The development of Internet business

For most of the 20th Century, business-to-business (B2B) communication and commerce changed only at an evolutionary rate. The widespread adoption of computers for business transactions and communication by both small and large businesses starting in the 1970s, and the rise of the Internet, have precipitated a major paradigm shift, one in which we are all participating.

In the 1980s and 1990s Total Quality Management (TQM) and Business Process Re-engineering (BPR) dominated management mantra as widespread adoption of automation drove massive change in the way business is conducted. The focus was upon continuous improvement of people, processes and systems to streamline operations while reducing costs. Integration of partners` operational systems (ERP, Supply Chain Management, CRM, Ordering, Billing, Fulfillment, Shipping, Tracking, etc.) was an extension of this concept. Until recently, B2B commerce was conducted primarily between brick & mortar businesses via telephone, fax and mail. Wholesale channels were often seen as conduits to support the company` s business-to-consumer (B2C) market.

With the development of Internet businesses (generally with no brick & mortar storefronts or operations), both B2C and B2B markets have accelerated at unprecedented rates, and we are seeing just the tip of the e-commerce iceberg. Globalisation of markets, mergers and acquisitions have accelerated the need for integration within the four walls of a corporation during the early to middle part of this decade. Now we are seeing that move beyond the four walls to the Internet Economy. Even brick & mortar businesses are finding an Internet presence mandatory to meet changing market demands. And there are levels of that presence, starting with static web sites.

Since e-commerce is essentially frictionless, no phone calls, faxes, or paper trails clog the communications channel between buyers and is both faster and more efficient. If you are a consumer, payment is made via credit card. If you are a business the industry is not yet at the point where standard payment protocols are universally accepted. Functions such as fulfillment, billing, etc. need to be automated as well. In the mad rush to stake a claim on the Internet` s e-commerce landscape, many companies are focused 100% on order taking. There are some that literally pull a printout off the backend of a web server and fax it somewhere, manually e-mail it, or key it into other applications.

Virtually every industry is now represented online by at least one e-commerce entrepreneur, visible in the form of a market maker business. These e-businesses are using the Internet to optimise their market positions by integrating their supply chain and logistics management applications with their internal and external value chain processes. Companies can no longer afford to operate as independent islands in a sea of partners and competitors.

To be competitive and thrive in a real-time, 24 x 365 worldwide marketplace, companies must bridge information islands both within the organisation and across business communities. Companies worldwide have been investing heavily in business applications and computer systems to improve productivity, enhance efficiency, reduce costs, and share information with business partners. The challenge, however, is to integrate business-critical data from legacy applications and extend the functionality of Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM), and other systems between business partners across the Internet in a secure and reliable manner.

With more efficient and faster information flow, companies will realise the benefits of reduced inventory levels, shorter cycle times, improved customer service and asset utilisation, and reduced obsolescence. The key words in succeeding in B2B e-commerce are coordination, cooperation, and integration.