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ELC 200 DAY 18
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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
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Chapter 11 Business-to-Business E-Commerce
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OBJECTIVES What is B2B E-Commerce? B2B Models B2B Building Blocks
B2B Integration Challenges B2B Tools –EDI Beyond B2B
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WHAT’S B2B E-COMMERCE? B2B
Both sellers and buyers are business organizations Involves complex procurement, manufacturing, planning collaboration, payment terms and performance agreements
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B2B ENTITIES Selling Company Intermediating Service Provider
Buying Company JIT Deliverer ERP ERP
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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
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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
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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
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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
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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
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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
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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
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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
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ELECTRONIC AUCTIONS Reduce procurement costs
Maximize return on excess merchandise Types Forward auction Reverse auction Internet exchange
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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
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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
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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
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INTERNET EXCHANGE AUCTION (Cont’d)
Revolves around an electronic intermediary company that establishes an exchange market where buyers and sellers can make deals
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B2B BUILDING BLOCKS Application Server B2B Integration Server
Personalization Software Content Management Facility E-Commerce Package Security Quality of Service
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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
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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
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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
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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
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ADVANTAGES Cost reduction and time-saving
Improved B2B problem resolution Accuracy with integrity
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DRAWBACKS Unpopular Expensive Point-to-point
Requires expensive VAN networking Not easy to use, learn, or implement
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EDI JUSTIFICATION Volume of data
Frequency of document transmission and reception Content sensitivity Time sensitivity
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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
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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
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Chapter 11 Business-to-Business E-Commerce
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