Unit 31 E-Business Operations
1 Understand how business and consumer purchase transactions differ 2
1.2 Explain how use of professional buyers affects the buying process 3
1.3 Analyze variables in purchasing 5
2 Understand EDI and Electronic transactions 6
2.1 Explain how electronic transactions can reduce paperwork and delay 6
2.2 Examine how EDI has developed and laid the foundations for b2b e-business 7
2.3 Evaluate the use of different Electronic Payment Systems 8
3 Be able to demonstrate the benefits of electronic transactions to supply chain management 10
3.1 Create a diagram for an e-business supply chain 10
3.2 Write a report on the advantages of e-procurement 11
3.3 Present an analysis on the flow of information in a typical logistics operation 13
3.4 Demonstrate the benefits of electronic processes in integration of supply chain management 14
4 Understand issuesin e-business including quality recruitment and security decisions in anorganization 15
4.1 Explain how the issues of trust and security apply to supply chain management and other e-business operations. 15
4.2 Evaluate how the internet can be used for communication with prospective/current employees 18
4.3 Assess the issue of quality for an e-business 19
4.4 Review the development of the internet technologies on b2b industry networks and b2c markets 21
1 Understand how business and consumer purchase transactions differ
1.1 Describe the purchasing process used in b2b and b2c
The reason of having a better considerate of B2B market, it is intuitive to compare it with B2C market and to see the similarity and difference between these two market As a matter of fact, whether it is B2B or B2C market, the incontrovertible fact is that they are all collected of people. Maybe, to speak in a broad sense, what changes in B2B market is the context and the actors are ultimately same. Even though conventional view on organizational buying performance is more rational that purchaser buying performance, it can be argued that as long as people are still the actors in the association, unreasonable and moving behavior can still appear and influence the buying decision and behavior. moreover, traditional view also proposes that organizational buying is more complex and involves long period of information search. However, with the development of internet as well as the emergence of new forms of purchasing such as group buying, the gap between organization and consumers in terms of information search and complexity of purchasing is narrowing. In this sense, organizational buying and consumer buying have similarities. Nevertheless, as the main focus is to understand the B2B market, most important difference between B2B and B2C market will be the prior concern.
The aspects or dimensions listed in the table are considered to be important indicators when comparing two markets. The comparison is based on a normal setting which means the exceptional situation will not be considered. It can be concluded from the table that B2C markets can consist of millions of individual buyers, whereas the number of organizational buyers are small relative to consumer markets. Managerial buyers normally tend to purchase large quantity of goods with high value for managerial purpose. In contrast, the volume of an individual buyer would normally be small and low value compared with organizational buyers.
The main buying purpose for individual buyers is to satisfy personal need. In the B2B market, due to the large quantity and the likelihood that the long-term relationship is involved, the purchasing risk is between medium to high, whereas in the B2C market, consumers normally choose among several brandsbased on personal preferences and in case one brand does not satisfy one’s needs, one would simply switchto alternative and the loss would be small as the quantity purchased is usually low. This means the purchasing risk for consumers is between low to medium. In terms of the complexity of decision making, the result from level of risk applies to both markets as well. Even though as mentioned before, the technology progress has shortened the gap between the amount of knowledge obtained by managerial buyers and individual buyers, in most of the cases, the managerial buyers have more power than character buyer, with the support of the association.
Allowing the situation most group tend to uphold a long-term relationship with supplier, naturally ‘in’ suppliers would be willing to provide more information for buyers in order to prevent the execution of the association while the ‘out’ suppliers would provide all information possible in order to attract the buyers and establish a long term relationship. Thus, managerial buyers have more knowledge than character buyers. One attractive fact can be observed from the table is that the demand of B2B market is constrained by the B2C market. This is true in the sense that the ultimate purpose of the company is to deliver products and service to end clients in B2C market.
A little later in the command of customer market would sometimes mean a theatrical change in the industry market. For instance, the recent downfall of Nokia is due to the fact it misses the probability of smartphone product even though they are now catching up. But during recession period when they detected a dramatic shift in consumer purchasing from conventional mobile to smartphone, it not only means that their product type and technology is falling behind, but also it means that in order to expand new smart phones and recover their market share, they have to change the whole system from manufacture facilities, developing team, purchasing of equipment, etc.
1.2 Explain how use of professional buyers affects the buying process
1.3 Analyze variables in purchasing
2 Understand EDI and Electronic transactions
2.1 Explain how electronic transactions can reduce paperwork and delay
How to Get Started
To find out if your association previously receives electronic payments, check My expense preference. You can submit all of your claims and receive your payments electronically for faster processing and payment using Electronic Data Interchange (EDI).
Profit of Using EDI
EDI allow paperless bill and sum for healthcare services and materials and automates many types of custom study.
The profit of using EDI includes:
1. Better correctness of bill/rearrangement information
2. concentrated formalities for your organization
3. Better currency flow
4. Earlier claim dispensation
5. Better safety for confined in sequence
Using EDI, you can automatically post electronic release advice (ERA) to your practice management system, reducing data entry, speeding up patient billing and freeing up staff for more important tasks.
Electronic finances transfer (EFT) allows you to have your claim payments automatically deposited directly in your commerce report, minimize your risk of lost check or lock-box delays.
2.2 Examine how EDI has developed and laid the foundations for b2b e-business
2.3 Evaluate the use of different Electronic Payment Systems
3 Be able to demonstrate the benefits of electronic transactions to supply chain management
3.1 Create a diagram for an e-business supply chain
Supply chain is a network of facilities anddistribution operations for the entire network ofcompanies to work together to plan, create, transport and service goods. Usually, marketing, sharing, preparation, developed, and the purchasing organizations along the supply chain operated independently. These organizations have their own objectives and these are often conflicting. Clearly, there is a need for a mechanism through which thesedifferent functions can be integrated together; supplychain management is a strategy through where such integration can be achieved.
The major objectives of supply chain management are trying to integrated information flows and material flows well between each role on the chain which maybe includes consumers, supplier, manufacture, wholesalers, retailer, clients etc. Information technology has been slowly adopted in the electric industry due to factors such as the lack of standards.
Therefore, Wei develops standardized e-business solutions in the electric industry. Maclnness suggests a new framework forbusiness models that takes into account disruptivetechnologies. Business models are defined as summaryof the value creation logic of an organization or abusiness network including assumptions about itspartners, competitors and customers. E-business is considered as a new business model that emerging inthe web-driven environment and has descended acrossthe corporate world. All companies involved in thee-network interact directly in order to achieve thebusiness goal established the creators of the e-network itself. This purposed research will focus on the relationship between the cooperation process and thee-process of the companies including in an e-network iscentral to the e-service world. E-business modelframework and business model design andimplementation are discussed. The finding may assistpractitioners to devise an appropriate knowledgemanagement strategy to support their firm’s operations.
3.2 Write a report on the advantages of e-procurement
3.3 Present an analysis on the flow of information in a typical logistics operation
3.4 Demonstrate the benefits of electronic processes in integration of supply chain management
4 Understand issues in e-business including quality recruitment and security decisions in an organization
4.1 Explain how the issues of trust and security apply to supply chain management and other e-business operations.
Closs and McGarrell (2004) have defined security in supply chains as “The application of policies, procedures, and technology to protect supply chain assets from theft, damage, or terrorism and to prevent theintroduction of unauthorized contraband, people or weapons of mass destruction into the supply chain”. This definition considers security of supply chains from two aspects – soft and hard. Soft aspect refers to intangible vulnerabilities which in the above definition areconsidered as information theft. Hard aspect indicates tangible vulnerabilities, such as physical thefts or physical damages and terrorism. Hard aspects will have impact on the soft aspects as well.The focus of this paper is on information security, one of the soft aspects of supply chain security. The need for information security, issues brought out by researchers in this area and a proposed framework to look at information security management has been discussed in the subsequent sections
Different aspects related to information security in supply chains have been discussed inliterature. Some of these are enumerated below, classified on the following basis:
1. Information protection aspects
2. Knowledge aspects
3. Organization aspects
Information protection Aspects
This section looks at aspects related to sharing of data across the supply chain. Stefansson (2002) has discussed that each company’s information system should support bothproprietary and shared data. The proprietary data would be accessible only to thoseemployees who have legitimate internal business needs. The shared data should be availableto all supply chain stakeholders through appropriate information interfaces – hence, there isa need to look at data security issues in the flow of information between parties in the supply chain. Dynes et al. (2005) discuss that all partners within the supply chain must have access tocritical business information such as product specifications, marketing plans, and vasttransactional data on product sales and movement – however, firms dealing with supplychain partners as an extended enterprise often make information security decisions withvery limited information about the threats their systems face, the strength of their systemsagainst these threats, and the usefulness of additional security measures.Unger and Goel (2007) have categorized the threats related to information security intothree major categories: technical loss of proprietary information to competitors, systemmalfunction of information technology used and compromised bidding systems – weaknessesfrom inside and outside are discussed.Kauret al. (2008) have discussed the importance of a sound information sharing policy in thecontext of collaboration in supply chains – few papers have looked at the means andmechanisms of information sharing, trust and IT in supply chain co-ordination.
This section looks at aspects related to the technologies used for implementing information security: Gunasekaran and Ngai (2004) are of the opinion that researchers and practitioners have notpaid enough attention to the design and implementation of IT systems to enable effectiveinformation sharing and reduce information security risks in SCM. Smith et al. (2008) have discussed that IT-facilitated collaboration has improved customerservice and satisfaction by enabling sharing of information for coordinated decision-makingto help achieve maximum efficiency for all supply chain partners. However, this has alsoincreased the firm’s vulnerability to a variety of IT-specific risks – such as hacking, malware, unauthorized access etc. Wadhwa et al. (2009) have proposed a Decision Information Security Model to build anetwork security management system for the supply chain with features of confidentiality, authentication and availability. Sharifnia et al. (2009) are of the opinion that requirements for secure e-Supply ChainManagement applications include but are not limited to identification and authentication, authorization, non-repudiation, integrity and privacy. They have proposed that toadequately support the needs of secure and trusted e-SCM applications, effective riskanalysis and appropriate deployment of alternate countermeasures are essential.Ajayi and Maharaj (2010) discuss that the range of e-business technologies have not onlyopened up newer opportunities in SCM, but have simultaneously increased the threat andrisk of information flows which may be transformed or modified, consequently increasing theassociated risks.
This section looks at related management aspects and also a combination of the above two categories: Knight (2003) discusses different components related to information security risks in supplychains – physical security, access control, data security, human resource security, incidentreporting and investigations, crisis management & disaster recovery. Global multi-vendorsupply chains prevalent today require greater collaboration on addressing these securityissues. Faisal et al. (2006) discuss that efficient coordination for customer satisfaction andsustaining competency across the supply chain requires complex flow of information, materials, and funds across multiple functional areas both within and among the supplychain partners. In this context, natural and man-made disasters impact managementapproaches in the context of supply chains as organizations now rely on their partnersspanning several nations and continents – hence the protection of information as part of abusiness continuity plan assumes great significance.Wadhwa and Saxena (2005) discuss how knowledge management has provided newopportunities to create and retain greater value from supply chains based on the harnessingof core business competencies. Knowledge sharing in a supply chain is an evolution overinformation sharing – hence the availability and integrity of information, which is the basisfor knowledge creation, is vital across supply chain partners.
Summary of Findings
Issues highlighted in the previous sections may be summed up as follows:
1. In sequence leak and appropriation take place in the supply chain network.
2. This information leakage and misappropriation can lead to the following:
A. order essential may override the information imperative.
B. manufactured goods and examine deliveries may not be optimal.
C. firm may lose their aggressive edge.
3. Vulnerabilities in supporting IT communications may not be adequately controlledwhich increases the risk of intrusion, data loss, reduced availability and loss of business hours.
4. Information dependability and accordingly knowledge generation may be compromised.
5. Human resource supplies in relation to information security may be overlooked.
4.2 Evaluate how the internet can be used for communication with prospective/current employees
4.3 Assess the issue of quality for an e-business
4.4 Review the development of the internet technologies on b2b industry networks and b2c markets