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The Virtual Association Platform (VAP) can be described as a computer-based IO information system supporting what we can refer to as the association as a whole (the association as an independent organization and the set of the members of the organization). Such a system should integrate the functionalities typical of a variety of software packages (between the others: the ones cited above) and provide an electronic front office easily accessible to all the actors connected to a business association, and mainly the association’s members.
Generally speaking, the association as a whole should not involve only intraassociative relationships, i.e., relations between subjects mostly belonging to an environment of a same association (association to members; members to members). In fact, a VAP limited to intra-organizational relations would miss managing the large amount of extra-association relations that could be even more important for the association’s members. Therefore, the technological platform of the VAP should be suitable to interact with other ICT solutions both inside and outside the environment of the association, such as:
Figure 2: The VAP and the relationships it should be able to support
Other electronic solutions for procurement (e-marketplaces, e-procurements, etc.) to buy or supply strategic or nonstrategic goods and services outside the environment of the association
B2C e-commerce sites of members of the association and e-malls to which a member may take part
ERP systems of members and members’ partners
The development of a VAP is subject to the definition of a general reference model of a VAP. The VAP model should meet the specific requirements of IO relationships with which a business association has to deal.
Using the business association’s functions and activities (described in the section entitled “Business association activities”), it is possible to identify the most relevant actors involved, or, in other words, the actors engaging in relationships with the association’s members or directly with the association (Table 2).
Coordination and regulation
Representation of interests
Association, Members, Government (Local and National), Financial Institutions, Suppliers, Customers, Consumers
Provision of services
Association, Members, Government (Local and National), Financial Institutions, Suppliers, Customers, Consumers, Other Associations
Obviously, the fundamental role is played by the association’s members, who can be part of different supply chains or of the same one (and, in this case, each member can play at a different level of the supply chain, as supplier or competitor or customer of another member).
Besides them, a number of organizations not belonging to the association interact with it in various ways. Local and national governments impose constraints as well as generate business opportunities for the association’s members. Financial institutions are vital for those members whose investment capabilities cannot be sustained only by internal funding.
Moreover, it seems relevant to put into evidence other suppliers and customers (business customers and consumers) who do not belong to the business association. In fact, relationships engaged by members with these actors are not characterized by the same level of trust and sharing of interests of intraassociation relationships, but are essentially based on goods and financial transactions.
Finally, a business association can find it efficient or even strategic to sign a partnership agreement with another association, in order to share (or to sell) the services it provides to its own members with the members of the other association.
For the aims of this chapter, it is necessary to analyze the eventual relationships that could occur between each couple of the actors identified. The easiest way to represent such relationships is to draw a table in which these actors represent the headings of both rows and columns and to study if each cell is meaningful, i.e., if the corresponding relationship occurs.
Table 3 shows the framework of such a table—cells shaded gray represent relationships that do not occur in an association’s environment; the other cells represent activities involving IO processes, thus an interaction between two different actors, dealing with the activities of a business association. In particular:
Table 3: The framework of the relationships occurring between the actors identified
White highlights those cells representing relationships where the association plays an intermediary in the relationship between members and other actors.
Gray highlights those cells representing relationships where the association acts as the provider (or the addressee) of services and information to (or from) other actors.
The description of the association’s functions and activities leads to include in the framework all the interactions between the members and all the actors and vice versa (first row and first column of Table 3) and the interactions between the association and all the actors (second row of Table 3).
The particular role played by the government (third row of Table 3) deserves clarification. In fact, the government engages in relations with the members of an association, playing different roles:
As a customer of products sold by members
As a supplier of financial support to members
As an institution defining rules on transactions
Generally, the government (Administration, Education, Health, etc.) represents a set of actors that influences the characteristics of the environment in which members are located, thus it influences the way members engage in relationships with their customers and suppliers. For instance, Administration laws (at the local as well as the national levels) impose constraints on transactions; likewise, the Education system of the territory where members are located characterizes the overall infrastructure in which the members operate. In this sense, the government has an indirect relation with any actor dealing with the association’s members. Once the actual IO relationships are defined, this general framework enables the identification of the most typical IO information flows, and finally allows for the description of the requirements of the VAP model.
As mentioned above, a complete framework should take into account not only buying and selling activities, but also the infrastructural ones (such as company promotion, human resources management, knowledge management). These activities, even though not directly related to supply-chain management and financial transactions, contribute to the building of and enforcement of IO links. Coherently with this subdivision, information flows pertaining to each relation identified by a valid cell should be specified as follows:
Directly related to product/money flows: Those supporting procurement or commerce or supply-chain management activities)
Not directly related to product/money flows: Those supporting visibility of a company or cooperation between companies
Remarkably, the scheme does not examine in detail the quality of the service provided through information flows, and therefore, it does not distinguish relationships according, for example, to the timing or the degree of detail or the type (e.g., marketing information rather than technical specification of products) of the information exchanged across the relations. In fact, the VAP model aims at providing a descriptive rather than a prescriptive framework that should be specified according to the characteristics of a business association. Moreover, even though not explicit in the framework, community management activities should be considered to be embedded in the association’s role, thus supported by the VAP.
Table 4 shows the framework of the relationships and the corresponding information flows. Association’s members exchange the largest part of information that the VAP supports because of their direct relationship with all the actors determined. Members should be provided with all means to interact through the VAP both directly and indirectly on products and money flows, exploiting the potential of being at the same time into an electronic marketplace, a community hub, a communication platform (with financial institutions and governments), and a marketing/support tool (with customer and suppliers). When dealing with transactions of goods and services, the information exchanged would be that of a typical business transaction. The proposed framework adopts a general notion of transaction and related information requirements. Depending on the characteristics and heterogeneity of business association’s members, the VAP should support different information flows accordingly.
Table 4: The framework of the relationships and the corresponding information exchanged
Considering the relationships between members of the association, the VAP should support all the information flows characteristic of an electronic marketplace, thus supporting members in performing procurement and selling activities
(i.e., stock availabilities, possible overstocks, and product catalogs). One of the distinctive aspects of interactions in an associative environment is the exchange of general and competitive context-related information (know-how or how to on specific activities, information on external agents, information on foreseeable customers and suppliers or employees of associates’ firms). Other interactions could concern information for the coordination of joint competitive strategies or business opportunities.
The association operates at a higher level than the other actors, providing intermediation services (thus, in this context, “infomediation”) other than being an aggregator of members’ instances. If members would provide the association with timely information on range and availability of their products, then the association could propose an aggregated offer by composing the offers of different members.
A second category of information exchanged between members and the association relates to requests of services provisioning. Differently, the association could act as a hub and thus aggregate possible instances from members. The collected information could then be used by the association in order to drive its actions for the creation of new supporting services. Moreover, the collected instances could require associations to leverage on their representative power and pursue lobby activities on specified institutions.
The interaction between members and government is not direct but is mediated by the association (and the VAP). In this context, it is possible for the association to provide support to members replying to government’s calls for bid.
A simpler approach would consist of using the VAP to enhance government procurement activities. Finally, the VAP could be used to support, in the interaction between business and government, the information exchanges required to fulfill fiscal or “bureaucratic” obligations.
Generally speaking, financial institutions act as service providers for business associations supporting members’ transactions. At the same time, it is common for business associations to have strong relationships with selected financial institutions and banks. These preferred partners could grant members better terms and conditions in force of an agreement with the business association.
Members could use the VAP to support the information exchange with the financial institutions and share or transfer, for example, financial figures, balance sheets, or business plans.
The typical information flows between members and not-member suppliers involve procurement activities: because such suppliers are not-members, their transactions should take place outside the boundaries of the association. Even in this case, the VAP could come to aid by allowing nonmembers to have restricted access to specific types of information related to members. Through the VAP, members could provide:
To their supplier of goods, information useful for effective supply-chain management (data on material flows, material needs and availability, etc.)
To their supplier of services, information required for the service provision, such as names of the employee for wages and salaries processing, or the mailing list for a mailing campaign; it should be noted that whenever in the presence of a well-established relationship, the association and the not- member supplier could find it helpful to agree on a common data inter- change standard, e.g., making use of XML templates
The application domain is similar to the one described above for not-members suppliers. Specifically, the VAP can act as a portal, offering all the services needed to engage a prospective customer. It is typical for a portal to require registration before starting the true transaction, and thus, the VAP should provide just an informative service or those services that the association decided to make publicly available.
The only difference with the case of the B2B transaction with not-members is the subject interacting with the VAP: an individual or consumer instead of a business. The implications on the VAP deal with the services offered that should be tailored to suit consumer’s needs. In fact, B2B versus B2C sales management activities can differ substantially. The association should consider carefully the market or markets in which it intends to operate and design the VAP accordingly.
The interaction between the association and its members is fundamental to strengthen the relationships among them and to improve commitment and trust. The typical coordination role of business associations could be played to enhance the transfer of information to members via the VAP. In particular, the VAP could keep companies updated with aggregated figures regarding cumulative production and prices of a sector or local area. This information could allow companies to pursue price control strategies.
The most typical communication from the association to its members is related to the provision of general information services. However, many associations have recognized the strategic relevance of the provision of educational services, through which they can improve the average competitiveness of their members by developing their competences as well as by propagating information on an industrial standard that could possibly influence industry efficiency. As a consequence, training activities sponsored and managed by associations are becoming increasingly popular. In this case, the VAP might be employed as a platform supporting e-learning activities.
Very often, business associations interact continuously with other institutions that aggregate companies (such as other associations geographically localized, associations in the same value chain or synergic interests, chambers of commerce, etc.). These relationships can sometimes be formalized and enforced by a signed agreement based on the reciprocal provision of services to members. The VAP could facilitate the coordination and the reach of such services to the entire set of members of the associations involved.
The information exchanged from the association to government concerns member’s activities and interests. This case is similar to the one discussed above (association to association), in fact, associations compose their members’ interests and deal with governmental institutions, such as local governments or public administrations. In such a position, associations can act as brokers of members’ requests and lobby government. The VAP could help with these tasks by simplifying the collecting and aggregating of members’ instances.
It is well known how SMEs, which represent by far the majority of members of a BA, experience obstacles in gaining access to funding from financial institutions. One of the reasons is the lack of information (and subsequently, lack of trust) about firms’ activities and expected results, which are essential to determine the risk level of any investment. In its role of members’ representative, the BA is in the position to act as an intermediary and negotiator by providing and granting financial institutions the necessary exchange of information concerning members’ activities, and finally, negotiating credit facilities for its members. In this sense, the VAP could prove another effective application.
Whenever banks or insurance companies belong to the BA, as the financial system is double tied with the interests of the local community, this information exchange is obviously made even more effective.
Association to not-members suppliers
When dealing with not-members suppliers, the BA plays the typical role of a broker. VAP can collect orders from members, aggregate them, and act as a purchasing group in order to achieve better conditions from the not-members suppliers.
Moreover, in this case, BA could play an informative role by promoting and informing suppliers on members’ activities and products.
Association to not-members customers (B2B relationship)
The relationship occurring between the association and the not-members’ customers is symmetrical to the one with not-members. Associations can aggregate members’ offers for prospecting suppliers, increasing the reach of the single company or raising their contractual powers. This aggregation allows the acquisition of new customers by enhancing the ability to enter new markets or to generate larger orders of supplies.
Eventually, the association might pursue promotion and lobbying also among these actors.
In this type of relationship, the BA can help members through the VAP by promoting on the Web their brand or even their specific products. In some context, the VAP could also feature order management features and could be used as a direct distribution channel.
The relationship between government and members is characterized by size. First, the VAP could propagate updated information on the legal framework, on activities, and eventually on the services offered. Moreover, assuming that local laws would admit it, governmental institutions could place and manage directly through the VAP their tenders and the possibly following procurement activities.
Government to other actors
Through the VAP, government can promote its activities among citizens and companies and propagate information on the legal framework and on local laws.
If a government institution subscribes to the VAP, it would gain access to the same set of functionalities of BA members, and therefore, it could use the VAP as a channel through which to distribute information related to its activities.
We assume that financial institutions are involved in two main information flows. The first concerns information on transactions completed by members; the second flow concerns the possible promotional communications on products and services offered.
The first flow contains Internet banking and the information that originates from the management of online payments made by customers on members’ sites.
The second flow could be seen as an alternative form of unsolicited advertisement, so the association should carefully consider the option to support this activity.
In order to support these information flows, the VAP should allow suppliers to provide members with updated information on the supply chain. Remarkably, this function could operate only under two conditions: first, the absence of a generally accepted standard for information exchange on the supply chain; second, before exchanging supply chain information, the BA should require the not-member to subscribe or associate.
Besides, the VAP could be used as a distribution channel of information, news, and software by not-members companies characterized by information intensive services (e.g., consulting companies).
Finally, as above, the VAP could allow not-members suppliers to advertise their products, after having taken into consideration the possible outcomes.
Not-members customers and consumers to members
The information exchange between not-members customers and members is generally part of a transaction: customers provide information to members when requesting the pricing or information on terms and conditions of the sale or when filling in all the forms for completing a transaction. Information flows not directly related to products and services are generally linked to pre- and post-sales support.
The next section provides a case example of a VAP from design to deployment.
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