Module 1: Introduction to B2B Integration

Module 1: Introduction
to B2B Integration
Contents
Overview

1

Lesson: Introduction to B2B E-Commerce

2

Lesson: Introduction to B2B Trading
Partner Integration

11

Review

19


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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 1 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 do 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

1

Overview
!

Introduction to B2B E-Commerce

!

Introduction to B2B Trading Partner Integration

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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.


2

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

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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

3

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

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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.


4

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

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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

5

What Are Marketplaces?
Marketplaces bring multiple suppliers and buyers
together in a single environment
Marketplaces
Descriptions
Descriptions
Marketplaces
Industry
specific
Vertical
Industry specific
Vertical
Horizontal
Horizontal

Product
Product or
or service
service specific
specific

Private
Private

Buyer
Buyer sponsored
sponsored

Regional
Regional

Geographically
Geographically specific
specific
Similar
Similar products
products gathered
gathered

Aggregator
Aggregator

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Definition

Marketplaces are organizations that bring suppliers and buyers together in one
B2B environment. Marketplaces assemble buyers with similar needs; they also
use a defined set of protocols and business document schemas. Marketplaces
also recruit suppliers to sell their products and services to this collection of
buyers.
Typically, marketplaces act as intermediaries in the exchange of business
documents. A buyer sends its purchase order to the marketplace, which then
sends the purchase order to the supplier. Marketplaces may also add value by
providing services such as auctions, reverse auctions, Customer Relationship
Management (CRM), and supplier-buyer collaboration tools.
Note Marketplaces are also called online exchanges, online marketplaces, and
e-marketplaces.

Types of marketplaces

The following types of marketplaces bring suppliers and buyers together:
!

Vertical. Serve the needs of a single industry—for example, the airline,
computer, or automotive industry.

!

Horizontal. Serve multiple industries and focus on a few types of products
or services—for example, office supplies or temporary employment
services.

!

Private. Are created by a single large buyer to serve its procurement needs.
For example, Microsoft Corporation and The Boeing Company both
maintain internal marketplaces.


6

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

7

Types of Trading Partner Relationships
Indirect
Relationship
Marketplace
Marketplace
Supplier
Supplier

Buyer
Buyer

Direct
Relationship

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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.


8

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

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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

9

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

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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 do 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

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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:
1. The supplier compiles information about its products or services in a single
master content source.
2. Using the master content source, the supplier designs and creates an

electronic catalog for a B2B trading partner.
3. 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.
4. When a trading partner makes a purchase, he sends a purchase order (PO) to
the supplier.
5. The supplier receives, validates, and transforms the purchase order.
6. The supplier sends the purchase order for further processing by other
business systems.
7. 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.
8. 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

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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:
1. Identify sources of existing
product information
2. Design a master content
source
3. Migrate product information

Master Content Source

model

SKU warranty weight height

price

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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:
1. 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.
2. Design a master content source. Choose information to include in the
master content source and choose the most appropriate storage method.
3. 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 1

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 2

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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

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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.