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. Figure 25.1 shows three of the roles (Web services live within and between the three others)^[1].

Figure 25.1: Roles in B2B e-commerce.

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 marketplaces.

Buyers: Customers and businesses that purchase goods and services directly from suppliers, either through traditional means or electronically through self-service procurement systems, ERP-based procurement applications, and electronic marketplaces (private or public). Examples of buy-side applications include those from vendors such as SAP, Ariba, Clarus, PeopleSoft, Commerce One, Oracle, and many others.

Market makers: Third-party organizations that run e-marketplaces using Internet technologies to connect multiple buyers with multiple suppliers so that participants can reach new trading partners, conduct e-commerce, and take advantage of Web services such as payment, logistics, and collaboration.

Web service providers: Third-party organizations that provide buyers, e-marketplaces, and suppliers with Web-based services (including payment, authentication, logistics, credit, business registries, and many others) necessary for completing B2B e-commerce transactions and collaboration^[1].

Each role has distinct business and technical challenges, but there are some common themes. For buyers, market makers, and Web service providers, the primary issue is liquidity. Success depends on the ability to reach the critical mass of trading partners and transaction volume necessary to provide sufficient return on investment and create a viable, sustainable business.

Suppliers face the difficult challenges of maintaining the ability to sell effectively to all their customers, both in traditional channels and through emerging e-commerce channels, while finding a way to differentiate themselves from the competition in those new electronic environments.

As a result, although it has been relatively easy to convince buyers and market makers of the value of B2B e-commerce, suppliers have been much slower to come around. And, without a critical mass of suppliers, the savings from procurement systems can’t be maximized and the liquidity that e-marketplaces require will be impossible to achieve.

^[1]“Empowering Suppliers for Integrated Business-to-Business E-Commerce,” 2002 Microsoft Corporation. All rights reserved. Microsoft Corporation, One Microsoft Way, Redmond, WA 98052-6399, USA, 01100, 2003.