The "Business" In "eThe "Business" In "e---Business . - EIDX

Promotion and Education Impact of Standards on Business Processes For example What would your company do if the standards body says that an order response message must be issued for every order, even if it means receiving redundant messages? What would your company do if the standards body says that order changes are exceptions that should be handled manually? 2002 Computing Technology Industry Association, All rights reserved 26

Promotion and Education Impact of Standards on Business Processes ‘Standard’ message definitions with similar functions and contents Partners disagree on which message should be used e.g. Do you send release against a blanket PO in: Purchase Order (850/ORDERS/3A4)? Change Order (860/ORDCHG/3A8)? Delivery/Ship Schedule (862/DELJIT/4D1)? “Embedded” in Forecast Schedule (830/DELFOR/4A1)? All “valid” in their respective standards. 2002 Computing Technology Industry Association, All rights reserved 27

Promotion and Education Impact of Standards on Business Processes Another example of the problem an order is a type of contract. What’s the relationship between: Purchasing agreement Blanket PO (BPO) Discrete PO? How should BPO be established? Use: Contract/purchasing agreement with discrete PO for each release? Discrete PO with ‘discrete release’ for each release? 2002 Computing Technology Industry Association, All rights reserved 28

Promotion and Education Impact of Business Process on Standards Should the standard be more flexible in order to accommodate multiple ways of doing business or should it be less flexible in order to force member companies to converge towards one way of doing business? 2002 Computing Technology Industry Association, All rights reserved 29

Promotion and Education Business Process and Standards More flexibility: Accommodates more process Interoperability variation; faster adoption Reduces business process interoperability, increases negotiation time and speed of implementing new partners Flexibility Less flexibility: Slower adoptions - partners must change processes, back-end systems Fewer interoperability roadblocks 2002 Computing Technology Industry Association, All rights reserved 30

Promotion and Education BackBack-end Integration Many interpretations of the term "integration“ Definition: Connecting hardware and/or software components from more than one system together so that they operate as if part of a single system In B2B, components from more than one company or organization One common mistake: Partners fail to discuss “degree” of integration 2002 Computing Technology Industry Association, All rights reserved 31

Promotion and Education To what Degree can a Ship Notice/Manifest be integrated? Ship Notice 1 Display or Print 2 Link to Open PO 3 » View 10 9 Create Receivable » Supplier Managed Inventory » Receive against ASN 11 8 12 13 Non - Integrated Link to Rec’vg System 4 Link to AP System » Pay on Receipt »Pay on Ship Link to Inventory System 7 6 Link to 3P Whse » Buyer-controlled » Seller-controlled 2002 Computing Technology Industry Association, All rights reserved 5 » Consignment » Pay on Consumption Integrated 32

Promotion and Education BackBack-end Integration Each partner needs to evaluate what degree of integration to implement Decision points include: What to develop in house vs. what to have solution provider develop Is there more than one way? What makes sense? 2002 Computing Technology Industry Association, All rights reserved 33

Promotion and Education BackBack-end Integration – Common mistakes What’s good for one is good for all.” Small company - one ship notice a day – not a good candidate for integration; 1st degree may be sufficient Mid-tier company - may better off integrating to a smaller degree than a large gorilla company; orangutans and gorillas don’t need exact same habitat “We’ll automate X and Y but not Z” Large company - may create more complexity for users and cost by only partially integrating a business process or scenario 1 or 2 more degrees of integration could make a big difference 2002 Computing Technology Industry Association, All rights reserved 34

Promotion and Education BackBack-end Integration Another common mistake: Evaluating business processes out of context. Just about every business process flows to or from some other business process To avoid shifting cost from one process to another, evaluate adjacent processes when automating/integrating a business process 2002 Computing Technology Industry Association, All rights reserved 35

Promotion and Education Web Services Same issues as Integration, plus Current cost models for services are often based on the assumption that the 24x7 need is universal The small company doesn’t necessarily need 24x7 up time and support, or nor the associated costs Models assume that services are available 24x7 Models assume that it’s a good idea to select the provider of a mission critical service on the fly 2002 Computing Technology Industry Association, All rights reserved 36

Promotion and Education Another Example: Forecast SelfSelf-study slide - you may study the details on your own. 20 Degrees of Integration Fcst Display 2 1 or Print 5 Link to Order System 3 7 6 Separate by Process 8 9 13 20 Link to Whse 14 15 Link to Shipping System 4 Link to A/R System 10 Link to Planning System 12 Trend Analysis 11 Supplier Managed Inventory Process 17 16 18 Link to Inventory System 19 Non - Integrated 2002 Computing Technology Industry Association, All rights reserved Integrated 37

Promotion and Education The “Business” in “e“e-Business” Part II: eBusiness Process Frameworks Ways of Categorizing or Organizing Business Processes

Promotion and Education Processes in An Enterprise SelfSelf -study slide - you may study the details on your own. Generate Business Plan Perform Business Planning Perform Strategic procurement planning Perform Strategic demand planning Perform Financial planning Design Supply chain Perform Master planning Plan product lifecycle Manage Support Services Manage corporate communications Ensure employee communications Provide legal services Plan & manage environmental safety programs Provide risk management Provide security Manage Human Resources Plan & manage employee resources Develop & train workforce Perform employee data & salary administration Perform employee benefit event maintenance & open enrollment Administer employee benefits Manage payroll Monitor employee health & safety Manage employee separation process Manage Tax, Customs & License Manage Import/Export Compliance Classify Materials & Products Recover / Avoid Duty Manage Transaction Tax Manage IT Develop IT Strategy Evolve IT Architecture Develop & manage IT vendor relationships Develop & deploy IT products & services Enhance & maintain IT products & services Manage operations of IT environment Support & train users Develop & manage user relationships Plan annual IT business Manage IT business unit Manage technical infrastructure Manage data communications Support desktop services Provide user help Manage application portfolio Manage software development lifecycle Provide operational system support Manage Finances Perform transaction processing Manage general ledger Perform closing Perform asset accounting Perform project accounting Manage taxes Perform overhead accounting & allocation Manage capital structure Manage financial risk Manage Asset & Income Tax Reporting Manage financial accounting policies & procedures Perform internal & external audits Support product costing Perform profitability analysis Process & maintain financial reports/statements Analyze financial results Perform financial forecasting 2002 Computing Technology Industry Association, All rights reserved Manage Facilities Maintain maintenance data & documentation Identify & plan maintenance requirements Schedule plant maintenance Execute maintenance activities Manage Customers Manage Customer Relationship Manage Customer Information Negotiate & Manage Contract Terms Collect Customer Feedback/ Respond Manage replenishment terms. 39

Promotion and Education Processes in An Enterprise SelfSelf -study slide - you may study the details on your own. Generate Products Conduct research & development Develop & design products Implement Products and Services Qualify products and services Perform Test capacity planning Manage Change Orders Manage Alpha/Beta Product Releases Launch Products and Services Source Develop Sourcing Strategy Perform Tactical procurement planning Establish New Material Establish New Source Manage Vendor Agreement Maintain Source Planning & Execution Data Manage Vendor Certification Manage Source Business Rules Determine Emerging Supplier Technologies Manage Supply Obtain Material / Resources Receive Material / Resources Inspect Material/Resources Hold Material Issue Material Fulfill Demand Generate Quote Generate Order / Demand Event Authorize Reserve / Commit Authorize Delivery Create invoice / A/R Close/Renew Manage Logistics Manage Traffic & Freight Manage In-Transit Inventory Monitor Delivery Performance Manage returns Settle Freight Charges Manage Warehouse Receive Resources Track Inventory Pick/Pack Products Consolidate Order Manufacture Perform tactical capacity planning Perform manufacturing execution planning Create/manage site recipes/process plans Manage engineering / recipe changes Maintain equipment / facilities Control production processes Manage production materials Monitor production status Monitor equipment status Manage production quality policies Manage short-term capacity Schedule manufacturing activities Issue material Manufacture and Test Package Stage product 2002 Computing Technology Industry Association, All rights reserved Market/Sell Develop marketing & sales strategy Perform sales and demand supply planning Manage portfolio Perform Channel replenishment planning Manage Pricing, Advertising, Promotions Forecast Demand Manage customer & segment relationships Manage channel partners Measure marketing sales performance Service & Support Manage Service Delivery Profile / Identify Customer Provide Point Of contact Exchange / Return Products Perform Remote Support Provide Field Installation / Service Perform System Repair Manage Quality Information (Warranty) 40

Promotion and Education eBusiness Process Frameworks eBusiness frameworks are the subset of enterprise processes that involve exchanges of documents and information with parties outside one’s own enterprise B2B Business-to-Business from one business to another business More and more processes that used to be contained inside one enterprise are becoming “extended” enterprise processes. Extended enterprise using eBusiness technologies to enable networking of multiple enterprises so that they act as if they are one enterprise; also called “virtual enterprise”. 2002 Computing Technology Industry Association, All rights reserved 41

Promotion and Education Supply Chain eBusiness Processes - Many Frameworks SelfSelf -study slide - you may study the details on your own. Many organizations focus on defining business process standards for exchanges between enterprises; some are industry-specific (vertical), some are industry-neutral (horizontal) Aerospace Industries Association (AIA): Acquire Business, Develop & Design, Produce & Deliver, Support Retail and Grocery: Setup Business, Align Data, Order, Deliver, Pay Universities, Certification, and Consulting Firms also operate with a starting framework Cross-industry consortia Ernst and Young: Plan, Buy, Make, Move, Sell University of Toronto: Demand Management, Distribution, Manufacturing, Materials APICS: Inventory Management, Just-in-Time, Master Planning, Material and Capacity Requirements Planning, Production Activity Control, Systems and Technologies SCOR (1997): Plan, Source, Make, Deliver EIDX (1990): Design, Plan, Source, Make, Deliver, Support (SCOR 2) RosettaNet (1998): Partner/Product Review, Product Introduction, Order Management, Inventory Management, Marketing Information Management, Service and Support 2002 Computing Technology Industry Association, All rights reserved 42

Promotion and Education Different Focuses, Common Core Core to most eBusiness frameworks are processes related to inventory management (planning, ordering, fulfillment) Mantra: Increase Revenues, Decrease costs; Increase revenues, Decrease costs . Inventory is a major cost factor; everyone wants to maximize ability to fulfill customer demand instantly while minimizing the amount of inventory on hand 2002 Computing Technology Industry Association, All rights reserved 43

Promotion and Education Different Focuses, Common Core Next priorities vary by industry Aerospace & Automotive: Core Quality, Development and Design, Engineering Changes “IT” Supply Chain - OEM’s and their resellers, distributors: Core Product Introduction, Sales Data, Service and Support Electronic Component Supply Chain: Core Advanced replenishment processes, Pre-Order processes (pricing, purchasing agreements) 2002 Computing Technology Industry Association, All rights reserved 44

Promotion and Education Different Focuses, Common Core In some industries, processes other than “core” are highest priority Health Care: Enrollment , insurance claims, determination of entitlement But, the priority for the industry may be for processes that are like the “core” processes Insurance policy a type of contract for services Insurance claim a type of “order” for services specified on the contract 2002 Computing Technology Industry Association, All rights reserved 45

Promotion and Education eBusiness Process Model CLUSTER 1 Partner & Product Review Establish Relationship CLUSTER 2 Product Introduction Release Product RosettaNet has attracted widespread interest in our industry and is being adopted by many of our companies. CLUSTER 5 Marketing Info Management Fulfill Demand Stimulate Market and Create Demand CLUSTER 7 Manufacturing CLUSTER 3 Order Management Produce Product CLUSTER 4 Inventory Management CLUSTER 6 Service and Support Provide Post-Sales Support 2002 Computing Technology Industry Association, All rights reserved 46

Process Overview Promotion and Education Clusters, Segments and PIPs SelfSelf -study slide - you may study the details on your own. Partner & Product Review Product Introduction Manage Profile Subscriptions Request Profile Data Profile Change Notification Profile Process Request Preparation for Distribution Product Change Notification Product Design Information Collaborative Design Marketing Information Management Design Transfer Manage Manufacturing WO and WIP Distribute Manufacturing Information (Genealogy and Quality) Order Management Quote & Order Entry Transportation & Distribution Inventory Management Collaborative Forecasting Inventory Allocation Returns & Finance Inventory Reporting Product Configuration, Assembly, Fabrication Inventory Replenishment Ship from Stock & Debit/Credit Service and Support Provide Warranty, Service Package & Contract Management Technical Support & Services Management Sales Reporting Price Protection LEGEND 9 Released Standard ¾ Standard in Development Development Backlog 2002 Computing Technology Industry Association, All rights reserved 47

Promotion and Education Cluster 3 Order Management SelfSelf -study slide - you may study the details on your own. Partner & Product Review Product Introduction Marketing Information Management Quote & Order Entry Request Quote Query Price & Availability Transfer Shopping Cart Manage Purchase Order Query Order Status Distribute Order Status Notify of Purchase Order Acceptance Change Purchase Order Cancel Purchase Order Seller-Initiated Change (proposed) Transportation & Distribution Distribute Transportation Projection Notify of Advance Shipment Notify of Shipment Status Query Shipment Status Change Shipment Notify of Delivery Exception Create Delivery Appointment Notify of Shipment Receipt Manage Transportation Claim Returns & Finance Return Product Obtain Financing Approval Reconcile Invoice Process Payment Order Management Inventory Management Service and Support Product Configuration Distribute Risk Analysis Notify of Solution Configuration Notify of Manufacturing Specification Request Build Authorization Distribute Material Status Distribute Build Readiness Request Deviation or Waiver Distribute/Query Work in Process Distribute Test Result Request Product Acceptance Distribute Engineering Change Request Distribute Engineering Change Response Request Engineering Change Order Approval Notify Engineering Change Order Notify Engineering Change Implementation Plan Ship from Stock and Debit/Credit Request Ship from Stock and Debt Authorization Notify of Blank Ship from Stock and Debt Authorization Distribute Open Ship from Stock and Debt Authorization Query Ship from Stock and Debt Authorization Create Ship from Stock and Debt Claim Notify of Ship from Stock and Debt Claim Status 2002 Computing Technology Industry Association, All rights reserved 48

Promotion and Education EIDX eBusiness Process Framework Self Study: See EIDX web site - Clickable Business Models * Historical Priorities * http:// http://www.eidx.org/publications/business models www.eidx.org/publications/business models/ www.eidx.org/publications/business models/ 2002 Computing Technology Industry Association, All rights reserved 49

Promotion and Education Questions? Comments? Feedback is welcome!

Order Component Models Forecast Component Models Part IV - Addendum Consignment Scenarios. Promotion and Education . Business Discovery and Negotiation Model Business Integration Model Messaging (with Transport,Security) Business Content Model Self Study: See EIDX web site Self Study: See EIDX web site --Internet Commerce Model * .