Page 150 - Introduction to Electronic Commerce and Social Commerce

130 4 Business-to-Business E-Commerce

policy portfolio is necessary to balance strategic sourc- need to support the inventory management system on
ing items, spot purchasing items, and design a supply behalf of its suppliers. Sensitive issues must be agreed
relationship management system. upon when initiating VMI. One such issue is how to deal
5. What are some ethical issues in B2B? Because B2B with item shortages created in the system.
EC requires the sharing of proprietary information, busi-
ness ethics are necessary. Employees should not be able
to access unauthorized areas in the trading system, and SUMMARY
the privacy of trading partners should be protected.
6. Which type of social network should we use—private In this chapter, you learned about the following EC issues as
(proprietary) or public? There are successes and fail- they relate to the chapter’s learning objectives.
ures in both types. Some large companies have both
types (e.g., northwesternmutual.com). In most cases, 1. The B2B field. The B2B field comprises e-commerce
it is better to use public networks such as linkedin.com activities between businesses. B2B activities account for
and facebook.com. 77–95% of all EC. B2B e-commerce can be done by
7. Which business processes to automate? It depends on using different models.
the company, industry, and value chain. However, as 2. The major B2B models. The B2B field is quite diversi-
illustrated in this chapter, selling and purchasing and fied. It can be divided into the following segments: sell-
other activities along the supply chains are the prime tar- side marketplaces (one seller to many buyers), buy-side
gets. These include payments (financial supply chains). marketplaces (one buyer from many sellers), and trading
Also important are logistics, shipments, and inventory exchanges (many sellers to many buyers). Each segment
management. includes several business models. Intermediaries play an
8. How difficult is it to introduce e-collaboration? Deal- important role in some B2B models.
ing with the technological aspects of e-collaboration 3. The characteristics and models of sell-side market-
may be the easy part. Tackling the behavioral changes places. Sell-side B2B EC is the online direct sale by one
needed within an organization and its interactions with seller (a manufacturer or an intermediary) to many buy-
the trading partners may be the greater challenge. ers. The major technology used is electronic catalogs,
Change management may be needed for the newly cre- which also allow for efficient customization, configura-
ated collaborations, to deal with issues such as the resis- tion, and purchase by customers. In addition, forward
tance to change. In addition, the responsibilities of the auctions are becoming popular, especially for liquidat-
collaborative partners must be articulated with the busi- ing surplus inventory. Sell-side auctions can be con-
ness partners. Finally, e-collaboration costs money and ducted from the seller’s own site or from an intermediary’s
needs to be economically and organizationally justified; auction site. Sell-side activities can be accompanied by
however, justification may not be an easy task due to the extensive customer service. E-commerce allows cus-
intangible risks and benefits involved. tomization of products and services in personalized
9. How much can be shared with business partners? catalogs.
Can they be trusted? Many companies are sharing fore- 4. Sell-side intermediaries. The primary role of interme-
cast data and actual sales data. However, when it comes diaries in B2B is to provide value-added services for
to allowing real-time access to product design, inventory, manufacturers and business customers. Intermediaries
and interface to ERP systems, there may be some hesita- can also support group buyers, conduct auctions, and
tion. It is basically a question of security and trust. The aggregate catalogs of many sellers.
more information that is shared, the better the collabora- 5. The characteristics of buy-side marketplaces and
tion. However, sharing information can lead to accidently e-procurement. Today, companies are moving to
giving away some trade secrets. In some cases, there is e- procurement to expedite purchasing, save on item and
an organizational cultural resistance against sharing administrative costs, and gain better control over the
(some employees do not like to share information, even purchasing process. Major procurement methods are
within their own organization). The business value of reverse auctions (bidding systems), buying from web-
sharing needs to be assessed carefully against its risks. stores and catalogs, negotiating, buying from an inter-
10. Who benefits from vendor-managed inventory? When mediary that aggregates sellers’ catalogs, internal
VMI systems are deployed, both sellers and retailers reap marketplaces and group purchasing, desktop purchas-
benefits. However, small suppliers may not have the abil- ing, buying in exchanges or industrial malls, and
ity to systematically monitor and manage inventory of e- bartering. E-procurement offers the opportunity to
their business customers. In this case, the large buyer will achieve significant cost and time savings.