PPT Slides by Dr. Craig Tyran & Kraig Pencil

E-Commerce: Supporting External and Internal

LinkagesPart 2

MIS 320

Kraig Pencil

Summer 2014

PPT Slides by Dr. Craig Tyran & Kraig Pencil

Game Plan

• Introduction• Supporting Internal Linkages

– Intranets• Supporting External Linkages

–B2C: Business to Consumer –C2C: Consumer to Consumer–B2B: Business to Business

PPT Slides by Dr. Craig Tyran & Kraig Pencil

G. Business-to-Business Applications (B2B)

1. Objective– Support external linkages– Foster trading between businesses– Reduce costs and time

• e.g., purchasing supplies, just-in-time inventory

2. Early growth (see figure)Shipping Information

Supplier Corporate Buyer

PPT Slides by Dr. Craig Tyran & Kraig Pencil

2005

2002

2005$8.5

Trillion

2005$8.5

Trillion2004

$6 Trillion2004

$6 Trillion

2003$3.6 Trillion

2003$3.6 Trillion

2002$1.9

Trillion

2002$1.9

Trillion

Comparison of B2C vs. B2B: Growth

Source: Garnter, Inc (http://findarticles.com/p/articles/mi_m0EKF/is_12_47/ai_72068777 )

B2C

B2B

$184B$92B$92B

B2B is about 50

times larger than B2C

B2B is about 50

times larger than B2C

PPT Slides by Dr. Craig Tyran & Kraig Pencil

G. Business-to-Business Applications (B2B)3. Example applications

– Scan-based Trading – e.g. Electronic data interchange (EDI)• EDI involves

– Repetitive business transactions (e.g., orders, bills)– Computer-to-computer exchange– Standard format for data exchanged

• “EDI translator” converts data to a format that TPS software will understand

• Benefits– Significant cost savings

• $50 per paper transaction vs. $1-2 per EDI transaction– Time savings -- from initiation to completion– Reduction of errors

• Costs – High initial investment ($) and startup period– EDI systems can be inflexible– Multiple EDI standards exist (e.g., different customers may use

different EDI standards)

PPT Slides by Dr. Craig Tyran & Kraig Pencil

Order Delivery: Without EDI and With EDI

Lots of paperwork and manual processing

Costly, Slow, Error-prone

Electronic data interchange and processing

Cheaper, Faster, More accurate

Source: Rainer, Turban, Potter, Introduction to IS, Fig 8.4

PPT Slides by Dr. Craig Tyran & Kraig Pencil

G. Business-to-Business Applications (B2B)

3. Example applications (cont.)– Extranet

• Extend portions of an intranet to selected business partners• E.g., Share current inventory, production schedules

– Inventory replenishment• “Electronic bread man”• Supplier scans inventory database and is responsible for

restocking

– Marketplace exchanges• Request for quotes, automated procurement• e.g., ChemConnect, Automotive Network Exchange (ANX)

PPT Slides by Dr. Craig Tyran & Kraig Pencil

Marketplace Exchange: ChemConnect