1. Elias M. Awad Third Edition ELECTRONIC COMMERCE From Vision to Fulfillment 6-1© 2007 Prentice-Hall, Inc ELC 200 Day 16 & 17

2. 6-2 © 2007 Prentice-Hall, Inc Agenda Questions from last class? Assignment 5 not corrected yet –Will be done by next class Assignment 6 Posted –Due Nov 3 @ 11:05 PM –2 more assignments after this one Quiz 3 will Nov. 13 or 17 –Chaps 7-12 –M/C and Short Essays Finish discussion on Web services Begin discussion on B2B eCommerce

3. 6-3 © 2007 Prentice-Hall, Inc Assignment 6 One of the major problems to be solved in B2C eCommerce is getting supplies to you and shipping products to your customers. Another issue involving distribution is ensuring that all non-electronic communication arrives on time at the right place. Investigate the types of support available to your company from the following three companies, The United States Postal Service (www.usps.com), United Parcel Service (www.ups.com) and FedEx (www.fedex.com). Write a two-page analysis comparing the business solutions available from the three organizations. Select the one organization you believe would best support the business activities of your company and explain the reasons for your choice. Two of the key factors in deciding which organization(s) would best serve your company is cost and availabilitywww.usps.comwww.ups.comwww.fedex.com

4. Elias M. Awad Third Edition ELECTRONIC COMMERCE From Vision to Fulfillment 6-4© 2007 Prentice-Hall, Inc Web Services

5. 6-5 © 2007 Prentice-Hall, Inc Ordinary Webservice versus Web Service HTTP Response HTTP Request Client PC Webserver SOAP- Capable Browser Web Service -- Interface Properties Methods SOAP Message Using XML Syntax Web Service Web services are objects (programs) Clients send them commands and data Web services send back results

6. 6-6 © 2007 Prentice-Hall, Inc Ordinary Webservice versus Web Service HTTP Response HTTP Request Client PC Webserver SOAP- Capable Browser Web Service -- Interface Properties Methods SOAP Message Using XML Syntax Web Service Web service requests are sent via HTTP They are sent as SOAP messages written in XML

7. 6-7 © 2007 Prentice-Hall, Inc Ordinary Webservice versus Web Service HTTP Response HTTP Request Client PC Webserver SOAP- Capable Browser Web Service -- Interface Properties Methods SOAP Message Using XML Syntax Web Service Web services have interfaces that will accept commands Commands contain methods and properties (parameters)

8. 6-8 © 2007 Prentice-Hall, Inc Simple SOAP Request and Response Simple Object Access Protocol (SOAP) Carried in HTTP request or response message Formatted using XML Syntax –Similar to HTML syntax but the sender and receiver can create new tags that they can then use in transactions, such as $33 HTTP Header SOAP Body

9. 6-9 © 2007 Prentice-Hall, Inc Simple SOAP Request and Response Situation –There is a pricing object that returns the price if another object sends the part number, quantity, and shipping type (rush, etc.) on an interface –Objects can be on different computers Sending Object Pricing Object Request (PartNum, Quantity, ShippingType) Response (Price)

10. 6-10 © 2007 Prentice-Hall, Inc Simple SOAP Request and Response SOAP Request Message HTTP Request Header pointing to program QA78d 47 Rush

11. 6-11 © 2007 Prentice-Hall, Inc Simple SOAP Request and Response SOAP Response Message HTTP Response Header $750.33

12. 6-12 © 2007 Prentice-Hall, Inc Web Services: A More Complex Example Web service 1 (Object) Web service 3 (Object) Web service 2 (Object) Client PC With Browser Server Mainframe Minicomputer Service Via HTTP: SOAP + XML Service Via HTTP: SOAP + XML Service Via HTTP: SOAP + XML

13. 6-13 © 2007 Prentice-Hall, Inc Universal Description, Discovery, and Integration (UDDI) Server for Web Services UDDI Functions: White Pages By name Yellow Pages By type Green Pages Details of how to use, payment, etc. Client PC UDDI Server Server with Web Service 1. UDDI Request for Information, Response 2. Web Service Interaction Interaction Between UDDI Servers to Fulfill a Request

14. 6-14 © 2007 Prentice-Hall, Inc Web Service Description Language (WSDL) Protocol for asking a corporate webserver about the company’s SOAP- compliant services Client PC Corporate Webserver WSDL Request-Response Cycle

15. 6-15 © 2007 Prentice-Hall, Inc Perspective on Web Services Benefits of Web Services –Offers a way to standardize interactions between objects over the Internet –Can make distributed computing far simpler once Web services standards are fully developed Concerns –High overhead (very chatty) –Standards immaturity –Security is embryonic

16. 6-16 © 2007 Prentice-Hall, Inc Issues in Providing IT for Knowledge Sharing Responsiveness to user needs Content structure Content quality requirements Integration with existing systems Scalability Hardware-software compatibility Synchronization of technology with the capabilities of the user

17. 6-17 © 2007 Prentice-Hall, Inc Planning and Developing an Enterprise Portal Identify the sore points in the business that a portal can help address. Identify the portal users and their role in the firm. Select, install, and incorporate portal technology and associated hardware.

18. 6-18 © 2007 Prentice-Hall, Inc Chapter Summary A portal is a secure, Web-based interface that provides a single point of integration for and access to information, applications, and services for all people Portals have made their way into enterprises, bringing together not only information from the Internet, but in-house data as well The term data sources encompasses structured data and unstructured data, but also includes the data resulting from specific processes and enterprise applications

19. 6-19 © 2007 Prentice-Hall, Inc Chapter Summary (Cont’d) Content management requires directory and indexing capabilities to manage automatically the ever-growing store of structured and unstructured data residing in data warehouses, Web sites, ERP systems, legacy applications Collaborative functionality can range from tracking e-mail to developing workplace communities

20. Elias M. Awad Third Edition ELECTRONIC COMMERCE From Vision to Fulfillment 6-20© 2007 Prentice-Hall, Inc Business-To-Business E-commerce

21. 6-21 © 2007 Prentice-Hall, Inc The focus of this chapter is on several learning objectives The meaning, benefits, and opportunities in B2B B2B building blocks and their relationship to supply chain management Key B2B models and their main functions EDI as a B2B tool Role of leadership in B2B as an ongoing concern

22. 6-22 © 2007 Prentice-Hall, Inc What Is B2B? Business has always been about exchange Money as economic value eliminates barter Today money is exchanged by the invisible transfer of funds between businesses via computer business relationships The Unique contribution of B2B e-commerce is in the way these relationships are established and maintained. B2B is a network of independent organizations involved in a business area or an industry B2B focuses on the concept of exchange Efficiency is a factor

23. 6-23 © 2007 Prentice-Hall, Inc Distribution Channel Metrics B2B e-commerce was estimated at $624 billion in 2004. US B2B eCommerce in 2005 > $1.3 trillion – ~ 25% of all B2B transactions – 94% of all ecommerce transactions http://www.census.gov/eos/www/2006/2006reportfinal.pdf

24. 6-24 © 2007 Prentice-Hall, Inc Factors Driving B2B Today’s customer has become more cost conscious and value conscious and demands quality products in a timely manner Maturation of information technology and networks makes it possible to design a supply chain to meet customer demand The global dimension, involving distance, costs, time, variety, and uncertainty, makes it almost mandatory that the long supply chains be managed efficiently around the clock

25. 6-25 © 2007 Prentice-Hall, Inc What Is B2B E-commerce? Alternative ways of executing transactions between buyers and sellers that are business organizations; a network of independent organizations and long-term trading partners What is involved in B2B? –Complex procurement, manufacturing, and planning collaboration –Complex payment terms –Round-the-clock performance E-business is not information technology, and information technology is distinctly separate from e-business

26. 6-26 © 2007 Prentice-Hall, Inc Examples of B2B Messaging products for facilitating secure, reliable data movement between trading partners Work flow and process flow products for implementing conversational logic between partners Trading partner management products for helping identify where the data need to go and how they should get there Directories for assisting businesses in locating other businesses that provide a particular service or product

27. 6-27 © 2007 Prentice-Hall, Inc Elements of B2B Buying company Selling company Intermediating service provider JIT deliverer Web-based platform B2B tools like electronic data interchange (EDI) Back-end technical support to keep it all running

28. 6-28 © 2007 Prentice-Hall, Inc Key B2B Entities

29. 6-29 © 2007 Prentice-Hall, Inc Comparing B2B and B2C The connection mechanism Type of relationship Nature of control Nature of needs-based segmentation Sales complexity

30. 6-30 © 2007 Prentice-Hall, Inc B2B VS. B2C B2CB2B How connection is set upConsumer-to-systemBusiness-to-business Types of relationshipPlacing orders Executing payments Fulfilling orders Browsing of merchant’s catalog Sending feedback Online procurement Tracking order status Executing payments Managing promotions, returns, and catalog info Fulfilling orders

31. 6-31 © 2007 Prentice-Hall, Inc B2B VS. B2C (Cont’d) B2CB2B Nature of controlUnidirectionalUnidirectional to peer-to-peer Level of needs-based segmentation Moderate to lowSharper than B2C Sales complexityModerateComplex

32. 6-32 © 2007 Prentice-Hall, Inc Advantages and Disadvantages of B2B Advantages –Replacing a purchasing bureaucracy with online links means savings –Improved efficiency in ordering material –Fewer errors –Just-in-time environment that minimizes inventory sitting in the warehouse Disadvantages –Possible antitrust violations (non-competitive behavior) –Barriers to entry for competitors

33. 6-33 © 2007 Prentice-Hall, Inc Supply-Chain Management and B2B The supply chain represents all the events associated with the flow and transformation of goods from the raw material stage to the end-user customer (SCM) refers to overseeing materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer Ultimate goal is to reduce inventory costs –Lower cost lead to greater value Main types of SCM systems –Planning applications –Execution applications

34. 6-34 © 2007 Prentice-Hall, Inc SCM Life-Cycle Process Plan Source Make Deliver Return Source Make Deliver Return Plan

35. 6-35 © 2007 Prentice-Hall, Inc Supply Chain Management – an example

36. 6-36 © 2007 Prentice-Hall, Inc B2B Building Blocks The application server The B2B integration server The personalization software The content management facility The e-commerce package

37. 6-37 © 2007 Prentice-Hall, Inc Supply Chain Event Management

38. 6-38 © 2007 Prentice-Hall, Inc Trust in SCM The core of collaborative relationships over time is trust Trust elements –Competence - the ability of the parties in the chain to meet commitments –Cognitive and affect-based trust that assures you the vendor means well and stands by his or her reputation –Vulnerability - choosing a course of action even if such action has a probability of failure greater than 50 percent

39. 6-39 © 2007 Prentice-Hall, Inc Disaster Planning What if the chain snaps? –Disaster planning - taking specific steps to ensure the flow of products and services during a disaster –Growing awareness of the need for disaster planning so that the chain can keep operating –Work with the highest-risk customers and collaborate on a contingency plan to suit their needs in the event of a disaster –Empower employees on supply-chain disruptions and how to communicate effectively to minimize unnecessary delays

40. 6-40 © 2007 Prentice-Hall, Inc B2B Models Buyer-Oriented B2B, a buyer purchases thousands of products and uses the Internet to open a marketplace and a Web site for suppliers to do the bidding Supplier-Oriented B2B, a supplier invites individual consumers and business customers to order products via its electronic market store Electronic Auctions, auctions carried out on electronic Web sites such as eBay –Forward Auction is an auction where a seller entertains bids from buyers; an auction used to liquidate merchandise –Reverse Auction is an auction used to solicit bids from sellers and service providers; the lowest bidder wins Internet Exchange Auctions, an electronic auction involving many buyers and sellers who trade bids and offers until an agreement is reached to exchange product for payment. A third party often operates the exchange

41. 6-41 © 2007 Prentice-Hall, Inc Forward Auction Model

42. 6-42 © 2007 Prentice-Hall, Inc Reverse Auction Model

43. 6-43 © 2007 Prentice-Hall, Inc Internet Exchange Model

44. 6-44 © 2007 Prentice-Hall, Inc B2B Models (Cont’d) Intermediary-Oriented B2B, an intermediary company establishes an exchange market where buyers and sellers can make deals –Livestock auctions http://www.dvauction.com/ –MRO Auctions http://www.sourceapp.com/demo.asp

45. 6-45 © 2007 Prentice-Hall, Inc Intermediary Model

46. 6-46 © 2007 Prentice-Hall, Inc Electronic Data Exchange A computer-to-computer transfer of business information among businesses that use a specific standard format EDI components: –Interbusiness –Computer-to-Computer –Standard transactions –Standard format

47. 6-47 © 2007 Prentice-Hall, Inc Cycle of AP Transaction

48. 6-48 © 2007 Prentice-Hall, Inc Information Flow Between Buyer and Seller with EDI

49. 6-49 © 2007 Prentice-Hall, Inc EDI Advantages and Drawbacks Benefits –Cost reduction and time savings –Improved B2B problem resolution –Accuracy with integrity Drawbacks –EDI has yet to catch on as the perfect solution to information flow or for doing business. –EDI is point to point. –EDI requires expensive VAN networking to operate at peak efficiency. –EDI is not easy to use, learn, or implement.

50. 6-50 © 2007 Prentice-Hall, Inc Justifying EDI Conditions justifying EDI implementation –Volume of data –Frequency of document transmission and reception –Content sensitivity –Time sensitivity An alternative is Web-based EDI

51. 6-51 © 2007 Prentice-Hall, Inc Management Implications The goal of B2B is to line up partners, work with the partners, and allow the partners to compete for lowest price The changes in B2B are so intense that technology has become a mere enabler, not a solution Compensation is a major issue and always will be a high priority IT employees should be involved in the decision process, especially in projects that affect their jobs

52. 6-52 © 2007 Prentice-Hall, Inc Chapter Summary B2B involves complex procurement, manufacturing, planning collaboration, payment terms, and round-the-clock performance agreements B2B and B2C have distinctive characteristics Among the advantages of B2B are suppliers using the purchaser’s Web site to respond online to bids and sell excess inventory B2B is part of the supply-chain process

53. 6-53 © 2007 Prentice-Hall, Inc Chapter Summary (Cont’d) Among the models in B2B e-commerce are: –Buyer-oriented B2B –Supplier-oriented B2B –Electronic Auction –Intermediary-oriented B2B B2B integration is about coordinating information among partners and their information system infrastructure Most B2B traffic is handled by EDI, which is computer-to- computer transfer of business information between two businesses that use a specific standard format