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
After a short definition of the basic aspects of
electronic marketplaces and a focus on its topic, this
paper introduces mySAP.com Marketplace, which is
part of SAP’s line of products in mySAP.com,
dealing with electronic marketplaces.
To follow, the actual model is being developed and
divided into 3 phases, major emphasis of the model
can be found in phase 2.
The following part of this paper analyses findings
on the use of the model. An empirical analysis of a
smaller test marketplace is presented, which was
implemented by SAP and Deutsche Bank. The
Emaro marketplace project focussed on the
implementation of a horizontal marketplace dealing
with MRO-goods.
Keywords: Electronic Marketplace, Emaro,
Implementation, ASAP, Model
1. Introduction
Developing a model for the implementation of
electronic marketplaces (EM) involves theoretical
aspects, and on the basis of mySAP.com
Marketplace also practical aspects. Especially the
business-to-business (b2b) marketplaces are
encompassed in this paper.
Important industries have defined their goal to
implement electronic marketplaces in the near
future, i.e. the automobile industry, the airline
industry and the travel industry as a whole, etc.
Besides these classes of large electronic
marketplaces, a lot of smaller, specialized
marketplaces are being implemented or will be so in
the near future. A summary of the distribution of
existing b2b marketplaces by region and industry
gives [6].
Recent research by the Gartner Group underlines the
importance of a proven concept for the
implementation of electronic marketplaces:
Covisint, the marketplace of the automobile
industry,[3] is not expected to work before 2002,
due to the complexity of the current technologies
and a lack of established communication technology
of the partners.
2. Electronic Marketplaces
Definition of terms
According to [1], electronic marketplaces can be
defined as virtual places, where, based on internet
technologies, to that extent free of timely and spatial
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
enterprises. [10]
Electronic marketplaces can be split into vertical
and horizontal marketplaces.
Vertical marketplaces address a specific industry
and are specialized for the needs of this group. [7]
The main characteristics and main goals are
bundling of demand and supply in an environment
where the same expectations and interests are
focussed onto the offered products. As well as
supporting transactions, industry-specific
informations are the additional services of vertical
marketplaces. Therefore it is a prerequisite for the
operator of an vertical electronic marketplace to
have a thorough knowledge of the specialities and
needs of the addressed industry.
In contrast to the vertical marketplaces, horizontal
marketplaces are not focussed on a specific
industry, they address processes and functions,
which are of industryspreading importance.
An example for a horizontal marketplace could be a
marketplace which deals with the distribution of
MRO (maintenance, repair and operation) goods
like office materials or other, not production
relevant consumption goods, the so-called C-
materials. In this case, the exact knowledge of the
appropriate business proces is the most important
prerequisite for the marketplace operator.
The functionality of an electronic marketplace
supports ideally all phases of a commercial
transaction: preparation, agreement and handling.
Therefore the emphasis on the transaction function
separates the concept of electronic marketplaces
from the concept of portals.
mySAP.com Marketplace
mySAP.com is a line of products from SAP AG
which consists of a range of software components
and services for the handling and integration of
business processes in and between enterprises.
Internet technology is used for the handling of these
business processes. mySAP.com Marketplace was
developed especially for the automatization of
industryspreading business processes.
4. AcceleratedSAP
Overview
AcceleratedSAP (ASAP) has become a proven
concept for the implementation of information
systems based on SAP's standard software R/3.[9]
The model, which is based on ASAP, is divided into
3 main phases:
1. Preparation Phase
A) Analysis of potential
B) Definition of a business model
C) Acquisition of participants
2. Implementing Phase
A) Project Preparation
B) Definition of a Business Blueprint
C) Realization and Implementation
D) Production Preparation
E) Productive Start
3. Opening Phase
Due to the restrictions of this paper, phase 2, the
implementation phase, shall now be introduced in
more detail.
The Implementing Phase
This phase of the model applies the concepts of
ASAP and adapts them to the procedure of
implementing electronic marketplaces with
mySAP.com Marketplace.
Based on five steps which are each supported by
further software tools, every step is exhausted in
more and more becoming finer structures.
These steps are the project preparation (step 1), the
definition of an business blueprint (or preparation
of an objective concept) (step 2), the realization and
implementation (step 3), the production preparation
(step 4) and the productive start (step 5).
Step A: Project Preparation
In this first step the decision makers fix clear project
objectives to find a solution with an efficient
method. The following working packets were
chosen:
• The introducing strategy’s designation,
• the fixing of the project organisation and
• the determination of technical requirements.
ASAP supports the introducing strategy’s
designation by document-templates and report-
templates and by examples, which help to find
standards and methods for the introduction. [9] The
setting up of the project plan has essential
importance. This project plan should contain a
working plan and also detailed documentations. The
working plan defines the planned project results
(and the estimated time which is needed) and the
previous and following project parts. The
concretized project working plans should ensure that
the established business model will be realized and
that each activity will be coordinated. In this phase,
extensive documentations are established. They are
completed during the whole project.
Documentations about configurations and
customizing settings, user documentations or service
reports may be helpful for the project decisions.
The project team’s combination is fixed in the
project organisation. Mostly, a marketplace team
is a mixed project team of colleagues from the
order-giving enterprise and of external consulting
partners.
The definition of the needed infrastructure, the
procurement of hardware and of necessary
interfaces for the data-adoption from the ERP-
systems of the marketplace participants are among
the technical requirements of the marketplace-
construction. The hardware architecture of an
electronic marketplace is mostly characterized by a
complex construction.
At the end of the first step the project structure is
evaluated by the “Concept Check Tools”.[11] The
now following project-kick-off-meeting deals with
the technical tasks of the marketplace project.
Within this meeting the project leader explains the
final objectives and the project planning. The
project shifts to step 2 (the preparation of an
objective concept) after the project leader has
completed this step.
Step B: Definition of a Business Blueprint
The objective concept, often called “business
blueprint”, is a main thread of the marketplace
construction and contains all details of the
implementation in only one document.[12] All
business requirements are portrayed there, and this
is the base for organisation, configuration and, if
necessary, for development activities. The following
working packages have to be managed in this phase:
• The training of the project members,
• a detailed definition of the business process
that has to be portrayed and
• the establishment of the system
preconditions.
The objective concept’s result is a special concept,
which is orientated on the established business
model. A catalogue of measures is developed, based
on the special concept. A two-step view is
characteristic: The first and most important manner
of sight is orientated on business processes, which is
supported by the information technology (IT) on the
electronic market.
The last mentioned contains their technical
realization and the demands on the network and the
memory.[9] First of all, business processes are fixed
by an approximate grade of details. The marketplace
is completely modelled as a whole system. This
model contains indirect affected sectors as well as
aspects between different companies.[8]
Afterwards, the business processes are divided. The
main aspect is to manage the complexity in form of
clear business processes (a “Question & Answer-
database” might help). The special concept (which
describes the business process that has to be realised
in detail) and the functionality of the marketplace
software have to be synchronized. Possible
developments of individualisation will be
foreseeable in this planning phase.
The last working package in the phase of the
objective concept’s preparation deals with system-
technical aspects. A detailed analysis of the
hardware requirements and of further technical
components is necessary for the fixing of system
preconditions. The result is that decisions
concerning the operating system, the database
system and the network configuration have to be
made. Also reflections about necessary safety
precautions and the authorization concept have to be
considered. It is clarified which measures have to be
taken to prevent interruptions like operation errors,
system- and net failures and unauthorized pounces
like data misusing or data destruction. There must
be also reflections about electronic paying
procedures that are secure and practicable. After a
final consistence check of the measure catalogue
and after the corresponding release, the realisation
of the marketplace functionality begins.
Step C: Realization / Implementation
Now follows a detailed configuration and fine
setting of each system component based on the
business blueprint. This contains the function units’
combination of the system, which are necessary to
fulfil the defined tasks. The operation parameter’s
adjustment occurs in two steps: the so-called
“baseline-“ and the “detail configuration”. Further
elements of this phase are the fixing and the
establishment of the system’s management, the final
distribution of authorization and the workflow
specification.[9]
The baseline-configuration contains about 80 per
cent of the common marketplace transactions. 3 The
number and precision of the baseline scenarios
depend on the striven reliability’s degree of the
market place.[9] The configuration is conducted by
the business process- and the technical consulting
team and the employees of the enterprise. Both have
to work together.
The detail configuration is based on the baseline-
configuration and deals with the processes, which
rarely appear. There is a division in process-
orientated cycles that may be configured parallel.
Therefore, reports, process descriptions, test
scenarios and authorization profiles have to be
prepared.
Another important precondition for the task
fulfilling of the system’s management is made in
this third step: System installation and system
administration including guidelines of detailed
descriptions, responsible people who deal with this
system and methods for the escalation management
are documented in a system’s management
handbook.[9]
The preparation of an approximate authorization
concept that was enlarged in the objective
conception by fixing the roles and tasks of the users
was already made in the project preparation. The
detailed description of the user administration takes
first place in this phase. Each special department or
organisation of the marketplace is described and
concretized to each working place with the
connected security requirements.[2]
The “Four-eyes-principle” is mostly used therefore.
The administrative tasks are distributed to, at least,
two administrators to ensure a high security
standard. Application and data are protected against
unauthorized approaches by a flexible authorization
concept.
In connection to the mySAP.com Workplace
(another product in the line of mysap.com) the
marketplace participants are simultaneous equipped
with the necessary authorizations for individual
applications. Mainly expensive and longwinded
processes are checked about their workflow ability
in the last working package in step 3.
Heilmann defines a workflow as a defined, mostly
work-divided process that leads to the preparation or
utilization of company achievements.[5] The
dynamic course of events, from the initiation to the
end, is the main focus of this consideration. A
workflow generally arises by an event, for example
a customer’s order. Now follow different activities
until the workflow ends with a result (for example
with an invoicing).[8]
Depending on the business model different
marketplace processes may be automated. They may
lead to cost- and time savings of the participating
market partners. The status of the planned
achievements has to be checked of completeness
and exactness at the end of phase 3. The project
management conducts this internal quality check.
This quality check must not be mixed up with the
independent reviews, which should be ideally
conducted after each phase.
Step D: Preparation of Production
The aim of this step is the final preparation for the
marketplace opening. One main element is the
execution of various tests to ensure a start without
problems. The test plan includes all important
situations that may appear at the normal marketplace
operation. Besides the tests of interface programs
are throughput- and stress tests.[9] The choice of
test cases depends on the importance of each
function and the expected frequency of errors.
Connections to the ERP-systems of attached
suppliers are also checked (in connection to the
system tests).
Step E: Productive Start
The productive start of the marketplace takes place
in the final step. The project team conducts the care
and optimization of the EM in view of the technical
infrastructure and its regular usage and it also
conducts the business process. A concept for the
preventive check of the marketplace functionality,
the marketplace settings and the marketplace
performance has to be prepared, too.
In this phase the commencement of following
projects is possible. They will add new marketplace
functionalities or achieve another automation and
improvement of the business transactions. In this
context, reflections about further activities in the
content and community sector must be made to
achieve that the participants profit from the current
added value functions.
5. The Emaro Marketplace Project
Overview
The Emaro marketplace [4] has been a test project
for the validation of the described implementation
model.
This horizontal marketplace has been organized as a
joint venture between SAP AG and its partner, the
Deutsche Bank AG, with SAP holding 40% of the
shares.
Emaro is designed to deal with MRO-goods like
office materials, office furniture and IT for offices.
SAP’s task concerned mainly the technical aspects
of driving the marketplace as well as care and
maintenance. Two leading consulting firms were
involved as the other participants in the project.
Meanwhile, other German and international global
players have entered the succesfully implemented
marketplace.
The analysis of the Emaro project is based on both a
quantitative and a qualitative questionnaire which
was given to senior executives of the project
partners.
Project Phases
The development of Emaro consists of 2 phases:
The first phase dealt with the construction of the
marketplace infrastructure. Functional target was the
implemenation of a solution for the buying and
selling of products based on a multi vendor catalog.
The duration of this phase was 4 months, it was
completed on time. All project participants stated
this as an postive aspect of the project.
The main objective of the second phase, which
started immediately after the successful
implementation of the first phase, is the extension of
the implemented functionality of the marketplace.
The main objectives here are:
• The implementation of a complete integration of
the marketplace transactions into the ERP-
Systems of the participants,
• Adding the functionality of auctions and reverse
auctions,
• Integration of additional services like financial
services (online financing),
• New product groups.
Analysis
The empirical analysis of the questionnaires
identified a few problems of the Emaro project,
despite it’s overall success.
The consequences for the further development of the
marketplace product of SAP and the underlying
implementation model are:
• Lean infrastructure platform
The hardware-architecture, on which Emaro
runs, is, regarding to the statements of nearly all
participants involved in the technical aspects of
the project, too complex. This results in high
costs for the needed multiple server-computers
and causes monitoring problems of these
servers.
• Need for an uniform upgrade strategy
SAP is following a component based strategy
for the upgrade of it’s products. In the context of
the marketplace product, this is leading to
complex interdependies of different releases of
the marketplace components.
• Migration of mandators from the ERP-
system
All mandators, which are configured in existing
ERP-systems like SAP R/3, have to be
configured in the marketplace product. This
causes a high one-time effort, because there is
no simple migration tool avaible at the moment.
SAP offers a so-called User Server as a solution
to this problem, but this means another level of
complexity of the whole system and additional
costs. Because of this, the project participants
are asking for a smaller and more simple
migration tool.
• Testing
The Emaro marketplace is developed on the
basis of mySAP.com Marketplace. Because of
still existing technical weaknesses of
mySAP.com Marketplace, an extensive testing
phase had to be conducted in the Emaro project.
This effort could have been spared, if
mySAP.com Marketplace had been tested in a
more thorough way.
• Documentation
The documentation of mySAP.com Marketplace
is still in an early stage of development. The
complexity of a marketplace project can be
reduced in a significant amount, if the
documentation of the underlying technolgy and
product is better developed.
.
 6. Conclusions
The results of the analysis of the Emaro project
allow a balanced view of the project and the
implementation model:
SAP has established the image of a competent
implementation partner for electronic marketplaces,
the model proved basically its validity and
usefulness.
The Emaro project suffered from a few
shortcomings like an insufficient number of project
participants with thorough knowledge of the know-
how of electronic marketplaces. Some minor
weaknesses in the implementation of the proposed
model and the mySAP.com Marketplace product
were identified by a thorough analysis of the
questionnaires and were taken into account for the
further development of the model.
It is predicted, that in the future, the concepts of
electronic marketplaces will develop into the
direction of Value Webs, leaving the traditional
concept of Value Chains, which are the main
concept of today and proposed electronic
marketplaces, behind.
The ability to adapt the proposed implementation
model and the underlying technology to such new
developments will be crucial in the future, maybe
even for the existence of global players like SAP.
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