Lesson 3	Selecting an eBusiness model for B2B
Objective	Identify the various B2B models available

Selecting e-business Model for B2B

Establishing an e-business model helps the enterprise identify its purpose. Because it helps to identify how a business connects the activities in its value chain more cheaply or more adeptly than its competitors, it in some ways determines how efficiently the business invents or reinvents itself. An e-business model may vary in complexity, from the simplest forms that involve a business selling goods and services directly to customers, to the more complex forms that involve facilitators and brokers.

B2B Models differentiate Themselves on Three Levels

B2B models aim at 1) low-entry cost, 2) functionality, and 3) more comprehensive automation of business cycle, and differentiate themselves on three levels.

Business process: for example, supply chain management, distribution channel management and procurement
A business process is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers. It can often be visualized with a flowchart as a sequence of activities with interleaving decision points or with a Process Matrix as a sequence of activities with relevance rules based on data in the process.
Method: for example, EDI, Web-EDI, Internet. (EDI) Electronic data interchange is an electronic communication system that provides standards for exchanging data by means of any electronic means. By adhering to the same standard, two different companies in two different countries can electronically exchange documents (such as purchase orders, invoices, shipping notices). EDI has existed for more than 30 years and there are many EDI standards, some of which address the needs of specific industries or regions.
It also refers specifically to a family of standards.
Type: for example, software, implementation services and ongoing services

Merits and Limitations of B2B ecommerce

Merits of B2B E-commerce:

Expanded Market Access: B2B e-commerce potentially widens the market reach of businesses. By leveraging digital platforms, companies can access global markets more easily than through traditional channels.
Efficiency in Operations: It automates and streamlines business processes, leading to increased efficiency. This efficiency can be seen in order processing, customer service, and supply chain management.
Cost Reduction: There's a significant reduction in costs associated with marketing, customer service, and inventory management. The digital nature of e-commerce minimizes the need for physical stores and reduces paper-based processes.
Data-Driven Decision Making: E-commerce platforms can provide valuable data analytics. This data helps in understanding market trends, customer preferences, and buying patterns, aiding in more informed decision-making.
Personalization and Customer Relationship Management: B2B e-commerce platforms allow for customized experiences for business clients, which can enhance customer satisfaction and loyalty.

Limitations of B2B E-commerce:

Complex Integration with Existing Systems: Integrating e-commerce platforms with existing business systems and processes can be complex and costly, especially for businesses with legacy systems.
Security Concerns: There are significant security concerns, including data breaches and cyber-attacks. Maintaining high levels of security to protect sensitive business information is crucial but challenging.
Limited Human Interaction: The lack of personal interaction can be a downside in B2B relationships where trust and long-term partnerships are vital. This limitation can affect negotiation processes and relationship building.
Dependency on Technology: There's a heavy reliance on the technological infrastructure. Any downtime or technical issues can disrupt business operations and lead to losses.
Market Saturation and Competition: The ease of entering e-commerce has led to saturated markets in some sectors. This saturation increases competition and can pressure profit margins.

In conclusion, while B2B e-commerce offers numerous advantages such as efficiency, cost reduction, and expanded market reach, it also comes with challenges like complex integration, security concerns, and the need for a robust technological infrastructure. Businesses must carefully weigh these factors when considering their e-commerce strategies.

It pays to be Adaptable: Although the concept of business models is not new, e-business has in many ways rewritten the rules and introduced new and exciting possibilities. The same motto applies to B2B e-business models: it pays to be adaptable. With hybrids and new ideas emerging continually, it is impossible to discuss or define every possible option. We will first look at the primary B2B model, then at the more common specialized versions.
The primary B2B Model: Within the primary B2B model, there are many model variations that the architect must address. We will discuss some of the more common ones. e-business B2B models are interfaces between businesses. The models applied to B2B e-business are often similar to those used in B2C e-business, and some may apply to both. Examples include the Brokerage and Advertising models, which we will address in later lessons. Let us now look at specialized B2B models.
Specialized B2B models are required when a business is an intermediary or hub^[1].

Selecting e-business Model for B2B

B2B Models differentiate Themselves on Three Levels

Merits and Limitations of B2B ecommerce

B2B Hubs - Business to Business hubs

Examples of Vertical and Horizontal Hubs

Site Enhancements

Selecting e-business Model - Exercise