MSBI : BI # 38 : Business Intelligence – Tools & Theory # 30 : Different Ways of Data Warehousing #4 : Different Types of B2B Intelligence Models

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

  • Different Types of B2B Intelligence Models

Different Types of B2B Intelligence Models

Like how there are more than one business models for non-electronic businesses there are more than one type for Business-to-Business e-commerce. These business models have the main concepts in common such as most of the business model will have something of importance to offer to the market place which could be goods, products or services. It helps to target market which the organization is trying to sell its products. The following are the different types of Business-to-Business models and are described as follows:

· Electronic Exchanges

Electronic exchanges are also known as electronic markets or B2B hubs. These hubs are the sites on the Internet where buyers and sellers can come together to exchange information and buy and sell products and services.

· Consortia-backed Exchange

The consortia-backed exchange is a general type of Electronic Exchange. These are e-markets created by consortia of conventional firms within an industry who group together to create a common environment for business- to-business transactions of goods and services. One of the main purposes of consortia-backed exchanges is to force down costs for all participants.

· Private Exchange

Private exchange is also a type of electronic exchange structure.These exchanges are planned around the needs of a specific sponsoring business and its trading partners which could be joined by invitation only. The advantages of private exchanges over other types of electronic exchanges are:

Firstly, the owners of these exchanges can adjust access to both buyers and sellers which means that the owners have the ability to eliminate the competitors and their suppliers from the exchange so that the exchange only benefits its members.

Secondly, the owners of a private exchange can also offer pricing incentives or alternatives so that they can reorganize the business processes and benefit participants. In addition, most of the private exchanges can be tailored to serve specific products.

· Public Exchange

Public exchange is also known as an independent exchange. It is a third party market that operates in the electronic market, displays information, and provides the tools necessary to conduct e-business. There are Independent exchanges which may be vertical that is serving members of a specific industry or horizontal that is concurrently serving businesses in different industries. Public exchanges are independently owned by the third party who display the content and provide electronic tools for conducting business.

· Dell Business Model

Dell business model is one of the business models for business-to-business operations that have been enabled by information technology. Here, the orders for computers are placed with Dell by telephone or through the Internet. Using a process called just-in-time or lean manufacturing, waste is reduced and productivity is improved by having only the required inventory on hand when it is actually needed for manufacturing. This minimizes both the lead times and the set up times for building a computer. As per the just- in-time 2philosophy, Dell only orders for the parts of a computer when it has a firm order. As a result, Dell operates with little in-process and no finished goods inventory: Products are shipped as and when they are manufactured. This approach also allows Dell to forego having brick and mortar store fronts with inventory that must be kept on the books or that might become out dated, thereby considerably minimizing the overhead.

· Cisco Business Model

Cisco model is another lean business-to-business model that has been enabled by information technology. The successful network communications manufacturer receives roughly about 90 percent of its orders over the Internet. The orders are then routed to contract electronics manufacturers who can build the products to Cisco’s specifications. Not only are the majority of the Cisco’s orders received over the web, but 70 to 80 percent of their customer service requests are also dealt with online.

· Other Business Model Innovations

Although the business models used by Dell and Cisco have revolutionized the way these and similar organizations are doing business over the Internet, these models are not suitable for every organization.

· EHubs

Electronic hubs (also known as vertical portals) are business-to-business web sites that bring together buyers and sellers in a particular industry such as information technology or retail. These hubs make possible business transactions within an industry and may charge a transaction fee for purchases. The value of the hubs is that they minimize transaction costs by aggregating buyers and sellers in an electronic marketplace. As opposed to business-to-consumer hubs that are one-way networks that primarily create value for sellers, business-to-business hubs are the two-way networks that arbitrate between buyers and sellers and create value for all parties. Business-to-business hubs create value in a number of ways which includes reducing search costs, standardizing systems, and improving the matches for both buyers and sellers. A business-to-business hub offers many choices to buyers and gives the sellers more access to buyers.

For example, if there are five buyers and five sellers who are potentially interested in doing business with each other, then they will first have to locate each other. The sellers determine the potential buyers through advertisements or a direct sales force. The sellers then have to make contact with each potential buyer. This requires 25 separate searches and

25 separate contacts each time a seller wants to sell. With the hub system, however, this number is drastically minimized. The hub then finds the potential sellers and buyers, thus, reducing the total number of postings to ten. That is, five postings on the hub by the sellers and five views by the buyers. Hub systems can also allow information such as credit checks, product descriptions, and evaluations to be transferred more easily.

· Vertical Hubs

Vertical hubs are set up to specialize within an industry or other vertical market. They give domain-specific content and relationships that are of value to the participants. Vertical hubs are particularly advantageous when there is much fragmentation among the buyers and sellers, and also inefficiency in the existing supply chain. Vertical hubs successfully tend to have a high degree of domain knowledge and industry relationships to create master catalogs and allow advanced search options. Examples of vertical hubs are Band-X for the telecommunications industry, Cattle Offerings Worldwide for the beef and the dairy market, PlasticsNet.com for the plastics industry.

· Functional Hubs

Functional hubs are the horizontal hubs which can provide the same functions across different industries rather than more functions within a single industry. Functional hubs are successful in the situations where there are a greater degree of process standardization along with the sufficient knowledge about the processes and the ability to customize the business process to respond to differences in various industries. Examples of functional hubs include iMark which focuses on buying and selling used across industries

There are also trade portals or global e-marketplaces which can be broadly divided according to the business models. Depending on the mode of operation the B2B portals are classified as:

· Buyer-oriented

The Buyer-oriented B2B trade exchanges are operated by a community of buyers who want to support an efficient purchasing process. For buyers, this environment helps to acquire the best pricing for products from sellers by with lowering the administration cost. On the other hand, suppliers can also advertise their catalog to target potential customers.

· Supplier-oriented

The Supplier-oriented e-marketplaces are also known as supplier directories. These types of trade exchanges are handled by suppliers who are looking to generate online sales channel for potential buyers. They give sellers greater visibility in the market, which helps in attracting more leads. Buyers also gain from supplier directories by getting access to information on profiles of suppliers and relative products and services. Furthermore, products and services can be searched conveniently.

· Independent or third-party

The Independent or third-party trade exchanges are operated and managed by a third-party that can offer a common online B2B platform to buyers and sellers. Registered members of independent e-marketplaces can access display ads, quotation requests, or bids relevant to their industry field.

· Vertical trade portals

The Vertical trade exchanges links every sector of the supply-chain of a specific industry. Trading on vertical trade portals improves operating efficiency and effectively reduces intermediary supply chain costs. Furthermore, it also saves considerable process cycle time.

Horizontal trade portals

The Horizontal trade portals also connect buyers and sellers of various industries across the globe. These types of portals are like huge open markets where people can purchase or sell to the potential leads.

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