During Convergence 2004, however, MBS announced its ongoing momentum and upcoming plans to expand the reach of Microsoft Business Network to a broader audience of trading partners and it also highlighted the solution's success thus far and road map for the future.
The Microsoft Business Network (MBN) product has certainly drawn most of our attention during the recent user conference. There are many reasons for that, but the major one would be its potential to possibly deliver on the never really (or hardly ever) realized benefits of early dot-com era Internet trading exchanges or networks that could reasonably effectively link customers to their trading partners., As the complexity grows, this network could possibly become part of many larger exchanges, connecting companies in the same vertical industry or horizontally, across various industries.
There is also a lucrative potential of selling software licenses to every participant and of generating recurring revenue from network membership fees (similar to popular Internet service providers [ISP], such as, well, Microsoft Service Network [MSN], EarthLink or America Online [AOL]) and even from specialized services (e.g., community building, performing request for quotes [RFQs], conducting auctions and reverse auctions, etc.), often without charging single transaction fees and unnecessarily repelling the customers wary of being "nickeled and dimed" till "blue in face".
To that end, MBN has been for some time (over two years) in live use in Mexico and Argentina as a part of Microsoft bCentral integrated on-line marketing services for small businesses, where it has been used to link 25 large retail trading hubs to some 4,000 trading partners. MBN allows trading partners to exchange business documents germane to supply chain management (SCM) transactions, such as price lists; purchase orders (POs); sales orders (SOs); acknowledgements; ASNs and shipping manifests; invoices; and so on, by using secure extensions to Outlook or Excel products. The intent is to automate the transactions and minimize (if not completely eliminate) phone calls, faxes, and the resultant errors that come from manual data entry and paper-based processes. Accordingly, as mentioned earlier on, MBN will facilitate system-to-system communications via XML, traditional value-added networks-based (VAN), electronic data-exchange (EDI), or Internet-based EDI (on the AS2 standard at first).
That MBN is not necessarily suitable only for retailers. Consumer packaged goods (CPG) suppliers, and other smaller manufacturing or distribution enterprises on MBS back-office systems might prove the example of Northrop Grumman, a large defense contractor and SAP user, which is using MBN to link with more than 800 suppliers to communicate and collaboratively share information on order status, delivery, and production scheduling. Thus, one should not be surprised with our interest in analyzing the product, which offers several compelling reasons to evaluate.
For one, it should help companies deal with approximately 80 percent of their trading partners that typically account only for an estimated 20 perrcent of revenues, and yet originate around 80 percent of the operational cost for administering them (due to the need to handle them manually, with pesky and dreaded error-prone re-keying exercises). Conversely, remaining 20 percent of trading partners that account for hefty 80 percent of the company's revenues, would originate only 20 percent of the operational cost to administer them, given their use of EDI or any other automated information exchange technology.
The Microsoft Business Network (MBN) product has certainly drawn most of our attention during the recent user conference. There are many reasons for that, but the major one would be its potential to possibly deliver on the never really (or hardly ever) realized benefits of early dot-com era Internet trading exchanges or networks that could reasonably effectively link customers to their trading partners., As the complexity grows, this network could possibly become part of many larger exchanges, connecting companies in the same vertical industry or horizontally, across various industries.
There is also a lucrative potential of selling software licenses to every participant and of generating recurring revenue from network membership fees (similar to popular Internet service providers [ISP], such as, well, Microsoft Service Network [MSN], EarthLink or America Online [AOL]) and even from specialized services (e.g., community building, performing request for quotes [RFQs], conducting auctions and reverse auctions, etc.), often without charging single transaction fees and unnecessarily repelling the customers wary of being "nickeled and dimed" till "blue in face".
To that end, MBN has been for some time (over two years) in live use in Mexico and Argentina as a part of Microsoft bCentral integrated on-line marketing services for small businesses, where it has been used to link 25 large retail trading hubs to some 4,000 trading partners. MBN allows trading partners to exchange business documents germane to supply chain management (SCM) transactions, such as price lists; purchase orders (POs); sales orders (SOs); acknowledgements; ASNs and shipping manifests; invoices; and so on, by using secure extensions to Outlook or Excel products. The intent is to automate the transactions and minimize (if not completely eliminate) phone calls, faxes, and the resultant errors that come from manual data entry and paper-based processes. Accordingly, as mentioned earlier on, MBN will facilitate system-to-system communications via XML, traditional value-added networks-based (VAN), electronic data-exchange (EDI), or Internet-based EDI (on the AS2 standard at first).
That MBN is not necessarily suitable only for retailers. Consumer packaged goods (CPG) suppliers, and other smaller manufacturing or distribution enterprises on MBS back-office systems might prove the example of Northrop Grumman, a large defense contractor and SAP user, which is using MBN to link with more than 800 suppliers to communicate and collaboratively share information on order status, delivery, and production scheduling. Thus, one should not be surprised with our interest in analyzing the product, which offers several compelling reasons to evaluate.
For one, it should help companies deal with approximately 80 percent of their trading partners that typically account only for an estimated 20 perrcent of revenues, and yet originate around 80 percent of the operational cost for administering them (due to the need to handle them manually, with pesky and dreaded error-prone re-keying exercises). Conversely, remaining 20 percent of trading partners that account for hefty 80 percent of the company's revenues, would originate only 20 percent of the operational cost to administer them, given their use of EDI or any other automated information exchange technology.
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