Inter-Organizational E-commerce

Inter-organizational e-commerce refers to the full spectrum of e-commerce that

can occur between two organizations. It is the e-commerce between businesses
i.e. the businesses focus on selling to other businesses in the B2B e-commerce.

It includes companies doing business with one-another with a goal to save money
on purchases that can be negotiated easily. Companies are now mutually buying
and selling products and services on the internet.

Inter-organizational e-commerce many reduce the transaction costs, increase the

availability of products and suppliers and reduce dependencies on a few trading
partners and products.

Moreover, they offer many secondary services towards integrating purchasing,

distribution, and inventory processes, streamlining the entire transaction process.
Thus, it allows better inventory management, quality control and supply chain
processes.

Business organizations are constantly buying and selling goods and services.
Shops buy products in bulk from their suppliers and sell those goods in small
quantities to their customers.

Manufactures buy raw material or components from their suppliers, assemble

them into new products and sell them to their customers. Retailers make a great
number of transactions and the whole operation of their business is dependent on
their effective execution.

Other business service sector organizations such as accountants may be less

dependent on a constant flow of goods but they still need supplies and they are
careful to account for the transactions with their transactions.

For all businesses, there is a web of inter-organizational transactions. This web of

transactions forms a value chain and is illustrated as the Logistics Network in the
following figure:

Credit Transaction Trade Cycle

Most inter-organizational trade transactions take place as a part of an established,
ongoing trade relationship. The trade cycle for inter-organizational transactions is
generally a credit trade cycle. The stages in the credit trade cycle are:

 Pre-sales -
Before trading starts, the two organizations need to make contact (search) and
agree trading terms (negotiate). The customer organization may go out to tender
or simply contact a firm it knows. The supplying firm may want to run credit checks
on the customer. Both organizations will need to agree the price of goods,
conditions of delivery and terms of payment.

 Execution -
Execution consists of requesting the goods (order) and then collecting or receiving
them (delivery). For most supplies, firms will have formal purchasing procedures-
order originate from a purchasing department. The delivery of the goods is also
formalized- goods come with a delivery note that is cross checked manually or
electronic with the original purchase order to complete the stage.

 Settlement -
The supplier of the goods has to be paid with inter-organizational transaction that
usually takes place after delivery. The supplier requests payment (invoice) and the
customer settle the account by making the payment.

 After-sales -
In any transaction, there can be problems, damaged or faulty goods, and these
issues are sorted out after the execution phase. For items such as machinery,
there can be an ongoing process of warranty or maintenance (after sales).

Many inter-organizational transactions will be repeated on a regular basis. For

example, the produce purchases of the retailer and the component orders of a
vehicle assembler- this is shown by loop of the execution and settlement stages.

Additionally, customers and suppliers will re-visit price and other conditions of the
contract on a periodic basis or the customer will switch to an alternative supplier,
shown as a loop back to the negotiate and search phases respectively.

Each stage of the inter-organizational trade cycle is documented and both the
customer and supplier have systems to trace the progress of the transaction. The
customer will check for delivery of the goods and will not want to pay before the
delivery is recorded in their system.

The supplier integrates the order entry system with a stock control or production
control and certainly needs to check payment against the invoices that are issued.
The exchange of documents for the trade cycle of a simple transaction is shown
below:
Varity of Transaction -
There are many organizations and there is a variety of the transactions that takes
place. The organizations range from a large supermarket chain down to a local
corner shop. The type of transaction that takes place and how it is executed
depends on the size of the business involved, the nature of the business and the
norms of the particular trade sector. A variety of transactions that can take place
are:

 Discrete transactions of commodity items.

 Repeat transactions of commodity items.
 Discrete transactions of non-commodity items.

These differing transactions may be done electronically and can be mapped onto
the various e-commerce technologies:

 Electronic Markets -
An electronic market is an inter-organizational information system that allows the
participating buyers and sellers to exchange information about prices and product
offerings.

They are the commerce sites on the internet that allow large numbers of buyers
and suppliers to meet and trade with each other. Electronic markets provide an
efficient search mechanism to compare commodity product offerings and find a
suitable supplier.

Many electronic markets also offer additional services, such as payment or

logistics services that help member complete a transaction.

 Electronic Data Interchange (EDI) -

Electronic data interchange (EDI) is the electronic exchange of business
documents in standard, computer-process able, universally accepted format
between the business partners.

EDI comes into its own once the supplier has been located and terms of trade
arranged. It enables the computer in one organization to communicate with a
computer in another organization without producing any paper documents or
human intervention. It provides for the automation of regular repeat orders and
other standardized exchanges on a weekly, daily or even hourly basis.

 Internet Commerce-
In addition to the large and regular purchases, organizations will be making once-
off, consumer style purchases e.g. stationery purchases. Such purchases are not
the subject of electronic markets and probably do not justify an EDI system but
they can be undertaken using e-commerce facilities on the internet.

All these e-commerce technologies could be used by a single company as per

their requirements.

Intra-organizational e-commerce
When e-commerce transaction does not involve multiple organization, then, it is
termed as Intra-organizational e-commerce.

Or

it is emerging field which facilitates information collection and transfer within

organization for a speed redress of grievances of common man.

Advantages-
[Link] communication capability among employees of department ensuring
fast decision making.

[Link] to reduce record maintenance by eliminating the conventional way of

record keeping.

[Link] government departments collection of information is a prime concern by

storing information in digital formats it provides efficient way of sharing information
and expertise idea.

[Link] customer satisfaction as whole information is available at a click of a

mouse without visiting office premises.

Intra-Organisational in commerce: is visualized under such sites as Online

Shopping for Electronics, Apparel, Computers, Books, DVDs & more

and Ebay. A simple site from the buyers prospective is a store front to purchase

products and services.

From a business stand point you looking at various industry and business
applications forces to collaborate in synchronization.

1) Management Function

2) Business Function

3) IT functions

4) Mobile Functions
5) Outsource vendors functions.

Intra-organizational e-commerce is the purchase of goods, services, or

consultant from resources by an organization from within the same organization.
This can include everything from purchasing office supplies from co-workers to
hiring a within the company. Some common intra-organizational e-commerce
examples include:

1. Purchasing office supplies from co-workers - This is a common intra-

organizational e-commerce scenario, as it can be cost effective and faster than
ordering supplies online.

2. Hiring a consultant from within the company - Consultants can be a valuable

resource, and it can be faster and easier to hire one within your organization than
to find one outside of it.

3. Purchasing intellectual property from within the company - Intra-organizational

e-commerce can also involve purchasing intellectual property, such as patents or
trademarks. This can be useful in protecting your intellectual property, and it can
be quicker and easier to do than seeking out external sources.