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Business and XML
XML is being applied to some of today's most important problems, including solving critical business communication issues. Many attempts in the past, such as Electronic Data Interchange (EDI), have had only limited success in attempting to electronically connect the different parts of a business organization. XML plans to change this track record by introducing business-specific functionality aimed squarely at solving the business needs of all industries and firms, large and small alike.
All products have to attract customers at one point or another. In some cases, the consumers are actual individual consumers rather than business entities. Individual customers are a well-defined group of buyers that have long been the objects of marketing, advertising, and other targeted selling activities. Many of the early developments on the Internet were focused at helping businesses directly sell their goods to customers. This model of selling directly to individual end users of goods is known as Business to Consumer (B2C) sales processes.
The other main source of customers for a business is other businesses. Transacting with other businesses as customers is a comparably much larger market than selling directly to end users. The Business to Business (B2B) market is estimated at over 10 times the size of comparable B2C markets. However, selling to businesses involves many differences and complexities that are not present in traditional B2C sales environments.
Of course, the major difference between B2C and B2B commerce is that the customers are different—B2B customers are other companies, whereas B2C customers are individuals. However, a more important difference between the two business goals is that
B2B transactions are more complex and involved than the comparatively simpler B2C transactions. Selling to another business involves negotiating prices, sales terms, credit, delivery, and product specifications. Business buyers need to be approved in advance and their business needs to follow allowable parameters. Companies selling to other businesses also need to simplify and, in many cases, automate their purchasing interactions so that processes can be as smooth as possible. Whereas B2C transactions are made for the benefit of individuals, B2B transactions are for the most part important purchases for daily operations and the production of manufactured goods.
The Internet has changed all the rules, from servicing customers to licensing and installing applications. Not all models for business-to-business interaction are the same. As the technologies and mechanisms for e-Business evolve, so too do the models for B2B business. In particular, B2B business models are migrating from long-term one-to-one relationships to rapidly changing and fluid many-to-many relationships. Rather than establishing fixed relationships with a set of identified supply chain partners, there has been an increasing trend towards fluid and, in some cases, spontaneous supply chain partnering.
XML standards and robust specifications, including ebXML and RosettaNet, have provided users with a framework by which they can reliably exchange e-Business information and transact efficiently in a supply chain. The advent of these frameworks and hopefully their widespread use will no doubt herald an era when even the smallest business operation can effectively communicate online with its customers, suppliers, and partners.