Electronic marketplaces and online trading exchanges are all the rage among e-businesses today. Hoping to reduce their transaction costs, companies within vertical markets are joining together to form their own industry-specific online exchanges, where buyers and sellers can more easily find one another, negotiate deals and make transactions. To maximize the potential cost savings of doing business electronically, many of these companies are connecting their ERP systems to marketplaces and automating their business processes.

The concept of doing business through a B2B marketplace sounds simple enough, but in reality the process of integrating a company's ERP system with an outside exchange is fraught with potential pitfalls. To help you plan for your company's integration with an e-marketplace, this paper details the first, most basic aspect of integration--the data flow between the internal enterprise and the exchange--from the viewpoint of a hypothetical IT professional working at a hypothetical gadget manufacturing company.

Setting the Stage

The gadget industry has come together to form an independent corporation called Gadget Marketplace, whose mission is to manage and operate the gadget industry's new electronic exchange. Gadget Marketplace plans to offer a variety of value-added services, such as online auctions, electronic catalogs, supply chain management and payment services. For buy and sell transactions, Gadget Marketplace and its member companies will exchange predefined XML documents.

Gadget Girl, an IT employee at WidgetMakers, had heard about such things as online marketplaces and supply chain integration, but she did not pay a great deal of attention to them--until WidgetMakers decided to connect to Gadget Marketplace. WidgetMakers will eventually act as both a supplier and a buyer in the marketplace. However, right now the company doesn't feel ready to tackle the complexities of participating as a supplier--such as creating and maintaining an online product catalog--so the company decides to initially participate only as a buyer.

Additionally, the company plans to only exchange purchase order information. Gadget Girl's task, which she has chosen to accept, is to process the content from the XML documents into the ERP application running on WidgetMakers' servers. Other co-workers are given the tasks relating to technology platforms, transport, timing and security.

The marketplace has already designed the business processes to be used, so Gadget Girl just needs to extend those processes into WidgetMakers' business processes. To help with this, Gadget Marketplace has provided her with a complete set of standards and guidelines. As expected, connected buyers and suppliers will exchange all their information in an industry-defined XML format.