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Implementing Electronic Marketplaces

Alexander ELSAS
Institute for Information Systems, Johann Wolfgang Goethe-University
Frankfurt, 60054, Germany

and

Andrea LÜTKE-VERSPOHL
SAP AG
Walldorf, 69189, Germany

Abstract marketplaces, a lot of smaller, specialized
marketplaces are being implemented or will be so in
After a short definition of the basic aspects of the near future. A summary of the distribution of
electronic marketplaces and a focus on its topic, this existing b2b marketplaces by region and industry
paper introduces mySAP.com Marketplace, which is gives [6].
part of SAP’s line of products in mySAP.com,
dealing with electronic marketplaces. Recent research by the Gartner Group underlines the
importance of a proven concept for the
To follow, the actual model is being developed and implementation of electronic marketplaces:
divided into 3 phases, major emphasis of the model Covisint, the marketplace of the automobile
can be found in phase 2. industry,[3] is not expected to work before 2002,
due to the complexity of the current technologies
The following part of this paper analyses findings and a lack of established communication technology
on the use of the model. An empirical analysis of a of the partners.
smaller test marketplace is presented, which was
implemented by SAP and Deutsche Bank. The
Emaro marketplace project focussed on the 2. Electronic Marketplaces
implementation of a horizontal marketplace dealing
with MRO-goods. Definition of terms
According to [1], electronic marketplaces can be
defined as virtual places, where, based on internet
Keywords: Electronic Marketplace, Emaro, technologies, to that extent free of timely and spatial
Implementation, ASAP, Model restrictions, transactions between suppliers of goods
and services and their respective clients take place.
In other words: electronic marketplace stands for an
internet based framework/platform for commerce or,
in a wider sense, the support of transactions between
1. Introduction enterprises. [10]

Developing a model for the implementation of Electronic marketplaces can be split into vertical
electronic marketplaces (EM) involves theoretical and horizontal marketplaces.
aspects, and on the basis of mySAP.com
Marketplace also practical aspects. Especially the Vertical marketplaces address a specific industry
business-to-business (b2b) marketplaces are and are specialized for the needs of this group. [7]
encompassed in this paper. The main characteristics and main goals are
bundling of demand and supply in an environment
Important industries have defined their goal to where the same expectations and interests are
implement electronic marketplaces in the near focussed onto the offered products. As well as
future, i.e. the automobile industry, the airline supporting transactions, industry-specific
industry and the travel industry as a whole, etc. informations are the additional services of vertical
Besides these classes of large electronic marketplaces. Therefore it is a prerequisite for the

com Marketplace implementation (step 3). 4. 3. the production preparation mySAP. not production more detail. the MRO (maintenance.com Marketplace was chosen: developed especially for the automatization of industryspreading business processes. agreement and handling. which is based on ASAP. relevant consumption goods. In this phase. shall now be introduced in like office materials or other. The following working packets were business processes. Preparation Phase concretized project working plans should ensure that A) Analysis of potential the established business model will be realized and B) Definition of a business model that each activity will be coordinated. C) Acquisition of participants extensive documentations are established. In this first step the decision makers fix clear project objectives to find a solution with an efficient Internet technology is used for the handling of these method. mySAP. . The 3 main phases: working plan defines the planned project results (and the estimated time which is needed) and the previous and following project parts. the realization and mySAP. ASAP and adapts them to the procedure of implementing electronic marketplaces with The functionality of an electronic marketplace mySAP. separates the concept of electronic marketplaces from the concept of portals. supports ideally all phases of a commercial transaction: preparation. Implementing Phase have a thorough knowledge of the specialities and A) Project Preparation needs of the addressed industry. They are completed during the whole project. AcceleratedSAP ASAP supports the introducing strategy’s Overview designation by document-templates and report- AcceleratedSAP (ASAP) has become a proven templates and by examples. • The introducing strategy’s designation. horizontal D) Production Preparation marketplaces are not focussed on a specific E) Productive Start industry. is divided into working plan and also detailed documentations. Opening Phase An example for a horizontal marketplace could be a marketplace which deals with the distribution of Due to the restrictions of this paper. which help to find concept for the implementation of information standards and methods for the introduction. This project plan should contain a The model. which are of industryspreading importance. they address processes and functions. These steps are the project preparation (step 1). every step is exhausted in Therefore the emphasis on the transaction function more and more becoming finer structures. B) Definition of a Business Blueprint C) Realization and Implementation In contrast to the vertical marketplaces. Based on five steps which are each supported by further software tools. the exact knowledge of the The Implementing Phase appropriate business proces is the most important This phase of the model applies the concepts of prerequisite for the marketplace operator. phase 2. which consists of a range of software components and services for the handling and integration of Step A: Project Preparation business processes in and between enterprises. repair and operation) goods implementation phase.[9] setting up of the project plan has essential importance. The 1.operator of an vertical electronic marketplace to 2.com Marketplace. the so-called C- materials. • the fixing of the project organisation and • the determination of technical requirements. the definition of an business blueprint (or preparation of an objective concept) (step 2).com is a line of products from SAP AG (step 4) and the productive start (step 5). In this case. [9] The systems based on SAP's standard software R/3.

[9] of sight is orientated on business processes. The result is that decisions final objectives and the project planning. A detailed analysis of the now following project-kick-off-meeting deals with hardware requirements and of further technical the technical tasks of the marketplace project. the final on the special concept. based establishment of the system’s management.Documentations about configurations and The last mentioned contains their technical customizing settings. Mostly. The hardware architecture of an developments of individualisation will be electronic marketplace is mostly characterized by a foreseeable in this planning phase. The operation parameter’s adjustment occurs in two steps: the so-called The objective concept’s result is a special concept. Also reflections about necessary safety completed this step. user documentations or service realization and the demands on the network and the reports may be helpful for the project decisions. fulfil the defined tasks. Further which is orientated on the established business elements of this phase are the fixing and the model. precautions and the authorization concept have to be considered. components is necessary for the fixing of system Within this meeting the project leader explains the preconditions. software have to be synchronized. the clear business processes (a “Question & Answer- procurement of hardware and of necessary database” might help). business processes are fixed by an approximate grade of details. and this and after the corresponding release.and net failures and unauthorized pounces The objective concept. the realisation is the base for organisation. Possible construction. After a implementation in only one document. Afterwards. is a main thread of the marketplace be also reflections about electronic paying construction and contains all details of the procedures that are secure and practicable. A catalogue of measures is developed. the database project shifts to step 2 (the preparation of an system and the network configuration have to be objective concept) after the project leader has made.[8] order-giving enterprise and of external consulting partners. The following working packages have to be managed in this phase: Step C: Realization / Implementation • The training of the project members. 3 The number and precision of the baseline scenarios depend on the striven reliability’s degree of the . memory. cent of the common marketplace transactions. The last working package in the phase of the At the end of the first step the project structure is objective concept’s preparation deals with system- evaluated by the “Concept Check Tools”. “baseline-“ and the “detail configuration”. which are necessary to preconditions.[12] All final consistence check of the measure catalogue business requirements are portrayed there. It is clarified which measures have to be taken to prevent interruptions like operation errors. Now follows a detailed configuration and fine • a detailed definition of the business process setting of each system component based on the that has to be portrayed and business blueprint. if of the marketplace functionality begins.[11] The technical aspects. configuration and. often called “business like data misusing or data destruction. There must blueprint”. a marketplace team model contains indirect affected sectors as well as is a mixed project team of colleagues from the aspects between different companies. A two-step view is distribution of authorization and the workflow characteristic: The first and most important manner specification.[9] First of all. the business processes are divided. for development activities. The special concept (which interfaces for the data-adoption from the ERP. The concerning the operating system. complex construction. This project organisation. describes the business process that has to be realised systems of the marketplace participants are among in detail) and the functionality of the marketplace the technical requirements of the marketplace. This contains the function units’ • the establishment of the system combination of the system. The marketplace The project team’s combination is fixed in the is completely modelled as a whole system. The main aspect is to manage the complexity in form of The definition of the needed infrastructure. which is supported by the information technology (IT) on the The baseline-configuration contains about 80 per electronic market. necessary. Step B: Definition of a Business Blueprint system.

conducts the business process. reports.[2] and optimization of the EM in view of the technical infrastructure and its regular usage and it also The “Four-eyes-principle” is mostly used therefore. They will add new marketplace In connection to the mySAP. is the main focus of this consideration. too. The preparation of an approximate authorization Connections to the ERP-systems of attached concept that was enlarged in the objective suppliers are also checked (in connection to the conception by fixing the roles and tasks of the users system tests). scenarios and authorization profiles have to be prepared. Mainly expensive and longwinded achieve that the participants profit from the current processes are checked about their workflow ability added value functions.[9] test cases depends on the importance of each function and the expected frequency of errors. Both have lead to cost. The Emaro Marketplace Project work-divided process that leads to the preparation or utilization of company achievements. which management conducts this internal quality check. two administrators to ensure a high security the marketplace settings and the marketplace standard. One main element is the this third step: System installation and system execution of various tests to ensure a start without administration including guidelines of detailed problems. The project configuration and deals with the processes. mostly 5. preventive check of the marketplace functionality. independent reviews. which should be ideally Therefore.market place. reflections about further activities in the with the necessary authorizations for individual content and community sector must be made to applications. Besides the tests of interface programs are documented in a system’s management are throughput. The test plan includes all important descriptions.[9] The configuration is conducted by Depending on the business model different the business process. rarely appear. test conducted after each phase. Each special department or Step E: Productive Start organisation of the marketplace is described and The productive start of the marketplace takes place concretized to each working place with the in the final step. unauthorized approaches by a flexible authorization concept. There is a division in process.com Workplace functionalities or achieve another automation and (another product in the line of mysap. This quality check must not be mixed up with the orientated cycles that may be configured parallel. They may team and the employees of the enterprise.[9] The choice of handbook. from the initiation to the The Emaro marketplace [4] has been a test project end. Heilmann defines a workflow as a defined. Application and data are protected against performance has to be prepared. In this marketplace participants are simultaneous equipped context.[8] joint venture between SAP AG and its partner. market partners. the .[5] The Overview dynamic course of events. process descriptions. and exactness at the end of phase 3.com) the improvement of the business transactions.and time savings of the participating to work together.and the technical consulting marketplace processes may be automated. a customer’s order. in the last working package in step 3. The status of the planned achievements has to be checked of completeness The detail configuration is based on the baseline. Step D: Preparation of Production Another important precondition for the task The aim of this step is the final preparation for the fulfilling of the system’s management is made in marketplace opening. In this phase the commencement of following projects is possible. responsible people who deal with this situations that may appear at the normal marketplace system and methods for the escalation management operation. A for the validation of the described implementation workflow generally arises by an event. The detailed description of the user administration takes first place in this phase. The project team conducts the care connected security requirements. for example model. Now follow different activities until the workflow ends with a result (for example This horizontal marketplace has been organized as a with an invoicing). A concept for the The administrative tasks are distributed to. was already made in the project preparation.and stress tests. at least.

office furniture and IT for offices. The • Integration of additional services like financial complexity of a marketplace project can be services (online financing). is the extension of mySAP. Analysis . Two leading consulting firms were involved as the other participants in the project. This The development of Emaro consists of 2 phases: causes a high one-time effort. reduced in a significant amount. costs.com Marketplace had been tested in a • The implementation of a complete integration of more thorough way. • Documentation • Adding the functionality of auctions and reverse The documentation of mySAP.Deutsche Bank AG. regarding to the statements of nearly all Emaro is designed to deal with MRO-goods like participants involved in the technical aspects of office materials. it was migration tool. the marketplace product. other German and international global SAP is following a component based strategy players have entered the succesfully implemented for the upgrade of it’s products. the marketplace transactions into the ERP- Systems of the participants. because there is no simple migration tool avaible at the moment. which are configured in existing ERP-systems like SAP R/3. on which Emaro runs. The first phase dealt with the construction of the SAP offers a so-called User Server as a solution marketplace infrastructure. an extensive testing the implemented functionality of the marketplace. documentation of the underlying technolgy and product is better developed. if the • New product groups. have to be Project Phases configured in the marketplace product. the project participants are asking for a smaller and more simple The duration of this phase was 4 months. This effort could have been spared. The empirical analysis of the questionnaires identified a few problems of the Emaro project. • Testing The Emaro marketplace is developed on the The main objective of the second phase. but this means another level of implemenation of a solution for the buying and complexity of the whole system and additional selling of products based on a multi vendor catalog. completed on time. In the context of marketplace. with SAP holding 40% of the • Lean infrastructure platform shares. is still in an early stage of development. this is leading to complex interdependies of different releases of The analysis of the Emaro project is based on both a the marketplace components. is. maintenance.com Marketplace auctions. • Need for an uniform upgrade strategy Meanwhile. This results in high costs for the needed multiple server-computers SAP’s task concerned mainly the technical aspects and causes monitoring problems of these of driving the marketplace as well as care and servers. All project participants stated this as an postive aspect of the project. Because of started immediately after the successful still existing technical weaknesses of implementation of the first phase. which basis of mySAP.com Marketplace. too complex. Functional target was the to this problem. despite it’s overall success. quantitative and a qualitative questionnaire which was given to senior executives of the project • Migration of mandators from the ERP- partners. phase had to be conducted in the Emaro project. if The main objectives here are: mySAP. Because of this.com Marketplace. system All mandators. the project. The hardware-architecture. The consequences for the further development of the marketplace product of SAP and the underlying implementation model are: .

1999 . maybe im Detail. 1994 further development of the model.covisint. [3] http://www.com Marketplace product Informationsverarbeitung. Volume 34. in: Handbuch der were identified by a thorough analysis of the modernen Datenverarbeitung.): SAP R/3 Concept Review Service – Präventive Überprüfung des betriebswirtschaftlichen Umfelds unter Berücksichtigung der Performance-Aspekte. Walldorf. 6. No. 1999 even for the existence of global players like SAP. Funktionen developments will be crucial in the future. 9-21.com The Emaro project suffered from a few shortcomings like an insufficient number of project [4] http://www.): Accelerated SAP. Some minor [5] Heilmann.: Workflow Management – weaknesses in the implementation of the proposed Integration von Organisation und model and the mySAP. G. questionnaires and were taken into account for the p. Conclusions References The results of the analysis of the Emaro project [1] Berlecon Research (eds. 1999 usefulness.com participants with thorough knowledge of the know- how of electronic marketplaces. 1999 The ability to adapt the proposed implementation model and the underlying technology to such new [9] SAP AG (eds. Walldorf. 176. 2000 [11] SAP AG (eds.com – Der mySAP. the concepts of electronic marketplaces will develop into the [7] Mattes. H.com Marketplace.): mySAP. [10] SAP AG (eds. [6] http://www. which are the main concept of today and proposed electronic [8] Keller.logistik-heute.de/PDF/B2B. leaving the traditional Commerce mit Internet und EDI.PDF It is predicted. Iteratives Prozess-Prototyping zur Bildung von Wertschöpfungsketten. Stuttgart.emaro. that in the future. München. Folder. F. Technische Implementierung von SAP R/3 planen the model proved basically its validity and und realisieren. White Paper. implementation model: Berlin. München. H.: R/3 prozessorientiert anwenden – marketplaces.: SAP R/3 – Einführung mit ASAP: implementation partner for electronic marketplaces. behind.): Tools and Accelerators – Turbo-Charging Your Installation. 1999 concept of Value Chains. 1999 SAP has established the image of a competent [2] Brand.): Virtuelle Vermittler – allow a balanced view of the project and the Business-to-Business-Marktplätze im Internet. Walldorf. 1999 [12] SAP AG (eds. Fact Sheet.: Electronic Business-to-business – E- direction of Value Webs. Walldorf.