Major barriers and the incentives for the development of e- commerce

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Major barriers and the incentives for the development of e- commerce

The whole rationale for e-commerce is that it lowers the operational costs for a business and improves the buying and selling opportunities. As a result profit increase should increase.

Lowering costs require:

Connecting everyone together

Typically B2C E-commerce uses technology illustrated in the figure below.

 

The benefit of this approach for B2B E-commerce is that company 1 using a web browser does not need any special technology to connect with its partners. Company 2 can easily present web pages that can be used by company 1 to order goods or services. The harder job is for Company 2. It has to integrate their eCommerce or Web Server with their ERP or accounting systems. However some, particularly the smaller, companies are reluctant to integrate their Internet and accounting systems. As a result, data captured by Company 2 may, in practice, be re-entered manually into their ERP systems as well as Company 1.

A better approach is illustrated by the figure below:

In this example both Company 1 and Company 2 have implemented XML technology to make their solutions integrate. This can offer significant cost benefits. Now I will show you examples of purchase order of two different companies. However exchanging documents is not completely straight forward since you need to know which format to use. Many ERP vendors are each defining their own versions of equivalent XML documents. For example consider the following two examples of XML.

When I was researching on internet I have find out two similar purchase order. Now I will show you the html format for both purchase order.

Purchase Order Sample 1

<Purchase Order OrderNo="1234">

<Buyer BuyerNo="AB24567"  

<Name="Smith & Co2/>

<Address1>123 High St</Address1>

<Address2>Epping Forest</Address2>

<Zip>E15 2HQ</Zip>

</Buyer>

<Supplier>

...

</Supplier>

<OrderItem>

...

</OrderItem>

<Tax>

<TaxType>VAT</TaxType>

<TaxPercent>17.5</TaxPercent>

...

</Tax>

...

</PurchaseOrder>

Purchase Order Sample 2

<PurchaseOrder>

<Party Type="Buyer">

<Reference>AB24567</Reference>

<Name>Smith & Co</Name>

<Street>123 High St</Street>

<Town>Epping Forest</Town>

Join now!

<PostCode>E15 2HQ</PostCode>

</Party>

<Party Type="Supplier">

...

</Party>

<OrdNo>1234<OrdNo>

<OrderItem>

...

</OrderItem>

<Tax Type="VAT" Percent="17.5"... />

...

</Purchase Order>

Even though these two sample purchase orders contain identical information they have different structures. This means that if one company is using one format and a second company the other, then one or other of the companies will need to map their XML Purchase Order documents to the alternative format. This is one of the major barriers on online business (e-commerce).

The conclusion to be drawn from this is that XML, on its own, will not provide a complete answer to ...

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