In: Categories » Internet » Affiliates and Ecommerce » The Evolution of Business to Business Commerce
|
Electronic business-to-business commerce has progressed through a number of phases of development based upon a series of changes in technology: Electronic Data Interchange, area networks (Value Added Networks), and the Internet. In the 1960s and 1970s, mainframe solutions focused initially on internal automation and proprietary EDI links with suppliers. EDI has been primarily used in the subcontracting area and has been proven most effective in supporting operational-level applications, mainly due to its limited technical capabilities and the existence of multiple technical standards. In order to support more complex and strategically more important applications and processes, some organizations have maintained dedicated data links between their computer systems by themselves, using various interfaces and communication protocols capable of handling more sophisticated forms of information exchange. While considerable benefits were achieved by those companies that implemented EDI effectively, it tended to be only large companies and their suppliers that applied EDI due to the significant costs associated with implementation. EDI requires significant investments in systems and organizational infrastructure, as well as a large volume of transactions to justify the level of investment. In the 1980s to the mid-1990s, client-server solutions broadened the scope of participants in the supply chain by focusing on applications, such as supply chain management, enterprise resource planning (ERP), and customer relationship management (CRM). These approaches were often very expensive to purchase, difficult to implement, complex to use, and costly to maintain. In the categories already discussed, all parties involved are predetermined and have agreed to trade or exchange other information electronically. However, in the mid-1990s the advent of the Internet has led to an explosion in connectivity that allows companies of different sizes and resource bases to interact. The Internet is a public network that is connected and routed over gateways. The Internet evolved from a software convention for computer networking developed by the U.S. Army’s Advanced Research Projects Agency - termed the Transmission Control/Internet Protocol (TCP/IP). This open standard was adopted by a wide range of research, education, and public sector organizations. In the late ’80s, a point-and-click hypertext interface was developed for the Internet which was called the World Wide Web. This development led to the explosion in interest in Internet usage, with organizations and individuals being able to easily access and use the Internet. The Internet has led to the redefinition of economies of scale and scope, and the reduction of transaction costs leading to the emergence of virtual markets. Virtual markets refer to business transactions that are conduced over open networks based on fixed and wireless Internet infrastructure. These markets are characterized by high levels of connectivity, the importance of information products and networks and high reach and richness of information. Reach refers to the number of products and services that are reachable in virtual markets, while richness refers to the depth and detail of information that can be collected, exchanged, and analyzed by the market participants. In fact, information itself becomes a source of competitive advantage in virtual markets. The connectivity associated with the Internet has the potential to bring an industry’s customers and suppliers in a unified and economically perfect marketplace. For example, an organization offering a range of products and services can now create an electronic catalog on its website in order to achieve global reach. With the advent of Internet-enabled communications, it is now possible for an organization to establish links with other organizations at significantly lower costs than with previous technologies. The emergence of virtual markets clearly provides ways for organizations to create value for customers. An organization’s routines and processes are unique capabilities that allow organizations to make strategic changes that give them the flexibility to operate in dynamic markets. For example, a significant development from innovations in Internet technologies has been the growth of electronic intermediaries. It is now possible to offer an intermediary service, developed around a sophisticated IT platform. The intermediary has a Web front-end, allowing buyers to order from supplier catalogs, participate in auctions, or conduct tendering online. This is significantly different from EDI, which tended to be based on a ‘hub and spoke’ arrangement - with one large company acting as a hub and suppliers trading electronically. In contrast, an electronic intermediary can act as a single gateway to a range of products or services that are provided by a number of suppliers. It is designed to allow a number of suppliers to interact with a number of buyers through one connection.
|
legal disclaimer
1) Our website is not responsible for the information contained by this article as well for any and all copyright infringements by authors and writers. E-articles is a free information resource. If you suspect this article for any copyright infringements, please read the Terms of service and contact us to investigate the problem.
2) The E-articles directory team is not responsible for inaccuracies, falsehoods, or any other types of misinformation this tutorial may contain and will not be liable for any loss or damage suffered by a user through the user's reliance on the information gained here. Please read the Terms of service
Useful tools and features
If you like this article (tutorial), please link to it from your web page using the information above. Linking to this page, this is the only way to help us improve our service, the same time providing your visitors with a way to improve their online experience.
related articles
The future of e-commerce in Australia and New Zealand looks optimistic, with significant plans being made for increased activity and implementation in the region. The Australian government has acknowledged the opportunities of e-commerce and is working with all Australian states and territories to coordinate efforts to reduce barriers to its adoption. The findings suggest that e-commerce is now reaching a critical mass and, while a number of elements continue to restrict its development, many of these, includ...
|
|
With an affiliate program, you can employ any person on the World Wide Web to be your virtual sales person. All that person has to do is to refer people to your products. Whenever someone they refer makes a purchase, you just have to pay the affiliate a percentage of the selling price of the product. You can have hundreds, if not thousands, of affiliates promoting your product and your web presence will be huge! What am I talking about? How can these things be done? If a prospect decides to buy you...
3. Models of B2B Commerce
Although the exploitation of Internet technologies at the business-to-business level is in its infancy, a number of models have begun to emerge that manage transactions between buyers and suppliers: 1. Established Buyer-Supplier Relationship This is a pre-determined one-to-one relationship between a buyer and supplier that is supported by electronic commerce technologies. Due to the aforementioned limitations associated with EDI, companies have now turned their attention towards the Internet to support these type...
4. Which are the abilities of and E commerce leader
Which are the abilities of and Ecommerce leader (q) Two groups, known as leaders and followers, were identified from the survey results. They include organizations that have achieved profit or productivity gains from e-commerce implementation and those that have not. The leaders and followers displayed distinct sets of characteristics in terms of ecommerce adoption, implementation, and integration. With regard to ecommerce, ‘leaders’ are those for whom ‘very good’ or ‘excelle...
5. Benefits of the E Commerce Market
The letter “e” lost much of its language-domineering swagger with the fall of the dot-com economy. Technology marketers, journalists, and analysts now cringe at “e”-inspired products and concepts. Venture capitalists hide their money-stuffed mattresses when Silicon Valley experts drop by with business plans. Yet, electronic commerce veterans in some of the largest companies in the United States, companies such as Ford, Cisco, Wal-Mart, Procter and Gamble, McKesson, and Compaq, see opportunity in the midst ...
6. Roles and Challenges in Business to Business E Commerce
Before solving key issues in B2B e-commerce, it is important to understand the key roles that companies or individuals within companies play. There are four primary roles in B2B e-commerce. Every company plays at least one of them, and many companies play multiple roles. Suppliers: Businesses that market and sell goods or services directly to business customers through traditional or other sales channels, ideally selling directly to their customers’ Web-based procurement systems and electronic mark...
7. Identifying the Strategic Opportunities of E Business Innovation
E-business in organisations is linked with the Internet and the growth in the use and application of computers. The identification and establishment of strategic opportunities of e-business for the firm will lead to an understanding of the innovation and its justification for improved business, competitiveness and customer service. Suggested a four stage 'strategic breakout' model addressing initiation, diagnosis of the industry environment, breakout to establish a strategic target and transition or plotting a migration path, emphasis...
8. Advantages of E Partnerships and Virtual Organizations
The greatest advantage of e-partnership and virtual organization lies in the fact that it eliminates the physical boundaries of organizations, and that cross-functional teams and organizations are able to operate and collaborate across space and time by communicating with each other via electronic channels. The Internet becomes the most important interface between participating organizations, teams and individuals. The e-partnerships and virtual organizations allow businesses to sell and deliver products and services across the world ...
9. Disadvantages of E Partnerships and Virtual Organizations ~ Issues and Problems
However, like e-business and e-commerce, e-partnership is also facing a range of issues related to the use of the Internet as well as the reliance on inter-organizational interfaces. The key issues identified are: Challenges and risks of e-partnerships and virtual organizations; Productivity and revenue-sharing in e-partnerships and virtual organizations; Transferring and sharing core competencies between participating organizations; Sharing power and empowering amongst participating...
10. Customer Relationship Management ~ A Strategy for Success in Electronic Commerce
Customer relationship management (CRM) is a concept for increasing companies’ profitability by enabling them to identify and concentrate on their profitable customers. The term “electronic commerce customer relationship management” (ECCRM) refers to the application of CRM in electronic commerce, i.e., when business relationships are maintained via the Internet or World Wide Web. Previous studies on the effectiveness of ECCRM have often focused on the process level, technical aspects, or on marketing issues. Yet only little evidence has been ...