Business
-to-Business
Business-to-Business
Electronic Commerce
( B2B
-EC )
B2B-EC
Sistem e-Business
(MG-652)
Jurusan Manajemen
Agenda
•
•
•
•
Characteristics of B2B EC
Models of B2B EC
From Traditional to Internet-based EDI
Integration with Back-End Information
Systems
• Managerial Issues
• Summary
05 September 2002
Chandra Wibowo W.
2
Supply Chain
Electronic Marketing
Supplier-Oriented Marketplace
Procurement Management
Buyer-Oriented Marketplace
Intermediary-Oriented Marketplace
Virtual Corporation
Models of
B2B EC
Electronic Intermediaries
Charecteristics
of B2B EC
Entities of
B2B EC
Networking between Headquarters and
Subsidiaries
Buyer-Oriented Marketplace :
GE's TPN
Intermediary-Oriented Marketplace :
Boeing's PART
Electronic Data Interchange
Intranet
Extranet
Online Services to Business
Integration with Back-End
Information Systems
Business-to-Business
Electronic Commerce
Supplier-Oriented Marketplace :
Cisco Connection Online
Just-In-Time Delivery
Case Studies
Online Service to Business
Procurement
Management
Buyer's Internal Marketplace
Issues in Procurement Management
Inefficiency in Procurement Management
Goals of Procurement Reengineering
Just-In-Time Delivery :
FedEx InterNetShop
EDI and standards
Direct Marketing
Relationship Marketing
Audience Strategy
and Mailing Lists
Electronic Marketing
in B2B
Electronic / Interactive Media
Traditional EDI
Applications of EDI
Limitation of traditional EDI
Electronic
Data Interchange
Internet-Based EDI
Reasons to create
intenet-based EDI
Types of internet-based EDI
Prospect of internet-based EDI
05 September 2002
Chandra Wibowo W.
3
Characteristics of B2B EC
• B2B EC implies that both the sellers and buyers are
business corporations, while B2B EC implies that the buyers
are individual consumers.
• B2B EC covers a broad spectrum of applications that enable
an enterprise or business to form electronic relationships
with their distributors, resellers, suppliers, and other
partners.
• B2B applications will offer enterprises access to the
following sorts of information: product, customer, supplier,
product process, transportation, inventory, supply chain
alliance, competitor, sales & marketing, supply chain process
& performance.
05 September 2002
Chandra Wibowo W.
4
Supply Chain
• The supply chain encompasses all the
activities associated with the flow and
transformation of goods from the raw
materials stage all the way to the end
user. Æ Taken together these processes
and roles are called a supply chain.
• Historically, many of the process in the
supply chain, have been managed with
paper transactions. Æ this is where B2B
EC applications come into play.
05 September 2002
Chandra Wibowo W.
5
Entities of B2B EC
•
•
•
The Internet can provide the most economical B2B EC platform for linking
companies without additional network implementation.
B2B EC can contribute to lower purchase costs, reduced inventory,
enhanced efficiency of logistics, as well as to increased sales and lowered
sales costs and marketing costs.
The key entities in B2B EC are the following:
–
–
–
–
–
–
–
Selling company – with marketing management perspective.
Buying company – with procurement management perspective.
Electronic intermediary – a third party intermediating service provider (the
scope of service may be extended to include the order fulfillment).
Deliverer – who should fulfill the JIT delivery.
Network platform – such as the Internet, intranet, and extranet.
Protocols and communication – such as EDI and comparison shopping, possibly
using software agents.
Back-end information system – possibly implemented using the intranet and
Enterprise Resource Planning (ERP).
05 September 2002
Chandra Wibowo W.
6
Models of B2B EC
• The business models of B2B, the first
three models are classified depending upon
who controls the marketplace: the
supplier, customer, or intermediary.
• Other important business models are:
virtual corporation, networking between
headquarter and subsidiaries, and online
services to business.
05 September 2002
Chandra Wibowo W.
7
Supplier-Oriented
Marketplace
• The most common B2B model is the Supplieroriented marketplace. Most of the manufacturerdriven electronic stores belong this category.
• In this model, both individual consumers and
business buyers use the same supplier-provided
marketplace (see figure 6.2).
• The architecture for this B2B model is basically
the same as that for B2C EC, and the purchasing
process is similar.
05 September 2002
Chandra Wibowo W.
8
Supplier-Oriented B2B
Marketplace Architecture
Consumer
Business Customer
Supplier's
Electronic Store
Consumer
Business Customer
Supplier's
Products
Catalog
Customer's
Order
Information
B2B EC
B2B EC
05 September 2002
Chandra Wibowo W.
9
Buyer-Oriented
Marketplace
• Under the platform of supplier-oriented
marketplace, the buyer’s acquisition department
has to manually enter the order information into
its own corporate information system.
• Searching e-stores and e-malls to find and
compare suppliers and products. Æ can be very
costly for companies who purchase thousands of
items on the Internet.
• Under this model, a buyer opens an electronic
market on its own server and invites potential
suppliers to bid. (see figure 6.3).
05 September 2002
Chandra Wibowo W.
10
Buyer-Oriented B2B
Marketplace Architecture
Business supplier
Buyer's
Electronic Store
Business Supplier
Buyer's Requesting
Products Catalog
05 September 2002
Supplier's Bid
Information
Chandra Wibowo W.
11
IntermediaryOriented Marketplace
• The third business model is establishing an
electronic intermediary company, which
runs a marketplace where business buyers
and sellers can meet. (see figure 6.4).
• This concept is similar to intermediarybased e-malls or e-stores developed for
B2B EC.
05 September 2002
Chandra Wibowo W.
12
Intermediary-Oriented
B2B Marketplace Model
Business Supplier
Business Customer
Intermediary's
Electronic Store
Business Supplier
Business Customer
Customer's
O rder
Inform ation
05 September 2002
Shared
Products
Catalog
Supplier's
Product
Information
Chandra Wibowo W.
13
Virtual Corporation:
Networking between Business
Partners
• A VC is an organization composed of several
business partners sharing costs and resources for
the purpose of producing a product or service.
• Permanent VC are designed to create or assemble
productive resources rapidly, frequently,
concurrently, or to create or assemble a broad
range of productive resources.
• This creation, operation, and management of a VC
are heavily dependent on the B2B EC platform
(Internet and extranet).
05 September 2002
Chandra Wibowo W.
14
Networking between
Headquarter and
Subsidiaries
• The B2B EC platform can help the
communication and collaboration between
headquarters and subsidiaries or
franchiser and franchisee by providing email, message boards and chat rooms, and
online corporate date access around the
globe no matter what time zone is.
05 September 2002
Chandra Wibowo W.
15
From Traditional to
Internet-based EDI
The majority of B2B transactions are conducted by EDI and/or
extranets (see figure 6.5).
• Traditional EDI: EDI and Standards
•
– It is a system that standardizes the process of trading and tracking
routine business documents, such as purchase orders, invoices,
payments, shipping manifests, and delivery schedules.
– EDI translates these documents into a globally understood business
language and transmits them between trading partners using secure
telecommunications links. (see figure 6.6).
– Also see the limitations of traditional EDI.
Internet-based EDI
– The appears to be the most feasible alternative for putting online B2B
trading within the reach of virtually any organization, large or small.
– Internet e-mail can be used as the EDI message transport in place of
VAN. The Internet Engineering Task Force (IETF) is considering
standards for encapsulating the messaging within Secure Internet Mail
Extension (S/MIME).
05 September 2002
Chandra Wibowo W.
16
Typical Flow of EDI
Messages
Buy er
Supplier
RFQ
Response to RFQ
Purchase O rder
PO Acknowledgement
Purchase O rder Change
PO Change Acknowledgement
Functional
Acknowledgement
(for each transaction)
05 September 2002
Chandra Wibowo W.
17
Traditional EDI
Translate
Business
Application
Store and Forward
EDI
Formatted
Message
05 September 2002
Value-Added
Network
Chandra Wibowo W.
Translate
EDI
Formatted
Message
Business
Application
18
Web-based EDI
O rders
Internet
W eb Browser
EDI Server
Inventory
W eb Server
Legacy
Applications
05 September 2002
Chandra Wibowo W.
19
Integration with BackEnd Information Systems
• The typical back-end information systems tend to
be developed on the intranet (with e-mail,
workflow, and groupware capabilities), DBMS,
legacy systems, and ERP.
• Integration of EC with the intranet is relatively
simple as far as the firewall can control the
unauthorized access to the internal network.
• Enterprise Resource Planning (ERP) is an
enterprise-wide application software that can
provide a centralized repository of information
for the massive amount of transactional detail
generated daily. (See figure 6.7).
05 September 2002
Chandra Wibowo W.
20
Managerial Issues
•
•
•
•
•
•
•
Focus of EC Management
Sales promotion
Purchase process reengineering
JIT delivery
New electronic intermediary business
Provision of solutions
Business ethics
05 September 2002
Chandra Wibowo W.
21
Summary
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Applications of B2B EC
Key technologies for B2B EC
Architectural Models for B2B EC
Characteristics of supplier-oriented marketplace
Characteristics of buyer-oriented marketplace
Characteristics of intermediary-oriented marketplace
Benefits of B2B EC to procurement reengineering
Importance of JIT delivery in B2B EC
Characteristics of Internet-based EDI
Method of integrating EC with back-end information
systems
05 September 2002
Chandra Wibowo W.
22