B2B transaction is an e-commerce business between two businesses/companies such as manufacturers and suppliers or wholesalers. This is the type of e-commerce which takes care of relationships among businesses. This type of e-commerce is now
recognized as the E-commerce segment with major /the biggest potential. The B2B market has two primary components: e-frastructure and e-markets. E-frastructure is the architecture of B2B, primarily consisting of the following:
Dell provides business to business (B2B) transactions which helps to low procurement costs of an organization. Within a B2B transaction, you can shop online from within your Enterprise Resource Planning (ERP) “procurement” application and return the contents of your shopping session back to your ERP system electronically. No longer are you required to enter duplicate information in order to purchase. The electronic requisition can now be routed through your standard ERP workflow where it can be approved electronically. Once this electronic requisition is approved, it can become an electronic purchase order and be transmitted instantly to Dell. These orders flow directly into Dell’s manufacturing system where your orders are built immediately, saving you hours or days in processing time. This brings you the latest technology at the quickest pace.
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Dell defines B2B Integration as server-to-server communication over the Internet integrating both systems and business processes to dramatically transform the way we conduct business with our partners, suppliers, and customers. By electronically integrating these processes, we not only benefit in process efficiency and information accuracy, we also increase our ability to respond and interact with each member of a business relationship.
Dell’s has two objectives with its B2B integration initiative:
To quickly integrate with customers who are capable today
To help customers build a B2B solution for rapid deployment and connectivity
Dell has built a solution that extends its existing Internet infrastructure and E-Commerce capability to easily integrate with any customer who supports open, industry document standards of XML (such as cXML based on Ariba, xCBL based on Commerce One) and EDI. This allows Dell to provide the same customized catalog most customers use today with Premier Pages, and integrate this dynamic commerce functionality into their internal procurement systems.
If a customer is not currently capable of integrating their procurement systems and processes with their suppliers, Dell can provide the necessary hardware, software, and consultation to help build and deploy a solution that not only connects the customer to Dell, but one that can to connect to even other suppliers or customers.
- Better align Dell with customer procurement processes
- Ease the purchasing process and reduce errors by eliminating duplicate data entry
- Reduce costs for clients by eliminating paper purchase order/fax processes
- Reduce customer cycle times for ordering approval and payment
- Process controls for shoppers versus buyers
Business-to-consumer (B2C, sometimes also called Business-to-Customer) transaction is when businesses such as companies and retailers serve their products and services to individual consumers directly. This transaction can be done online by consumers using shopping carts in the website.
It is the earliest form of electronic commerce and the largest after B2B transaction form. By enhancing customer access to information and make it easier to customers to find a competitive and economical price for some products and services, B2C can decrease transactions costs.
Moreover, constructing and maintaining a website costs much less than installing a “brick-and-mortar” structure for a firm; therefore, B2C e-commerce also reduces market entry obstructions.
Its origins can be traced to online retailing (or e-tailing).13 Thus, the more common B2C business models are the online retailing companies such as Amazon.com, Drugstore.com, Beyond.com, Barnes and Noble and ToysRus.
In the case of information goods, B2C e-commerce is even more attractive because it saves firms from factoring in the additional cost of a physical distribution network. Moreover, for countries with a growing and robust Internet population, delivering information goods becomes increasingly feasible.
Business-to-Business-to-Consumer e-commerce (B2B2C) :
“It is when a business sells products and services to client businesses. The business provides products and services to client businesses to maintain its own customers. This can be when a business provides products and services to agencies, which are considered as business partners, sell it to customers.” (Efraim Turban, Electronic Commerce, 2006)
Dell uses e-procurement services and offers it to its agents who purchase the products. Customers visiting the agent’s website will find a link which connects the user to Dell’s website. After that when the customer buys a product, the agent receives a commission which is a percentage of the price of the product bought by the customer.
Short for business-to-government, B2G is the exchange of services and products from one company to a government agency. Business-to-government e-commerce is generally described as commerce between companies and parts of a country’s economy which is controlled or supported financially by the government.
B2G e-commerce form indicates a large market potential since the public sector plays an important role in establishing e-commerce, also, to make the procurement system effective, the public sector need the public sector has the greatest need for making its procurement system more effective
Business-to-Government e-commerce (B2G) is a type of transactions where the government buys information, products, or services from businesses. (Electronic Commerce, Efraim Turban, 2006)
Dell sells its products and services to governments. It provides a separate section called ‘public sector’ in its website which serves several divisions within a government. The company offers special products and services to government divisions and areas supported by government such as State government, Local government, Federal government, Higher education and Healthcare. Government agencies can buy the offered products and services from the company’s website online and the delivery service is provided by Dell.
Collaborative commerce should help companies forge long-term relationships while reducing the costs of cooperation, says Lisa Williams, an analyst at The Yankee Group in Boston. For example, a Web server hub could substitute for distributed groupware for jointly managing projects such as constructing a building. “Instead of all the partners buying the same groupware product, they’ll all just sign on to the Web site,” she says.
But while collaborative commerce has the potential to be the next big trend in partneringit’s just beginning to take shape, says Stan Lepeak, an analyst at Meta Group Inc. in Stamford, Conn.
In today’s global commerce environment, the need for accurate, standards-based information is critical for conducting business efficiently. By standardizing the way information is communicated, and by having all trading partners accessing the same information, the opportunity for errors decreases dramatically, costs are reduced, and supply chains operate more efficiently.
Collaborative commerce is a technology that enhances a company’s communications with its business partners electronically. It enables companies and organizations to share information between each other, including
Coolaborative commerce helps/provides companies and organizations a variety of benefits and opportunities by reducing service costs, Key business issues:
- Decreased service costs
- Faster cycle times
- Increased customer satisfaction
- Streamlined operations
- Enhanced flexibility and responsiveness
- Rapid, reliable fulfillment
- Improved planning through better system visibility
In a collaborative environment, organizations and individuals can work together, share sensitive information, protect their privacy, and collaborate on activities and projects efficiently and effectively.
Dell provides support forums for users and customers to refer in order to gain information from experts who bought Dell products and services. In this way, customers will be able to know how to buy and which product or service they should choose. It will also avoid buying products and returning it to Dell if it was not suitable due to the lack of knowledge. (http://en.community.dell.com/support-forums/default.aspx)
Collaborative commerce (or c-commerce) can be regarded as the next evolutionary step beyond the more basic process of electronic commerce (or e-commerce). It is an emerging area that is based on interactions enabled by Internet technology.
The business models used by Dell:
EC business models can differ depending on the industry and the company’s strategy. According to Weill and Vital methodology/framework (2001), there are eight elementary e-commerce business models combines to create
Online Direct Marketing:
online direct marketing is very inexpensive, especially as postage rates continue to raise. With a little effort, it can also generate enough responses to be equally successful. Generally, online direct marketing focuses on creating communication between you and your customers, giving you the opportunity to target specific customers with relevant promotions.
Read more: How to Be Successful in Online Direct Marketing | eHow.com http://www.ehow.com/how_2103036_be-successful-online-direct-marketing.html#ixzz1AqFb2CsV
1- Online Direct Marketing:
It means selling products and services online directly to customers. This E-business model reduces costs and makes the distribution/dispersion of procurements more efficient, where sales are direct from the manufacturer or retailers to customers without processing through/using agents and physical stores.
Dell offers e-procurement service to customers and businesses willing to buy products or services from the company. It allows buyers to browse, buy and order stocks through the Dell website which offers to buyers a chance to contact their staff for any guide. In premier B2B; another more developed version of e-procurement; authorized users of British Airways staff are provided with e-procurement tools to be able to access the intranet service and request for a product or order stocks from Dell Company. (Electronic Commerce, Efraim Turban, 2006)
Electronic Tendering Systems:
E-tendering is used for large-value purchases which are usually made by large organizations or public organizations. Conducting such a tendering online through Dell’s website will consume less time and money. Government agencies use e-tendering in most of their procurement to buy products and services efficiently. E-tendering can be applied on B2C business transaction as well as B2B transaction.
In this way, Dell can become more popular and gain more customers to the company. Also many government agencies recommend tendering in most of their e-procurements.
(Electronic Commerce, Efraim Turban, 2006)
Dell established an e-procurement model to share it with business partners, such as British Airways. Electronic Tendering help them in requesting for bids when buying from sellers. Dell uses e-tendering in buying large quantities of components for their products. In this case, Dell will be to save more money when buying products through tendering.
(Electronic Commerce, Efraim Turban, 2006)
Affiliate marketing is an internet-based marketing where an arrangement is made between the company and a marketing partner which is refered/called affiliate , . The affiliate will place/display an online advertisement of the company on his website by placing a banner ad or the company’s logo or its link. A commission will be given to the affiliate partner every time a customer visits/refers to the selling company’s website or makes a transaction/purchase through the advertisement placed in the affiliate website.
the publisher (also known as ‘the affiliate’)
It is a pay-for-performance model which means if an affiliate does not generate sales, it represents no cost to the merchant
Those methods include organic search engine optimization, paid search engine marketing, e-mail marketing, and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.
Dell appoints affiliate partners to link their websites to Dell website (dell.com). This partner receives 2 to 4 percent of the price of the product sold, if the buyer used the link of Dell website at the partner’s website. (Electronic Commerce, Efraim Turban, 2006)
Online auctions are sales transactions conducted online where shoppers make bids for products and the highest bidder wins the auction and gets the product delivered to him. The participants could be consumers, retailers or companies.
The functionality of buying and selling in an auction format is made possible through auction software which regulates the various processes involved.
Dell auction has renewed Dell’s computers and other products at dellauction.com. Whereas the online auction is important sales channel in 2006, Dell has opened physical stores, mostly in reaction to customer demands. (Electronic Commerce, Efrim Turban, 2006)
Dell has support forums in its website where buyers and users can refer to gain knowledge and information about Dell products. Customers of Dell who bought products and services will be able to help those who do not know what to buy, as they can make use of their experience from what they bought. In this way, Dell can gain more customers by encouraging their customers to inform others about Dell products in the forum. Also loyalty can be gained from customers by Dell when they find specific and accurate information is provided. (http://en.community.dell.com/support-forums/default.aspx)
Supply Chain Management:
E-supply chain management:
e-supply chain management is a joint technology used- to improve the processes of B2B transaction along with improving agility, speed, real time control and customer satisfaction. Vi
Dell IT has successfully implemented this solution for Dell’s Americas, Brazil,
Europe, and Asia Pacific/Japan regions. By using the same processes for
disaster recovery, backup, and monitoring across all Dell operations, Dell IT has
achieved a cost-effective and readily supported deployment model.
January 2007 Page 5 Dell Enterprise Technology Center
This article describes in depth how Dell IT made the transition from proprietary
Unix-based servers to running mission critical supply chain management
applications on Dell’s own hardware. The problem being solved by these
database applications is described in detail in Section 3. The old solution and the
Dell-on-Dell solution are described in Section 4 and Section 5. Finally, measured
performance improvements are shown in Section 6.
Dell’s Supply Chain Management
The sheer number of transactions and pieces of information that the supply chain
management system needs to handle is impressive. Each of the core
components of the supply chain management (SCM) system are heavily used
and relied on to keep Dell’s operations running smoothly.
Configuration Management: The Configuration Management system manages
over 1 million Dell part numbers across approximately 200 product families, and
over 2 million Bills of Materials (BOMs) per year. BOMs listing component part
numbers are created for manufacturing to build assemblies and sub-assemblies
to produce Dell’s products.
Procurement: The Procurement system manages nearly 1.8 million Purchase
Order lines per year, from more than 5,000 suppliers worldwide. To streamline
the procurement process Dell uses an automated application which includes
workflow approvals and vendor communication, and provides for services such
as defective part warranty replacement.
Cost: The Cost component of the system runs mostly in batch mode to calculate
the costs to Dell for all Bills of Materials. These batch jobs run weekly, monthly
and quarterly, with each run rolling up total material costs.
Inventory: Between all sites there are more than 3 million inventory movements
daily from stock rooms to the factory floor. A corresponding 3 million messages
are transmitted to various systems for reporting, analysis and factory scheduling.
Accounts Payable: Accounts Payable handles approximately 15,000 items per
day including payments to Dell suppliers, invoices and receipts. Vendor
information includes number, location, negotiated terms and contact information.
On top of these order-related transactions, there are several batch process jobs
that need to be run to rollup data every week, month or quarter. The longest of
these, the end-of-quarter (EOQ) rollup, took 31 hours under the Unix-based
In Dell’s Americas region the SCM Oracle database application consists of
approximately 3,000 database objects (functions, packages, procedures,
triggers, tables, and views). The same SCM system is also supported by 6 Dell
PowerEdge 2650 application servers, 5 internally developed web-based
applications, more than 50 system-to-system integrations, approximately 125
batch jobs, and about 500 user interfaces deployed to support the entire SCM
Dell’s Supply Chain Management (SCM) System allows customers to make their own orders. This feature involves the customer directly and cuts down costs for Dell salesmen salaries at the same time. Furthermore, Dell’s SCM system allows customers to build up their own computer systems with all provided options. Thus, customers will be forced to review all the available options along with adding components and parts they might not have thought of adding initially. When customers can review all of the possible options at their own pace, without direct sales pressure from a salesperson, Dell’s can benefit from additional component sales.
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– Dell is also striving on establishing good communication and better customer service. The company now is providing easy access to support through its web site. Customers can find answers to frequent/common problems without the need of Dell’s technical assistants which helps the company to reduce its payroll costs. Dell also provides other opportunities like online chat, email and phone to make it easier for customers to contact the company’s customer service for enquiries and to solve problems that are not mentioned in the website. Dell uses chat groups and users groups to keep customers involved with the company, which help to retain customers for future components sales from satisfied customers.
Dell has established a web site that provides wide information options for its customers. In order to make it easier to its customers, The company has splitted the home page into a number of main customer groups;
1- Home & Home Office,
2- Small Business,
3- Medium and Large Business and
4- Government, Education & Healthcare. (Dell’s Website Flowchart I made illustrates this perfectly.)
In each group, customers will find particular products and services that are suitable to their usage. Classifying the website shows that Dell realizes each customer group’s needs and saves consumers time by displaying the products and services that concern them only. Dell also devoted a particular division for customer service and support on its website, which shows the company’s high priority to customer satisfaction. Dell has provided “Service & Support” group and it’s duplicated in all customer group pages. Dell makes it possible for the customer to do a significant amount of research on their own. The website contains a large deal of information that will address their needs and answer most of their enquiries and questions. Dell’s customer support and service field is greater than its competition in comparison to other companies (Dell.com).
Recommendation: Industry advisory firm, Technology Business Research (TBR), issued a report on support satisfaction among corporate buyers and has indicated that Dell’s satisfaction ratings have slipped to 80.98, down from 83.4 in the third quarter of 2003. TBR questions buyers on eight aspects of support, including their overall satisfaction with a company’s support service, and assigns each one a weighted score for a total of 100 possible points. Although Dell still topped rivals HP and IBM in the TBR survey, its score was the lowest seen since the research firm began tracking Dell’s satisfaction levels in the first quarter of 2001. According to the TBR report, IBM outscored Dell in the fourth quarter of 2003 based on product design/features and long-term durability. From polling customers that have switched from Dell to IBM, customers stated that their reasons for changing companies were product performance, pricing and support. Although Dell has maintained its strong leadership position in the fourth quarter of 2003, Dell needs to address their customer loyalty and keep customers from changing companies. As a result of these polls, Dell is working toward reversing the declining customer satisfaction trend and to return to the industry leader in the area of customer service. Dell is aware that the PC business is becoming increasingly commoditized, marked by similarly equipped machines and price erosion. By cutting out the middleman, Dell believes it has established a closer relationship with its customers. One way to stand out from the crowd is to appeal to existing and new customers by offering better service and support than competitors (4Q03).
– Although US consumers have condemned Dell in some fields, Dell is still doing extremely well in other countries. According to Technology Business Research (TBR) reports report in September 2003, “the France Customer Satisfaction Study determined Dell is the No. 1 ranked desktop and notebook vendor in France and is tied No. 1 server vendor”. Dell was significantly ranked higher than other vendors within most notebook categories in loyalty and satisfaction. Moreover, customers in France consider that Dell provides excellent long-term durability hardware. Dell’s General Manager in France, Thierry Labbe stated “These results, and recent strong market share gains in France, show this is starting to pay off. We will however, constantly drive value up and prices down, and focus on providing a great customer experience, giving customers plenty of reason to continue choosing Dell (Customer Satisfaction in France).”
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