Information Technology Reference
In-Depth Information
Businessprocess
1.Consumerplacesanorderwithsupplier
2.Supplierrequestsfinancingwithfactor(sellinginvoices)
3 Factor verifies credit rating of consumer
Factor
(bank)
4
Contractor1
7
3.Factorverifiescreditratingofconsumer
4.Factorpaysthesupplier
5.Supplierandcontractorsproducegoods
6.Suppliersendsgoodsandinvoicestoconsumer
7.ConsumerpaysFactor(e.g.after30days)
2
3
1
Contractor2
5
Supplier
(hub)
Consumer
6
Fig. 1.
Factoring example
collaborating parties, a process must be built to allow a specific party to retrieve
(or be delivered) the monitoring information in the right way. Such monitoring
process should account for the temporal and aggregation dependencies among
monitoring information.
Let us consider the running example of a business network for factoring in
the manufacturing industry (see Fig. 1), constituted by a supplier, a set of con-
tractors (two in our case), a consumer, and a factor. The supplier, in particular,
acts as the coordinating hub of the set of contractors, which execute the process
required to deliver the product ordered by the consumer. Factoring is a financial
transaction whereby a business (supplier) sells its account receivables (invoices)
to a third party financial institution (factor) in exchange for immediate payment.
Factoring allows consumers to obtain financing at an interest rate, i.e. the one
provided by the factor, lower than the one they could obtain directly from the
supplier [10]. In this context, continuous monitoring may help reducing the risks
associated to the collaboration, e.g. the risk that the supplier will not deliver
thegoodsaspromisedortheriskthattheconsumerwillnotbeabletopay.
Therefore, continuous monitoring may help to further increase the benefits that
the involved parties achieve through the collaboration.
In this scenario, the supplier wants to monitor when the consumer has made
the payment to the factor and when the factor has received such payment. If
the consumer does not pay, in fact, the supplier should not agree to further
transactions in the future involving the same consumer. Note that (i) payment
confirmations are not conveyed to the supplier in the process depicted in Fig. 1
and (ii) a temporal dependency exists between monitoring information, i.e. if the
supplier checks the factor acknowledgment of the payment without knowing if the
consumer has actually sent out the payment, he or she may have an inconsistent
view on the process (and may take wrong corrective actions accordingly).
The factor, similarly, wants to monitor the progress and quality of the process
on the supplier side to reduce its own risk. The consumer, in fact, may not be
satisfied with the goods, e.g. because of late delivery or poor quality, and, as a
consequence, may not be willing to pay the factor according to established terms.
This information may be delivered either by the supplier, or being reconstructed
through more detailed progress information made available by the contractors
and aggregated correctly. Again, note that progress information is not conveyed
to the factor in the business collaboration depicted in Fig. 1.
The latter example also shows that there could be different alternatives for a
party to obtain the required monitoring information and each alternative may
