Lecture 5 – eCommerce Business to Business Strategies eBusiness

eBusiness

Lecture 5 – eCommerce Business to

Business Strategies

eCommerce Business to Business Strategies Lecture 5 - 5.2

Introduction to Lecture 5

Topics covered:
• Purchasing activities
• Logistics activities
• Support activities
• eGovernment
• Electronic data interchange (EDI)
• Value-added networks (VANS)

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eCommerce Business to Business Strategies Lecture 5 - 5.3

Background to B2B eCommerce

Companies can use eCommerce to improve:

• Purchasing and logistics processes
• Support processes:
– Finance
– Administration
– Human resources
– Technology development
• Flexibility to respond to changing circumstances

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Lecture 5 – eCommerce Business to Business Strategies eBusiness

eCommerce Business to Business Strategies Lecture 5 - 5.4

Purchasing Activities
• Identifying vendors
• Evaluating vendors
• Selectingg specific
p p
products
• Placing orders
• Resolving issues after order has been
received

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eCommerce Business to Business Strategies Lecture 5 - 5.5

Sourcing Suppliers
• Procurement staff have high levels of
product and supplier knowledge
• eProcurement involves use of Internet
technologies to assist
• eSourcing uses specialist purchasing
websites
• Business purchasing process is complex

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eCommerce Business to Business Strategies Lecture 5 - 5.6

Steps in a Typical
Business Purchase Process

Schneider, G. (2007) Electronic Commerce 7th Ed, p.221

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eCommerce Business to Business Strategies Lecture 5 - 5.7

Maintenance, Repair and

Operating (MRO) Supplies
• Indirect materials – low value
• Suppliers create online catalogues
• Purchases often made through purchasing cards
• V d
Vendors save costs iin printing
i i andd shipping
hi i
catalogues and handling telephone calls
• Cost of processing MRO order online can be 10%
of handling same order via telephone

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eCommerce Business to Business Strategies Lecture 5 - 5.8

Logistics Activities
“Providing the right goods in the
right quantities in the right place
at the right time”
• Receiving
• Warehousing
• Controlling
• Inventory
• Scheduling and controlling vehicles
• Distributing finished goods

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eCommerce Business to Business Strategies Lecture 5 - 5.9

Enhancing Logistics
Via Web Technology
• Web-enabled automated warehousing
operations
• Delivering real time shipment information to
customers’ browsers
customers
• Making freight tracking web pages available
to customers
• Using global positioning satellite (GPS)
technology to monitor vehicle movements

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Lecture 5 – eCommerce Business to Business Strategies eBusiness

eCommerce Business to Business Strategies Lecture 5 - 5.10

Enhancing Support Activities

Via Web Technology
• Making human resources information available via
a secure web connection
• Online payroll processing
• Web-enabled sales supportpp and sales force
automation
• Making training materials available online
• Facilitating the collection, classification and
dissemination of information via knowledge
management

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eCommerce Business to Business Strategies Lecture 5 - 5.11

eGovernment
• Provide ways for citizens to
interact online with their
government
• Distribute benefit payments
• Administer tax laws
• Increase the availability of
information
• Government departments
buying online from vendors

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eCommerce Business to Business Strategies Lecture 5 - 5.12

Electronic Data Interchange (EDI)

“Computer to computer transfer of business

information between two businesses that use a
standard format of some kind”
• Invoices
• Purchase orders
• Requests for quotations
• Bills of lading (shipping documents)
• Receiving reports

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Lecture 5 – eCommerce Business to Business Strategies eBusiness

eCommerce Business to Business Strategies Lecture 5 - 5.13

EDI Standards
• ASC X12 (American National Standards
Institute)
• UN/EDIFACT (United Nations)
• Agreement to develop one set of
international standards, but…..no date set
for implementation

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eCommerce Business to Business Strategies Lecture 5 - 5.14

Information Flows in a Paper-

Based Purchasing Process

Schneider, G. (2007) Electronic Commerce 7th Ed, p.234

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eCommerce Business to Business Strategies Lecture 5 - 5.15

Information Flows in an
EDI Purchasing Process

Schneider, G. (2007) Electronic Commerce 7th Ed, p.235

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eCommerce Business to Business Strategies Lecture 5 - 5.16

Value-Added Network (VAN)

• Provides communications equipment, software and
skills
• Enables the receipt, store and forward of electronic
messages containing EDI transaction sets
• Customer must install EDI translator software
• Customers connect to each other via the VAN
(indirect connection EDI)

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eCommerce Business to Business Strategies Lecture 5 - 5.17

Direct Connection EDI

Schneider, G. (2007) Electronic Commerce 7th Ed, p.238

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eCommerce Business to Business Strategies Lecture 5 - 5.18

Indirect Connection EDI

Through a VAN

Schneider, G. (2007) Electronic Commerce 7th Ed, p.238

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eCommerce Business to Business Strategies Lecture 5 - 5.19

EDI on the Internet

• XML used as the basis for information exchange
• Content Inspired Component Architecture (CICA)
provides greater flexibility
• Emergence of ebXML
• Financial EDI (FEDI) provide instructions to banks
• FEDI transactions handled by EDI-capable banks

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eCommerce Business to Business Strategies Lecture 5 - 5.20

Summary
• eProcurement can aid purchasing activities
including sourcing suppliers
• Web technologies can enhance logistics by
tracking and reporting on freight movements
• eGovernment can improve links between citizens
and their government
• EDI can radically improve the transfer of business
information

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eCommerce Business to Business Strategies Lecture 5 - 5.21

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