1. ELC 200
DAY 18

2. Agenda Assignment #6 Due Quiz 3 will be on April 8
Change from April 5
Chap 8-12
15 M/C (60 Points), 4 Short Essay (40 Points)
Extra credit --- What is the derivation of the name “cookie” used by Internet Browsers?
Start discussion on B2B eCommerce

3. Chapter 11 Business-to-Business E-Commerce

4. OBJECTIVES What is B2B E-Commerce? B2B Models B2B Building Blocks
B2B Integration Challenges
B2B Tools –EDI
Beyond B2B

5. WHAT’S B2B E-COMMERCE? B2B
Both sellers and buyers are business organizations
Involves complex procurement, manufacturing, planning collaboration, payment terms and performance agreements

6. B2B ENTITIES Selling Company Intermediating Service Provider
Buying Company
JIT
Deliverer
ERP
ERP

7. B2B ENTITIES (cont.) Purchasing Company Selling Company
Focus on procurement in terms of reduced purchase prices and cycle time
Selling Company
Focus on marketing and sales
Intermediating Service Provider
Focus on ensuring order fulfillment
JIT Deliverer
Focus on just-in-time delivery

8. B2B ENTITIES (cont.) Web-based Platform Tools of B2B
Focus on Internet, intranet, and extranet
Tools of B2B
Focus on Electronic Data Interchange and software agents
Back-End Technical Support
Focus on Enterprise Resource Planning

9. B2B VS. B2C B2C B2B How connection is set up Consumer-to-system
Business-to-business
Types of relationship
Placing orders
Executing payments
Fulfilling orders
Browsing of merchant’s catalog
Sending feedback
Online procurement
Tracking order status
Managing promotions, returns, and catalog info

10. B2B VS. B2C (Cont’d) B2C B2B Nature of control Unidirectional
Unidirectional to peer-to-peer
Level of needs-based segmentation
Moderate to low
Sharper than B2C
Sales complexity
Moderate
Complex

11. ADVANTAGES Save money on purchases that are negotiated instantly
Replacing earlier purchasing bureaucracy with online links improves efficiency
Just-in-time environment minimizes inventory sitting in the warehouse

12. DRAWBACKS
Suppliers have to work with big technology integration issues with the rest of suppliers in the exchange
Antitrust violations may result
Open Web Exchange but keep prices and trade secrets of all suppliers confidential
FTC Guidelines

13. SUPPLY CHAIN
Process of moving goods from customer order through the raw materials, supply, production, and the distribution of products to the customer
Benefits
Reduced inventory, higher sales, improved ability to customize products for different business buyers, and reduced production cost

14. B2B MODELS Buyer-oriented B2B Supplier-oriented B2B
A buyer uses the internet by opening a marketplace on its own server and opening the window for suppliers to do the bidding
Supplier-oriented B2B
A supplier invites customers to order product via its electronic market store

15. ELECTRONIC AUCTIONS Reduce procurement costs
Maximize return on excess merchandise
Types
Forward auction
Reverse auction
Internet exchange

16. FORWARD AUCTION One seller entertains bids from many buyers
Allows the seller to post products or services they want to sell via its auction website
Payment and fulfillment is handled through normal electronic channels
Ideal where demand and supply are unpredictable, and there is a timing factor to unload the merchandise

17. REVERSE AUCTION Used to solicit bids where lowest bidder wins
Typical of large corporate buying
Tends to drive down prices and expand buyer’s zone of choice among suppliers

18. INTERNET EXCHANGE AUCTION
Involves many buyers and sellers who trade bids and offers until there is an agreement to exchange product for payment
A third party operates the exchange
Responsible for quality assurance and prompt delivery of the goods

19. INTERNET EXCHANGE AUCTION (Cont’d)
Revolves around an electronic intermediary company that establishes an exchange market where buyers and sellers can make deals

20. B2B BUILDING BLOCKS Application Server B2B Integration Server
Personalization Software
Content Management Facility
E-Commerce Package
Security
Quality of Service

21. B2B INTEGRATION CHALLENGE
Deals with spanning independent businesses, each with its own set of applications and users
Interoperates with heterogeneous systems without being tied to one specific system technology

22. B2B INTEGRATION Solutions
Via a Web site as a front-end for information sharing among partners
Extract information from one partner’s application convert it into a format amenable for transmission via EDI
For two companies to use common technology to coordinate data exchange
XML

23. B2B TOOLS – EDI
Allows one computer system to communicate business information with another computer system in a standardized electronic form
Computer-to-computer transfer of business information

24. COMPONENTS OF EDI Interbusiness Computer-to-computer
Transmission of data between businesses
Computer-to-computer
Data communication from one computer to another
Standard transactions
Replace standard business forms
Standard format

25. ADVANTAGES Cost reduction and time-saving
Improved B2B problem resolution
Accuracy with integrity

26. DRAWBACKS Unpopular Expensive Point-to-point
Requires expensive VAN networking
Not easy to use, learn, or implement

27. EDI JUSTIFICATION Volume of data
Frequency of document transmission and reception
Content sensitivity
Time sensitivity

28. FINANCIAL EDI
Electronic transmission of payments between a payee and a payer via their respective banks
Allows businesses to replace labor-intensive activities of collecting, disbursing and processing payments
Improves certainty of payment flows
Examples
EFT
Electronic Funds Transfer
ACH
Automated Clearing House

29. BEYOND B2B
A2Z Approach
Connect all the links of value chain via partnership
The link would be turned from physical connections to digital ones
Clear visibility of each stage of business process

30. Chapter 11 Business-to-Business E-Commerce