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Research on the Impact of the Internet on Business-to-Business Commerce

By Arie Segev, Contributing Editor
Email: segev@haas.berkeley.edu

The Internet and the World-Wide Web provide significant opportunities to make business-to-business more effective and efficient. The impact ranges from cutting the cost of paper and mailing, to shortening the time-to-market of products due to better supply-chain management. In our research, the focus has been on Procurement Process Re-Engineering, Electronic Catalogs, Internet-based EDI,  Bargaining and Auctioning issues, and the Impact of the Internet on Purchasing Strategies and Practices. By following the previous links, the reader can view summaries of the projects and read the complete reports (where available).

The study of the Impact of the Internet and the WWW on purchasing, incorporates several issues that have been dealt with in the other studies. Specifically, the current Web-based survey consists of four major parts:

  1. Purchasing Process - to take full advantage of electronic commerce, a change in rules, policies, and business processes are required. The survey tries to determine to what degree this is happening.

  2. Supplier Relationships - the trend in recent years has been towards a reduction in the number of suppliers, and stronger relationships with selected suppliers (including vendor-managed inventories). Depending on the type of procurement, one may argue that in some cases, the ability to source more efficiently and compare prices and other features through the use of intelligent agents, will increase the number of suppliers. The survey addresses this issue and related ones.

  3. Pricing and Negotiations - a significant part of business-to-business procurement is through catalogs. As electronic catalog technology is advancing, issues related to negotiation need to be addressed (these issues are strongly related to pricing strategies). Questions in this category include the degree to which negotiation can (should) be automated, and what dimensions are the most important (price, quality, and other terms).

  4. Information Technology and Systems - the role the Internet and related technologies play is obviously central and implicit in the previous 3 parts. In this section of the survey we are trying find out what specific technologies and systems are being used currently. We are also trying to identify information technology needs which will be required to support changes identified in the preceding sections.

The value of this study lies in several dimensions. First it will provide information regarding the current state of purchasing practices and plans to take advantage of electronic commerce. Second, it may identify needs which are currently not being addressed by technology developers, and third, it will help us refine our models and guide us to further detailed studies in several areas, including auctioning and bargaining strategies, electronic catalog architecure and functionality, customer relationships, and general inter-organizational processes (including virtualization issues).

Arie Segev is a contributing editor to the Journal of Internet Purchasing. He is a professor at the Walter A. Haas School of Business and the Director of the Fisher Center for Information Technology & Management at The University of California, Berkeley. Professor Segev's research has dealt with Electronic Commerce and various issues related to Information Management technologies, techniques and methodologies. Professor Segev has published over 70 papers on the above topics in leading journals and conferences, and consulted government and industry.