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EIDX General Supporting Documentation
Status:  Provisional draft.  Adapted from previous published version (Balloted and Ratified by Membership, June 1997)

Trading Communities

Introduction

An emerging trend in electronic commerce is the enable internet- and web-based business processes.   These processes are still in the process of being defined.  However, we already see that the most confusing issue surrounding Trading Exchanges is the various terms used to describe them.  The same name is used by two companies to describe two distinct trading models, and different names are used by different companies that describe basically the same thing.

Example:  A glossary tells you that an eMarketplace is, by definition, a public marketplace.  After all, the definition of "marketplace" is "an area in a town where a public market is set up."  Then a partner comes along and starts telling you about their "private" eMarketplace. Now, wait a minute ... which is it ... public or private?

The point is:  When discussing concepts with a trading partner or solution provider or whoever, ask them what they mean whey they use a term. 

We are starting by looking at the definitions, so that we can move forward with a common understanding.  If you have any business process models, scenarios, examples, etc., please send them to the Chair of the Business Process Subcommittee.

How did all this terminology confusion around "trading communities" come about?

First, here are some of the terms that are used:

Just to make sure that we know we are talking about internet- and web-based business processes, some terms may have an "e" or "i" prefix added to the name or a qualifying adjective that is commonly interpreted as an internet term:

Sometimes a "qualifier" is part of the name as part of an attempt at clarifying the process scope of a given trading community:

Additional "qualifier" terms attempt to identify who owns or operates the trading community and/or who may or may not join/participate.

Do not assume that everyone using the terms "independent", "public" and "private" assigns the same meaning.

And then sometimes you put them all together:

The entities that run these trading communities may also use these labels:

Definitions

This is not a complete Electronic Commerce (EC) glossary.  The information below focuses on terminology used when talking about Trading Communities, Hubs, Exchanges, Repositories.  Once we think we've captured it all, we'll update the previous revision of the EIDX Glossary with these definitions and other EC terminology. 

You might want to read the introduction above first (if you haven't already), but here we go:  The definitions below are the definitions we will use.

Aggregator  Model - Models where buyers pool requirements to increase their buying power, and buy in a block, sellers pool their offerings under one umbrella to increase their selling power.   Also called Net Market.  More information about B2C aggregator model here.   Note: The FCC is starting to watch aggregates for price fixing.

Application Service Provider (ASP) - An Internet-based provider of hosted applications and/or services, or an applications/services outsourcer.  ASPs provide applications and services such as a business-to-business auction site or electronic catalog.  Think of such applications and services as being available for rent (for hire); the ASP is the landlord and is responsible for maintenance, improvements, certain utilities, pest control (security), etc.   An ASP provides comprehensive services to fill a market need.   Many of these ASPs provide exchange services; many use a term other than "ASP" to describe themselves, such as ESP (Exchange SP, eBusiness SP) or FSP (Full SP).

Auction - An auction is really a specific way for a buyer to locate items they want to buy or for a seller to advertise items they want to sell.  An auction usually reduces the negotiation to a single variable, price.

Buyer's Auction (Reverse Auction) - In 'standard' on-line auctions, items or services available for sale are posted and buyers place bids for them. On a Reverse Auction Web site, the buyers post their needs, and suppliers bid for the business.  This is really a form of the traditional quote process, whereby a buyer sends out a Request for Quote, usually indicating maximum acceptable price, and sellers respond with Quotes (bids for the buyer's business), and the buyer may choose to send the request to a limited list of suppliers (Closed Auction) or may broadcast the need publicly (Open Auction).

Closed Auction - In a seller's auction, notification of items for sale is sent to a limited list of buyers, usually buyers who have previously done business with the seller.  Likewise, in a buyer's auction, the request for quote is sent to a limited list of suppliers.

Open Auction - In a seller's auction, notification of items for sale is broadcast publicly, and any buyer who receives the notice may submit a bid to buy.  In a buyer's auction, notice of the buyer's need is broadcast publicly, and any seller who receives the notice may bid for the buyer's business.

Seller's Auction (Standard Auction) - Items or services available for sale are posted and buyers place bids for them.  An Open Seller's Auction is much like placing an advertisement in a newspaper, to which any buyer may respond.  In a  Closed Seller's Auction, the notice of items for sale is published to a limited list of buyer's (bid is by invitation only).

Business Intelligence - the latest trendy name for decision support.

B2B -Business-to-Business.  Refers to electronic commerce between businesses.  The term emerged to describe conducting business between two more more companies over the internet, but in fact, refers to any automated, computer-enabled exchange of business data between one or more companies.  B2B is contrasted to traditional modes such as telephone, snail mail and face-to-face, and to other computer-enabled modes such as A2A, B2C, and B2P.

Buyer's Auction - See Auction.

Catalog Aggregators - eCommerce super sites that list items for sale by multiple companies. Often, these listings are organized by type of merchandise, not by vendor.

cCommerce - Collaborative Commerce.  From thesupplychain.com glossary:  "Current ERP and supply chain applications are focused on supporting transactions and optimization within the single enterprise or, at best, within and among the enterprise and its more traditional, strategic trading partners. C-commerce moves beyond that level of support to enable multiple enterprises to work together online within a dynamic trading community."

Channel Enablers - Web sites that list products from multiple companies, driving eCommerce traffic to company-owned sites rather than handling the transactions themselves.

Clearinghouse - An application-independent connection hub hosted by a third-party service provider.   Allows companies to eliminate repeated, expensive and time-consuming connectivity projects. In the clearinghouse model, the hub affordably delivers a single point of contact that easily enables companies to electronically exchange business information with suppliers, customers, digital marketplaces - in short, their entire value chain.   [c.f. Value Added Services, VAN].

Closed Auction - See Auction. - See Auction.

Collaborative - Another word used to mean more than one thing.  One definition of "collaborate" is to work together in a joint effort. The term "collaborative" is applied to real-time interactions, groupware, shared information spaces, file sharing, advanced monitoring and management, supply chain integration, etc. In the context of eBusiness, we call a process "collaborative" if it allows real-time, electronically-enabled business interactions. Collaboration allows supply chain partners to make joint decisions by sharing information real time and/or interacting on-line using a solution that allows interactive information/knowledge exchange.

Critical Mass - An amount or level of B2B transactions between companies or vertical or horizontal marketplaces that serve to maximize technical and commercial efficiencies.

Data Mart - see Repository.

Data Warehouse - see Repository.

Decision Support System - a system or tool that allows business users to perform analyses of data in order to make business decisions.  Many decision support systems use one or more data warehouses; however, a decision support system does not have to use a data warehouse.  In fact, the most common decision support tool is a single spreadsheet containing data that the user may have gathered from a variety of sources using a variety of means (largely manual).

Digital Marketplace - See eMarketplace.

eCommerce Network - Another trendy term for exchanges and/or repositories; specifically, it refers to a network of interconnected exchanges and/or repositories.

eMarketplace - A Web site where goods and services are bought and sold over the Internet.  An eMarketplace is a public exchange - an open marketplace where a buyer can evaluate all the potential suppliers for a particular product or service.

ETL - Stands for Extract-Transform-Load, a Data Warehousing term.  Data is extracted from a source, transformed (combine several items into one, summarize, perform computation, generate a new attribute, and other actions that change data), and loaded (add or replace in source or destination data base).

Exchange - A business-to-business website where buyers and sellers congregate to transact business.  Although the term exchange has been used to talk about sites where information is exchanged, the term 'Exchange' is becoming commonly understood to mean a place where goods and services are exchanged.  An exchange is a type of Hub.

An exchange may be bring together buyers and sellers in vertical markets, horizontal markets, or both.

Many of these Exchanges are trying to further differentiate themselves by offering outsourcing options for corporate applications, thereby becoming hybrid Application Service Providers (ASPs), while others are offering supply chain and business consulting services through partnerships or acquisitions.

Exponential Markets - eMarketplaces where each participant may both buy and sell goods and services.

Extranet- A computer network that has been selectively opened to limited audiences, such as a company's suppliers, customers, employees, or strategic allies, via the Internet, often using a Web-type interface.   A private exchange owned by a company would be part of that company's extranet.

Horizontal Market - In a business-to-business context, refers to the sale of goods or services to a range of companies in different market segments. These services or goods are not likely to be specific to an individual industry.

Hub - In internet technology, a hub is a device that connects several networks or machines together.  In the context of eBusiness, "hub" usually refers to a central Repository or private Exchange.   It is a web-based solution that makes it easy for trading partners to exchange data necessary to negotiate and complete eCommerce transactions.  

Intranet - Local area network or a company network, accessed by anyone who is connected, that may or may not be connected to the larger Internet.

Information Hub - see Repository.

Marketplace - A place of commercial activity where goods and services are bought and sold.   See eMarketplace.

Member (of Exchange or eMarketplace) - A business that has successfully completed an eMarketplace/exchange enrollment process.

Net Market - See Aggregator Model.

Open Auction - See Auction. - See Auction.

Portal - A doorway or gateway to the worldwide web - a web site that offers a collection of links to other web-accessed services or products.  Search engines are portals.  An eMarketplace or exchange is a specialized portal.

Private - Confined or restricted to particular persons or groups.

Privately-held - A company that restricts stock share ownership to a group of individuals or other companies.

Procurement Hub - A type of eMarketplace that sells products and services to multiple buyers across numerous, unrelated industry segments.

Purchasing Hub - Using economies of scale, a web site that combines various product or service bids from numerous prospective buyers and then approaches sellers to negotiate price points favorable to the buyers.    Similar to a buying consortium.

Public - Open to or concerning all.

Publicly-Held - Company whose stock shares are regulated and sold to the public.   Also called "public company."

Registry - A mechanism for discovering and retrieving something (a piece of information, a document, a template, software, a service, etc.) over the internet. The registry provides information about the item, including the location of the repository containing the item.   Sometimes a repository contains its own registry describing all the contents of the repository, and sometimes a registry keeps track of one or more repositories that are located in different places on the internet.

Repository - A digital "place" for storing and retrieving certificates and other data.

Reverse Auction - See Auction. - See Auction.

Seller's Auction - See Auction.

Standard Auction - See Auction. - See Auction.

Value-added Services - In eMarketplaces, any services offered to buyers and sellers beyond simple listings of bids and offers. Examples of eCommerce value-added services include insurance, financing, secure communications between transaction parties, and complete transaction receipts, etc.

Vertical Markets - In a business-to-business context, refers to the sale of goods or services to companies in specific market segments (specific industries) with specialized needs.   Some of the vertical markets are:

  • Aerospace
  • Agriculture
  • Automotive
  • Banking
  • Chemicals / Petrochemicals
  • Communications
  • Construction
  • Defense
  • Discrete Manufacturing
  • Electronic Commerce
  • Education
  • Electronics & Technology
  • Energy
  • Entertainment, Leisure & Tourism
  • Finance
  • Food
  • Government
  • Healthcare
  • Non-Profit Institutions
  • Insurance
  • Investment Banking
  • Logistics and Transportation
  • Manufacturing
  • Media & Publishing
  • Military
  • Mining / Extraction
  • Real Estate
  • Pharmaceutical
  • Retail
  • Service Provider
  • Software Manufacturers
  • Telecommunications
  • Utilities

Resources

Most of the terms in this area of the web site are synthesized from numerous glossaries, dictionaries, articles, solution-provider definitions, and other sources.  The following list, therefore, is not complete, as half the content on the internet would be needed, and these resources do not necessarily contain definitions that exactly match the synthesized EIDX definitions.  It is important to note, too, that definitions at some of these sites may seem to contradict the EIDX definitions; this is because there is not (yet) universal consistency in the usage of terms in the eBusiness world.  What are synonyms to one person are distinctly different terms to another, and vice-versa.  The point is:  When discussing concepts with a trading partner or solution provider or whoever, ask them what they mean whey they use a term. 

 

"Don't get out of the Trojan Horse unless you are inside the castle."

- Mark Walsh, VerticalNet
Internet Week, June 1999

Last updated 06 February 2003