E-business Model ppt

B2B Models Company-centric models  Sell-side marketplace one-to-many  Buy-side marketplace many-to-one  Collaborative commerce...  Goals of procurement reengineering  Increase purc

Assoc Prof Dr Siriluck Rotchanakitumnuai

Department of Management Information Systems

Faculty of Commerce and Accountancy

Thammasat University

E-business Model

B2B Models

 Company-centric models

 Sell-side marketplace (one-to-many)

 Buy-side marketplace (many-to-one)

 Collaborative commerce

Models of B2B E-Commerce

B2B Models (cont.)

 Virtual service industries in B2B

 Travel and tourism services

Sell-Side Marketplace Architecture

Selling Side: Auctions and Other

Models

 Forward auctions—quick disposal of items

 Revenue generation

 Increased page views

 Member acquisition and retention—bidding

transactions result in additional registered members

Selling Side:

Auctions and Other Models (cont.)

 Using intermediaries when:

 No resources required

 Own and control auction information

 Fast time to market

 Searching and reporting

 Search and report all auction activities

 Standard reports available

 Additional analysis of complex information

Buy Side: One-from-Many,

E-Procurement

 Purchasing agents (buyers)

 Direct purchasing

 Use of material is scheduled

 Not a shelf item

A Traditional Purchasing Process Flow

Source: ariba.com, February 2001.

Buy Side: One-from-Many,

E-Procurement (cont.)

 Innovative procurement management

 Innovative purchasing as strategic approach to increase profit margins

 Web facilitation includes:

Buy Side: One-from-Many,

E-Procurement (cont.)

 Goals of procurement reengineering

 Increase purchasing agent productivity

 Lower purchasing prices of items

 Improve information flow and management

 Minimize maverick (unplanned) buying

 Improve payment process

 Streamline purchasing process to make it:

 Simple

Buy Side: One-from-Many,

E-Procurement (cont.)

 Goals of procurement reengineering (cont.)

 Reduce administrative processing cost per order

 Find new suppliers and vendors to provide

faster/cheaper goods and services

 Integrate procurement process with budgetary control in an efficient and effective way

 Minimize human errors in buying or shipping

process

Buy-Side B2BMarketplace

Architecture

Buy Side: One-from-Many,

E-Procurement (cont.)

 Direct vs indirect sourcing

 Tools to automate purchasing goods

 Direct or mission critical

 80% of manufacturer’s expenditure

 Long-term relationship with vendor of known quality goods

 Tight integration with suppliers along supply chain

 Indirect—use of public exchanges for indirect sourcing

Buy Side: Reverse Auctions

 Pre-Internet Reverse auction process

 Prepare description of product to be produced

 Announce project via ads, mail, telephone

 Send detailed information to interested vendors

 Vendors prepare proposals

 Bidders submit document proposals

 Proposals evaluated

 Problems:

 Laws Expensive

Buy Side: Reverse Auctions (cont.)

 Web-based reverse auction process

 Buyers prepare bidding project information

 Buyers post project on portal

 Identify potential suppliers

 Invite suppliers to bid

 Suppliers download project information

 Suppliers submit electronic bid

 Reverse auction in real-time, or it can take a few days

 Buyers evaluate and award contract

Buy Side: Reverse Auctions (cont.)

 Web-based reverse auction process

 Benefits:

 Electronic process is faster

 Administratively much less expensive

 Enables location of cheapest possible products

Group Purchasing

 Group purchasing—orders from several

buyers are aggregated

 Internal aggregation

 Economy of scale

 Reduced transaction processing cost

 External aggregation

 Aggregating demand online

 Putting together orders from multiple buyers to make large volumes/lower costs

Collaborative Commerce

(C-Commerce) (cont.)

 Reduce design cycle time by connecting

suppliers: Adaptec, Inc.

 Microchip manufacturer supplying electronic equipment makers

 Outsources manufacturing tasks

 Delivery times exceeded their competitors

 Solution to the problem

 Extranet and enterprise-level supply chain integrated software

 Significantly reduced order-to-product delivery time

Heavy machinery manufacturer uses extranet

Request for customized component directly to

designers and suppliers ship to buyers

Connect engineering and manufacturing division with worldwide

Practical categories of E-business

 Brokerage model

 Are market-makers: they bring buyers and sellers together and facilitate

transaction e.g auction broker, marketplace exchange

 Merchant model

 Wholesalers of goods and services Sales may be made based on list prices

or through auction

 Manufacturing (Direct model)

 It is predicated on the power of the web to allow a manufacturer

(suppliers/service providers) to reach buyers directly and thereby compress the distribution/service delivery channel)

Managerial Issues

 B2B marketing—sell-side marketplaces require advertisement and incentives

 Which models to use and when—need for

implementation strategies and prioritization

 Purchase process reengineering (BPR)

 Establish buy-side marketplace on its server if

volume is big enough to attract major vendors

 Join third-party intermediary-oriented marketplace if volume is small

Managerial Issues (cont.)

 Business ethics

 Accessing unauthorized areas in the tracing

system should not be allowed

 Privacy of partners should be protected

technically and legally

 Auctions—both forward and reverse

 Benefits are substantial

 Implementation is relatively simple

 Considerable flexibility in implementation