Business oriented

e- commerce
Topics to be covered

• Introduction
• Business models
• E- Procurement and buyer oriented e commerce system
• Buy- side- e- commerce- intercompany activities of procurement
• Sell side e commerce
• Virtual market
• Collaborative supply chain management

• Integration
• Intercompany integration
• B2B E- commerce communication using xml
• Intra company integration
Introduction
• Vendor and buyer of goods and services involved in the transaction
are business organization rather than individual customer who are
end user of the goods purchased.
• The business that is the purchaser can either utilize the goods or
services itself or transform the goods into manufactured product
which it then sells
• B2B e commerce involves large quantity and large amount transaction
than a B2C e commerce.
Some of the goods and services needed by business as well as some of those that are
currently provided by one business to another in tradition bricks and mortar world of
commerce. business currently need to:
1.Sell and distribute their goods to other organization.
2.Carry out the procurement of goods and services
3.Having logistics to move goods to the appropriate place.
4. warehouse facility.
5.marketing and advertisement.
6.Have appropriate support service for different business support function.
7.Appropriate information and forecast and market intelligence.
Advantages of business oriented e commerce
• Global rather than local sales.
• Global purchasing.
• Ability to buy and sell at any time any where.
• Less infrastructure cost.
• Better customer service.
More significant advantages arises from
following:
• Integration between business process of different business enterprises
resulting in collaborative and fully automatic supply chain management
(SCM)and demand chain management (DCM) .
• Automation of the business processes within a business enterprises.
• Integration of the different back office business function resulting in an
enterprise resource planning (ERP) system.
• EDI.
• Mass customization.
• Data warehousing.
These factors will lead to sizeable saving in business enterprise.
Features of B2B E-commerce

• High volume of goods traded.

• High net value of goods traded.
• Multiple form of electronic payment.
• Prior agreements and contracts.
• Multilevel of authorization of purchases.
• Different types of tax regime.
These factors makes whole process of B2B e commerce much more
complex than B2C.
Business models
If it deals with tangible goods then
3 types of models:
1. A buyer oriented e commerce.
2. A seller oriented e commerce.
3. A virtual market place with multiple buyers and sellers.
if it deals with service then :
It concerns with actual delivery of services monitoring of the stages of
the service and its status at anytime and then payment.
E procurement and buyer oriented e
commerce :
• Suitable for : Big organization that purchases large volume of large
number of items.
• The first group sometimes called maintenance repair and operating goods
(MRO ) goods.
• The second group includes products needed to service a given project
excluding capital.
• The third category involves components or raw materials used In
manufacturing.
• The fourth category included that are traded by wholesaler.
• The fifth category includes large less frequently ordered capital items.
Two activities involved in procurement
• Intracompany activities.
• Intercompany activities.
Buyer side e- commerce-intercompany activities of procurement :
First two category of goods are known as operating resources.
The management of these goods and services is referred as operating
resource management (ORM) or operating resource procurement.
These are frequently high volume low cost products.
Effective ORM will result in considerable saving both in intercompany
purchases and intracompany process.
An effective approach to ORM is to set up a buy side e commerce system.
Basic element of buy side e commerce
Working of buy side e –commerce:
• Procurement department put out request for quotations(RFQs).it
includes a description of goods and services.
• Supplier access these RFQs and put in Bids, which include prices and
specification of the goods.
• These bids are stored in catalog of bids, to be used by actual buyer in
the company after being vetted by the procurement department.
• The vetting can be manual or automated.
• This allows the procurement department to set up preffered suppliers
for particular goods in the goods catalog
• There may also be formal agreement in place with respect to these
bids on RFQs after a process of negotiation.
• Once a preferred supplier has been designated and within the term of
any agreement between the supplier and the corpoartio, the supplier
can electronically update the bids.
Purchasing using a buy side e commerce
• When purchaser anywhere in the company, not necessarily in the
procurement department, wishes purchase an item, he uses a web
browser to browse through the catalog.
• Selects the required items, and creates a purchase requisition.
• This is then processed by the business rule which would determine if
the buyer is authorized to carry out the purchase of such items and
weather the value of them are within the his authorized spending
limits.
• If necessary the requisition can be electronically routed to an
approver.
• Once approved, a purchase order can be submitted directly by the
buyer to the supplier.
• If the goods are available with supplier then he fulfills the order
organizes logistic for delivery and generates electronic invoice.
• When the goods are received and checked for quantity and quality,
an electronic payment is generated by receiving organization to
supplier.
• Software used:
Aribia’s ORMS used by dell and cisco.
Catalog maintenance in buy side e commerce
system :
ARIBA's Operating Management System (ORMS):

• Used by IBM and Cisco;

• Monitors individual supplier performance;

• Information about expenditure patterns;

• Total monthly expenditure;

•  Allows electronic payments
 Sell side e- commerce:
• It is most suitable for corporation that are producing or marketing
products to a large number of small and large corporation.
• 1:M SYSTEM (supplier to buyer).
• Example are DELL AND CISCO.
• Better customization .
• The sell side system also provide better demand forecasting as it
directly coupled with actual sales data.
The sell side e commerce should provide the following information:

• Product catalog.
• Product configuration.
• Business roles to allow automation of approval and ordering.
• Customer service.
• Fulfillment and shipping.
• Account receivable /invoicing and electronic payment.
• Monitoring of order status and account history
Sell side e commerce system
Connections in sell side e – commerce
Virtual market:

These are software application that provide a meeting place for many
Vendors and buyers.
Also known as digital market place infomediaries,vertical portals,
intermediary-oriented market place and digital exchanges.
The most successful of these virtual markets are highly focused and
addresses a specific sector of industry.
EXAMPLE Boeing's PART system
Chemdex.com
Virtual market are suitable for:
• Products that are non standardized and require considerable
customization;
• A marketplace that is regionally widespread with buyers and sellers
myriads location.
• Goods that are perishable requires special logistics, warehousing or
have limited lives.
• Goods where temporary supply shortage can develop which in turn
leads to price volatility.
Virtual market cont.…..
• These marketplaces also provides for the possibility of aggregation.
Collaborative supply chain management
• Here information is shared between the manufacturer and all
suppliers up the chain to enable the whole process of production to
be optimized.
Downstream activities (without e commerce)
Downstream activities with e commerce
INTEGRATION
• Integration is needed so that information can flow electronically.
intracompany integration
intercompany integration
• Intercompany integration :
EDI
B2B e commerce communication using xml
B2B E-commerce using xml technology
Intracompany integration
• It involves two aspects make sure that order received by e commerce
system and consequence that flow from them are seamlessly
communicated to the backend system.as well as application system that
carry out automated processing and fulfilment of the orders including
arranging logistic and tracking the status of the or
The system that can be integrated within an organization are
• Order entry
• Order fulfillment
• Logistic
• Inventory
Intracompany integration cont.
……
• Product planning and monitoring.
• Accounting entry and financial systems.
• Human resources including payrolls.
System that provides integration across a multiplicity of function across
Multisite are called enterprise resource planning(ERP)system.
Ex SAP R/3
THANK YOU