Kansai Economic Federation

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BtoB Order Matching System (Kansai E-Business Network)

A variety of measures have been taken across Japan in order to activate local economies that find themselves in a state of prolonged stagnation. The Kansai* Economic Federation's "Kansai E-Business Network", introduced on this page, is especially attractive. This system comprises an XML-based information search function that is used to establish a site for placing and meeting orders on the Internet. This in turn links enterprises of all sizes, thus leading to the creation of an open business network.
Note : Kansai is Japan's western region, with the city of Osaka as its business hub.

Necessity of changing industrial structures

For Kansai and the rest of Japan to break out of a long-term economic slump, it is said to be necessary not only to make a new financial policy, but also to convert the traditional industrial structure bounded by various rules and business practices.
Movement toward a new industrial structure includes re-examining what we call the full-set production policy, whereby a single enterprise performs all manufacturing processes from natural resource to finished product, and breaking away from the pyramid structure of business relationships that ties smaller companies to larger ones. This is because both of these phenomena can restrict the opportunities for smaller and venture companies, which have the technical capabilities and future potential, to participate in the business world. Moreover, the pyramid structure of business relationships has a tendency to weaken the management skills (such as technical capabilities, cash planning, product development capabilities) that an independent enterprise requires.
A "network industrial structure", consisting of horizontal networks of smaller companies as well as networks of large and small companies with none of the patriarchal relationships of the old system, can be used to convert the traditional industrial structure.

Measures for recovery of the Kansai economy

In addition to carrying out a variety of research studies and policy recommendations for the rejuvenation of the local and national economy, the Kansai Economic Federation is also promoting numerous large-scale projects to stimulate the Kansai economy.
In 1999, the Kansai Economic Federation compiled the "Kansai Economic Recovery Scenario". This scenario sets the goals of "strong industry", "interesting society", and "pleasant locality" based on the cornerstone principles of "accumulation and networking".
To create "strong industry", the Federation proposes and promotes several action plans to achieve a "place for the accumulation of dynamic ventures" for entrepreneurs and a "network industrial structure" that connects enterprises in the same field. One of these action plans was the establishment of a Kansai open business network to connect enterprises by the Internet.
This plan became reality in October 2000 as the "Kansai E-Business Network", which connects the information databases of large and small enterprises in the Kansai area.

Movement toward building the Kansai E-Business Network

What is the Kansai E-Business Network?
The first step in dealing with a new enterprise is to gather information about that enterprise. The next step is organizing a location in which partners in a transaction (simply put, sellers and buyers) can exchange information. The concept of the Kansai E-Business Network is to provide an environment* in which enterprises can find desired information on potential business partners easily on the Internet, and sellers and buyers can provide procurement and sales information in order to find business partners.
Note: This kind of Internet environment is called an "e-market".

Pre-requirements of Kansai E-Business Network
The following items were required to establish the Kansai E-Business Network:

1. Wide-area enterprise information database
It is almost impossible for an enterprise to find information about another enterprise's equipment, its products, location, or size by referring to the enterprise's homepage or over the phone. The ability to locate necessary information from an enterprise information database would minimize the cost of cultivating new business partners.
Organizations for promoting small- and medium-scale businesses in individual regions within the Kansai region have had local enterprise information databases in place for some time. However, the information available on each of these databases was limited to that particular region. A database that covered the whole Kansai region was required.

2. Easy-to-use search system
As evidenced by the existence of a "Database Searcher" certificate, it is necessary to have specific knowledge and experience to efficiently find required information in a database that contains a large amount of information. However, the people who search for information on businesses are not such experts. Therefore, a system that could easily find relevant enterprises was required.

3. Online meeting place for enterprises (e-market)
A location was required where enterprises with orders to place could search for sales enterprises and release procurement information (such as on products they required or tasks they needed doing) and sales enterprises could view procurement information and publish their sales information (products they could make, tasks they could handle).

Creating the Kansai E-Business Network

To meet the requirements described in the previous chapter, the Kansai Economic Federation applied for research and development project support from the Telecommunications Advancement Organization of Japan* and developed cutting-edge Internet technology. After exhaustive demonstrations and testing, the Federation put the technology into practical use as the Kansai E-Business Network.
Note: The Telecommunications Advancement Organization of Japan is a government-backed corporation that deals with research and development of information and telecommunications. The Organization falls under the jurisdiction of the Ministry of Public Management, Home Affairs, Posts and Telecommunications (formerly Ministry of Posts and Telecommunications).

Virtual integration of enterprise information databases (creation of wide-area enterprise information database)
Several small business promotion organizations and autonomous bodies had already established local enterprise information databases. However, in order to find information about an enterprise in the whole Kansai area, users would have to search each of these databases. On the other hand, it would be unrealistic to build a new enterprise information database to cover the whole Kansai area due to the cost and time involved. For this reason, a virtual wide-area enterprise information database was built on the Internet using XML technology. The following illustration shows how this was done:

Key:

1. Search for enterprise information (User)
Users log in to the Kansai E-Business Network system (hereafter referred to as the KEBN system) from a Web browser and search for enterprise information.

2. Search request (KEBN system)
The KEBN system sends a request to search for information in the local database system of each enterprise.

3. Conversion of search request and results to XML (Enterprise information database system)
The enterprise information database system searches for the requested information. Because the search results vary according to each database-specific format, they are converted to a standard format (XML).

4. Integration of search results (KEBN system)
The search results are integrated* to appear as if they come from a single database. Whereas, from the users' point of view, they are searching several databases integrated into one, it is in fact only the results that are integrated. In this way, the virtual database is created.

Note: Because the search results are integrated into a standard format (in this case, XML), results can be processed and integrated regardless of the formats of the different databases.

5. Conversion to HTML (KEBN system)
Search results are converted to HTML with XSLT technology. This means that users can check the converted results in a Web browser. From the users' point of view, the search results appear to originate from a single wide-area enterprise information database. If the KEBN system did not exist, users would have to log in to each enterprise information database separately and repeat the search in each one.

Related article :
- Core XML technology : XSLT

Fuzzy searching, infomediary searching (creating an easy-to-use search system)
The following easy-to-use search functions simplify the process of finding a company that will accept an order:

- Fuzzy search function: related terms are added when searching
When you specify a search keyword that is commonly used, related terms are added to the keyword. For example, if you specify "cutting", terms such as "broach", "boring", "milling", "cutter", and "planning" are added as search keywords.
- Infomediary search function: allows searching using advanced technical terms
By specifying details such as the necessary process technology and product size, you can search for enterprises that meet the specified conditions.

Public procurement and sales market (creating an e-market)
An online membership-based ordering market has been created on the Internet. Members can register procurement and sales information according to their needs. They can also view and apply for the registered information.

- Ordering members
These members consist mainly of big enterprises such as members of the Kansai Economic Federation, related enterprises of Federation members, or other listed enterprises. Any joint-stock company can be a member. Ordering members can use simple search tools to find sales members (i.e., other registered businesses) that can supply their needs. They can also register details of what they require and then wait for applications from sales members as well as view sales information registered by sales members and ask them for quotes.
- Sales members
Sales members consist of smaller enterprises in the Kansai region. Any enterprise that is a member of a local enterprise information database participating in the KEBN system can apply to be a sales member. Sales members can view procurement information registered by ordering members and submit tenders in response to such information. They can also register information on the goods or services they offer and wait for trade inquiries from ordering members. Because the KEBN system cooperates with several other e-markets, members can access those markets in the same way.

Note : The KEBN system uses Fujitsu Interstage Application Server and Interstage Portalworks.

Development in the future

As of August 2003, the KEBN system links with 12 enterprise information databases and two e-markets. KEBN expects to increase the number of linked databases and e-markets, thus increasing the number of participating members and activating business networks based on the KEBN system.

Result

The use of XML technology in constructing the system had the following benefits:

- Processing and Integration of Search Results
By standardizing the search result format as XML (previously, the format varied with each enterprise information database), it is possible to process and integrate search results.
- Achieving an Easy-to-search Integrated Database
By standardizing the search result format as XML, a virtual, integrated database for searching for enterprise information can be created. In this way, searching for enterprise information in databases linking with the KEBN system is simplified. This in turn acts as a business stimulus by bringing together big companies and smaller companies.

Reference data:
Kansai Economic Federation HP http://www.kankeiren.or.jp/English/
Kansai E-Business Network http://www.ebn.kankeiren.or.jp/ (Japanese)

Customer's Voice

Interviewee: Kansai E-Business Network office of Kansai Economic Federation

Q1: What is the reaction of ordering members to the Kansai E-Business Network?
Some members say that using the KEBN system has enabled them to find new business partners and to expand their business opportunities. They also say that having available at-a-glance enterprise information on multiple small business promotion organizations is extremely useful.

Q2: What is the reaction of sales members to the Kansai E-Business Network?
Some members say that their range of business opportunities has widened because the Network increased the scope for promoting their technology and thus they received inquiries from new business partners. Also, viewing the Internet as a business market has improved employees' IT skills and increased their use of IT. On the other hand, it has also become apparent that a great number of companies were previously just not interested in Internet-based business.

Q3: What is the reaction of cooperating e-markets?
In addition to the obvious merits of the increase in participating companies, member companies of e-markets also highly praise the Network because, due to its existence, they are now able to cultivate new business relations with companies establishing themselves in the Kansai region. They also remark that the accumulation of an enterprise database for the entire Kansai region is a major business attraction.

Q4: What effect do you think the Kansai E-Business Network has had on the Kansai economy?
The number of businesses that use the KEBN system in their dealings is steadily increasing. We believe that the system is a major stimulus in the economic revitalization of the Kansai region.

Q5: Do you have any plans for further development of the Kansai E-Business Network?
Nowadays broadbandization is progressing and the use of the Internet as a place to do business is increasing. Therefore we shall continue to coordinate with existing and emerging small business information databases and e-markets so as to broaden online business opportunities and aid the development of the Kansai economy.
In so doing, we remain aware that we must show tangible positive results if we expect medium and small companies to continue to use our system or to start using our system for the first time.

Q6: Did you have any worries about introducing XML?
We were concerned about XML because we were unfamiliar with the technology. However, after investigating which technology would be capable of bringing together scattered information on small enterprises as the Kansai E-Business Network, we chose XML as it was recommended as a world-standard data format with flexibility for data addition and change.
As a result of adopting XML for information searches and system linkage, the system could be developed in a short period and changes to small enterprise information databases were kept to the minimum.