Business to Business (B2B) Model

B2B (business – to‐ business) is the major and valuable model of e‐commerce.B2B (business – to business) e‐commerce is conducted between two separate businesses and has been in effect for many years. E‐commerce plays an important role in enhancing and transforming relationships between and among business. B2B (business – to‐ business)is also known as e‐biz, is the exchange of products, services, or information between businesses rather than between businesses and consumers. Although early interest centered on the growth of retailing on the Internet (sometimes called e‐tailing), forecasts are that B2B revenue will far exceed business to consumers [B2C] revenue in the near future. B2B (business – tobusiness)is a kind of e‐ commerce, which refers to a company selling or buying from other companies. One company communicates with other companies through electronic Medias. Some of these transactions include sending and receiving orders, invoice and shopping orders. It was an attractive alternative to the current process of printing, mailing various business documents.

Some B2B applications are the following.

1. Supplier Management
Electronic applications in this area helps to speed up business partnerships through the reduction of purchase order processing costs and cycle times, and by maximizing the number of purchase order processing with fewer people.

2. Inventory Management
Electronic applications make the order‐ship bill cycle shorter. Businesses can easily keep track of their documents to make sure that they were received. Such a system improves auditing capabilities, and helps reduce inventory levels, improve inventory turns, and eliminate out‐ of‐ stock occurrences.

3. Distribution Management
Electronic based applications make the transmission of shipping documents much easier and faster. Shipping documents include bill of lading, purchase orders, advance ship notices, and manifest claims. E‐commerce also enables more efficient resource management by certifying that documents contain more accurate data.

4. Channel Management
E‐commerce allows for speedier distribution of information regarding changes in operational conditions to trading partners. Technical, product and pricing information can be posted with much ease on electronic bulletin boards.

5. Payment Management
An electronic payment system allows for a more efficient payment management system by minimizing clerical errors, increasing the speed of computing invoices, and reducing transaction fees and costs.

Many organizations are implementing electronic commerce in numerous ways and receiving tangible benefits but as electronic commerce matures and develops, these ways are likely to change based on the accelerating adoption rate. There are three specific implementation models of B2B E‐commerce.

• Transaction based‐ a single company establishes a common transactional method for conducting business with its major customers or key suppliers. This offering is common across all business units within the company and includes common tools, techniques, and infrastructure.

• Process based‐ Two companies establish a common business process to conduct business efficiently between the two firms. The two firms establish and share this common practice jointly, both within their firm and outside their organization with this predetermined trading partner.

• Strategic relationship based – Two or more companies establishing a strategic relationship partnership based on all major interactions between the organizations. This includes transactions, processes, and any other collaboration between the organizations. From a technology perspective this includes linking the CRM, ERP and SCM systems of the two organizations. This way each organization can actually monitor sales activity, production schedules, inventory management, and technical service exchanges.


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