B2B Transactions Term Paper

Excerpt from Term Paper :


Walmart and Business to Business transactions

Business to business (B2B) e-commerce transactions are the most rapidly growing segment of the e-commerce field. B2B transactions help two companies to interact between each other over the internet in order to complete transactions. It is beneficial for the businesses as it cuts down the cost. (Bidgoli, 2013)

Walmart is an international retail giant, which has a humungous retail chain in USA and abroad. Walmart uses B2B e-commerce arrangements in order to replenish its stocks and order stocks of new products from its suppliers. To control the replenishment of stock and making the buying process more efficient, Walmart has made B2B arrangements with its suppliers. As a result, it shares data related to stocks with its suppliers and in turn, it also gets information about new products. (Lussier, 2009)

Nature of Transactions

The nature of transactions that Walmart makes is ordering supplies. As Walmart and its suppliers share information, the restocking and payment process get smoother. The suppliers get the information about the stock that is depleting, as a result, they can send in more units of the product. Walmart, gets information about the new products of the supplier and thus it can order new products over the internet. (East & Wright et al., 2008)

In addition, the Walmart could avoid promotions from the supplier side, this made it easier for them to order products and eventually made the supply and demand interact with ease. The suppliers could easily supply the products according to the demand and as a result, Walmart's restocking system improved a lot. Walmart enjoyed a stock that would not deplete and its suppliers would get a customer that would be in a constant need of products. (East & Wright et al., 2008)

This B2B arrangement helps Walmart and its suppliers to meet the consumer demand without any delay and shortages. It also helps to eliminate any intermediary and therefore the cost of ordering and supplying is cut to minimum. (East & Wright et al., 2008)

Technical Architecture

With the evolution of B2B e-commerce, the need for better software architecture, which can cope up with speedy and huge transactions, has increased. The transactions of Walmart are also in a large amount and therefore a suitable technical architecture is necessary in order to ensure the smooth ordering and supply process. (Bianco & Kotermanski et al., 2007)

The technical architecture that supports the transactions of Walmart is Service-Oriented Architecture (SOA). Service-Oriented architecture does not have a specific definition but it can be described using a set of characteristics. SOA consists of two parties normally. One is the provider of service whereas the other is the user. These two parties can perform a host of tasks using the SOA. These tasks are: (Bianco & Kotermanski et al., 2007)

The service users can send massages to the service providers.

A service provider can also become a service user and can send messages to other companies.

A service user can look up for several service providers in the service providers directory.

An Enterprise Service Bus can also act as a mediator between the service users and service providers. (Bianco & Kotermanski et al., 2007)

The first characteristic of SOA is that it is a complete independent unit in itself. This means that it can be deployed independently without connecting to any other system. Secondarily, the SOA is modular and thus it contains several components. These components are the part of the SOA. The users of a service enjoy a specific interface provided by the SOA. The users do not have to worry about the implementation. Moreover, the service users and providers can have different languages and styles according to their preference. (Bianco & Kotermanski et al., 2007)

There are many uses for the Service-Oriented Architecture. Different organizations opt for SOA to accomplish one of the following tasks:

Incorporation with older systems

Corporate mergers

Altering relations with business partners. (Bianco & Kotermanski et al., 2007)

The SOA supports Walmart's transactions as Walmart alters its relations with its suppliers by giving them more information about the stock so that the suppliers can send the product themselves when they are at a low level. (Bianco & Kotermanski et al., 2007)

Advantages and Disadvantages

The use of B2B e-commerce transactions has advantages and disadvantages as well. The first advantage of these transactions is the cost efficiency it brings. Traditionally, the buyers and sellers used to meet after going through a lot of advertisements, meetings and confirmations. All of the aforementioned steps used to take a lot of time and money as well. With the advent of B2B e-commerce, Walmart can easily; order supplies and find new suppliers without worrying about the above-mentioned steps. In addition, e-commerce also omits the need of hard copies and paper-based presentations. All of these things accumulate and make the whole process cost effective. (Lucking-Reiley & Spulber, 2001)

Apart from getting saving costs, e-commerce also gives an advantage of optimum stocks to Walmart. As the suppliers have information about the stocks, Walmart enjoys optimum stock levels and easily avoids shortages. (Lucking-Reiley & Spulber, 2001)

Moreover, Walmart enjoys better relationship with its suppliers and gets a better customer service without any delay. B2B e-commerce transactions helps Walmart to focus on its own customers without worrying about suppliers and depleting stocks. It can therefore be more efficient in fulfilling the demands of its customers. (Lucking-Reiley & Spulber, 2001)

On the other hand, there are disadvantages of B2B e-commerce as well. Despite the fact that Walmart can easily get optimum stock levels, not all the supplying companies offer the e-commerce facilities. Therefore, the market of B2B e-commerce is limited. (Sun & Finnie, 2004)

In addition to that, the goods ordered over the internet via e-commerce may have quality issues. Although the goods may have a guarantee, the time taken by the goods to be sent back and return creates a gap, which may lead to shortage. Moreover, the delivery of goods may also get delayed. (Sun & Finnie, 2004)

Effects of E-business on Project Management

The field of e-business is so vast that is has affected almost all the aspects of the day-to-day activities. Project management means managing the resources and personnel that are engaged in completing a project. The advent of e-business has changed the conventional ways of project management. There are positive and negative aspects of the changes in project management. (Fong & Fong et al., 2002)

First of all, a lot of physical equipment has been eliminated. Nowadays, the project managers only have to work using computers on different websites. This makes it a less tedious job to perform. In addition, costs are also cut as the use of printed information is also reduced. (Fong & Fong et al., 2002)

Secondly, the projects can also be tested before final deployment. Conventional project managers had to be very careful about mistakes and errors, as it would ruin the project. With the advent of e-commerce, a project can be tested before it starts working and therefore, the designers and managers get a chance to rectify errors that are found. (Fong & Fong et al., 2002)

E-business projects are also flexible when compared to conventional projects. Softwares can adapt to changes in hardware and therefore the system shows a level of flexibility. These systems are also made flexible so that they can cope with the constantly changing technology. (Fong & Fong et al., 2002)

On the other hand, these projects also have risks associated with them. The first risk is the security of data. As data stored on computer nowadays is more vulnerable to theft than the one stored in lockers. Therefore, there is a risk of hacking. (Fong & Fong et al., 2002)

In addition, compatibility can also become a problem for project managers. Sometimes hardware and software may not be compatible with each other and may result in increased time consumption. (Fong & Fong et al., 2002)

Lastly, the e-commerce project have seriously affected the system reliability. The conventional systems were reliable as they normally did not depend on chips and other electronic equipment. Increased dependence on this equipment has adversely affected the system reliability. (Fong & Fong et al., 2002)

Effects of E-business on supply chain management

E-business will also affect the supply chain management as it will directly affect the three flows that make up the supply chains of different organizations. E-business affects the physical flow by making sure that information reaches the two parties via virtual means. Therefore, the companies will be able to explore more markets without physically travelling to them. This will reduce the cost of ordering supplies. (Rekha, 2007)

The information flows are affected by the E-business as it can provide information to a company 24 hours a day, seven days a week. This reduces the use of traditional paper-based systems which had to be prepared and presented to the management so that they can make decisions. (Rekha, 2007)

Lastly, e-business also affects the financial flows by eliminating the need…

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