Identify and describe the major stages in the development of B2B commerce

What will be an ideal response?

B2B commerce has evolved over a 35-year period through several technology-driven stages. The major stages in this evolution were the development of automated order entry systems, electronic data interchange (EDI), digital storefronts, private industrial networks, and Net marketplaces.

Automated order entry systems began in the mid-1970s with the use of telephone modems to send digital orders to health care products companies. Modems were eventually replaced by personal computers using private networks in the late 1980s and by Internet workstations accessing electronic online catalogs in the late 1990s.

By the late 1970s, a new form of computer-to-computer communication called electronic data interchange (EDI) emerged. EDI is a communications standard for sharing business documents such as invoices, purchase orders, shipping bills, product stocking numbers (SKUs), and settlement information among a small number of firms. Virtually all large firms have EDI systems, and most industry groups have industry standards for defining documents in that industry.

B2B e-commerce websites emerged in the mid-1990s along with the commercialization of the Internet. These storefronts are online catalogs of products made available to the public marketplace by a single supplier.

Net marketplaces emerged in the late 1990s as a natural extension and scaling up of the electronic storefronts. These marketplaces bring hundreds to thousands of suppliers – each with electronic catalogs and potentially thousands of purchasing firms – into a single Internet-based environment to conduct trade.

Private industrial networks also emerged in the late 1990s as a natural extension of EDI systems and the existing close relationships between large industrial firms and their suppliers. Private industrial networks (also referred to as private trading exchanges, or PTXs) are Internet-based communication environments that extend far beyond procurement to encompass truly collaborative commerce. Private industrial networks permit buyer firms and their principal suppliers to share product design and development, marketing, inventory, production scheduling, and unstructured communications. These networks are the most prevalent form of Internet-based B2B commerce, and this will continue into the foreseeable future.