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05.27.04
 By
Nowshade Kabir
Business processes are the building blocks of an enterprise. If one
of these processes fails to live up to its expectation, business starts
to flounder. How to minimize the risks, get a better monitoring of
the processes and, at the same time, reduce costs involved? The answer
is - business process automation.
Although, automated business processes based on online technologies
can create incredible value to existing business, many companies are
slow to adopt technological innovations and reap benefits from them.
However, lately, things have started to change! According to a recent
poll conducted among mid size companies shows 52 percent of respondents
plan to spend over a million dollar on business process automation.
Large companies - early adopters of online business processes - have
been immensely profiting from the value created by process automation.
Intel recently announced that it saved one billion dollar last year
alone thanks to online business process management. |
In
broader sense, business process management technology delivers solutions
to understand, analyze and simulate business process models. Companies
adopt this technology to streamline their business operations, lower
overhead expenses, reduce maverick buying, reduce paper-based - mistake
prone - transactions and get better control. The ultimate goal is
to make the corporation a fully process-managed enterprise, transformed
through strategy, design, realization and actual operations.
Companies require streamlining their business processes to help solve
various crucial but specific problems, such as:
An electronic supplier, in order to stay competitive, requires
reducing order fulfillment cost aggressively.
A merchant needs to reduce shipping time by better monitoring
his inbound shipping.
A manufacturer needs to cut production cost by reducing manufacturing
time of a key product.
A bank needs to develop and market a financial product faster
than its competitors.
A large distributor needs to consolidate buyers and suppliers
to bring efficiency to its business.
Although, business processes are wide in range; and there are many
complex issues that require meticulous work, automation of some basic
processes may bring notable result for virtually any company. These
processes include supply chain, procurement, logistics, inventory
control, etc. By adopting an online business to business exchange
companies can streamline most of these business processes bringing
added value to their operations.
A B2B exchange is a unified online platform, where buyers and sellers
login to communicate, collaborate and make business transactions.
A private B2B exchange, mostly, consolidates suppliers and buyers
of a specific company, which owns and operates the exchange.
There are two ways of integrating B2B exchange to automate business
processes. A company can participate in existing B2B exchange or create
its own private exchange.
While for small companies, it is more viable to participate in a major
B2B exchange that has required components, larger companies should
consider creating their own B2B exchange.
The profits companies can reap from joining an existing B2B exchange
or creating their own private one could be enormous.
Customer Base Development
A supplier, once registers with a B2B exchange, gets immediate access
to a large community of prospective buyers of his products or services.
Increase Revenue from Existing Customers
Business process automation allows companies develop products faster,
buyers get faster and easier access to product information, receive
quicker response to their requests, get better customer support and
may buy products online. These turn into more sales.
Add Profit from Value Added Services
Once the exchange is set as primary sales channel, available free
resources can be used to create more value added services for clients.
Some of the services that the exchange may offer also can be used
to generate more value.
Reduce Order Processing Cost
The supply chain solutions of a B2B exchange may allow sellers to
reduce order processing cost significantly. Studies show that cost
of processing a purchase order can be reduced from US$ 70 down to
US$ 6 only.
Sales and support costs
By automating sales and customer support processes companies can reduce
over head costs over 25-30% easily.
Inventory keeping costs
Clearer visibility and forecasting ability allow companies considerably
reduce inventory keeping costs.
Since an existing B2B exchange may not have all the necessary features
and functions, a good option is to build a private exchange based
on one's own specific business process automation need. This exchange,
at its minimum, should be able to cover major portion of supply chain
and inventory control.
The following elements should be integrated to create substantial
value to a private B2B exchange:
Supply Chain Management
Supply chain management is the core solution of an exchange and can
deliver great values to existing systems. Implementation of this solution
will help achieve incredibly high return on investment. Business process
automation in this component of the exchange includes both supplier
and buyer-side quotation, requisition, purchase order and invoice.
Marketplace
This is the venue where the exchange owner company will post their
products for sale. A shopping cart should be integrated to the electronic
marketplace in order to automate the buying process. The offered-for-sale
products will be directly related to inventory control management
component of the exchange.
Auction
Electronic auction system can use both English and Dutch auction methods.
For convenience the auction component can be integrated to the electronic
marketplace. Online auction helps liquidate surplus goods easily.
Reverse Auction
This solution allows automate electronic procurement, where suppliers
compete for a business deal real time online.
Members Storefront
The participants of the Private Exchange - both buyers and sellers
of the exchange owner company get a Storefront that reflects profile
of the company, their products and other information.
Forum
A Forum or Discussion Board is an organized, on-line interactive message
board where participants conduct discussion on a set of topics by
posting questions, comments and responses.
Directory of Companies
This is a listing of all registered participants - buyers and sellers
of the exchange owner company - either by business category or by
alphabetical order. An advanced search engine tool can be incorporated
in order to find a company based on data provided.
E-catalog
E-catalog is a hierarchy of product and service categories. All products
and services handled by the exchange owner company should be consolidated
in the catalog.
Private B2B exchange is a powerful concept, which engulfs a fairly
big portion of business processes requiring automation. This is more
like a business ecosystem that has an ability to change the way companies
think and do business and create tremendous value to their owners.
About the Author:
Nowshade Kabir is the founder, primary developer and present CEO of
Rusbiz.com. He has Ph. D. degree in Information Technology. Dr. Kabir
has over 12 years of experience in International Trade and has worked
as an advisor to several government projects. You can contact him
at nowshade@rusbiz.com, http://ezine.rusbiz.com,
http://www.rusbiz.com
Read this Newsletter at:
http://www.smallbusinessupdate.com/2004/0527.html |
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