MSBI : BI # 36 : Business Intelligence – Tools & Theory # 28 : Different Ways of Data Warehousing #2 : B2B Business Intelligence Model

Hi Folks,

This post is part of Series Business Intelligence – Tools & Theory

Currently running topic for this series is listed as below :

Series Business Intelligence – Tools & Theory

>>Chapter 1 : Business Intelligence an Introduction

>>Chapter 2 : Business Intelligence Essentials

>>Chapter 3 : Business Intelligence Types

>>Chapter 4 : Architecting the Data

>>Chapter 5 : Introduction of Data Mining

>>Chapter 6 : Data Mining Techniques

>>Chapter 7 : Introduction to Data Warehousing

>>Chapter 8 :Different Ways of Data Warehousing<You are here>

Continuing from my previous post on this series, If you have missed any link please visit link below

We are going to Cover the Following Points in this article

  • B2B Business Intelligence Model

B2B Business Intelligence Model

Business-to-Business (B2B) was originally used to describe the electronic communications between businesses or enterprises in order to differentiate it from the communications between businesses and consumers (B2C). It finally came to be used in marketing as well, primarily describing only industrial or capital goods marketing. Today, it is broadly used to describe all products and services used by enterprises.

B2B supports commerce dealings involving products, services, or information between two businesses or parties. Usual B2B dealing takes place between buyers, suppliers, manufacturers, resellers, distributors and trading partners.

Figure illustrates a typical B2B business:


Figure :B2B business

In a usual B2B business, the businesses purchase goods or services directly from another business. The selling of business can be a wholesaler, a distributor, a manufacturer or a retailer who can sells to buyers from other businesses.

There are more than one model for business-to-business e-commerce just like how there are different business models for non-electronic businesses. A business model is the way organizations do business.

Though there are many different business models available, most of the business models have several main concepts in common. At the most fundamental business model level, an organization must have something of value to offer to the marketplace, whether it is goods, products, or services. For example, a bookstore may offer books and magazines as well as various services such as special ordering. To be successful, the thing which the organization provides its customer has to be of value something which the customer either wants or needs.

Another part of the business model is the customer which is the target market to whom the organization is trying to sell its offering. The business model has to be clear about how the business will gain, maintain, and foster relationship with customers.

To get the product into the hands of the customer, the organization should also have an infrastructure in place. The infrastructure can include things such as having the right mix of people and skills necessary to make the product as well as to run the business. This can include not only the people working directly for the organization, but also the partners who can provide skills or services which the business will not provide for itself but is necessary to get the product into the hands of the customer. This can include companies that should have matching skills necessary to make the product. For example, suppliers as well as supply chain partners that can provide raw materials, supplies, components or distribute, warehouse or sell finished products.

The business model also has to also include consideration of the company’s income and cash flow along with its cost structure.

Electronic Data Interchange and E-Commerce Models

E-commerce is the way of doing business transactions over the internet or a similar technology. This helps the business in reducing the cost, increasing customer satisfaction and also in increasing the sales which makes the customer’s shopping experience easier. The type of e-commerce business model that the company will use depends on the type of buyers and sellers in the e-commerce company and B2B, B2C, C2C and B2G are the different types of e-commerce models.

One of the outgrowths of information technology that has allowed the development of the new business-to-business e-commerce models is the electronic data interchange, a standard format used in interchanging business data such as price or product identification number. Electronic Data Interchange (EDI) is a standard format that is used to interchange business data including price or product identification number.

EDI technology is particularly important for international commerce where paperwork required for international trade creates costs that can be up to seven percent of the value of items being traded. With EDI technology shippers, carriers, customs agents, and customers all can send and receive documents electronically so that both time and money for the international transactions can be saved.

Advantages of E-Commerce for B2B Businesses

The conventional business model for business-to-business operations requires a procurement staff that can discuss with many suppliers. For example, a book house may get books from several distributors and office supplies from one or more other suppliers. In the e-commerce business model, a procurement staff may shop online for supplies and other items required for the business. Just like the way it is done for the consumer in the business-to-consumer business model, the Internet allows businesses to evaluate shop online in order to find the most appropriate product at the best price. This reduces many of the front-end costs for finding goods and products that are obtained in the conventional model.

Systems for Improving B2B E-Commerce

The Business-to-business e-commerce is still in a state of confusion as enterprises learn how to influence information technology in general and the Internet in particular into systems that help them more efficiently and effectively to do business. There are several things to be considered.

Firstly the business-to-business e-commerce should be made meaningful. The systems need to evolve to handle not only simple transactions but also the complex ones as well. To assist these needs, standards will have to be developed and put in place.

Also as markets have become more competitive, transaction fees will more likely reduce or even fade away. Among other implications, the providers will have to move from dealing in transactions to providing more comprehensive solutions to business needs. For example, products can be bundled with related information and services in an effort to create customer loyalty and long-lasting relationships.

New business-to-business models will continue to appear as technology will continue to evolve and enterprises will seek creative solutions. Among the new business-to-business e-commerce models that are starting to emerge are the mega exchange that maximizes liquidity and sets the common transaction standards, the expert originator that deals with complex and relatively exclusive products, the e-speculator model has a high degree of product standardization and is also fair to high price volatility, the solution provider in which product expenses are only a small portion of the overall expenses, and the sell-side asset exchange with high fixed expenses and a comparatively fragmented supplier and customer base.

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