How Business-to-Business Internet Transactions and

Relationships Change Business.

Created By:Created By:

Brandon D. SmithBrandon D. Smith

Management Information SystemsManagement Information Systems

Professor Sistrunk MWF 11:00Professor Sistrunk MWF 11:00

Table of ContentsTable of Contents 1st Fact1st Fact

slide 3slide 3

Benefits of B2B Internet TransactionsBenefits of B2B Internet Transactionsslide 5slide 5

2nd Fact2nd Fact slide 6slide 6

Examples of B2B Transactions via InternetExamples of B2B Transactions via InternetSlide 7Slide 7

Table of Contents cont.Table of Contents cont. Interview with Stephen D. SmithInterview with Stephen D. Smith

Slide 26 Slide 26

3rd Fact3rd Fact

Slide 30Slide 30

The future of Internet in dealings with The future of Internet in dealings with businesses.businesses.

Slide 31Slide 31

U.S. Internet Revenue U.S. Internet Revenue Totaled $301 Billion in Totaled $301 Billion in

19981998

(Source Univ. of Texas Study/Washington Post 6/10/99)

Business to BusinessBusiness to Business Internet related transactions Internet related transactions are focused on selling within a business contract  or business are focused on selling within a business contract  or business partner relationship, which entails delivering agreed upon products partner relationship, which entails delivering agreed upon products and prices to each buyer within specified buying companies. and prices to each buyer within specified buying companies. Because users and their requirements are already known, the Because users and their requirements are already known, the emphasis is on getting the businesses to manage contracts, users, emphasis is on getting the businesses to manage contracts, users, orders and more; and to allow the system to tailor customer orders and more; and to allow the system to tailor customer interactions based on contractual or other business relationship interactions based on contractual or other business relationship terms.terms.

Benefits of B2B Internet Benefits of B2B Internet TransactionsTransactions

Cost reduction; Cost reduction; Increased transaction volume; Increased transaction volume; Increased transaction revenue; Increased transaction revenue; Opportunities for new products Opportunities for new products

and services and services Opportunities for increasing Opportunities for increasing

revenues through cross selling revenues through cross selling Commercial customer retentionCommercial customer retention

Electronic CommerceElectronic Commerce brings many brings many benefits and in a recent study of U.S. benefits and in a recent study of U.S. companies offering product purchases over the companies offering product purchases over the Internet - 63% of those interviewed reported Internet - 63% of those interviewed reported cost savings, 31% saw revenue increases, and cost savings, 31% saw revenue increases, and 47% noted a cycle time reduction in delivery of 47% noted a cycle time reduction in delivery of goods or services. It is clear that Business to goods or services. It is clear that Business to Business electronic commerce represents by Business electronic commerce represents by far the most compelling business case for far the most compelling business case for virtual trading and will dominate the business virtual trading and will dominate the business opportunity for banks.opportunity for banks.

Examples of Business to Examples of Business to Business Internet Business Internet

TransactionsTransactions

ContractingContracting Buying and selling of goods/servicesBuying and selling of goods/services Electronic Mail (E-Mail)Electronic Mail (E-Mail) Advertisement of Goods/ServicesAdvertisement of Goods/Services Making and Receiving PaymentsMaking and Receiving Payments Creating Awareness of your Creating Awareness of your

companycompany

Business to Business Business to Business Internet ContractingInternet Contracting

Example:Example:

One example of this would be a company who One example of this would be a company who owns the building they operate out of. The owns the building they operate out of. The companies upper management decides that companies upper management decides that the entire building needs to be re-painted. As the entire building needs to be re-painted. As a result of this the company hosts an online a result of this the company hosts an online bid for various painters to offer their prices for bid for various painters to offer their prices for the job. After finding a painter with a desired the job. After finding a painter with a desired price, the company draws up a contract and e-price, the company draws up a contract and e-mails it to him. He in returns places an mails it to him. He in returns places an electronic signature on the contract and electronic signature on the contract and forwards it back to the company.forwards it back to the company.

Benefits Internet Benefits Internet ContractingContracting

Saved the time and money of hosting the job bidding in person and vice versa.

Saved time and manual labor of by emailing the contracts, instead of mailing it through the post office.

Business to Business Business to Business Buying and Selling of Buying and Selling of Goods/Services via Goods/Services via

Internet.Internet.

Example:Example:

An example of this would be An example of this would be Office Max. Office Max Online sells Office Max. Office Max Online sells office supplies to many businesses office supplies to many businesses across the globe. But they also buy across the globe. But they also buy their products from wholesalers their products from wholesalers electronically through the web in electronically through the web in order to sell on their web site for a order to sell on their web site for a maximized profit.maximized profit.

Benefits of Buying and Benefits of Buying and Selling Goods/Services via Selling Goods/Services via

Internet.Internet.

Reduced the manual labor and Reduced the manual labor and stress of placing these multitudes stress of placing these multitudes of orders manually.of orders manually.

Saved the time of the person who Saved the time of the person who would be in charge of submitting would be in charge of submitting these orders manually.these orders manually.

Created organization (No need for Created organization (No need for excessive paper work.excessive paper work.

Business to Business to Business E-MailBusiness E-Mail

ExampleExample

An example of B2B Emailing would An example of B2B Emailing would be an employee sending a letter be an employee sending a letter via internet to an employee at via internet to an employee at another company, discussing price another company, discussing price rate changes.rate changes.

Benefits of E-MailBenefits of E-Mail

Saves time, by not having to go Saves time, by not having to go through the manual preparation through the manual preparation and the number of days it actually and the number of days it actually takes for it to go through the takes for it to go through the postal system.postal system.

Saves money by not using excess Saves money by not using excess paper or ink, and by not using paper or ink, and by not using postage.postage.

Business to Business Business to Business Advertising of Advertising of

Products/Services via Products/Services via InternetInternet

ExampleExample

The shoe company Nike uses their The shoe company Nike uses their websites to display as well as websites to display as well as promote their shoes and apparel to promote their shoes and apparel to retailers (such as Foot Locker). In retailers (such as Foot Locker). In return the retailers may purchase return the retailers may purchase the advertised products in mass the advertised products in mass online.online.

Benefits of Advertising of Benefits of Advertising of Products/Services via Products/Services via

InternetInternet

Able to reach a more broad range Able to reach a more broad range of peopleof people

Saves money Saves money Reduces manual laborReduces manual labor

Making and Making and Receiving Receiving

Payments via Payments via InternetInternet

ExampleExample

When a business orders supplies When a business orders supplies online, more than likely they will online, more than likely they will also make an online payment. This also make an online payment. This process usually involves the buyer process usually involves the buyer inputting their credit card inputting their credit card information.information.

Benefits of Making and Benefits of Making and Receiving Payments via Receiving Payments via InternetInternet

Fast and AccurateFast and Accurate Accessible from home or officeAccessible from home or office Easily tracked or tracedEasily tracked or traced

Creating Awareness of Creating Awareness of Your BusinessYour Business

When a company does business When a company does business through the internet, it gives other through the internet, it gives other businesses and customers the idea businesses and customers the idea that the company is cutting edge that the company is cutting edge and on top of the game. This and on top of the game. This perception in returns creates perception in returns creates interest, which in returns attracts interest, which in returns attracts business.business.

My Interview My Interview with a with a

Professional in Professional in the Fieldthe Field

Stephen D. Stephen D. SmithSmith

OfOf

Davis Smith & Co. CPA Davis Smith & Co. CPA FirmFirm

Reference in Bibliography

InterviewInterview

Q&A’sQ&A’sQ: What percent of your business transactions done through the web?A: Estimated 60%

Q: What transactions do you actually make through the web?A: I bill clients, send and receive bank statements, communicate with

clients, I also use email to send updates to my staff.

Q: How has the web process benefited you and your business?A: It saves me time, money, and reduces stress levels within the company.

Q: What new and upcoming technologies are you looking forward to working with?

A: I am looking forward to work with web conferencing. My clients and I will be able to have conferences from different cities and states face to face.

Interview Cont.Interview Cont.

Q:Q: How do you think web technology will play a factor in business How do you think web technology will play a factor in business to business relationships in 5 years?to business relationships in 5 years?

A: I believe that in 5 years any business who is not up on the new A: I believe that in 5 years any business who is not up on the new

technology and information will be technology and information will be obsoleteobsolete..

In the USA, 78% of the small to medium In the USA, 78% of the small to medium size firms are online, and more than a quarter size firms are online, and more than a quarter of those attribute an increase in revenue to of those attribute an increase in revenue to the application of Internet technologies. By the application of Internet technologies. By 2003, business to business revenue is 2003, business to business revenue is expected to top $1.3 trillion. For the business-expected to top $1.3 trillion. For the business-to-business marketplace that's a 3400% to-business marketplace that's a 3400% increase from the $43 Billion in purchases increase from the $43 Billion in purchases today.(today.(http://ideas.repec.org/p/nbr/nberwo/8017.htmlhttp://ideas.repec.org/p/nbr/nberwo/8017.html ))

Fact:

The future of Internet in The future of Internet in dealings with businesses.dealings with businesses.

Internet usage in businesses will Internet usage in businesses will become a necessity not an optionbecome a necessity not an option

Technology will keep improving Technology will keep improving and innovating.and innovating.

““Businesses who do not keep up Businesses who do not keep up with the new technologies will with the new technologies will become obsolete” become obsolete” (Stephen Smith interviewee)(Stephen Smith interviewee)

ConclusionConclusion

As times move forward so will technology. As times move forward so will technology. Businesses will be forced to keep up with the Businesses will be forced to keep up with the technology. When one company advances their technology. When one company advances their technology, their position in the playing field technology, their position in the playing field advances separating themselves from the advances separating themselves from the competition. If competing companies do not also competition. If competing companies do not also keep up they will be left behind. Business to keep up they will be left behind. Business to Business endeavors are greatly affected by this Business endeavors are greatly affected by this technology movement. Companies have saved technology movement. Companies have saved billions of dollars from the reduction of time and billions of dollars from the reduction of time and labor. The web allows businesses to move more labor. The web allows businesses to move more smoothly with less convenience. The future of smoothly with less convenience. The future of business is within cyber space.business is within cyber space.

BibliographyBibliography www.sba.com/GC/e-com2.pptwww.sba.com/GC/e-com2.ppt

http://www.csulb.edu/web/journals/jerc/issues/papehttp://www.csulb.edu/web/journals/jerc/issues/paper2.htmlr2.html

www.nber.org/papers/w8017.htmlwww.nber.org/papers/w8017.html

http://www.uchicago.edu/fac/steven.kaplan/researchttp://www.uchicago.edu/fac/steven.kaplan/research/gk.pdfh/gk.pdf

Bibliography cont.Bibliography cont.

Interview Interview

Stephen Smith of Davis Smith & Co.Stephen Smith of Davis Smith & Co.

(214) 951-0100(214) 951-0100

Dallas, TxDallas, Tx