Unit 31 E-Business Operations

Introduction

Aim

This Unit 31 E-Business Operations provides learners with an understanding of e-business operations so they can develop the skill to use internet and electronic processes for supply chain activities and other business applications.

Unit abstract

The purpose of this unit is to develop learner understanding and skills in the complex processes and transactions which support e-business operations. An e business infrastructure comprises a large number of business processes that are exposed through web and electronic services. E-business operations concern how technologies are used to manage the procurement of products/services, supply and transport, handling of goods and the fulfilment function. This area of study is subject to rapid rates of change with an immense array of continually developing technology converging and impacting on how e-businesses operate. The unit considers the difference in transactions between business and consumers (b2c) and business to business (b2b), which is necessary in order to understand required operations. It then looks at Electronic Data Interchange (EDI) which has been instrumental in the development of e-business over the internet, electronic marketplaces, networks and instruments for the electronic transfer of funds and payment systems. E-business operations processes can be implemented through an entire industry supply chain linking suppliers with manufacturers, assemblers, distributors and customers. This interactive relationship between customers and suppliers has many benefits and learners will need to analyse the supply chain and its components. Other essential topics in the study of this area include quality, trust and security, the use of the internet for recruitment and the development of internet communities.

Learning outcomes

1 Understand how business and consumer purchase transactions differ

• The purchase process: b2c (business to consumer) purchasing transactions – information search (e.g. via search engines), comparisons and evaluation of alternatives, purchase decision and purchase sequences e.g. input of data, credit card information, post-purchase communications; b2b (business to business) buying transactions – problem recognition, requisition, supplier search (e.g. via Virtual Private Network), review of quotations, negotiate contract, place purchase order, delivery, goods receiving, quality check, receive invoice, buyer approves payment, payment authorised by accounts and payment made via e.g. Electronic Fund Transfer (EFT)
• Activities of professional buyers: contracts between buyer and supplier organisations; high proportion of business costs; large budgets; negotiation of contract includes products and services, quantities, delivery dates, prices and payment terms
• Variables in purchasing: items purchased (services, supplies); high/low value items; lead times; wide range of items; different types of purchase; MRO items (maintenance, repair and operating supplies); strategic materials and capital equipment purchases; risk and perceived risk; the concept of e-procurement.

2 Understand EDI and electronic transactions

• Electronic transactions: electronic architecture to include hardware and software for functions including websites, web server farms, middleware, applications servers and business processes execution platforms; comparison of paper-based transactions with electronic transactions; benefits of electronic transactions including simplification, saves time, reduces costs and delays; need to keep records (transaction logs)
• Electronic Data Interchange (EDI): definitions and applications; EDI technology; standardisation and EDI; VAN (value added network); services of VAN; benefits of using a VAN; growth of WebEDI e.g. XML extranets, AS2; EDI outsourcing providers; advantages and limitations of EDI
• Electronic Payment Systems: definition; type of payment systems; online payment systems; pre-paid e-payment system; post-paid e-payment system; electronic fund transfer system; digital token; digital wallets; e-cash; mobile payment; smart card; credit card and emerging financial instruments; Payment Service Providers (PSP) e.g. Paypal, Worldpay; Electronic Bill Presentment and Payment (EBPP); Models of EBPP e.g. consolidation, biller direct, direct email delivery; requirement metrics of a payment system.

3 Be able to demonstrate the benefits of electronic transactions to supply chain management

• Components of supply chain management: order processing; e-procurement of products/services; logistics including supply and transport; handling of goods and the fulfilment function; scope of cooperation between firms in the supply chain includes e.g. product development, forecasting and planning, production, transportation and logistics
• E-procurement: buyers or sellers may specify costs or invite bids; types of eprocurement; web-based ERP (Enterprise Resource Planning); e-MRO (Maintenance, Repair and Overhaul); e-sourcing; e-tendering; web auctions; ereverse auctioning or e-auction; e-informing; e-marketsites
• Logistics services and international trade: role of logistics services; use of internet to communicate information (availability, delivery, invoices); the flow of demand information to back up the supply chain; Tracking and Radio Frequency Identification (RFID); return mechanisms; perishable items; timed deliveries; additional information needed to support international trade; use of the internet (forwarding, customs, transport and shipping, bills-of-lading or airway-bills and payment)
• Evaluate the benefits of electronic processes in the integration of supply chain management: benefits e.g. volume discounts, automation of transactions, reduction in overheads, improve manufacturing cycles, cost reductions, lowering transaction costs, just-in-time deliveries, increased efficiencies, responsive supply chains
• Trends in supply chain management:supply chain integration including order management; E-procurement integrated into Purchase-to-Pay (P2P) value chain; SCM 2.0

4 Understand issues in e-business including quality, recruitment and security

• Quality control in e-business operations: importance of correct data and identify quality degradations as well as their causes; web analytics; how businesses define qualitative and quantitative metrics based on e.g. data on purchase orders; total quality management (TQM); certification e.g., ISO 9000
• Trust and security: secure systems for business on the internet; security policy; procedures and practices; transaction security; impacts of delays and deferrals on trust between organisations; certification authority; cryptology; digital signatures; security protocols
• Recruitment and employee communication: advertising vacancies on the internet; process online application forms; services offered by recruitment agencies; career planning; job searches; preparing CVs; newsgroups; networking sites e.g. LinkedIn; head hunting; use of intranet and extranet by organisations to communicate with employees; internal vacancies; policies; procedures; newsletters; staff development; knowledge management and transfer, e-learning e.g. Riverdeep.
• Industry networks, portals and industry trends: b2b; b2c; the concept of web-communities; development of industry networks either through extranets or portals for research reports; new product developments; knowledge dissemination; industry trends; trading marketplaces; vertical portals or vortals; innovations include cloud computing, Service Oriented Architecture (SOA) e.g. travel search sites; Service as a Software (SaaS) e.g. Gmail, digital supply chain for media delivery; mash ups of converging technologies; Web 2.0, social network sites, blogging, file sharing sites e.g. YouTube, increasing use of broadband, wireless and mobile technologies, smart phones and iphone applications.

Resources

Essential requirements

There must be access to the web in class to illustrate the required topics. Tutors must build a bank of resource materials to ensure there is a sufficient supply of relevant information across a range of elements of the supply chain. Texts must be supported by website examples and case studies. For part-time learners working in business, their work experience must be used in comparing the approaches adopted.