Cramming B2Be-commerce models

An intensive crammer course in the various models for doing business-to-business e-commerce awaited delegates at this month's IT...

An intensive crammer course in the various models for doing business-to-business e-commerce awaited delegates at this month's IT Directors' Forum

An intensive crammer course in the various models for doing business-to-business (B2B) e-commerce awaited delegates at this month's IT Directors' Forum, led by Liz Daniel at the Cranfield School of Management.

Daniel started with the basics. Using e-commerce to improve relations and business with suppliers or business customers can, she said, be as simple as using e-mail, rather than fax or telephone to communicate. It may also involve scanning the Web to identify alternative suppliers or potential customers.

Some companies post their purchasing requirements on their Web site and let potential suppliers come to them. This approach is, however, only likely to work, said Daniel, if you are large enough that companies will seek you out, or you are a specialised producer whose needs can be easily anticipated.

Hosting an electronic community or interest group was highlighted as another way companies may consider playing in the B2B e-commerce space.

E-commerce services can also be aimed at improving the sales process. Daniel listed the various stages involved in the purchase of any item, from the recognition of a need, through to after-sales contact or services, and reminded delegates that e-commerce services can be developed for each stage of this process - not just the online ordering and payment of goods.

Delegates heard that some companies are aiming to improve this process for their business customers by developing e-procurement systems. Ideally these systems will not reside solely in central purchasing departments, said Daniel, but be spread around the organisation, so the people using the products can order directly.

Such systems empower individuals in organisations to make their own purchasing decisions and can save companies the considerable overhead associated with raising the paper trail and associated authorities needed in most organisations to undertake a purchase.

Daniel pinpointed e-marketplaces or e-hubs as being one of the most fashionable areas of B2B e-commerce. She identified two basic types of e-marketplace: catalogue integrators that aggregate the products and services of many suppliers; and exchanges that match the supply and demand of commodity products or excess stock.

Catalogue integrators aim to bring together many buyers and suppliers in markets that are traditionally highly fragmented. An example is Chemdex.com, which brings together companies that supply goods to bio-science laboratories and companies.

Obviously building a critical mass of both buyers and suppliers is key to the success of such marketplaces. Buyers will be keen to obtain the best price, but this may not be their main criteria for using such services. Finding suppliers that can meet their needs may be more important and hence firms selling through these hubs will have scope to provide differentiated products and build relationships with their clients.

Exchanges, however, are aimed at helping companies find the lowest price for commodity goods or excess or perishable stock. Such e-hubs aim to match the supply and demand for simple goods, the price of which will vary dynamically.

The final way of exploiting e-commerce explored by the forum was sharing information between partners in the supply chain to better forecast demand and schedule production.

However, it was recognised that while the requisite IT systems could be developed easily enough, adopting them relied on mutual trust. Companies traditionally believe that information is power and therefore are reluctant to share it with others, particularly companies they are in negotiation with for the purchase of goods.

Next week: Computer Weekly reports on the launch of the world's largest online exchange

Models for B2B e-commerce

  • Searching the Web for new suppliers/customers

  • Company Web site

  • Communities

  • Improving the sales process

  • E-procurement

  • Extranet applications with chosen suppliers

  • Participating in electronic marketplaces

  • This was last published in June 2000

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