Business to Business E-Commerce (EC)

Introduction

Business-to-Business e-business holds electronic transactions among and between businesses. The Internet and reliance of all businesses upon other companies for supplies, utilities and services has enhanced the popularity of B2B e-business and made B2B the fastest growing segment within the e-business environment.

In recent years, extranets (more than one intranet) have been effectively used for B2B operations. B2B e- business creates dynamic interaction among the business partners; this represents a fundamental shift in how business will be conducted in the 21" century.

Companies using B2B e- business relationship observe cost savings by increasing the speed, reducing errors and eliminating many manual activities. In a B2B environment, purchase orders, invoices, inventory status, shipping logistics and business contracts handled directly through the network result in increased speed, reduced errors and cost savings.

B2B e- business reduces cycle time, inventory and prices and enables business partners to share relevant, accurate and timely information. The end result is improved supply-chain management among business partners. The figure 2.1 illustrates a generic B2B relationship.

For example, Wal-Mart Stores is an example for B2B e- business. Wal-Mart's major suppliers (e.g., Proctor & Gamble, Johnson & Johnson and others) sell to Wal-Mart Stores electronically; all the paperwork is handled electronically. These suppliers can access online the inventory status in each store and refill needed products in a timely manner.

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E-Procurement Cycle

Figure 2.6 illustrates the different steps associated with the overall procurement cycle, from the order placement to the accounts payable, in steps through a web based e-commerce network. It includes customers' inventory and supplier information and is readily accessible at any time and from everywhere. E-procurement allows two-way communication of real-time financial and purchasing information. Management at both the buying and selling end can see what is happening at any given moment and identify trends and problems. A shorter purchasing cycle enables companies to maintain lower inventory levels and respond more quickly to stock-outs. Previous Next

Business Strategy - Strategic Planning Cycle

E-business competitive strategy is normally formed and implemented according to a planning cycle which is called strategic planning cycle . There are four stages in this planning cycle as shown in figure 1.19: Industry and Competitive Analysis It aims to identifying those factors on which the success of an electronic commerce project or business would depend. One way of doing that is to carry out SWOT analysis and study your business as well as the business of competitors. Analysis of online competitor businesses is relatively easy since they are just a few clicks away on the web. Strategy Formulation Based upen study of internal and external business environment and in light of a company's strengths and weaknesses, a competitive business strategy is formed. It may be a strategy of cost leadership, product differentiation or focus. One can also identify ways how information technology can be used to implement/enforce such strategy. The inputs to the strategy formulation process ar...

Disadvantages of EDI

1), Operating Procedures : Since EDI is a structured way of working, companies usually change operating procedures. 2) Production and Purchasing Decisions : Responsibilities may have to be changed during the introduction of EDI system. Unless this system and the links with other systems are managed well, it is not possible for the data processing department to become involved in production and purchasing decisions. 3) Transparent : Less transparent than paper-based systems. 4) Flexibility : Certain EDI systems are highly flexible, others are very simple to implement. 5) High Costs : Applications are costing to develop and operate; especially new entrants find this more difficult to have EDI. Many small companies are facing resources problems in getting starter with the initial implementation of EDI system. It is beyond the resources these companies to invest tens or hundreds of thousands of dollars in setting and implementation costs, as well as weeks of personne...

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