New technology architecture enlivens e-business
Service-oriented technology is gradually resolving the e-business problems of the past, according to Jason Bloomberg, senior analyst at ZapThink, a Massachusetts-based IT market intelligence firm. Business issues that helped sink the e-business marketplace in the 1990s--such as changing business environments, complex requirements and new international laws--are not cause for concern these days. Now new technology helps organizations provide a more agile, flexible approach to e-business that was not technologically available five years ago.
As Bloomberg explains it, in the old days of e-business, organizations wanting to do business-to-business (B2B) e-business had to control both ends of the data exchange. Think of the value-added networks from earlier generations using electronic data interchange (EDI). Large companies such as Wal-Mart or General Motors would basically mandate their suppliers to implement EDI. Bloomberg says that required suppliers to spend all kinds of money and time getting their software to work with the major company in that space.
"If you take a service-oriented architecture approach using Web services, then all you have to do is require others to use a common set of standards," Bloomberg relates. "These are open standards-based approaches. Now you can have multiple players participating in the marketplace situation without having to spend nearly as much money or time on software because you are able to take advantage of Web services."
The B2B e-business need
Organizations--both large and small--continue to spend millions on e-business despite the slower economy because it generates revenue, can improve customer satisfaction and boost productivity. The real goal all along for e-business--since the '90s--has been to streamline commerce. Bloomberg says that involves streamlining the overall process of doing business by moving toward new approaches to distributed computing.
"Companies are making great strides in achieving that goal of streamlined commerce as well as agile commerce," Bloomberg says. "Agility is more than doing things fast. It's also responding quickly to a changing business environment. That's something the old e-business marketplace didn't do well at all."
Organizations today have integrated e-business into core business operations--from human resources and accounting to operations and sales. Web-based e-business focuses on e-commerce, customer relationship management and others.
Certain industries are more B2B-oriented than others. Insurance, for example, sells "information" as its product. That industry is taking off with the use of Web services, service-oriented architecture, according to Bloomberg, because all the different companies--from insurance agents to whole insurance companies to large insurance vendors--have to conduct business with each other. Certain manufacturing supply chain industries, such as electronics, are also progressive in their use of business networks and exchanges.
A perfect example of what's happening with smaller organizations and e-business is Amazon.com's k development of its affiliate network. Any individual or organization can build a Web site and sell Amazon's products through the site. Amazon provides several Web services to its affiliates, such as searching for items, handling various merchandising aspects and providing information to help affiliates build their own sites. If a customer wants to make a purchase, he or she is seamlessly directed to Amazon's site for the credit card swipe. Amazon still retains the security for the commerce capability but uses its affiliate network as a merchandising tool.
"This is a great example of what small companies can do using Web services provided by a vendor of their supply chain," Bloomberg says.
eBay and PayPal are offering similar opportunities to help small businesses take advantage of e-business. eBay provides Web services that enable its "PowerSellers" to build more sophisticated offerings. One pawnshop chain, for example, doesn't have storefronts anymore but operates as an online pawnshop using eBay's commerce. PayPal, a division of eBay, also offers its customers the commerce transaction services separately. It provides the Web services toolkit to its large customers or software vendors that want to build PayPal transaction capabilities into their IT organizations.
Hot vendors in B2B e-business
Organizations such as Grand Central Communications and E2open provide a sampling of the IT organizations that are hot in the B2B marketplace for e-business.
Grand Central Communications, an integration infrastructure provider that offers services-oriented architecture for business-to-business use, is one of the few companies taking that approach. Its unusual model earned the organization several honors including the 2004 Frost & Sullivan Award for Product Differentiation Innovation.
Through Grand Central's network, multiple organizations can do business with one another without having to buy software or hardware necessary to connect them together. Businesses of all sizes can easily connect, create, share and manage business processes through the Internet between and within organizations without technology constraints. Grand Central's network offers organizations a number of benefits including reduced business operations costs, reduced investment risk, increased productivity and faster return on investment.
"The Grand Central network handles the heterogeneity and agility requirements of the multiple participants," Bloomberg says. "You could have one company that wants to use one approach to deal with purchase orders and another that wants to use something completely different. Grand Central acts as the middle man to translate the different requirements."
Eastman Chemical Company turned to Grand Central's Business Services Network to increase customer loyalty by providing differentiated services to its customers. Eastman Chemical customers now have personalized, real-time access to product technical data sheets without having to add any additional hardware or software to access Eastman's product catalog. The Web services are helping Eastman Chemical improve customer satisfaction, reduce costs and provide a competitive advantage.
E2open is another provider in the e-business space that offers a truly service-oriented approach to building online marketplaces. E2open offers multicompany process management that puts companies back in control of their inter-company processes, which provides better visibility and coordination with trading partners. IBM recently adopted E2open's B2B Integration Solution to streamline IBM's business-to-business order management processes. It expects to save an estimated 50% of the current cost required to deploy and operate its own B2B integrated order management function.
e-Business and its e-commerce sub-category are doing well, according to Bloomberg, despite the negative connotations that may still linger from the dot.com days.
"All the tourists have gone home, as we say," Bloomberg says. "Those that are left are doing real business. The technology is a lot better, and the business models are a lot better. The Internet for e-business is what the roads were for Rome. You couldn't do business without it, but once you have it, the sky's the limit."
Vicki Powers is a freelance writer of knowledge management and business-related articles, e-mail firstname.lastname@example.org.