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Trading online has allowed the integration of technology in both hardware and

software into the supply chain itself. Although this driver for innovation enabled
transaction to be conducted quickly and without the intervention of third
parties, it seems that there are a number of issues that companies have to
consider in order to fully exploit the potential of technology and be able to
build the correct trust infrastructures with other companies.

Some of the issues are: (Quocirca, Sept 2005)

The complexity of the value chain. The sheer number of suppliers and buyers a
single company can trade with, through the B2B environment is colossal. Managing
the different preferences, policies, and legislation and payment methods is a very
big challenge. This is focused on mostly four areas:
Physical level. The number of suppliers and buyers, the speed of transaction and
the level of the transaction that are made, the level of the supply chain and the
number of products a company has to deal with hinders the potential of the B2B
segment, due to the fact that although transaction are established and conducted
quickly and quite cheap, if multiplied by the sheer number of those physical
transaction then the maintenance and technological cost make this a risky
environment for any business. (Quocirca, Sept 2005)
Standards level. Mostly at the technological level; some companies still use EDI,
others use the web and others use a big number of other mechanisms to trade
online. Although EDI was supposed to standardise the way businesses trade and
exchange information between them, the emergence of the WWW and new technologies
in networks, hardware and software has by far made EDI and other web based (today)
mechanisms a standard. There are issues related to the integration of new B2B
systems with the legacy systems, and issues between the integration and
compatibility of systems between buyers and suppliers. (Quocirca, Sept 2005)
Technological level. A consequence of the standards level. Based on the above,
companies use different technological standards to support their transactions.
What happens when a supplier/buyer has different standards? There are even issues
when company x and y use the same software but company x updates its software to a
new version which is not backwards-compatible with previous version. Provided that
company y has not yet updated to the new version we can clearly see the
transactional incompatibility that will be created. Would company x pressure
company y to update or vice versa? Or do companies need to support multiple
standards in order to minimize the risk of transaction failures and the loss of
important customer bases? (Quocirca, Sept 2005)
Geographical, regulation and legislation level. The internet has broken the
barriers of geographical location, the drive to search for production of cheaper
products had functioned as driver for the search for suppliers of materials and
buyers of produce outside the national barriers. Although this has surely an
evident increase in revenue of the B2B companies, it resulted in some, perhaps,
invisible at first complexities. This are usually focused towards the consumer
trends of that country, cultural behaviour, legislations and regulations of that
country, additional transactional costs, language, extra skills( e.g staff that
understand and can evaluate local and international legislation) and trust issues.
(Quocirca, Sept 2005)
Problems in managing the value chain complexity. The diversity of trading partners
on the technological level and the procurement level causes increase complexity in
managing the value itself. The use of non-standardized approaches to the B2B
trading has caused the de-centralization of innovative methodologies and the use
of manual processes such as the telephone-mail, fax and paper.
Loss of business intelligence. The use of manual process although simple, it does
not aid companies to fully utilize information gathered and use that information
to effectively improve the efficiency of value chain decision making. (Quocirca,
Sept 2005)
So in effect the attempt to automate the supply chain transactions may create more
problems between suppliers and buyers. It can complicate the transaction lifecycle
and a non standardized approach may create security issues, and loss of trust
between trading parties.

References
Quocirca, Insight Report, September 2005, B2B Reality Check, Overcoming challenges
in B2B Transaction Automation

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