Mandatory Group Trailer UNE Conditional Interchange Trailer UNZ Mandatory

Interactive EDI interchange structure Name Tag Status Service String Advice UNA Conditional Interactive Interchange Header UIB Mandatory Interactive Message Header UIH Mandatory Message Body Interactive Message Trailer UIT Mandatory Interactive Interchange Trailer UIZ Mandatory

Example message segment table POS TAG Name S R Notes 0010 Uxx Message header M AAA Segment AAA name M BBB Segment BBB name C CCC Segment CCC name C Segment group C DDD Segment DDD name M 1 | 0070 EEE Segment EEE name C9 | 0080 FFF Segment FFF name C 9 | 0090 GGG Segment GGG name C Segment group C HHH Segment HHH name M 1 | | Segment group C III Segment III name M 1 | | 0140 JJJ Segment JJJ name C 9 | | | | Segment group C | | 0160 KKK Segment KKK name M 1 | | | 0170 LLL Segment LLL name C nnnn Uxx Message trailer M 1 DEPENDENCY NOTES: 1. D3(0050, 0100) One or more

An example for information storage from Japan

Impacts expected by theory 1 Reduction of transaction cost by Person to machine and machine to machine transactions Wider and faster availability of information Use of new instruments e.g. auctions, demand aggregation Collaboration effects by Co-operative stock- and logistics management; reduction of Forrester effects Reduction of throughput time Knowledge management Dis-intermediation and Re-intermediation due to new compromises between richness and reach of information (e.g. elimination of old intermediaries and the creation of new intermediaries) Employment effects by e.g. elimination of administrative functions, changed knowledge demand Self organisation of co-operative networks because of Shift of the horizontal and vertical limits of enterprises Increasing fragmentation of the value chain Increasing dispersion of critical knowledge

Impacts expected by theory 2 Diffusion of “General Purpose Technologies” (Helpman/ Trajtenberg) characterised by Pervasiveness continuous technol. advances Necessity of complementary innovation Impacts dependent on completion of complementary innovation “downstream” productivity gains Typical diffusion phases (Strassman, Skinner, Millard...) characterised by Implementation of new technology Internal diffusion of applications Definition of standards & interfaces New process organisation Organisational adaptation

Our approach 1 Aims Problems / Framework conditions Problems / Framework conditions B2B e-Business Processes Impacts Infrastructure / complementary Innovation

Our approach 2 Infrastructure Use Standardisation Complementary Innovation Systems integration Impacts “preparatory” X X X X X X X “advanced application” X X X “early application” X X X X X “enlarged application” X

Our approach 3 Product / Service Value Chain Enterprise Related Services / Equipment Value Chain Tier N Suppliers Tier N Suppliers Tier 1 Suppliers Tier 1 Suppliers “Core” Firms Business Customers Equipment & indirect goods Suppliers Equipment & indirect goods Suppliers Enterprise Oriented Service Suppliers

Results 1

Ergebnisse der Diffusion 1a

Ergebnisse der Diffusion 2

Ergebnisse der Diffusion 3

Ergebnisse der Diffusion 4

Ergebnisse der Diffusion 5

Ergebnisse der Diffusion 6

Ergebnisse der Diffusion 7

Ergebnisse der Diffusion 8

Nutzung neuer Techniken 1

Nutzung neuer Techniken 2

Nutzung neuer Techniken 3

Wirkungen 1

Wirkungen 2 Impacts

Wirkungen 3

Wirkungen 4 Zum Vergleich: Handelskooperationen 34%

Wirkungen 5 Automobilindustrie 65% Zum Vergleich: Handelskooperationen 25%

How to modify the initial model? Important, not included framework conditions Existence of enterprises with formative power Fragmentation of the value chain Concentration of management, product- and process knowledge Possibility to standardise processes

Our modified approach Aims Problems / Framework conditions Problems / Framework conditions B2B e-Business Processes Impacts Infrastructure / complementary Innovation Complementary information exchange