Module 1: Introduction to B2B Integration Contents Overview Lesson: Introduction to B2B E-Commerce Lesson: Introduction to B2B Trading Partner Integration 11 Review 19 Information in this document, including URL and other Internet Web site references, is subject to change without notice Unless otherwise noted, the example companies, organizations, products, domain names, e-mail addresses, logos, people, places, and events depicted herein are fictitious, and no association with any real company, organization, product, domain name, e-mail address, logo, person, place or event is intended or should be inferred Complying with all applicable copyright laws is the responsibility of the user Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document Except as expressly provided in any written license agreement from Microsoft, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property  2001 Microsoft Corporation All rights reserved Microsoft, Windows, BackOffice, BizTalk, FrontPage, Hotmail, PowerPoint, Visual Basic, Visual C++, Visual Studio, and Windows Media are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries The names of actual companies and products mentioned herein may be the trademarks of their respective owners Module 1: Introduction to B2B Integration iii Instructor Notes Presentation: 45 minutes This module introduces students to business-to business B2B e-commerce and the roles of different organizations as they buy and sell products in a B2B e-commerce scenario The module also introduces the elements of a B2B integration solution After completing this module, students will be able to: Required materials Preparation tasks ! Describe B2B e-commerce and the types of relationships between suppliers, buyers, and marketplaces ! Describe the process of selling products to trading partners over the Internet To teach this module, you need the following materials: ! Microsoft® PowerPoint® file 2420A_01.ppt ! Module animation, How Trading Partner Integration Works, 2420A_01d005.htm To prepare for this module: ! Read all of the materials for this module ! Preview the animation iv Module 1: Introduction to B2B Integration How to Teach This Module This section contains information that will help you teach this module Lesson: Introduction to B2B E-Commerce This lesson introduces B2B e-commerce and the elements of B2B e-commerce that this course focuses on When introducing B2B e-commerce, avoid lengthy discussions on elements that are outside the scope of this course, such as supply chain management Ensure that students understand the difference between direct and indirect trading partner relationships Play the How Trading Partner Integration Works multimedia file, and then discuss the animation with the students The following information is specific to individual pages in this lesson Lesson: Introduction to B2B E-Commerce In this course, the term direct trading partner relationship describes relationships between buyers and suppliers Students may also be familiar with the term peer-to-peer relationship Ensure that students not confuse direct and indirect trading partner relationships with the manufacturing terms direct and indirect materials Also note that we start each module with the full term, B2B trading partner integration, and then use B2B integration thereafter What is B2B E-Commerce? This slide briefly introduces the next slide: What Is B2B Trading Partner Integration? Define B2B e-commerce and then move to the next slide to emphasize the topics that are included in trading partner integration Also discuss the topics that are not included in Course 2420A Be sure to read the definition and example for supplier-buyer collaboration, because that term can cause confusion Direct Trading Partner Relationships When we mention the advantage of greater cost savings, we are referring to long-term savings Significant start-up costs occur in both direct and indirect trading partner relationships Although start-up costs may inspire interesting class discussions, limit your discussion about these costs Lesson: Introduction to B2B Trading Partner Integration This lesson introduces the modules in the course, topic by topic Use this lesson to provide students with an overview of the topics that they will learn in the class Explain to students how each page in this lesson corresponds to a segment of the multimedia file in the previous lesson, and also to a subsequent module in the course Implementing Remote Shopping Although remote shopping provides enhanced information and functionality to buyers when they shop on marketplace Web sites, be sure to emphasize that remote shopping is an equally important value proposition for suppliers in direct trading partner relationships Module 1: Introduction to B2B Integration Customization Information This section identifies the lab setup requirements for a module and the configuration changes that occur on student computers during the labs This information is provided to assist you in replicating or customizing Microsoft Official Curriculum (MOC) courseware There are no labs in this module, and as a result, there are no lab setup requirements or configuration changes that affect replication or customization v Module 1: Introduction to B2B Integration Overview ! Introduction to B2B E-Commerce ! Introduction to B2B Trading Partner Integration *****************************ILLEGAL FOR NON-TRAINER USE****************************** Introduction In addition to conducting business with consumers, most organizations buy and sell products or services with vendors, distributors, and other organizations Establishing effective business-to-business (B2B) relationships involves many challenges For example, an organization may store its business data in formats that are different from those that its trading partners use Incompatible business systems may lead to expensive and inefficient business processes To remain competitive, organizations must conduct B2B transactions efficiently by minimizing procurement costs The goal of trading partner integration is to help organizations establish and manage B2B relationships by automating the exchange of business documents Objectives After completing this module, you will be able to: ! Describe B2B e-commerce and the types of relationships between suppliers, buyers, and marketplaces ! Describe the process of selling products to trading partners over the Internet Module 1: Introduction to B2B Integration Lesson: Introduction to B2B E-Commerce ! What Is B2B E-Commerce? ! What Is B2B Trading Partner Integration? ! What Are Marketplaces? ! Types of Trading Partner Relationships ! Indirect Trading Partner Relationships ! Direct Trading Partner Relationships ! Multimedia: How Trading Partner Integration Works *****************************ILLEGAL FOR NON-TRAINER USE****************************** Introduction This lesson explores B2B trading partner integration from a supplier’s perspective It describes the roles of suppliers, buyers, and marketplaces in B2B e-commerce relationships By understanding each of these unique roles, you can define the business drivers that determine your design decisions Lesson objectives After completing this lesson, you will be able to describe: ! B2B e-commerce ! B2B trading partner integration ! The function and types of marketplaces ! The two types of trading partner relationships in B2B e-commerce ! The advantages and limitations of indirect trading partner relationships ! The advantages and limitations of direct trading partner relationships Module 1: Introduction to B2B Integration What Is B2B E-Commerce? B2B -Commerce EE-Commerce B2B EFormation Formationof oftrading tradingpartner partnerbusiness businessrelationships relationships Electronic Electroniccatalog catalogdesign designand andexchange exchange Order Orderprocessing processingintegration integration Supplier-buyer Supplier-buyercollaboration collaboration E-procurement E-procurementand andrequisitioning requisitioning Supply Supplychain chainmanagement management Infrastructure Infrastructuresupport supportand andmanagement management *****************************ILLEGAL FOR NON-TRAINER USE****************************** Definition Business-to-business (B2B) e-commerce is the electronic exchange of products or services between businesses B2B e-commerce follows the same basic principles of nonelectronic commerce However, instead of using printed catalogs, paper purchase orders, and other printed business documents, buyers and suppliers perform business transactions through automated processes on networked computers Elements of B2B e-commerce B2B e-commerce includes: ! Formation of trading partner business relationships ! Electronic catalog design and exchange ! Order processing integration ! Supplier-buyer collaboration ! E-procurement and requisitioning ! Supply chain management ! Infrastructure support and management Module 1: Introduction to B2B Integration What Is B2B Trading Partner Integration? B2B E-Commerce B2B B2BTrading TradingPartner PartnerIntegration Integration Formation Formationof oftrading tradingpartner partnerbusiness businessrelationships relationships Electronic Electroniccatalog catalogdesign designand andexchange exchange Order Orderprocessing processingintegration integration Supplier-buyer Supplier-buyercollaboration collaboration E-procurement E-procurement and and requisitioning requisitioning Supply Supply chain chain management management Infrastructure Infrastructure support support and and management management *****************************ILLEGAL FOR NON-TRAINER USE****************************** Definition B2B trading partner integration is a subset of B2B e-commerce that enables organizations to create strategic relationships with other suppliers and buyers by automating business transactions Trading partner integration, or B2B integration, can increase the speed and efficiency of doing business, reduce transaction costs, and add value to the business relationship The process of trading partner integration defines the scope of this course Elements of B2B integration B2B integration includes the following components: ! Formation of trading partner business relationships One goal of trading partner integration is the rapid formation of business relationships between suppliers and buyers Formation of these relationships includes discovering potential trading partners, gathering B2B integration information, and creating trading partner agreements ! Electronic catalog design and exchange Suppliers of products and services must publish electronic catalogs so that their buyers can make purchases The level of sophistication of electronic catalogs varies, depending on the buyers’ needs and the catalog restrictions of the trading partners ! Order processing integration Suppliers and buyers can automate transactions by creating an infrastructure to transmit business documents securely Trading partners can gain efficiencies and reduce costs by integrating other business systems, such as Enterprise Resource Planning (ERP) systems, in their automated document exchange ! Supplier-buyer collaboration Suppliers add value to their business relationships by providing their buyers with services, such as direct e-procurement integration or custom order status applications B2B trading partner integration does not include e-procurement and requisitioning, supply chain management, or infrastructure support and management Module 1: Introduction to B2B Integration ! Regional Specialize in a specific geographic region—for example, Latin America or Europe ! Aggregator Create one catalog from catalogs that they gather from multiple suppliers who sell similar products and services, such as products sold by lot at a fixed price or at an auction Module 1: Introduction to B2B Integration Types of Trading Partner Relationships Indirect Relationship Marketplace Marketplace Supplier Supplier Buyer Buyer Direct Relationship *****************************ILLEGAL FOR NON-TRAINER USE****************************** Introduction As a supplier, you can interact with buyers indirectly or directly If you work with several trading partners, you may develop both types of relationships Types of trading partner relationships There are two types of trading partner relationships: ! Indirect In an indirect trading partner relationship, suppliers and buyers conduct business through a marketplace ! Direct In a direct trading partner relationship, the supplier and buyer have a one-to-one integration whereby the buyer buys products or services directly from the supplier A supplier may have direct relationships with many different buyers Note In this course, the term trading partner refers to any organization, whether a buyer or a marketplace, that a supplier conducts business with Module 1: Introduction to B2B Integration Indirect Trading Partner Relationships Supplier Supplier Marketplace Marketplace Buyer Buyer Advantages Advantages Limitations Limitations ""Quick Quick time time to to market market ""Mass buyer Mass buyer acceptance acceptance ""Value-added Value-added business business services services ""High High cost cost of of entry entry ""Loss of flexibility Loss of flexibility ""Loss Loss of of control control over over business business processes processes ""No No guarantee guarantee of of sales sales to to buyers buyers *****************************ILLEGAL FOR NON-TRAINER USE****************************** Introduction In an indirect trading partner relationship, suppliers and buyers conduct business through a marketplace Marketplaces offer some distinct advantages and limitations compared to direct trading partner relationships Advantages of indirect trading partner relationships Advantages of using a marketplace include: Limitations of indirect trading partner relationships ! Quick time to market Marketplaces enable suppliers to offer their products without waiting to plan and develop a solution that is compatible with each buyer ! Mass buyer acceptance In certain industries, marketplaces have established large customer bases that include numerous potential buyers ! Value-added business services Marketplaces often provide value-added services, such as auctions, reverse auctions, CRM, and supplier-buyer collaboration tools Limitations of using a marketplace include: ! High cost of entry Most marketplaces have significant fees for initiation and usage ! Loss of flexibility Marketplaces define the business rules for the trading partner relationship As a supplier, you will likely be unable to brand your product and service offerings ! Loss of control over business processes The standardization of business and technical processes in marketplaces often leaves suppliers with little control of those processes ! No guarantee of sales to buyers Participation in online marketplaces is just as competitive as traditional marketplaces No guarantee exists that buyers will buy from you more than from your competitors Module 1: Introduction to B2B Integration Direct Trading Partner Relationships Supplier Supplier Marketplace Marketplace Advantages Buyer Buyer Limitations Limitations "" Greater Greater cost cost savings savings "" Potential Potential need need for for "" Increased control developer expertise Increased control developer expertise over "" Increased over processes processes Increased time time to to "" Greater flexibility and market Greater flexibility and market customizability customizability "" Faster Faster response responseto to market market conditions conditions *****************************ILLEGAL FOR NON-TRAINER USE****************************** Introduction In a direct trading partner relationship, suppliers and buyers conduct business without the help of a marketplace Direct trading partner relationships are not new Electronic data interchange (EDI), developed in the 1970s, was the first form of B2B e-commerce Advantages of direct trading partner relationships Advantages of conducting business directly with buyers include: Limitations of direct trading partner relationships ! Greater cost savings over using a marketplace Most marketplaces have significant fees for initiation and usage with no guarantee of future sales By conducting business directly with buyers, you not pay fees for services that may not be valuable to your organization ! Increased control over business and technical processes As a supplier, you work with your buyers to define how to conduct business to your mutual benefit You have direct control of security and business intelligence ! Greater flexibility and customizability Buyer personalization and sales targeting are possible in direct relationships You can also provide valueadded business services to your buyers with greater ease ! Faster response to market conditions When market conditions change, you can change your business strategies without being limited by the technical restrictions or update latency of the marketplace Limitations of conducting business directly with buyers include: ! Potential need for developer expertise Your B2B integration solution will be specific to your organization and your trading partner Developing your solution may require an experienced development team ! Increased time to market Because you must develop your own B2B integration solution, it may take longer to offer products or services to your buyers 10 Module 1: Introduction to B2B Integration Multimedia: How Trading Partner Integration Works Trading Trading Partner Partner 44 PO Supplier Supplier Product Product Information Information Business Business Logic Logic PO 11 Catalog Catalog Master 33 Management Management 22 Master Content Content Source Source 66 Other Business Business Systems Systems CRM ERP 55 Inventory PO Accounting 77 UDDI 88 XML Web Service *****************************ILLEGAL FOR NON-TRAINER USE****************************** Introduction This animation provides a brief overview of the steps in the trading partner integration process In this course, you will study each of these steps in greater detail Steps of trading partner integration This animation provides a brief overview of B2B trading partner integration From a supplier’s perspective, trading partner integration involves these steps: The supplier compiles information about its products or services in a single master content source Using the master content source, the supplier designs and creates an electronic catalog for a B2B trading partner The supplier transforms the electronic catalog into the trading partner’s Extensible Markup Language (XML) catalog schema, and then sends it to the trading partner When a trading partner makes a purchase, he sends a purchase order (PO) to the supplier The supplier receives, validates, and transforms the purchase order The supplier sends the purchase order for further processing by other business systems The supplier may also use Universal Description, Discovery and Integration (UDDI) to publish B2B information about the organization and to gather information about current and potential trading partners The suppler may also use XML Web services to offer customers added value and to provide critical data that is used in order processing Module 1: Introduction to B2B Integration 11 Lesson: Introduction to B2B Trading Partner Integration ! Managing Product Information ! Creating Electronic Catalogs ! Publishing Electronic Catalogs ! Receiving, Validating, and Processing Orders ! Implementing Remote Shopping ! Establishing New Business Relationships Using UDDI ! Integrating XML Web Services *****************************ILLEGAL FOR NON-TRAINER USE****************************** Introduction This lesson introduces you to B2B integration by providing an overview of each step in the integration process The remainder of the course discusses each step in more detail Lesson objectives After completing this lesson, you will be able to describe the process of: ! Managing product information ! Creating electronic catalogs ! Publishing electronic catalogs ! Receiving, validating, and processing orders ! Implementing remote shopping ! Establishing new business relationships by using UDDI ! Integrating XML Web services 12 Module 1: Introduction to B2B Integration Managing Product Information ERP Flat File Paper Catalog SQL Server™ Database Migrate Data Other Sources Existing Product Information To manage product information: Identify sources of existing product information Design a master content source Migrate product information Master Content Source model SKU warranty weight height price *****************************ILLEGAL FOR NON-TRAINER USE****************************** Introduction As a supplier, you maintain product data, such as price, size, and color To simplify the management of this data, you can collect your product information in a single location and format, called a master content source You can then use the master content source as a staging area to create a catalog Steps Maintaining product information includes the following steps: Identify sources of existing product information Determine where you store product information Some organizations store all of their data in a single electronic format, whereas others store data in multiple formats in multiple locations Design a master content source Choose information to include in the master content source and choose the most appropriate storage method Migrate product information Move all of your product information to the master content source and establish management procedures to keep your master content source current and accurate Module 1: Introduction to B2B Integration 13 Creating Electronic Catalogs Electronic Catalog for Trading Partner Master Content Source price price model model SKU SKU 139.99 139.99 M-990 M-990 23654 23654 warranty warranty weight weight 11 2.5 2.5 9.0 9.0 height height 139.99 139.99 M-990+ M-990+ 23656 23656 11 2.5 2.5 9.0 9.0 139.99 139.99 M-998 M-998 23657 23657 11 2.75 2.75 8.5 8.5 159.99 159.99 N-800 N-800 23658 23658 22 1.8 1.8 6.0 6.0 169.99 169.99 N-880 N-880 23659 23659 11 1.8 1.8 6.0 6.0 169.99 169.99 N-880+ N-880+ 23660 23660 11 1.9 1.9 6.0 6.0 179.99 179.99 N-900 N-900 23661 23661 22 2.0 2.0 5.5 5.5 Electronic Catalog for Trading Partner *****************************ILLEGAL FOR NON-TRAINER USE****************************** Introduction Each of your trading partners has different needs and may require catalogs in different formats Therefore, you must create a separate catalog for each trading partner After creating a master content source, you can create multiple electronic catalogs quickly When you design electronic catalogs, your goal is to provide the prospective buyer with the right amount of relevant information so she can make a purchasing decision 14 Module 1: Introduction to B2B Integration Publishing Electronic Catalogs Supplier Transforms the catalog to the appropriate format Commerce Server Catalog Trading Trading Partner Partner Transports the catalog to the trading partner cXML Catalog Internet cXML cXML Catalog Catalog *****************************ILLEGAL FOR NON-TRAINER USE****************************** Introduction After you create electronic catalogs for each trading partner, you must transform the catalogs to the correct format and securely transport them to your trading partner For example, if your catalog is in Microsoft® Commerce Server 2000 format and your trading partner uses the Commerce XML (cXML) format, you must transform the catalog to cXML and then transport it over the Internet to your trading partner You must also manage updates to the catalogs that your trading partner hosts ... that affect replication or customization v Module 1: Introduction to B2B Integration Overview ! Introduction to B2B E-Commerce ! Introduction to B2B Trading Partner Integration *****************************ILLEGAL... products to trading partners over the Internet 2 Module 1: Introduction to B2B Integration Lesson: Introduction to B2B E-Commerce ! What Is B2B E-Commerce? ! What Is B2B Trading Partner Integration? ... to offer customers added value and to provide critical data that is used in order processing Module 1: Introduction to B2B Integration 11 Lesson: Introduction to B2B Trading Partner Integration