Category: Education

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eBusiness Lecture 5 – eCommerce Business to Business Strategies

Introduction to Lecture 5:

Introduction to Lecture 5 Topics covered: Purchasing activities Logistics activities Support activities eGovernment Electronic data interchange (EDI) Value-added networks (VANS)

Background to B2B eCommerce:

Background to B2B eCommerce Companies can use eCommerce to improve: Purchasing and logistics processes Support processes: Finance Administration Human resources Technology development Flexibility to respond to changing circumstances

Purchasing Activities:

Purchasing Activities Identifying vendors Evaluating vendors Selecting specific products Placing orders Resolving issues after order has been received

Sourcing Suppliers:

Sourcing Suppliers Procurement staff have high levels of product and supplier knowledge eProcurement involves use of Internet technologies to assist eSourcing uses specialist purchasing websites Business purchasing process is complex

Steps in a Typical Business Purchase Process:

Steps in a Typical Business Purchase Process Schneider, G. (2007) Electronic Commerce 7th Ed, p.221

Maintenance, Repair and Operating (MRO) Supplies:

Maintenance, Repair and Operating (MRO) Supplies Indirect materials – low value Suppliers create online catalogues Purchases often made through purchasing cards Vendors save costs in printing and shipping catalogues and handling telephone calls Cost of processing MRO order online can be 10% of handling same order via telephone

Logistics Activities:

Logistics Activities “Providing the right goods in the right quantities in the right place at the right time” Receiving Warehousing Controlling Inventory Scheduling and controlling vehicles Distributing finished goods

Enhancing Logistics Via Web Technology:

Enhancing Logistics Via Web Technology Web-enabled automated warehousing operations Delivering real time shipment information to customers’ browsers Making freight tracking web pages available to customers Using global positioning satellite (GPS) technology to monitor vehicle movements

Enhancing Support Activities Via Web Technology:

Enhancing Support Activities Via Web Technology Making human resources information available via a secure web connection Online payroll processing Web-enabled sales support and sales force automation Making training materials available online Facilitating the collection, classification and dissemination of information via knowledge management


eGovernment Provide ways for citizens to interact online with their government Distribute benefit payments Administer tax laws Increase the availability of information Government departments buying online from vendors

Electronic Data Interchange (EDI):

Electronic Data Interchange (EDI) “Computer to computer transfer of business information between two businesses that use a standard format of some kind” Invoices Purchase orders Requests for quotations Bills of lading (shipping documents) Receiving reports

EDI Standards:

EDI Standards ASC X12 (American National Standards Institute) UN/EDIFACT (United Nations) Agreement to develop one set of international standards, but…..no date set for implementation

Information Flows in a Paper-Based Purchasing Process:

Information Flows in a Paper-Based Purchasing Process Schneider, G. (2007) Electronic Commerce 7th Ed, p.234

Information Flows in an EDI Purchasing Process:

Information Flows in an EDI Purchasing Process Schneider, G. (2007) Electronic Commerce 7th Ed, p.235

Value-Added Network (VAN):

Value-Added Network (VAN) Provides communications equipment, software and skills Enables the receipt, store and forward of electronic messages containing EDI transaction sets Customer must install EDI translator software Customers connect to each other via the VAN (indirect connection EDI)

Direct Connection EDI:

Direct Connection EDI Schneider, G. (2007) Electronic Commerce 7th Ed, p.238

Indirect Connection EDI Through a VAN:

Indirect Connection EDI Through a VAN Schneider, G. (2007) Electronic Commerce 7th Ed, p.238

EDI on the Internet:

EDI on the Internet XML used as the basis for information exchange Content Inspired Component Architecture (CICA) provides greater flexibility Emergence of ebXML Financial EDI (FEDI) provide instructions to banks FEDI transactions handled by EDI-capable banks


Summary eProcurement can aid purchasing activities including sourcing suppliers Web technologies can enhance logistics by tracking and reporting on freight movements eGovernment can improve links between citizens and their government EDI can radically improve the transfer of business information

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