While business-to-consumer (B2C) e-business seems to be getting a lot of hype, business-to-business (B2B) is where the real money will be earned and that is good news for the future of data warehousing. According to Forrester Research, B2B currently yields $109 billion in goods sold online; by 2003, that number will exceed $1.3 trillion. But, it doesn't stop there! Forrester says that by 2003, business services will contribute another $220 billion to the pile and global e-services will fetch up to $78 billion. Even the IDC, which is typically the most conservative analyst, forecasts a $2.8 trillion worldwide Internet economy by 2003. Inevitably, a good chunk of that figure will have to be spent integrating the proper systems in an effort to share information with partners and customers.
Accurate information and seamlessly tied systems may be the most critical component for excelling in the world of B2B e-business. Without it, the integrity of shared data is compromised and systems are inefficient. Data warehousing enables the consolidation of data from product, manufacturing and customer databases into operational data stores. This gives "delivery channel applications," such as customer relationship management systems, access to suppliers, product, inventory and customer data. By opening warehouse access via the Web to suppliers and customers, relationships along the supply chain are strengthened and greater value is realized. Online ordering saves both cost and time two of the greatest value propositions for any organization. Time is money in the new economy. An effective e-business strategy supported by tightly integrated systems can make the supply chain more efficient, provide the ability to track transactions throughout the supply chain, understand customer behavior, craft more accurately targeted sales and marketing efforts, and automate processes across the enterprise and with external vendors and partners. The sharing of accurate data among involved parties strengthens the relations between customer and supplier as well.
E- Business at its Best
Companies such as Dell and Cisco represent B2B e- business at its best. Dell completes the e-business supply chain integration by linking directly to their suppliers who receive the customer-entered orders and deliver them directly to their suppliers who ship the right parts or configure the desired computer just in time, just as ordered. Dell's e-commerce site hosts 2 million visits per week and sells $14 million in goods daily. Cisco, another e-business giant, boasts that 75 percent of orders are handled via the Internet; and over 80 percent of those customer orders are "booked, credit checked, scheduled for manufacturing and sent to the factory without human interface."
With numbers such as the $550 million in operating cost savings for Cisco in 1998, companies can't afford to not do e-business the right way; and they can't afford to wait. Seamless process and supply chain integration, of which Cisco boasts, requires careful consideration of data and technology; and seemingly effortless processing, fulfillment and delivery of orders takes careful systems planning and implementation.
This rapid movement of goods and accelerated response times require data delivery to decision-makers at the same pace. With closed-looped decision support, product movement pathways and progress are collected and tracked, and effectiveness, performance and customer preference are measured without human intervention via the data warehouse. Also, alerts can be sent to the proper decision-maker, process owners or even directly to customer service personnel who can tweak the process, the product or open communications with customers before problems arise.
Doing B2B e-business the right way doesn't mean you build a Web site, hope your partners will buy into it, share data, allow access to information via a Web browser and sell a few items online. E-business requires careful technical architecture design, a well-planned strategy and a commitment to altering the current business model to fit e-business. Also, it requires planning and consideration of what partners, retailers and suppliers are using as the technical backbone for their B2B solutions in an effort to achieve compatibility.
What is the bottom line? If done right, B2B increases revenue for the organizations which, in turn, yields rewards for stockholders as well. As noted in a recent Business 2.0 article, "Dell's stock, bought at its $8.50 IPO price in June 1998, would have a pre-split value of $4,131 as of March of this year." Now, that's quite a return on investment.
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