Open Buying on the Internet (OBI) is not a software package, technology or a third-party vendor. OBI is a standard by which organizations can conduct business-to-business purchasing transactions over the Internet. It may be used in software packages, utilized with technology, or adopted by third-party vendors, but in and of itself, it is an architecture.

The average cost of ordering a transaction can cost a selling organization from .5-3% of the total selling price where as the average transaction cost for a buying organization can cost between $20-200. Beyond just the cost of processing an order-to-payment transaction, buying organizations also want to insure that end-users utilize preferred vendors where significantly reduced prices are in place. Therefore, providing a the technical framework to automate the requisitioning, approval, order, confirmation, and payment process for goods can save both buying and selling organizations a significant amount of money. OBI seeks to provide the architecture for this purpose.

The history of OBI is listed below. Initially, American Express funded the Purchasing Roundtable (later becoming the OBI Consortium) in order to insure that the interests of payment providers were included. Now, the Consortium is funded by the more than 60 member organizations.

The foundation of OBI lies in developing standards by which businesses can conduct purchasing and payment transactions via the Internet. The primary goal of OBI is the development of open, publicly documented standards that any organization can utilize. Furthermore, the standards are meant to provide competition to all organizations (buyers, sellers, hardware providers, software providers, and payment processors) by establishing the open architecture.

The standards address security, cataloging, user login, transaction type, and transaction format issues. In the business-to-business world of electronic commerce, there has been substantial debate about where certain information resides. For example, if an individual needs to purchase from Boise Cascade on the Internet today, that individual needs a unique logon id for Boise, which Boise maintains. Should the same individual need to purchase from other selling organizations, again they would need a unique logon id from each seller. OBI states that these ids (or certificates) are maintained by the buying organization rather than the seller. Therefore, one certificate can be used at multiple sellers. OBI also states that catalogs are maintained by the seller. Although this is the standard for Internet Purchasing today, it is not for many ERP systems where the buyer maintains the catalogs via EDI.

The process steps below provide a more comprehensive understanding of a typical application:

This is a conceptual transaction for OBI; however, no seller nor buyer has implemented this process as prescribed by OBI.

Although some have tried, currently no organization has implemented a fully compliant OBI model. BASF Corporation initially planned to pilot OBI with VWR; however, with the implementation of SAP and Y2K changes, no funding was available. No firm seems to want to make the investment to forge ahead. Who wants to be the first to adopt a standard that no one else uses or that no one else may ever use. The lack of a proven and widely-accepted base for OBI is the largest obstacle that the standards encounter. No one wants to buy the Beta of Internet technology. Hence, many buying organizations are moving to middleware providers because of their own lack of internal resource support and because many middleware providers have made headway in enrolling marquee accounts. Also, many middleware or third-party providers that charge transaction fees enable organizations to begin using the Internet for Purchasing without making an upfront investment.

There is one OBI trial underway. Motorola and VWR are planning to test an OBI pilot, but again, there is just one example - not enough for everyone to start jumping on board. OBI may never become THE standard, but at least it provides a thought framework for further developments in the field.

There are no firms that are completely OBI compliant, but there are several firms that are eThere are over 60 members of the OBI Consortium, from software and hardware providers to major buying and selling organizations to the three primary credit card associations. A complete list of the members is as follows: