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William McDaniel Albritton Collaborative Software Development Lab University of Hawaii

VENDOR RELATIONSHIP MANAGEMENT: Re-engineering the Business Process Through B2B Infrastructure to Accelerate the Growth of Small Businesses in Geographically Isolated Areas. William McDaniel Albritton Collaborative Software Development Lab University of Hawaii. Co-authored by Joy M. Agustin

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William McDaniel Albritton Collaborative Software Development Lab University of Hawaii

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  1. VENDOR RELATIONSHIP MANAGEMENT:Re-engineering the Business Process Through B2B Infrastructure to Accelerate the Growth of Small Businesses in Geographically Isolated Areas William McDaniel Albritton Collaborative Software Development Lab University of Hawaii

  2. Co-authored by Joy M. Agustin Funding by City Bank UH New Economy Research Grant Program Participants Dr. Philip Johnson City Bank FedEx Hilo Hattie United States Postal Service (USPS) University of Hawai’i 10 Local Businesses Participation

  3. Issue Small businesses limited to local market Solution Global marketplace of the Internet Example: Village near Chincheros, Peru 1995 – village’s income = $300 US per month 1996 – Internet connection Online partnership with export company Sell produce in New York 1998 – village’s income = $1500 US per month “Wiring the Pueblo”, Business 2.0David Batstone, 1998 Geographically Isolated Businesses

  4. Virtual Merchant (+) Ideal in early 90’s (+) Direct control of inventory and information (-) Overhead of sales, marketing, and web site (-) Problem of being noticed on the Internet Metamediary/Virtual Mall (+) Larger well-established company (+) Has brand name recognition (+) Takes care of sales, marketing, and web site (-) Maintaining inventory and information Expanding Local Hawai’i Businesses

  5. Metamediary (Host) Sales, marketing, and website Virtual Merchant (Vendor) Maintain inventory and information Financial Institution Transaction processing and loans Shipping Provider Order tracking Vendor Relationship Management (VRM) Partners

  6. Partner Services VirtualMerchant TransactionProcessingandLoans ProductShipping ProductInformation OrderInformation FinancialInstitution Shipping Provider OrderTracking TransactionProcessing Metamediary

  7. Virtual Merchant/Metamediary VirtualMerchant ProductInformation OrderInformation FinancialInstitution Shipping Provider VRM System ProductInformation OrderInformation Metamediary

  8. Shipping Provider VirtualMerchant ProductShipping OrderTracking FinancialInstitution Shipping Provider VRM System OrderTracking OrderTracking Metamediary

  9. Financial Institution VirtualMerchant TransactionProcessingandLoans MerchantSales FinancialInstitution Shipping Provider VRM System TransactionProcessing Metamediary

  10. Web-based application Designed with Microsoft Components Microsoft Windows 2000 Active Server Pages (ASP) Internet Information Server (IIS) Open Database Connectivity (ODBC) Microsoft Access 4 main interfaces Metamediary (Host) Virtual Merchant (Vendor) Financial Institution Shipping Provider VRM Prototype

  11. Metamediary Interface Maintaincontactinfo. Createvendor accounts Sendorderstovendors View statusoforders VRM Prototype

  12. Vendor Interface Maintain contactinfo. Maintainproductinfo. View customerinfo. Receive orders View status oforders VRM Prototype

  13. Financial Institution Interface Maintain contactinfo. View vendorand hostcontactinfo. View vendorsales VRM Prototype

  14. Shipping Provider Interface - pending Provide .gif shipping labels VRM Prototype

  15. Ordering a Product Customer Shipping Provider VRM System Metamediary VirtualMerchant

  16. Ordering a Product Customer Order Shipping Provider VRM System Metamediary VirtualMerchant

  17. Ordering a Product Customer Order Shipping Provider VRM System Metamediary Order VirtualMerchant

  18. Ordering a Product Customer Order Shipping Provider VRM System Metamediary Order Notification and Shipping Label VirtualMerchant

  19. Ordering a Product Customer Order Shipping Provider VRM System Metamediary Order Notification and Shipping Label Product VirtualMerchant

  20. Ordering a Product Customer Order Product Shipping Provider VRM System Metamediary Order Shipping Information Notification and Shipping Label Product VirtualMerchant

  21. Ordering a Product Customer Order Product Confirmation Number Shipping Provider VRM System Metamediary Order Shipping Information Notification and Shipping Label Product VirtualMerchant

  22. Ordering a Product Customer Order Product Confirmation Number Confirmation Number Shipping Provider VRM System Metamediary Order Shipping Information Notification and Shipping Label Product VirtualMerchant

  23. Ordering a Product • Benefits of VRM BPM • Customer • only sees metamediary • Metamediary • no product inventory • no shipping • Virtual Merchants • no advertising • no web maintenance

  24. Returning a product Customer Shipping Provider VRM System Metamediary VirtualMerchant

  25. Returning a product Customer ReturnRequest Shipping Provider VRM System Metamediary ReturnRequest VirtualMerchant

  26. Returning a product Customer ReturnRequest ShippingLabel ShippingLabel Shipping Provider VRM System Metamediary ReturnRequest VirtualMerchant

  27. Returning a product Customer ReturnRequest Product ShippingLabel ShippingLabel Shipping Provider VRM System Metamediary ReturnRequest VirtualMerchant

  28. Returning a product Customer ReturnRequest Product ShippingLabel ShippingLabel ShippingInformation Shipping Provider VRM System Metamediary ReturnRequest ReturnNotification Product VirtualMerchant

  29. Returning a product Customer ReturnRequest Product ShippingLabel ShippingLabel ShippingInformation Shipping Provider VRM System Metamediary ReturnRequest ReturnNotification ReceivedNotification Product VirtualMerchant

  30. Returning a product Customer ReturnRequest Product ShippingLabel ShippingLabel ShippingInformation Shipping Provider VRM System Metamediary ReturnRequest ReturnNotification ReceivedNotification ReceivedNotification Product VirtualMerchant

  31. Returning a product Refund Customer ReturnRequest Product ShippingLabel ShippingLabel ShippingInformation Shipping Provider VRM System Metamediary ReturnRequest ReturnNotification ReceivedNotification ReceivedNotification Product VirtualMerchant

  32. Returning a product • Benefits of VRM BPM • Customer • only sees metamediary • Metamediary • no product inventory • no shipping • Virtual Merchants • no advertising • no web maintenance

  33. Portability Windows NT/2000 Reliability Microsoft products seem to attract viruses Access database Typically 10 to 20 users One megabyte of data Scalability Need to change to SQL Server Security Secure Socket Layer (SSL) Cannot load pages unless go through Login page Other general security concerns VRM Prototype

  34. Vendor interviews E-commerce issues and solutions 30-45 minutes interview Topics Degree of technological sophistication Use of Internet for sales and marketing Desires for and barriers to growth Present and future financial services Survey of 10 Local Businesses

  35. Business Size Staff of 1-2 (7 businesses) Staff of 5-25 (3 businesses) E-commerce 9 businesses on the Internet 8 individual websites Trouble getting site noticed (4) Product not easily sold online (2) No problems (2) Percent of business from Internet 95%+ (3) 30-95% (0) 10-30% (2) <10% (3) Survey Results

  36. Future Business Direction Keep growing (3) Eventually sell business (3) Have brick & mortar store (1) Outsource web site (1) Survive/continue at same pace (2) Advantages of Using a Metamediary/Virtual Mall 9 companies gave positive comments High visibility Wider customer base Increase traffic Less hassles No maintenance of websites Survey Results

  37. Disadvantages of Using a Metamediary/Virtual Mall 7 companies gave negative comments Concerns over setup with metamediary Insufficient time to keep up with production Possible competition with other products Loss of control over advertising Slower payment process Increase number of small orders 3 companies currently use a metamediary Metamediary/Virtual Mall Product Preferences Wholesale (6) Drop-ship (2) Commission (1) Survey Results

  38. Financial Services Present Credit card transactions (8) Merchant account (3) Future Loans (2) Other banking services (2) No loans (2) Not interested in additional services (4) Survey Results

  39. Participants Business Owners (2) Bank Employees (3) Topics Advantages Disadvantages Suggested Improvements Expert Critiques

  40. Advantages Easy for inexperienced small vendors Banking Advertising Ordering Shipping details Eliminate paper traveling between partners Vendors can get paid immediately by metamediary Metamediary does not need to store inventory Expert Critiques

  41. Disadvantages Vendor packs orders themselves Not geared toward vendors that do not “produce” their own product Metamediary immediately pays vendors Competition between metamediary and vendor Competition between vendors on web site Expert Critiques

  42. Suggested Improvements Include contract negotiations in business process Metamediary and shipping company Metamediary and vendors Financial institution and other 3 partners Add information on individual product sales Add user log Investigate third party shipping software Add fulfillment center as a fifth partner Expert Critiques

  43. Is this a viable approach? Under what conditions? When should we think about proceeding? What’s Next?

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