Business to Business (b2b) Electronic Commerce

The focus of business-to-business ecommerce ( e-B2B ) is on the     coordination and automation of interorganizational processes via electronic means. E-B2B is conducted between business organizations and is a subset of all e-commerce activicy, which includes,  among others, business-to-consumer ( B2C ), business-to-government ( B2G ), and consumer to consumer ( C2C ) activities.

Before an in-depth analysis of e-B2B, it is worthwhile to note that many authors today identify e-commerce as one component of a more general form of electronic business termed e-business. E-Business is generally used to identify the wider context of process automation that can occur between businesses and includes automating the provision and exchange of services, support, knowledge transfer, and other aspects of business interaction that do not necessarily result in a buy or sell transaction being executed. Within this document the terms e-commerce and e-business are used interchangeably and refer in either case to the wider context defined above.

E-B2B is a major driving force for the Internet economy. According to research from the Gartner Group, B2B is growing at a rate of 100-200% per year. With an estimated $430 billion in 2000, the total value of e-B2B activity was initially expected to exceed $7 trillion by 2009 with the largest shares in North America ( $2.8 trillion ), Europe ( $2.3 trillion ), and Asia ( $900 billion ), and the 24% of all e-B2B transactions are expected to be performed electronically by 2009. However, the recent slowdown in the global economy has caused a revision of these initial predictions to reflect changing economic conditions.

Sustaining a high rate of adoption and growth in the e-B2B activity requires several key components: the innovative application of technology, a ubiquitous communication mediul well suited for the transmision of e-B2B-related documents and information, a business and regulatory environment suitable for sustaining the process, and last but not least a set of motivating forces prompting organizations to adopt interbusiness automation as part of their day-to-day operations.

The technological foundations of e-B2B has been developing over the last 30 years and reflect innovations in telecommunications, computer communications protocols and methods, and interorganizational business process management. During the 1970s, electronic funds transfer ( EFT ) and electronic data interchange ( EDI ) were nascent communication standards developed for business exchanges over expensive private compute networks. The costs of participating in these initial systems were high. EDI systems, for example, require specialized data processing equipment and dedicated telecommunications facilities, prohibiting all but the largest businesses to participate. However, the potential benefits realized from implementing these early electronic B2B Systems included grately reduced labor costs and processing time as well as vast increases in accuracy.

Private communications networks requireing dedicated telecommunications facilities, initially the only option for e-business, are still in use today and provide a secure medium for exchanging electronic data. A value-added network ( VAN ) is a type of semiprivate communications network usually managed by the third-party provider that allows groups of companies to share business information using commonly agreen-upon standards for transmitting and formating the data.