Definition

Open Buying on the Internet (OBI)

OBI (Open Buying on the Internet) is a proposed standard for business-to-business purchasing on the Internet, aimed particularly at high-volume, low-cost-per-item transactions. OBI uses a number of security technologies such as the digital certificate to allow orders to be placed and filled securely. On average, 80% of company purchasing is for non-production supplies such as office supplies, cleaning products, and computer equipment. Making and fulfilling an order can cost an organization up to $150 and the seller up to $50. In the fall of 1996, the Internet Purchasing Roundtable, a group of Fortune 500 buying organizations and their suppliers met to develop an open standard for business-to-business e-commerce. The result - OBI - is intended to eliminate redundant work in purchasing, minimize errors, and reduce labor and transaction costs.

There are four entities involved in an OBI transaction: the requisitioner, the buying organization, the selling organization, and the payment authority. The requisitioner is the person who places the order and must have a digital certificate for authentication. The buying organization maintains an OBI server that receives OBI order requests and approves them. The buying organization also negotiates and maintains contracts with selling organizations. It is the responsibility of the selling organization to provide a catalog tailored to each department in each company, maintain products and prices based on contracts with the buying organization, and authorize payments with the appropriate payment authority.

An OBI transaction is done without the user needing special knowledge of the OBI process. With OBI, a purchaser needs only a computer, an Internet connection, a Web browser, and an OBI-compliant application. The following is a typical OBI scenario:

  • A janitor needs to purchase some cleaning supplies. Using the stockroom computer, the janitor connects to the organization's purchasing server using a Web browser.
  • The janitor selects a merchant from a list on the purchasing department's home page and is authenticated by the merchant's server.
  • The janitor views a catalog that is tailored to company needs and selects the needed cleaning supplies. The janitor clicks a button to submit the order, which is then formatted into the Electronic Data Interchange (EDI) format. The order is then encapsulated into an OBI object.
  • The janitor's order is sent to the buying organization in the company for approval using Hypertext Transfer Protocol (HTTP) and Secure Sockets Layer (SSL). The buying organization decodes the OBI object and approves the order.
  • The order is sent to the merchant and fulfilled.
  • The merchant submits the payment to a payment authority.
  • The payment authority sends the billing data to the company's billing department.

OBI architecture, technical specifications, guidelines, and compliance and implementation information is available at the OBI Consortium Web site. Future OBI versions will include international support and the use of Extensible Markup Language (XML) data formats.

 

Contributor(s): Mark Freitas and Cathy Steele
This was last updated in September 2005
Posted by: Margaret Rouse

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