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Thread: Types of E-Commerce Technology

  1. #1
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    Jul 2004

    Post Types of E-Commerce Technology

    Types of E-Commerce Technology

    The global economy may have faltered in 2002, but advances in e-commerce technology continue to transform personal communication and global business at an astounding pace. Although these advances promise to bring a substantial percentage of the world’s population online in the next five years, they also present significant challenges to industry and policymakers alike.
    According to NUA Internet Surveys (, over 620 million people worldwide are linked to the Internet. Experts predict that global Internet usage will nearly triple between 2003 and 2006, making e-commerce an ever more significant factor in the global economy. Estimates suggest that by 2009, some 47 percent of all business-to-business (B2B) commerce will be conducted online.

    E-Commerce Technology
    With the preceding in mind, the dynamic nature of the new economy, and particularly the Internet, calls for decision makers to develop policies that stimulate growth and advance consumer interests. But, in order to create the foundation for the rapid growth of e-commerce, enterprises must adopt the effective e-commerce technology policies that embrace the following four crucial principles:

    Strong intellectual property protection: Innovation drives e-commerce technology, and rewarding creativity fosters innovation. Thus, strong copyright, patent, and other forms of intellectual property protection are key to invigorating the information economy.

    Online trust: security and privacy: Without consumer confidence in the safety, security, and privacy of information in cyberspace, there will be no e-commerce and no growth. Protecting information and communications on the Internet is an absolute prerequisite to the continued success of the Internet and the information economy.

    Free and open international trade: Closed markets and discriminatory treatment will stifle e-business. The Internet is a global medium, and the rules of the information economy must reflect that fact. Only in an open, free market will the Internet’s potential be realized.

    Investing in an e-commerce technology infrastructure: Supporting the physical infrastructure necessary to deliver digital content (primarily through telecommunications deregulation and government efforts to reduce the digital divide) is vital to spurring technological growth.
    Last edited by CyberGuru; 13-09-2004 at 11:01 PM.

  2. #2
    Join Date
    Jul 2004

    Post Strong Intellectual Property Protection

    For hundreds of years, protection of creative material has given authors and other innovators powerful incentives to develop and distribute exciting new products. Throughout, respect for private property (whether in its tangible or intellectual form) has been a core value of market-driven economies.

    In the information economy, such protection is even more vital, because the core currency of the Internet is nearly exclusively intellectual property. Today, software developers and other authors of creative works depend on the rights granted by copyright laws to develop new, more functional, and more powerful products. Overall, U.S. copyright-based industries (particularly the software, film, music, and publishing industries) are among the fastest growing segments of the American economy. Of those industries dependent on copyright for their business models, the high-tech industries comprise an ever-growing share, particularly those creating software and hardware products.

    Industry leaders estimate that, within five years, an astonishing two thirds of software sales will be conducted over the Internet. Furthermore, one third of all software exports from the United States will be distributed electronically. Failure to properly protect this vital intellectual currency means its value will evaporate and the global economy will suffer greatly.

    Copyright in the Internet Age

    Digital piracy (the online theft of creative property) poses one of the single greatest threats to the success of the information economy. It undermines the confidence that creators and consumers place in their commercial interactions over networks.

    The very nature of the online world that makes it so attractive in the marketplace also renders the work of copyright violators easier. Now that unlimited, flawless copies of creative works in digital form can be made and distributed globally in a matter of seconds, intellectual property on the Internet can be at great risk. Internet piracy is real, acute, and growing, demanding strong protections in the digital arena.

    Software Piracy Is the Industry’s Most Serious Problem

    Piracy is the most significant problem facing the software industry globally. Every day, pirates steal millions of copies of copyrighted computer programs. Some of these are stolen by users making illegal copies personally, others by professional counterfeiting, and still others via illicit sales or auctions on the Internet.

    For example, International Planning and Research (IPR; recently found that 48 percent of all software loaded onto computers globally in 2002 was pirated. In many countries, the piracy rate exceeds 80 percent. The resulting economic losses, according to IPR, were staggering: over $23 billion lost internationally, with $4.3 billion attributable to piracy in the United States alone.

    Caution URLs are liable to change without notice!

    Widespread software theft harms not only America’s leading e-commerce technology developers, but also its consumers. They risk purchasing defective, counterfeit products and losing the benefits enjoyed by purchasers of legitimate software, such as customer support and product upgrades.

    But, the economic impact of software piracy extends far beyond the confines of the software industry and its consumers. Piracy distorts e-commerce technology economies worldwide by robbing governments of legitimate tax revenues and citizens of badly needed jobs.

    A recent study by PricewaterhouseCoopers ( found that software piracy cost the U.S. economy over 200,000 jobs, more than $5 billion in lost wages, and nearly $2 billion in foregone tax revenues. The study concluded that, by 2009, these losses would grow to 286,000 jobs, $8.4 billion in lost wages, and $2.7 billion in lost tax revenues. Conversely, PricewaterhouseCoopers concluded that reducing piracy could produce at least two million additional jobs and nearly $36 billion in additional government revenues worldwide by 2006

    Governments Must Combat Copyright Theft

    Stemming these massive losses requires a concerted, multifaceted effort to combat the theft of copyrighted material. Although technological measures to fight piracy and increased public education about copyright are essential, the key to copyright protection lies in governments worldwide adopting and vigorously enforcing strong laws prohibiting this theft.

    Copyright Laws Must Be Enforced

    Strong words in a statute are not enough. These laws must be backed by vigorous enforcement by governments and must allow private parties to pursue fast and inexpensive remedies when their rights have been infringed. Strong copyright protection includes:
    • Deterrent civil and criminal penalties
    • Sustained criminal enforcement
    • Copyright-related law enforcement efforts must be funded sufficiently
    • Court-ordered and court-appointed piracy inspections must be available
    Deterrent Civil and Criminal Penalties
    Effective copyright laws must provide strong civil remedies, including permanent injunctions against further infringement, the seizure of illegal software (and articles used to defeat copyright protection), compensation, and fines. They must also provide for minimum criminal penalties when piracy is committed knowingly and for commercial purposes or to satisfy the internal demands of a business or other entity. In the United States, both criminal penalties and civil remedies are available and, increasingly, other countries are adopting similar legal models.

    Sustained Criminal Enforcement
    Sustained criminal enforcement is absolutely necessary in order to deter piracy and send the message that piracy is a serious crime with serious consequences. In the United States, the No Electronic Theft (NET) Act enables law enforcement officials to prosecute individuals who steal software by distributing it over the Internet, even if they do not profit economically from their activities. The NET Act has proven to be an effective antipiracy tool and has resulted in numerous convictions. In countries where such laws do not exist, however, customs and other governmental agencies must vigorously investigate and enforce traditional copyright laws as a first step toward addressing Internet-based piracy.

    Copyright-Related Law Enforcement Efforts Must Be Funded Sufficiently
    Despite the very real economic damage caused by software piracy, copyright enforcement actions too often are forced to take a back seat to other criminal prosecutions. For authorities to make a real dent in copyright crimes, governments must provide adequate funding and explicit direction to those agencies responsible for copyright enforcement.

    Court-Ordered and Court-Appointed Piracy Inspections Must Be Available
    Given even minimal warning, a pirate can swiftly and easily eliminate evidence of software theft with the touch of a button. As a result, the prosecution of software piracy, whether in civil or criminal contexts, requires court-ordered inspections without advance notice to the suspected software pirate (as required under the Trade-Related Intellectual Property Rights [TRIPs] Agreement). To ensure fairness, such searches should be court-supervised, with court-appointed experts being permitted to search and inspect for the suspected piracy.

    The WIPO Copyright Treaties Must Be Implemented

    With the Internet, copyright theft has become a global phenomenon. The World Intellectual Property Organization (WIPO) recognized that fact when it adopted “digital” copyright treaties to create an international legal standard, covering online intellectual property. Now, the nations of the world must ratify them.

    The treaties were designed to promote online commerce by ensuring that authors are able to determine how their works are sold and distributed online. The WIPO treaties reinforce the fact that copyright protects all copies of a work, whether they are considered “permanent” or “temporary,” “tangible” or “digital.” The treaties also ensure that authors retain the right to determine the point at which their copyrighted works are placed on the Internet, in the same way that authors determine the locations at which tangible copies of their works may be distributed.

    The WIPO treaties also recognize that, to protect intellectual property from theft, owners need to employ e-commerce technology that guards against unauthorized access and copying. Because such e-commerce technology-based protections are an extremely effective means to prevent theft, the treaties recognize that attempts by pirates to break these technical defenses must be outlawed.

    Because many international copyright laws do not specifically protect creative materials distributed over the Internet, global adoption of these treaties is essential to promoting the safe and legal growth of Internet commerce. Under provisions of the treaties, a total of 30 signatory countries must ratify the treaties in order for their provisions to become enforceable worldwide. To date, over 36 countries have taken this step.

    Governments Must Lead By Example

    Governments are among the largest purchasers of computer-related services and equipment the world over. Not surprisingly then, many governments internationally have taken the important step of directing their public administrations to effectively manage software resources. High-profile government software management policies have been issued in the People’s Republic of China, Spain, Taiwan, Ireland, Colombia, Jordan, Thailand, the Czech Republic, and Paraguay, among other nations. A number of other governments are drafting similar policies, which have served as a catalyst for enhancing software protection in both the public and private sectors in those nations.

    For example, in 1998, the United States issued an Executive Order requiring U.S. government agencies and contractors to effectively manage their software resources and, in so doing, to use only legal, licensed software. Several U.S. states, including California and Nevada, issued similar orders applicable to state government agencies and related entities. These policies have had a powerful impact on the health of the software industry in the United States and, importantly, have set the tone for proper software management practices in America’s private sector.

  3. #3
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    Jul 2004

    Post Online Trust: Security and Privacy

    In the aftermath of the tragic events of September 11, 2001, individuals, companies, and governments have all focused attention on the issues of safety and security. Much of that attention has fallen on the Internet, as it has emerged as a vital information and economic link throughout the world[4].

    The continued success of the Internet is, in many ways, dependent upon the trust that individuals, businesses, and governments place in it. For that trust to exist, user information transmitted over computer networks must be safe from thieves, hackers, and others who would gain access to and make use of sensitive information without permission.

    Consumers have repeatedly shown they will not conclude commercial transactions over the Internet, unless they are confident of the security and privacy [4] of their personal information. Recent surveys by GartnerG2 ( and BusinessWeek/Harris ( suggest that 75% of U.S. Internet users fear going online for this reason, and that 70% of those who are already online harbor concerns about privacy that keep them from transacting commerce on the Internet. Yet, even as concerns about these vital issues proliferate, no single solution can suffice.

    Consider privacy, where consumer expectations vary considerably, based on a number of factors. Privacy expectations for a voluntary, online commercial transaction are very different from those that accompany a demand by a government entity.

    The key difference is choice. When an individual is required by law to submit his Social Security number or tax return to a government entity, that information should receive greater protection than that disclosed in a private business transaction. In the latter case, an individual is free to choose the online entity whose privacy polices match his needs. When consumers “vote with their feet,” businesses quickly take notice.

    For e-commerce to flourish, businesses also need to provide personalized products and services so that consumers get what they want without suffering “information overload.” Knowing this, successful e-business marketers must gather information about the wants and needs of their customers in the same way as traditional marketers. Policymakers also must remember that online “trust” encompasses two distinct concepts: security, so that an individual’s private information will not be obtained through illegal hacking, and confidence that the private information collected for one transaction will not be used in ways the information provider did not anticipate or expect.

    Protecting the Security of Information

    The first and best line of defense against unwarranted intrusions into personal privacy is for individuals to employ e-commerce technology to protect themselves. Industry-developed and supplied encryption technologies and firewalls, for example, provide individuals with substantial tools to guard against unwarranted intrusions.

    Encryption is technology, in either hardware or software form, which scrambles e-mail, database information, and other computer data to keep them private. Using a sophisticated mathematical formula, modern encryption technology makes it possible to protect sensitive information with an electronic lock that bars thieves, hackers, and industrial spies.

    In light of the recent tragic events of 9-11, security in all its forms (including security against cyber intrusion and attack) is more important than ever. Strong encryption technology plays a key role in such security, helping individuals, businesses, and governments protect sensitive or personal information against willful or malicious theft. Not surprisingly, then, nations have increasingly adopted policies that encourage the widespread availability of encryption tools for consumers. At the same time, they have successfully worked to permit law enforcement to access encrypted communications in certain critical instances, while rejecting calls for encryption products to be undermined through the building of “back-door” government keys.

    A firewall is essentially a filter that controls access from the Internet into a computer network, blocking the entry of communications or files that are unauthorized or potentially harmful. By controlling Internet “traffic” in a network, firewalls protect individuals and organizations against unwanted intrusions, without slowing down the efficiency of the computer or network’s operations. They also limit intrusions to one part of a network from causing damage to other parts, thereby helping to prevent large-scale system shutdowns brought on by cyber attacks. Not surprisingly, then, firewalls have become a key component of computer systems today, and their architecture comprises some of the most state-of-the-art e-commerce technology available in today’s marketplace.

    But, computer security, or cyber security, is more than encryption, and it requires more than a onetime fix. It is an ongoing process requiring the adoption of strong security policies, the deployment of proven cyber security software and appliances-such as antivirus, firewalls, intrusion detection, public key infrastructure (PKI), and vulnerability management, as well as encryption-and, in the case of larger organizations, the existence of trained security professionals. These professionals, in turn, must be continually retrained in order to ensure that they are able to address and combat the evolving nature of cyber threats.

    Strong security tools alone, however, cannot protect users against threats in each and every instance. Dedicated hackers and criminals will always seek new ways of circumventing even the most effective security technologies. That is why it is critical that strong laws be put in place to deter such activities. In particular, where needed, laws should make it illegal to defeat, hack, or interfere with computer security measures, and penalties for these crimes should be substantial.

    As is the case with copyright laws, however, strong words in a statute are not enough. Effective antihacking and computer security laws must:
    • Provide deterrent civil and criminal penalties
    • Be backed by vigorous enforcement by governments (including through adequate funding of such enforcement).
    • Allow private parties to pursue fast and inexpensive remedies when their cyber security has been illegally breached
    Although the government should create a strong legal framework against cyber crime, it should not intervene in the marketplace and pick e-commerce technology “winners” by prescribing arbitrary standards in the security field. Such intervention would do little more than freeze technological development and limit consumer choice. Instead, the development and deployment of security tools should be determined by technological advances, marketplace forces, and individual needs, and should be free of regulation.

  4. #4
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    Jul 2004
    Empowering Individuals to Manage Their Personal Information

    In the private sector, all parties to any transaction should have the discretion to voluntarily choose the terms of an information exchange. The choice should be informed; both parties should clearly understand the information to be exchanged and what will be done with it. The choice will then be based on the reasonable expectations of the parties regarding a specific transaction. There likely will be fewer expectations about privacy accompanying the online purchase of a newspaper subscription, than the purchase of prescription medicines, for example.

    The choices of both consumers and businesses should be respected, and the private sector should be given the latitude to develop and implement effective privacy policies to meet customer demands. Marketplace-developed measures are far more likely than government regulations to meet the expectations of individuals and promote the development of online commerce. The role of policy in this area should be aimed at ensuring that:

    Industry self-regulation of privacy practices continues, including giving notice to customers of these practices.

    Consumers have the option to prevent information from being gathered from them or used for a different purpose (opt-out), rather than requiring their specific permission for the information to be gathered (opt-in).

    There is predictability and certainty in interstate Internet-based commerce that allows the marketplace to function efficiently, rather than multiple state laws that will complicate, and thus chill, commerce.

    Hackers face stiff criminal penalties for stealing information or impeding its online movement.

    Law enforcers are fully funded, staffed, equipped, and trained to fight cyber crime.

    The government should lead by example by implementing strong security tools in its own systems, including Internet security solutions in its electronic operations.

    Enhanced basic research and development on security technologies is appropriately funded.

    Skilled professionals in the computer security field are trained and developed.

    Information and best practices are more freely shared between the public and private sectors

  5. #5
    Join Date
    Jul 2004

    Post Free and Open International Trade

    The global vitality of an electronic marketplace depends upon free and open trade. Tariffs, regulations, and similar barriers to commerce raise costs and can price many smaller, competitive firms out of the market. When trade is restricted, economic development is slowed, consumer choice is reduced, and global prosperity is harmed.

    International trade is vital to the software industry. Over half of the U.S. industry’s global revenues are derived from foreign sales. Exports as a percentage of American software companies’ total sales have increased dramatically over the past decade. They now account for over $50 billion each year.

    Enforcing the Trade-Related Intellectual Property Rights (TRIPs) Agreement

    Widespread piracy is the software industry’s single most significant trade barrier. The most effective means of reducing piracy internationally is to enforce TRIPs, the agreement by which all members of the World Trade Organization (WTO) commit to abide by laws that protect intellectual property. TRIPs-compliant nations must have in place adequate civil and criminal laws protecting intellectual property and must, in practice, effectively enforce those laws.

    Unfortunately, many countries fail to criminalize or adequately protect copyright holders against “end-user” piracy, as required by the TRIPs Agreement. Other nations lack critical enforcement tools, such as the right to conduct surprise (“ex parte”) civil searches, also required by the TRIPs Agreement.

    The deadline for developing nations to comply with the TRIPs Agreement was January 1, 2000. However, today, many countries still remain in noncompliance and in violation of their international commitments.

    Facilitating Importation and Production of Information E-Commerce Technology Equipment

    A decade ago, in addition to rampant software piracy, the U.S. software industry faced another major problem in foreign markets: unreasonably high tariffs on computers and related devices. Significant progress has been made in this area. The WTO “Uruguay Round” agreements and the subsequent Information Technology Agreement (ITA), substantially reduced many tariffs for e-commerce technology devices.

    Still, many economies, mostly in the developing world, impose high duties or excise taxes on foreign e-commerce technology equipment. These barriers can range from 20 percent to as much as 100 percent of a product or system’s price. In some cases, a government might justify such a barrier by claiming that these products are “luxury goods.” Or, a government might argue that such actions are necessary to protect an “emerging” domestic industry or “sensitive” sector of its economy.

    But, in all cases, such policies simply stifle the development of a vibrant base of e-commerce technology consumers and service providers. It is essential for governments to adopt policies that encourage the use of e-commerce technology—not policies that effectively prohibit or punish it.

    The preceding is true whether considering a computer and software in the home, or routers and wires in the workplace. The refusal to compete against high-quality, imported products will do nothing to enable domestic manufacturers to produce quality products at affordable prices.

    For a nation’s e-commerce technology development to flourish, countries should also open up their domestic markets to foreign investment. Foreign companies willing to invest in e-commerce technology overseas are affirming that particular country’s development and manufacturing capabilities and consumption potential. An infusion of capital and expertise also serves as a catalyst for the further development of the domestic industry.

    Pursuing New Trade Agreements that Respect E-Commerce
    As trade moves increasingly from the import and export of tangible goods to Internet-based commerce, it is vital to ensure that traditional free-trade principles apply equally in the realm of electronic commerce. Nations that have sought to rid themselves of burdensome trade barriers must ensure they do not stifle e-commerce with those same barriers. Because trade liberalization is crucial to the worldwide growth of the software industry, the following agreements and negotiations are very important:

    The pursuit of a new round of multilateral trade negotiations under the auspices of the WTO
    The conclusion of regional free trade agreements, such as the Free Trade Area of the Americas (FTAA)
    New, bilateral trade agreements, including the U.S.-Singapore Free Trade Area (FTA)
    Thus, the preceding bilateral and multilateral talks provide opportunities to further strengthen international trade law, provide a predictable business environment for e-commerce, and develop a progrowth e-commerce agenda.

    Keeping E-Commerce Barrier-Free

    Any new trade negotiations should focus on barring new measures whose effect would be to restrict or inhibit the growth of global e-commerce. Countries should also ensure that they apply current WTO standards to online transactions. Specifically, countries should:

    • Sign the Information Technology Agreement (ITA) and eliminate e-commerce technology tariffs.
    • Make the 1998 Moratorium on Customs Duties on Electronic Commerce permanent and binding.
    • Refrain from trade classifications that penalize software and other products acquired through downloading from a computer network, compared to those purchased in tangible form.
    • Affirm that current WTO obligations and commitments, namely the General Agreement on Tariffs and Trade (GATT; trade in goods), General Agreement on Trade in Services (GATS; trade in services), and TRIPs (intellectual property) rules are technology-neutral and apply to e-commerce. Countries should refrain from enacting trade-related measures that could impede, actually or potentially, international e-commerce. Such rules should be enacted only where a legitimate policy objective necessitates doing so and where the least trade-restrictive measure is chosen.
    • Support a NAFTA-type approach to e-commerce services issues in future trade negotiations. NAFTA’s services obligations apply to all services, including new services that have developed since the conclusion of NAFTA (this approach is sometimes referred to as “top-down”). Because it is impossible to anticipate what specific e-commerce services will develop over time, any “bottom-up” approach, as embodied in the current GATS, almost certainly will be out-of-date from its inception. There is a need to set the stage for an agreement that is more flexible with respect to future e-commerce and computer industry developments.
    • Adopt a horizontal work program in the WTO for all e-commerce issues. This is necessary in order to ensure that WTO rules and disciplines reflect the horizontal (cross-disciplinary) nature of e-commerce

  6. #6
    Join Date
    Jul 2004

    Post Investing in a Technology Infrastructure

    Investing in a Technology Infrastructure

    All the consumer confidence and legal support in the world won’t boost e-commerce if there’s no way to deliver electronic content to customers efficiently and quickly. The future of electronic delivery demands a dramatic evolution of the telecommunications infrastructure in the United States and across the globe. Today’s infrastructure was built to carry voice telephone traffic and has served well for the last 50 years. But, the information age is placing new demands on this system-demands that it cannot readily meet. Today’s slow transmission speeds and congestion are a legacy of an outdated system that must be modernized, lest consumers and businesses turn away because of the “world wide wait.”

    High-speed constant connections to the Internet (broadband access) let users send and receive far larger volumes of information than traditional dial-up telephone lines allow. Broadband access can be provided through modified cable television lines, an enhanced telephone service called Digital Subscriber Line (DSL), satellite, fixed-wireless[5], and other means.

    Broadband access is absolutely necessary in order to make the vision of new, exciting Internet-based services a reality. For example, highly anticipated interactive applications (whether online classrooms, business showrooms, or health clinics) cannot exist if users lack broadband access.

    In the United States today, roughly 70 percent of American households have access to the Internet, according to NielsenNetRatings ( But, fewer than 10 percent of U.S. households have broadband access.

    Many other nations rival the United States in their level of Internet penetration. In Sweden, nearly 75 percent of citizens have access to the Internet, whereas the number in Canada is 58 percent. But globally, broadband access rates are even lower than in the United States.

    Several factors conspire to stymie more extensive broadband deployment. There are financial challenges, changing market conditions, uncertain consumer preferences, and even cultural and societal trends. In this environment, policymakers must take the lead and encourage the provision of broadband to consumers and their homes over the so-called “last mile.”

    There is also a need to ensure that individuals in all sectors and geographical locations enjoy the benefits of broadband access. Not surprisingly, early evidence suggests that, in the United States, the rate of broadband deployment in urban and high-income areas is outpacing deployment in rural and low-income areas.

    The preceding disparity has raised concerns that the “digital divide” (the gap between information “haves” and “have-nots”) will increase. The digital divide is a major concern for companies who have worked individually to expand access to computer technologies in underserved areas. They recognize that a global e-commerce technology future depends on widespread access to new technologies, particularly by individuals who have thus far failed to share in many of the communications and productivity benefits that technology brings. For all these reasons, many e-commerce companies support policies to promote broadband deployment in a way that will enhance widespread access to technology and, in so doing, close the digital divide.

    Deregulating and Making Telecommunication Markets Competitive
    Genuine competition in all telecommunications markets will accelerate the deployment of advanced e-commerce technologies at reasonable prices. Competition in the long-distance market in the United States over the past decade has substantially reduced the cost of telecommunications services and steadily increased service quality and product innovation. This same model should be applied to local telephone markets in the United States and other countries. Competition will stimulate existing and new companies alike to deploy new equipment and software that is data friendly (packet-switched) and enable companies to tap into significant consumer demand for information-intense services.

    Now, let’s look at another type of e-commerce technology: the tools that reside within the Internet environment itself. In other words, with the growth of the Internet, B2B procurement and other processes are being moved to the World Wide Web, for increased efficiency and reach. Procurement systems from different vendors use various protocols, and additional protocols are being defined by several industry consortia. As a consequence, suppliers are faced with the difficult task of supporting a large number of protocols in order to interoperate with various procurement systems and private marketplaces. In this part of the chapter, the connectivity requirements for suppliers and private marketplaces are outlined, and a description of how suppliers and marketplaces can interoperate with diverse procurement systems and electronic marketplaces is presented. A description of a simple connectivity that is based on punchout processes for fixed and contract-based pricing is presented first. Next, a description of how asynchronous processes, such as requests for quotes, auctions, and exchanges can be distributed for interoperability across suppliers and marketplaces, is also presented. Finally, this part of the chapter presents a description of the B2B/market-to-market (M2M) Protocol Exchange. This is a prototype that IBM has implemented, which maps between different, but analogous, protocols used in procurement systems and, thus, alleviates some of the interoperability difficulties.

  7. #7
    Join Date
    Jul 2004

    Post The Internet Environment

    As previously explained, with the rapid growth of the Internet, organizations are increasingly using the Web to conduct business with greater speed, reach, and efficiency. This transformation is especially prevalent in business-to-business (B2B) commerce and trade. Many of the Fortune 500 companies have adopted e-procurement systems such as Ariba (see sidebar, “Ariba”), Commerce One, and mySAP. Many others participate as buyers in e-marketplaces, such as Commerce One MarketSet, Ariba Hosted Market Place, and IBM’s WebSphere Commerce Suite, Marketplace Edition (WCS MPE, or MPE for short), among others.

    B2B buyers have diverse procurement systems, such as those offered by Ariba, Commerce One, and SAP, among others. Each of these procurement systems uses different B2B protocols for interaction with seller systems. Many of these protocols are proprietary and specific to the procurement system. Check attached example:
    Ariba uses the punchout process between the Ariba Order Request Management System (ORMS) and seller systems using their Commerce XML (cXML, or Commerce Extensible Markup Language) specification for the messages. Commerce One uses XML Common Business Library (xCBL) as the format of messages, and mySAP uses the Open Catalog Interface (OCI; for a process similar to punchout) between buyer and seller systems.


    With purchasing managers facing the prospect of tighter corporate budgets, developers Verticalnet Inc., PeopleSoft Inc., and Ariba Inc. are each readying software that they indicate will enable their customers to better manage spending. The goal is to enable companies to more closely tie the process of finding sources of raw goods, negotiating the price for those products, and closing the loop with electronic settlement.

    Verticalnet has recently released an enhanced Spend Management module as well as the next version of its Metaprise collaborative planning and order management suite. Spend Management introduces a supplier score card and enhanced reporting and analytics, which will let suppliers see through a Web browser how they are serving buyer and performance metrics, such as actual costs versus standard spending. New functionality in Metaprise, which comes from the company’s acquisition of Atlas Commerce Inc., facilitates the process of improving requisitions and managing purchase orders. Enhanced logistics functionality integrates shipping updates with third-party logistics providers.

    Meanwhile, PeopleSoft, of Pleasanton, California, recently announced the general availability of its strategic sourcing suite. The company unveiled PeopleSoft Strategic Sourcing as a collaborative solution that helps companies manage the complex bidding and negotiation process in the procurement of direct goods, services, and large capital expenditures, according to officials.

    Separately, Ariba, of Sunnyvale, California, recently unveiled its Spend Management Suite, which has been in beta testing. The suite consists of new and enhanced software modules for analysis, sourcing, and procurement to help companies manage their spending before, during, and after the procurement process-stages that Ariba refers to as “find it,” “get it,” and “keep it.”

    In the find-it category, the new Ariba Analysis module gathers procurement information, which typically resides in the Ariba Buyer platform, accounts payable, and ERP planning systems. It then generates reports to help companies find potential savings.

    The second new module, called Ariba Contracts, falls into the get-it and keep-it categories, by focusing on the administration of contracts—those being used successfully and those requiring renegotiation. Integrated with Ariba Buyer and Enterprise Sourcing, the module helps companies track and manage contract life cycles. Ariba Invoice, the third new module, automates every stage in the invoicing process to help companies reduce reconciliation cycle times and lets suppliers upload invoices into Ariba Supplier Network and transmit them back to buyers.

    As for enhancements, Ariba Buyer has new integration with the Contracts module. Ariba Workforce features an expanded capability to capture and manage a broader spectrum of workforce procurement, indicate officials
    Many other protocols for B2B processes, many proprietary to procurement and other systems, and others customized for specific partners are being defined and implemented. In addition to the procurement systems, which typically reside within the firewall of the buying organizations, marketplaces are being set up on the Internet through which buyers can access a large number of suppliers, typically for specific industry segments. Many of these marketplaces use the same or similar technology to connect to procurement and supplier systems and offer buyers at small and medium-sized businesses access to suppliers.

    Meanwhile, standards bodies are defining protocols and message formats for B2B processes. One of the early processes was that defined by the Open Buying on the Internet (OBI) consortium, a precursor of the punchout process. The RosettaNet consortium used OBI as a starting point and defined Partner Interchange Processes (PIPs), including both flows and XML-based message formats for interactions between partners. The electronic business XML (ebXML) framework (sponsored by the United Nations Center for the Facilitation of Procedures and Practices for Administration Commerce and Transport [UN/CEFACT] and the Organization for the Advancement of Structured Information Standards [OASIS]) includes a messaging service, a Collaborative-Protocol Agreement (CPA) specification, and a Business Processes Specification Schema. These are all used for enabling the interaction between business processes.

    The Web services approach defines both a messaging and a remote procedure call mechanism using Simple Object Access Protocol (SOAP). On top of SOAP, the Web Services Description Language (WSDL) defines a Common Object Request Broker Architecture (CORBA) interface definition language (IDL)-like interface for Web-based B2B remote procedure calls. And, the Universal Description, Discovery, and Integration (UDDI) consortium has defined a directory mechanism for registering and locating businesses on the Web, with an optional WSDL interface specification. The Open Application Group (OAG) has defined Business Object Documents (BODs) for the content of B2B messages.

    Some of these originally disparate efforts are now coming together. For example, the RosettaNet consortium has announced that they will move to the ebXML messaging protocol, and OAG has announced that they will support ebXML. In spite of these efforts, however, the number of B2B protocols continues to grow.

  8. #8
    Join Date
    May 2004


    Awesome Guide CyberGuru, can you also comeup with some tuts on Digital Transactions.
    A complete guide about Digital transactions, which covers credit cards, Smart Cards and minute details about using them.

    This will be handy...

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