As an operations student the primary economic advantage of business to business electronic commerce in my
opinion is best understood through the value chain activities. (Porter 1985) The diagram here shows the
originally value chain activities.
From researching the value chain in respect to ecommerce I found that the primary economic advantage
of b2b ecommerce is the increased efficiency in the area of non-value added activities.
B2B e commerce streamlines the procurement process by adding efficiency to this aspect of the overall production process.
As suggested by Lucking � Reiley and Spulber (2000) B2B E � Commerce �aims to reduce the cost of procurement before,
during and after the transaction�. B2B E-Commerce reduces the cost of procurement before the transaction by reducing
the searching costs and by increasing the ease of price setting and product comparison. B2B E.C. also reduces the
level of interpersonal communication needed to complete the transaction. It can also reduce the costs associated with
monitoring performance and confirming product or service delivery.
