B2B marketplace models

B2B Marketplace
A Business to Business (B2B) marketplace is an Internet marketplace where
exporters, importers, traders, brokers, manufacturers, wholesalers, retailers and
other business communities from around the world meet for buying and selling. From
meeting the customer to fixing the deals along with the payment is held online with
no physical interaction. This is the biggest advantage of a B2B marketplace. So a
B2B marketplace is a place where B2B trade is carried on. In other words, B2B
marketplaces can be described as a virtual online market where buyers, suppliers,
distributors and sellers find and exchange information, conduct trade, and
collaborate with each other via an aggregation of information portals, trading
exchanges and collaboration tools. According to studies published in early 2000, the
money volume of B2B exceeds that of e-tailing by 10 to 1. Over the next 5 years,
B2B is expected to have a compound annual growth of 41%. In early 2000, the
volume of investment in B2B by venture capitalists was reported to be accelerating
sharply although profitable B2B sites were not easy to find but now they are
comparatively within the reach of people.

There are a number of ways to differentiate B2B e-marketplaces. Four main

distinctions that can be made are:-

• According to their ownership structure

It is possible to identify three types of e-marketplaces according to their
ownership structure:
1. Third-party e-markets – E-markets which are run as a neutral
communities of many sellers and many buyers.

2. Consortia e-markets – Communities founded by a few large

participants joining forces to face their market inefficiencies

3. Private exchanges – Communities where one large player establishes

one-to-many connections to ensure in depth integration and tight
relationship with its buyers/ sellers.

• According to their industry orientation

A distinction can be drawn between horizontal and vertical services. Vertical
e-marketplaces focus on the needs of a specific industry, horizontal e-
marketplaces on processes and functions that are common to a wide range of
industries, e.g. buying Maintenance, Repair and Operation products

• According to the transaction mechanism they offer

 E.g. Catalogue aggregation, buyer aggregation, auctions and real time
exchange and collaboration platforms.

• According to the technology approach

A distinction can be made between centralized-marketplaces models
supporting many to many processes, and peer to peer technology based
electronic marketplaces which do not require a centralized server but are
based on P2P partners operating independently.

Which e-marketplace type will dominate the particular industry depends on the
industry level of concentration and the relative market power of buyers and suppliers,
as well as on the type of the product traded and the complexity of the business
processes involved in its production.

Model of B2B Commerce

Although the exploitation of Internet technologies at the business-to-business level is
in its infancy, a number of models have begun to emerge that manage transactions
between buyers and suppliers:
1. Established Buyer-Supplier Relationship
This is a pre-determined one-to-one relationship between a buyer and supplier that
is supported by electronic commerce technologies. Due to the aforementioned
limitations associated with EDI, companies have now turned their attention towards
the Internet to support these types of buyer-supplier relationships. Companies are
now pursuing a more intensive and interactive relationship with their suppliers,
impacting upon the buyer-supplier relationship in a number of areas, including the
integration of manufacturing systems and supplier involvement in new product
development. Exchanging information via extranets costs less and is more effective
than through older traditional methods such as faxes and voicemail. For example,
NEC has developed an advanced information system to carry out a large part of its
procurement activities, ranging from procurement notices to settlement on the
Internet.

2. Supplier-Oriented Marketplace
In this model, both organizations and consumers use the supplier-provided
marketplace. This is the most common type of B2B model. In this model, both
business buyers and individual consumers use the same supplier-provided
marketplace. An example of this model is RS Components (rswww.com). RS
Components is a leading distributor of electronic, electrical, and mechanical
components, instruments, and tools in Europe. The marketplace provides fast search
and retrieval of 100,000 products, combined with personalized customer promotions
based on the buying profiles of its major customers. A supplier-oriented marketplace
may also provide an auctioning facility to offload surplus inventory or offer discounts
to customers.

3. Buyer-Oriented Marketplace
Under this model, a buyer opens an electronic market on its own server and invites
potential suppliers to bid on the announced Requests for Quotation (RFQs). One
company that has successfully exploited this model is GE Lighting. The purchasing
department receives electronic requisitions from internal customers that are then
sent to potential suppliers over the Internet. Within two hours of the purchasing
department starting the process, suppliers are notified of incoming RFQs and are
given seven days to prepare bids and send them back over the extranet to GE. With
the transaction handled electronically, the procurement function has been able to
concentrate on more strategic activities rather than clerical and administration tasks.

4. Business-to-Business Intermediary
This model is sometimes referred to as a ‘hub’ or ‘exchange’. It is established by an
electronic intermediary that runs a marketplace where suppliers and buyers have a
central point to come together. These B2B hubs tend to focus mainly on non-core
items that may range from stationery and computers to catering services and travel.

There are two types of hubs:

• Vertical - focus on an industry and provide content that is specific to the
industry’s value system of buyers and suppliers. Examples include e-Steel
that acts as an intermediary between steel- makers and customers, and
VerticalNet that provides intermediaries for many industries including
electronics, process, telecommunications, and utilities.
• Horizontal - provide the same function for a variety of industries. An example
is iMark.com, which acts as an intermediary between buyers and suppliers of
used capital equipment in different industries.
An intermediary may be closed - where members and trading partners are vetted for
legal and financial probity - or open to all-comers, with the marketplace itself acting
as a trusted intermediary. It is important to note that intermediaries may be biased
towards either buyers or suppliers. Supply-side intermediaries may be run by
consortia of manufacturers such as Chemdex that acts as an intermediary for
suppliers to the life sciences industry. Similarly, buy-side intermediaries may be run
by a consortia of customers such as Covisint for car makers or by independent
organizations such as Achilles for utilities. These intermediaries may attempt to
aggregate demand for buyers in order to obtain reduced prices and more favorable
terms from suppliers. In relation to payment, some intermediaries may charge a flat
fee per transaction to both the buyer and suppliers. Alternatively, a percentage may
be charged in the case of value-added services such as auctions. In the case of
large, repetitive transactions, to achieve maximum benefit the intermediary should be
linked seamlessly to the buyer’s purchasing and the suppliers’ systems so that the
entire purchasing process can be executed electronically.
In the context of competitive advantage and the influence of the Internet,
customer/supplier lifecycle is a useful framework for understanding an organization’s
business processes, as well as those of their customers, suppliers, and competitors.
This framework provides a way of distinguishing between buying and selling
activities to better understand the interrelationships between customers and
suppliers’ business processes, and what they term ‘TouchPoints’ in the company.
A successful electronic business strategy will alter the nature of the product or
service being offered, its value in the marketplace, or the buyer-supplier relationship.

Portals

Introduction
A portal is a web site that acts as a single source for all information on a specific
domain. An effective Web portal offers the user a broad array of information,
arranged in a way that is most convenient for the user to access. When designed,
implemented and maintained correctly a web portal becomes the starting or entry
point of a web user introducing him into various information, resources and other
sites in the internet. It has the power to draw together a common group of people,
common on the basis of their age, profession, location etc.

Web portals are browser-based applications that enable activities including

connecting business processes within the business and across the supply chain by
unifying access to structured and unstructured data, integrating applications to
support the business processes as well as providing access to real-time, current and
consistent information. Popular Portals are Yahoo, MSN etc.

Portal Framework
The portal framework is the portion of WebLogic Portal that is responsible for the
rendering and customization of the portal.
The portal framework turns a portal that you develop in workshop for WebLogic into
the HTML page that desktop visitor see in a browser. When you are familiar with the
portal framework tools provided in the WebLogic portal, you can look at a rendered
portal in a browser and understand which pieces of the underlying framework you
need to modify to obtain the results you want.

Portal Development and the Portal Life Cycle

The creation and management of a portal flows through a portal life cycle. The portal
life cycle has 4 phases:
• Architecture
• Development
• Staging
• Production
The tasks described in this guide are organised according to the portal life cycle,
which includes best practices and sequences for creating and updating portal.

Architecture
During the architecture phase, the design and planning of the configuration of the
portal is done. For example, we can create a detailed specification outlining the
requirements for our portal, the specific portlets we require, where those portlets will
be hosted, and how they will communicate and interact with one another. We might
also consider the deployment strategy for the portal. Security is also one of the major
consideration.

Development
Developers use workshop to create portals, portlets, pages and books. During the
development, we can implement data transfer and interportlet communication
strategies and consider the security of the components.
In the development stage, careful attention to best practices is crucial. Wherever
possible, this guide includes descriptions and instructions for adhering to these best
practices.
The development phase includes:
 Understanding portal development
 Setting up your portal development environment
 User Interface Development with look and feel features
 Visitor tools configuration
 Designing portals for optimal performance

Staging
In this stating environment, we use the WebLogic Portal administration console to
assemble and configure desktops. In the testing aspect of the staging phase, there is
tight iteration between staging and development until the application is ready to be
released.
The staging phase includes
 Managing Portal Desktops
 Deploying portals to Production

Production
A production portal is live and available to the end users. A portal in production can
be modified by administrators using the WebLogic portal administration console and
by user using Visitor Tools. For instance, an administrator might add additional
portlets to a portal or reconfigure tj=he contents of the portal.

Development of Portals
In the late 1990s the web portal was a hot commodity. After the proliferation of web
browsers in the mid-1990s many companies tried to build or acquire a portal, to have
a piece of the Internet market. The web portal gained special attention because it
was, for many users, the starting point of their web browser. Netscape became a
part of America Online, the Walt Disney Company launched Go.com, and Excite and
@Home became a part of AT&T during the late 1990s. Lycos was said to be a good
target for other media companies such as CBS.
Many of the portals started initially as either web directories (notably Yahoo!) or
search engines (Excite, Lycos, AltaVista, infoseek, Hotbot were among the earliest).
Expanding services was a strategy to secure the user-base and lengthen the time a
user stayed on the portal. Services which require user registration such as free
email, customization features, and chatrooms were considered to enhance repeat
use of the portal. Game, chat, email, news, and other services also tend to make
users stay longer, thereby increasing the advertising revenue.
The portal craze, with "old media" companies racing to outbid each other for Internet
properties, died down with the dot-com flameout in 2000 and 2001. Disney pulled the
plug on Go.com, Excite went bankrupt and its remains were sold to iWon.com. Some
portal sites such as Yahoo! and those others first listed in this article remain
successful

Types of Portals

Two broad categorizations of portals are horizontal portals, which cover many
areas, and vertical portals, which are focused on one functional area.

Vertical Portals (Vortals)

These are web portals which focus only on one specific industry, domain or vertical.
Vertical portals or vortals simply provide tools, information, articles, research and
statistics on the specific industry or vertical. As the web has become a standard tool
for business vortals provide an ideal gateway for businesses to market their products
& services and to gain exposure within their vertical by developing and using vortals.
Classic examples of vertical portals are cnet.com which focuses only on computer
and related issues, mp3.com only on mp3 audio etc. Most of the times, vertical
portals offer information and services customized to niche audiences about a
particular area of interest. Vertical industry portals, known as vortals, are sites that
provide a gateway to information related to a particular industry, such as, insurance,
automobiles, etc.

There are innumerable possibilities for establishing special vertical portals on the
market. The numerous solutions can be divided into 2 major groups that partially
overlap:

1.Corporate Portals:
provide personalized access to selected information of a specific company

2.Commerce Portals:
support business-to-business and business-to-consumer e-commerce

• Personal portals
A personal portal is a site on the World Wide Web that typically provides
personalized capabilities to its visitors, providing a pathway to other content. It
is designed to use distributed applications, different numbers and types of
middleware and hardware to provide services from a number of different
sources. In addition, business portals are designed to share collaboration in
workplaces. A further business-driven requirement of portals is that the
content be able to work on multiple platforms such as personal computers,
personal digital assistants (PDAs), and cell phones/mobile phones.

• B2B portals
 They have become a very important resource for Global business. They
provide buyer and seller details for different commodities and products and
help in connecting businesses across the globe.

• Regional Web Portals

Along with the development and success of international personal portals
such as Yahoo!, regional variants have also sprung up. Some regional portals
contain local information such as weather forecasts, street maps and local
business information. Another notable expansion over the past couple of
years is the move into formerly unthinkable markets.
"Local content - global reach" portals have emerged not only from countries
like Korea (Naver), India (Rediff), China (Sina.com), Romania, Greece (in.gr)
and Italy, but in countries like Vietnam where they are very important for
learning how to apply e-commerce, e-government, etc. Such portals reach out
to the widespread diaspora across the world.

• Government portals
At the end of the dot-com boom in the 1990s, many governments had already
committed to creating portal sites for their citizens. In the United States the
main portal is USA.gov in English and GobiernoUSA.gov in Spanish in
addition to portals developed for specific audiences such as DisabilityInfo.gov;
in the United Kingdom the main portals are Directgov (for citizens) and
businesslink.gov.uk (for businesses).
The official web portal of the European Union is Europa (web portal). Europa
links to all EU agencies and institutions in addition to press releases and
audiovisual content from press conferences.
All relevant health topics from across Europe are gathered in the Health-EU
portal.

• Corporate web portals

Corporate intranets became common during the 1990s. As intranets grew in
size and complexity, webmasters were faced with increasing content and user
management challenges. A consolidated view of company information was
judged insufficient; users wanted personalization and customization.
Webmasters, if skilled enough, were able to offer some capabilities, but for
the most part ended up driving users away from using the intranet.
Many companies began to offer tools to help webmasters manage their data,
applications and information more easily, and through personalized views.
Portal solutions can also include workflow management, collaboration
between work groups, and policy-managed content publication. Most can
allow internal and external access to specific corporate information using
secure authentication or single sign-on.
JSR168 Standards emerged around 2001. Java Specification Request (JSR)
168 standards allow the interoperability of portlets across different portal
platforms. These standards allow portal developers, administrators and
consumers to integrate standards-based portals and portlets across a variety
of vendor solutions.
 The concept of content aggregation seems to still gain momentum and portal
solution will likely continue to evolve significantly over the next few years. The
Gartner Group predicts generation 8 portals to expand on the Business
Mashups concept of delivering a variety of information, tools, applications and
access points through a single mechanism.[citation needed]
With the increase in user generated content, disparate data silos, and file
formats, information architects and taxonomist will be required to allow users
the ability to tag (classify) the data. This will ultimately cause a ripple effect
where users will also be generating ad hoc navigation and information flows.

• Hosted Web portals

As corporate portals gained popularity a number of companies began offering
them as a hosted service. The hosted portal market fundamentally changed
the composition of portals. In many ways they served simply as a tool for
publishing information instead of the loftier goals of integrating legacy
applications or presenting correlated data from distributed databases. The
early hosted portal companies such as Hyperoffice.com or the now defunct
InternetPortal.com focused on collaboration and scheduling in addition to the
distribution of corporate data. As hosted web portals have risen in popularity
their feature set has grown to include hosted databases, document
management, email, discussion forums and more. Hosted portals
automatically personalize the content generated from their modules to provide
a personalized experience to their users. In this regard they have remained
true to the original goals of the earlier corporate web portals.

Domain-specific portals
A number of portals have come about that are specific to the particular
domain, offering access to related companies and services, a prime example
of this trend would be the growth in property portals that give access to
services such as estate agents, removal firm, and solicitors that offer
conveyancing.Along the same lines, industry-specific news and information
portals have appeared.

Sports portals
Web portals have also expanded into the professional sports market. Fans of
sports teams create a Sportal (sports portal), which brings all information
about a professional sports team to one web portal.

What is a B2B portal?

A portal is defined as an access point to World Wide Web. A portal is a combination
of web pages, features and services which become a primary destination for users.
The word was first used to describe the sites of popular Internet access providers or
search engines such as AOL, MSN and Yahoo! At a later stage, the word "portal"
evolved into something bigger covering business websites, where a corporate portal
or enterprise information portal acts as a base for employees, customers, suppliers
and other associates of a company to access corporate information and web
services. A B2B portal is a distinct kind of website with features to conduct electronic
business and manage significant parts of corporate business processes.
Main components of B2B portal
Supply Chain Management Supply chain management solutions can deliver great
values to company's existing systems. Implementation of these solutions will help
achieving incredibly high return on investment and will have tremendous impact on
company's business, which include: better productivity, faster order processing,
greater visibility, the elimination of maverick or unplanned purchasing, etc.

Marketplace This is the venue where the enterprises can post their products for sale.
A sophisticated shopping cart will be integrated into the electronic marketplace in
order to automate the buying process.
Auction Electronic auction system can use both English and Dutch auction methods.
For convenience the auction component can be integrated into the electronic
marketplace. Online auction helps liquidate surplus goods easily.
Reverse Auction This solution allows the company to automate electronic
procurement, where suppliers compete for business real time online.
Storefront for Participants Each associate of the B2B portal will get a Storefront that
may reflect profile of the company, its products, services or other information.
Forum A Forum or a Discussion Board is an organized, on-line interactive message
board where participants conduct discussion on a set of topics by posting questions,
comments and responses.
Internal Messaging System Elaborate Messaging System allows a participant of the
B2B portal send and receive messages from other participants and the company.
Since the messages do not leave a secured server, participants would not be
worried about sending sensitive information over the Internet.
Classified Catalog based bulletin board allows company associates to post important
notices in various predefined formats.
Directory of Companies This is a listing of all registered associates of the B2B portal
either by business category or by alphabetical order. An advanced search engine
tool is incorporated in order to find a company based on data provided.
E-catalog E-catalog - a hierarchy of product and service categories based on
UNSPCS, a global products and services classification method that covers the
broadest collection of industries and commodities available today, and designed to
facilitate e-commerce transactions by providing geography-independent common
nomenclature system.
Product Content Adding System Product adding mechanism based on either easy-
to-use wizard or simple but detail forms allows users to integrate products or
services with accurate and up-to-date information.
Product Notification The system can generate an alert and send by email to a user,
who requested to inform once a particular product or service gets added to the E-
catalog.
Numerous other features could be incorporated to an existing B2B portal depending
on requirement, such as: News Aggregation using RSS feed, Contact Management,
Electronic Journal, Press Room, Document Repository, etc.

Benefits
Today, B2B portals are not just a fancy idea! They are an absolute necessity for all
enterprises of any type and size. The advantages of having a quality B2B portal are
massive. Implementation of a true high quality B2B portal could have immediate
impact on company productivity.
Revenue Growth
Revenue Increase from Existing Clients Existing clients get faster and easier access
to product information, quicker response to their requests, get better customer
support and are able to buy products online. Revenue Increase from Value Added
Services Once a B2B portal is set as the primary sales channel, spared resources
can be used to create more value added services for clients. Some of the services
that the portal may offer also could be utilized to generate more value.

Cost Savings
• Order Processing Cost
If the B2B portal integrates supply chain management solution, it will reduce
the cost of processing orders drastically. Studies show that similar solution
can reduce cost of processing a purchase order from US$ 70 down in
average to US$ 6 only.

• Sales and support costs

Automated sales and customer support features integrated in the in the
solution is capable of reducing overhead costs up to 30 percent.

• Inventory keeping costs

Clearer visibility and forecasting ability thanks to various features of the B2B
portal may help companies considerably reduce inventory keeping costs.

Other key benefits include:

Low customer acquisition cost Effective portal branding on the Internet will help to
attract customers from new sources. The cost of acquiring customers through online
channels is always cheaper than other traditional methods.
Improve customer service Ability to have constant interaction with customers through
the B2B portal helps companies serve customers better. The B2B portal solution
allows tracking the whole ordering process from payment to delivery and brings
greater efficiency in customer service. or directly buy products using the shopping
cart Reduce sourcing time cycle The customers can select products from the
integrated marketplace of the B2B portal and either sends purchase orders or
directly buy products using the shopping cart. Buyers handle all their procurement
related correspondence from a consolidated working page, which helps them react
instantly and reduce time in document processing.
Community participation Company buyers and sellers can create communities
surrounding the B2B portal's discussion board. This helps getting valuable
feedbacks on time, building new partnerships using the networking ability of a
community, and disseminating important information to members easily.
Real time access to current product information Current information of a product is
vital for an accurate buying decision. Updating product content and other information
using customized forms as it is necessary, the company can help buyers and other
associates to take critical decision promptly.
Control rogue spending Consolidated and automated procurement and approval
method stops maverick buying in a company.