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Transcript of Chapter 7 Business-to-Business E-Commerce. Copyright © 2003, Addison-Wesley B2B E-Commerce...
Chapter 7
Business-to-BusinessE-Commerce
Copyright © 2003, Addison-Wesley
B2B E-Commerce
Inter-corporate communication Exchange business information
between trading partners Supply chain focus
Improve efficiency of transactions Between different business entities
Copyright © 2003, Addison-Wesley
Figure 7.2 A real-world supply chain is very complex.
Wal-MartFrito Lay
Supplier B
Supplier A
Procter &Gamble
Supplier E
Customer C
Customer D
Customer B
Customer A
Customer E
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Visualizing the Supply Chain
A river analogy Source – raw materials
Upstream Flow direction – downstream Tributaries – suppliers Destination – customers
Downstream Series of linked processes
Value chain – within organization Supply chain – links value chains
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Interorganizational Systems (IOS)
Information system shared by two or more enterprises
Requires Compatible information technology Compatible infrastructures
Difficult to achieve Initially limited to large firms
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Figure 7.4 Early IOSs required custom software.
C to AMiddleware
B to AMiddleware
B to CMiddleware
A to CMiddleware
C to BMiddleware
A to BMiddleware
Company A
Company CCompany B
Custom software is very expensive
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Figure 7.5 Some potential benefits of an inter-organizational system.
Faster transactions Lower cost
transactions Fewer transaction
errors Reduced cycle time Reduced inventory Increased information
flow Increased customer
satisfaction Improved cash flows
Early examples EFT EDI
Still, limited to large organizations
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Interconnectivity
Private leased network Expensive Not easily scalable Highly secure and reliable
Value-added network (VAN) Semiprivate intermediary service Less expensive but still costly Scalable Less secure and less reliable
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Figure 7.7 Connecting through the Internet.
Public bandwidth Advantages
Inexpensive Highly scalable
Drawbacks Inconsistent Weak security
CompanyA
CompanyF
CompanyE
CompanyD
CompanyB
CompanyC
The Internet
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Figure 7.8 A VPN utilizes a secure tunnel to cross the Internet.
VPN Public network Tunneling Encryption
Advantages Low cost Good security Scalable
Encrypt andencapsulate
Encrypt andencapsulate
Company A Company B
The tunnel
The Internet
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Figure 7.10 Selecting a connectivity option.
Option
Secure private networkValue added networkVirtual private networkPublic network
CostExchangevolume
Tradingpartners
Securityneed
Scalability
**********
**********
******
*********
*****
**********
Companysize**********
Legend*****
MeaningHigh/large/manyLow/small/few
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Early Supply Chain Integration
American Airlines Sabre Online, real-time reservation services
Ticket agents Travel agents
Still in use Baxter Healthcare
Direct ordering of hospital supplies Wal-Mart inventory management
Driven by point-of-sale data collection
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Figure 7.11 EDI
Standard syntax ANSI X.12 EDIFACT
Two conversions InternalEDI EDIinternal
Highly scalable Templates Web-based EDI
still in use
EDI to InternalMiddleware
Internal to EDIMiddleware
Internal to EDIMiddleware
EDI to InternalMiddleware
EDI to InternalMiddleware
Internal to EDIMiddleware
Company A
Company C
Company B
EDI
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Figure 7.12 An extranet.
WAN Links intranets Standards
Client/server TCP/IP Web server Browser
Security issues
Company Aintranet
Businesspartnerintranet
SupplierintranetTelecommuter
(Personal firewall)
Extranet
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XML
Extension to HTML Special tags to mark data fields
Data structure, syntax, data type XML-enabled middleware can
Extract data values from document Create dynamic Web pages
XML is extensible Add and register new XML schema
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Figure 7.14 The XML code for a set of customer order data.
XML Tags
<?xml version="2.0"?><order>
<salesperson>John Doe</salesperson><item>Acme rocket engine</item><quantity>4</quantity><date>
<month>12</month><day>13</day><year>2002</year>
</date><customer>Harry Potter</customer>
</order>
Equivalent Data Structure
OrderSalespersonItemQuantityDate
MonthDayYear
Customer
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B2B Software and Services
E-procurement Buy-side Sell-side
Electronic invoice presentment and payment (EIPP) Exchange of invoices and payments
EFT Resembles IBPP Significant cost reduction potential
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More Software and Services
Logistics integrators Right stuff, right place, right time
Customer relationship management (CRM) Data on customer interactions Data warehouse Data mining
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Figure 7.16 Supply chain management intermediaries.
Category Supplier Product
Planning and Forecasting I2 TechnologiesManugisticsSAP
TradeMatrixNetWorksAPO
Purchasing AribaCommerce OneOracleRightWorks
Ariba SourcingMarketSetSupply Chain ExchangeeProcurement
Factory scheduling BaanOracleQADSAP
Baan SCSDiscrete ManufacturingSupply Chain OptimizerAPO
Order tracking EXE TechnologiesManhattan AssociatesOptum
eFulfillmentMA FulfillTradeStream
Market research andProduct design
Agile SoftwareMatrixOnePTCSAP
Agile AnywhereeMatrixWindchillMySAP PLM
Source: Thompson Financial and E-Business 2.0, May 2001, page 85.
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B2B E-Marketplaces
Similar to enterprise portal Categories
Commodity e-marketplace Business services e-marketplace
Financial services and process support Integration services e-marketplace
Facilitates process-to-process integration Vertical and horizontal e-
marketplaces