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Chapter 8

B2B Support Services

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Learning Objectives

Identify the major B2B services usually provided by specialized e-service providersUnderstand why EC services are frequently outsourcedDescribe the role and types of e-strategy consultantsUnderstand the e-infrastructure process and the role of Web hosting and integrationDescribe various financial services in B2B

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Explain the various B2B logistics services and order fulfillment servicesDifferentiate B2C from B2B with respect to marketing, advertisement, and sales, and describe some B2B initiativesDescribe content creation, syndication, delivery, and managementDescribe the role of directory services in B2BDescribe how CRM is done in B2B and its relationships with e-communities

Learning Objectives (cont.)

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Hewlett Packard Closes thePayment Gap in B2B E-Commerce

HP payment solution—seamless electronic B2B payment

Two components are preintegrated and provide end-to-end automation

Embedded options that establish rules to facilitate direct debit payment options

Buyer accountsPurchasing limitsCorporate discounting

The system connects all these accounts with their online financial institutions

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Hewlett Packard Closes the Payment Gapin B2B E-Commerce (cont.)

HP payment solutionThe integrated system reduces cost of:

Order processingContract administrationCustomer service

Captures and analyzes information that allows company to offer unique purchasing experience

Customers—best value online experiencePartners—handle complex transactions quickly and securelyEmployees—reduce cost and time for processing

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Figure 8-1Electronic Commerce Services and Analysis

Insert Fig 8.1 here

Source: Choi et al., The Economics of Electronic Commerce (Indianapolis: Macmillan Technical Publications, (1997), p. 18.

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EC Services:Overview & Services (cont.)

Why outsource B2B services?Desire to concentrate on core businessNeed to have services up and running quicklyLack of expertise for support servicesEconomy of scale for project not possible from insideIn-house options do not keep up with rapidly changing demandsToo many services for one company to handle

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Steps in the process of developing and managing EC applications

EC strategy formulationApplication designBuilding (or buying) applicationHosting, operating, and maintaining EC

EC Services:Overview & Services (cont.)

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Figure 8-2EC Application Development Process

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Figure 8-3The Evolution of E-Marketplaces

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Consulting Services

E-strategyConsultants help determine which specific EC applications to implementFirst step in infrastructure development

TechnologyConsultants advise companies on technology issues

EC architectureSecurity

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Consulting Services (cont.)

Four types of consulting firmsProvide expertise in area of ECTraditional firms that maintain divisions focused on ECA large firm that consists of many small firms that specialize in ECHardware and software vendors that provide consulting services

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Application-Building Services and Required Standards

Services that support B2B applicationsUtilized by in-house design teams putting together system that incorporates best-of-breed EC components (building blocks)Vendors and system integrators may do the jobEC components can be:

Special-purpose niche tools (tax-calculation)Broad packages that facilitate all aspects of successful transactions online

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Application-Building Services and Required Standards (cont.)

Industry standards—XML, XSL, and support organizations

Efficient interaction between B2B companies necessitates connection of:

ServersApplicationsDatabases

Standard protocols and data representation schemes are needed

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Application-Building Services and Required Standards (cont.)

Industry standardsXML—improve compatibility between disparate system by defining meaning of data in business documentsXSL– and XML require international agreements and cooperationSupport organizations

UN body for facilitation of ECW3C—XML and other EC standardsRosettaNet—supply chain topics

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Web Hosting and Other Services

Business hosting—hosting is popular for SMEs; large businesses need more advanced services

Dedicated server—assigned for specific purpose or customerCo-location (physical location for the server)Free Web hosting attractive option for small start-ups

Provider company inserts a banner ad on their siteStarting point for small company—minimize start-up costs

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Web Hosting and Other Services (cont.)

Sources of information about Web hostingWeb Host Review (hostreview.com): how to select free Web hosting based on various criteriaHost Search (hostsearch.com): search engine recommends best host based on:

Monthly costDisk space requirementsMonthly transfer volumeOther

WebHosting Magazine (whmag.com):comprehensive information for members of Web hosting industry and those looking for outsources

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Web Hosting and Other Services (cont.)

Management service provider (MSP)Deliver IT infrastructure management servicesMultiple customers over networks on a subscription basisSpecialize in e-business and enterprise solutionsSee imspassociation.org and crosscommerce.com

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Web Hosting and Other Services (cont.)

End-to-end solutionsBuilds Web sites and EC applications from conceptual design to deploymentAlso supply:

Payment systemsDelivery managementSite monitoringOther servicesSee bccentral.com and WebVision.com

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Figure 8-4Participants and Process of Using a Purchasing Card

Source: napcp.org/napcp.nsf/Cardparticipants!OpenPage. Used with permission of NAPCP.

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Financial B2B Services (cont.)

Payments (cont.)Electronic letters of credit

Benefits to sellerCredit risk reducedPayment highly assuredPolitical/country risk reduced

Benefits to the buyerAllows negotiation of lower purchase priceExpansion of supply sources Payment received after document inspected by issuing bank

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Financial B2B Services (cont.)

Payments (cont.)Payments in B2B global tradingVenture capital to fund e-commerce initiativesInternet incubatorsTax calculation services

DPCHotSambaSales tax clearinghouseTaxware international

Implementing tax collection in the U.S.

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Financial B2B Services (cont.)

Payments (cont.)Other financial services

Credit reporting firmsNew credit intermediaries broker credit risksAssurance firms guarantee qualityExchanges strike insurance dealsE-credit services

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Figure 8-5Transaction-Based Financing

Source: Aberdeen Group, Inc. November 2000

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Order Fulfillment, Logistics,and Supply Chain Services

Supply chain management

Reengineering & managing complex supply chains

SupplierManufacturerDistributorCustomer

Transportation services

Manages complexTransportation networksDedicated fleetsCarriersMultimodel shipments

UPS Logistics Group

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Order Fulfillment, Logistics,and Supply Chain Services (cont.)

Parts distributionComprehensive return-and-repairParts distributions operations

Logistics technologies

Integration of logistics information systemsServices to provide supply chain visibility

EC solutionsLogistics servicesWeb-based businesses worldwide

Global servicesLogistics facilitiesStaffingExpertise about global commerce

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Order Fulfillment, Logistics,and Supply Chain Services (cont.)

Call center servicesCustomer careCommunications (call center services to EC capabilities)

Financial services—full range of financial services that complement:

LogisticsTransportingAdditional business needs

Solutions for EC initiatives

Tracking systemsProduct return systemsShipping solutionsE-document exchangeCustomization

EC software/providersE-services/partners

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Marketing and Advertisement

Advertising methods used by offline marketers

Vertical trade showAds in industry magazinesSalespeople call on:

Existing customersPotential buyers

Digital advertisersAd server network providerElectronic wholesalers

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Figure 8-6The Architecture of Ad Server Networks

Source: Warkentin, Merrill, Vijayan Sugumaran, and Ravi Bapna. “eKnowledge Networks for Inter-Organizational Collaborative eBusiness,” Logistics Information Management, Vol. 14, No. 1/2, March 2001, pp. 149–162. Used with permission of MCB University Press.

Affiliate Programs

Affiliate programs (B2C services)Affiliates invited to put a banner of a vendor on their sitesConsumer clicks on the banner and brings up that company’s EC siteCommission paid to affiliate if customer makes a purchase

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Infomediaries

Infomediary servicesCollect data about consumer behaviorAnalyze itRepackage itSell the results

As marketing and profiling informationPurpose to increase customer loyalty

Identify likely buyersIncreased salesReduced marketing costs

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Online Data Mining Services

Clickstream data—data collected by monitoring what people do onlineAnalyzed and mined to produce useful knowledge used to improve:

ServicesMarketing efforts

Firms use these services to extend their ability to execute EC a successful strategy

NetTrackerWebTrends

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Other Marketing Services

Three examples of other services:Digitalcement.com provides corporate marketing portals; builds stronger relationships with customersVantagenet.com free tools that help ease traffic to a company’s Web siteBusinesstown.com has an online directory that enables small businesses to identify and evaluate service companies

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Figure 8-7Digital Delivery Content Life Cycle

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Content Generation, Syndication, Delivery, and Management (cont.)

Syndication Content-delivery networks (CDNs)Catalog contentContent management options

Do it yourselfLet the suppliers do itBuy the content from an aggregatorSubscribe to a vertical exchangeOutsource to full-service Internet exchange

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Content Generation, Syndication, Delivery, and Management (cont.)

Content maximization and streaming services—companies provide media rich content to reach target audience

Video clipsMusicFlash media

Use content delivery solutions that do not cause “traffic jams” with slow download times (e.g., Akamai Corporation)

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Directory Services &Search Engines

Directory servicesB2Business.netB2BToday.comCommunityb2b.comA2zofb2b.comI-stores.co.ukWebsteronline.comThomasregister.comBocal.comB2b.yahoo.com

Search engines and news aggregators

Moreover.comGoogle.comIentry.com

Newsletters

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E-Communities

E-communitiesChat roomsBulletin boardsPersonalized Web pages

B2B are basically communities of transactions

Classified adsJob vacanciesAnnouncementsIndustry news

E-communities connect:

PersonnelPartnersCustomersAny combination of these three

Service providersDesign of exchange portalsE-community service

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Partner RelationshipManagement (PRM)

In B2B environment the partners include:

SuppliersPartners in joint venturesService providers

PRM—relies on: TrustCommitmentQuality of servicesContinuity

Strategy for e-serviceHow much to invest in services

What services to provide

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Other B2B Services

Trust servicesTrust Trademark and domain namesDigital photosGlobal business communitiesClient matching

E-business rating sitesPromotion programsEncryption sitesWeb research servicesCoupon-generating sites

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Integration

Integration in e-marketplaces and exchanges

B2X hubs connect:All Internet business servicesMerchant servicesExchange infrastructureBuying and sellingMember enterprisesOther B2X exchanges

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Hypermediation

Hypermediators are:Content providersAffiliate sitesSearch enginesPortalsISPsSoftware makersOther entities

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Managerial Issues

Which services and to what level?Complex decision situation for managers; use:

Check out the competitionVendors can provide useful directionRead white papers etc.Hire a reputable EC consultant

Selecting service providers—

Public ratings and rankings of service providersTalk to others in the industryExamine growth rate of provider’s businessTry vendor with small projects first

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Managerial Issues (cont.)

E-infrastructure—large part of outsourcing funds go to e-infrastructureJoin ventures—look for potential partnerships with service providersEnd-to-end outsourcing vs. best-of-breed

Complete end-to-end serviceDifferent vendors for best-of-breed approach