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Developing e-Negotiation support with a meta-modeling approach in a Web services environment

Developing e-Negotiation support with a meta-modeling approach in a Web services environment. To be learned from this case. Capture and abstract various business process requirements Generalize them into an organized framework and model Application of IT and CS to solve a business problem

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Developing e-Negotiation support with a meta-modeling approach in a Web services environment

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  1. Developing e-Negotiation support with a meta-modeling approachin a Web services environment

  2. To be learned from this case • Capture and abstract various business process requirements • Generalize them into an organized framework and model • Application of IT and CS to solve a business problem • Novelty - process support for NSS is much less studied (as compared with decision models for negotiation) • Extend a traditionally human centric application • into a Web service based platform • to support growing need for programmatic interface • for B2B • support negotiating agents – autonomous intelligent programs act on behalf of a user • Architecture and Web service design

  3. Introduction • e-Contract • computerized facilitation or automation of a contract • cross-organizational business process • Negotiation • a decision process in which two or more parties make individual decisions and interact with each other for mutual gain • negozio =shop in Italian … • e-Negotiation • perform negotiation activities over the Internet • Web Services and Grid technologies and infrastructures => Context: extended e-Marketplace

  4. Classification of Negotiation Our Meta-model covers the following types of negotiation • Bidding • Multilateral distributive negotiation • Formal, competitive procurement procedure • Bargaining • Usually involves two parties • Each party has a single but opposing objective • Each fights for the best value that opponent would still accept • Request for Proposals (RFP) • Extended form of bargaining • Has a prelude phase of requirement & candidate identification

  5. Project Background • D.K.W. Chiu, S.C. Cheung, P.C.K. Hung, S.Y.Y. Chiu* and K.K. Chung*. Developing e-Negotiation Process Support with a Meta-modeling Approach in a Web Services Environment, Decision Support Systems, 40:51-69, 2005. (*FYP students) • Peliminary Version at ICWS'03, June 2003 • 6th Pacific Asia Conference on Information Systems, Sept 2002 • D.K.W. Chiu, S.C. Cheung, P.C.K. Hung, and H.F. Leung. Constraint-based Negotiation in a Multi-Agent Information System with Multiple Platform Support, HICSS37, Jan 2004. • S.C. Cheung, P.C.K. Hung and D.K.W. Chiu. On e-Negotiation of Unmatched Logrolling Views, HICSS36, Jan 2003 (best paper nominee). (journal version under revision for JMIS) • S.C. Cheung, P.C.K. Hung and D.K.W. Chiu. A Meta-model for e-Contract Template Variable Dependencies Facilitating e-Negotiation, ER2002, Oct 2002

  6. Contract Templates • Reference document based on which a new contract is created • Contains a set of template variables whose values are to be negotiated • Particularly applicable to standard business interactions that could be taken place over the Internet • Such as real-estate transactions, purchase and sale of goods, etc. • New e-Contracts for these business interactions can be defined based on standard contract templates • Specific business interactions not covered by the clauses in standard contract templates can be provided as contract variations or contract escalations The PURCHASER shall send a Letter of Credit for the GOODS to the SUPPLIER in the currency of [ ] within [ ] days of the invoice date. The SUPPLIER shall on receipt of the Letter of Credit ships the GOODS to the PURCHASER within [ ] days and provides the PURCHASER with shipment details.

  7. Motivation and Objectives • e-Contract template and template variables facilitate negotiation by avoiding uncontrolled openness of issues • Address specific semantic requirement of contracts for supporting B2B applications • Reduce cost and improve effectiveness of negotiation(avoid combinatorial explosion of issues) • Development of an effective and efficient negotiation plan in a natural way • Rapid development and deployment of a flexible negotiation support system (NSS) through reuse in a e-Marketplace • A reference model for future research

  8. Overall Meta-modeling Approach • Based on business experience and requirements, contract templates (with variables) are abstracted from previous contracts • Administrator models a contract template as an e-Contract template • Suitable e-Negotiation processes are designed based on our meta-model for e-Negotiation processes • Such as bargaining, auctions and RFP • Determine template variable relations (dependencies) • These designed processes are most likely repeatable and reusable for a business. • NSS derive e-Negotiation plan • Designed e-Negotiation processes are executed with the support of a NSS (e.g., exchange bids via Web Services) • Each successful e-Negotiation will lead to an e-Contract

  9. Meta-Model of an e-Contract Template involves e-Contract Party 2..* depends refines * 1 * e-Contract Template Contract Clause Template Variable 1..* * * references Obligation Permission Prohibition

  10. A Sales e-Contract Template as an Instance of the Meta-model involves involves depends Purchaser :Party Supplier :Party consists of Sales :e-Contract Template Shipping & Insurance :Contract Clause Deposit Payment :Contract Clause Pricing :Contract Clause Delivery :Contract Clause freight :Template Variable deposit :Template Variable quantity :Template Variable delivery date :Template Variable insurance premium :Template Variable unit price :Template Variable return policy :Template Variable

  11. Conceptual Model of e-Negotiation and e-Contract specializes consists of

  12. A Meta-Model of e-Negotiation Process in UML Activity Diagram Pre-negotiation phase formulate plan define issues and criteria for each collection of co-related issue all issues have been mapped organize tasks derive variable relations select e-Contract template validate consistency [consistent] [inconsistent] make offers & counter offers [reach consensus on all variables] Negotiation phase creation of e-Contract How we carry out e-Negotiation in general … [quit]

  13. System Architecture

  14. Bargaining e-Negotiation Process (1) formulate plan define issues and criteria for each collection of co-related issue all issues have been mapped organize tasks derive variable relations validate consistency select e-Contract template [consistent] [inconsistent] make offers & counter offers [reach consensus on all variables] creation of e-Contract [quit] • Decide your offers • Select E-contract Template / Define Issues and Criteria • business experience • formally from its old sale contracts • informally from quotations, purchase orders, invoices • other correspondences with its customers • typical contract template variables - product for sale, price, quantity, delivery date, freight, payment terms, deposit, etc.

  15. Web Services for Bargaining - Offer • Service Name: placeNewBargainOffer • Input: Item Description, Contract Template ID, Proposed Template Variable Values, Additional Requirement List • Response: Offer ID • Service Name: withdrawOffer • Input: Offer ID • Response: Confirmation • Service Name: searchOffer • Input: Search Criteria • Response: List of Offer ID and Descriptions

  16. Web Services for Bargaining – Contract Template • Service Name: searchContractTemplate • Input: Search Criteria • Response: XML Contract Template Summaries • Service Name: downloadContractTemplate • Input: Contract Template ID • Response: XML Contract Template • Service Name: uploadContractTemplate • Input: XML Contract Template • Response: Contract Template ID

  17. Bargaining e-Negotiation Process (2) Formulate Plan and Make Offer and Counter Offer • Based on offers and contract template • Evaluation of several variables and of several values per variable • Need to take in account of the dependencies among the issues • Deciding the order of negotiation • Trade-off evaluation of inter-dependent issues Compute Freight Negotiate: Payment terms, Deposit Negotiate: Unit price, Quantity, Delivery date Negotiate: Who pay freight/ insurance Negotiate: Return policy Check Insurance Premium

  18. Derivation of Negotiation Plan {facilities provision, lease period, basic rent} {start date, additional fee1} {management fee inclusion, additional fee2} {numOfMonths} Landlord {rent} start date additional fee1 facilities provision lease period {deposit} basic rent Partial ordering of variables (sets) mgt fee inclusion rent deposit additional fee2 numOfMonths Tenant

  19. Web Services for Bargaining – Contract Template & Negotiation Plan • Service Name: downloadNegotiationPlan • Input: Contract Template ID • Response: XML Negotiation Plans in the Repository for the specified contract template • Service Name: uploadNegotiationPlan • Input: Contract Template ID, XML Negotiation Plan • Response: Negotiation Plan ID

  20. Make Offer and Counter Offer [acceptance received] [failure received] Make offer /counter-offer Revise reservation prices [ready to make an offer] Identify the issue(s) to be next negotiated in the plan Prepare reservation prices [counter-offer received] [false] Quit? Evaluate offer /counter-offer [unacceptable prices] [offer received] Notify counterparty of acceptance [acceptable prices] start a new negotiation cycle [true] Notify counterpartyof failure Have all issues been negotiated? Successful negotiation [false] [true]

  21. Web Services for Bargaining – Make Offer and Counter Offer • Service Name: initNegotiationSession • Input: Offer ID Responded to, Negotiation Plan ID, Counteroffer Template Variable Values, Comments • Response: Session ID • Service Name: updateNegotiationSession • Input: User ID, Session ID, Counteroffer Template Variable Values, Comments • Response: Outstanding Variables Not Agreed or Successful Negotiation • Service Name: abortNegotiationSession • Input: Session ID • Response: Confirmation

  22. Auction Process (1) formulate plan define issues and criteria for each collection of co-related issue all issues have been mapped organize tasks derive variable relations validate consistency select e-Contract template [consistent] [inconsistent] make offers & counter offers [reach consensus on all variables] creation of e-Contract [quit] • Decide your offers • Select E-contract Template / Define Issues and Criteria • price is usually the main and only issue for negotiation • quantity - when a lot of same items are sold • occasionally may involve multiple issues, using a scoring rule (formula) • auction service or marketplace provider

  23. Auction Process (2) • Formulate Plan (specify the rules and parameter for the bidding process) • Format – Dutch or English auction, maximum rounds of bidding (if any), deadline for last bid (if any), maximum time between each bid (if any), whether bids are sealed or open, etc. • Rules of bidding – starting price, (minimum) price increment for each bid (if any), reserve price (sealed or open), etc. • Administration – start time and location (physical location, or URL in the case of electronic auction) of the bidding, entry fee (if any), deposit (if any), penalty for bidder default (if any), who may bid, etc.

  24. Auction Process (3) • Organize Task • Important factor for the success of an action • Potential bidders have to be identified • Announcements and publicity to attract potential bidders • Carry out the planned admission procedures, such as admitting and registering valid bidders, charging entry fee and deposit (if any)

  25. Auction Process (4) • Make Offer and Counter Offer (i.e. the bidding race) Received Valid Bid Wait for Next Bid Compare with Reservation Price Time Out or Exceeding Max. round (if any) Received Valid Bid [Valid Final Price] [Price too low] Time Out Success Fail

  26. Web Services for Auctions that are different • Service Name: placeNewAuctionOffer • Input: Item Description, Contract Template ID, Proposed Template Variable Values, Additional Requirement List, Auction Parameters • Response: Offer ID • Service Name: placeAuctionBid • Input: User ID, Session ID, Counteroffer Template Variable Values, Comments • Response: Valid | Invalid • Consider the following services could be the same as bargaining – withdrawOffer, seachOffer, those regarding templates, etc.

  27. Request for Proposals (RFP) (1) formulate plan define issues and criteria for each collection of co-related issue all issues have been mapped organize tasks derive variable relations validate consistency select e-Contract template [consistent] [inconsistent] make offers & counter offers [reach consensus on all variables] creation of e-Contract [quit] • Select E-contract template / Define Issues and Criteria • customer has some requirements, but with a lot of open issues • rest of the contract template is to be constructed based on the information from potential suppliers

  28. Request for Proposals (RFP) (2) • Decide your offer • Formulate Plan • Identifies which issues and criteria to be disclosed to RFP candidates • Identify specific candidates from directories, or identify some criteria for open advertisement • Determine various administration procedures, such as deadline, submission procedures, etc.

  29. Request for Proposals (RFP) (2) • Organize Tasks • Similar to auction… • Make Offers and Counter Offers • Candidate proposals before the deadline • Evaluates them according to the criteria previously defined • May need further interaction with the candidates for clarifications • Shortlist / rank candidates, or directly select a successful one • By this time, the customer will have much more understanding on the details of product/service requirements, their issues, and thus also in the potential contract • Can negotiate further issues and criteria by following the detail procedures of scenario 1 – bargaining

  30. Web Services for RFP • Service Name: placeNewRFP • Input: Item Description, Contract Template ID, Proposed Template Variable Values, Additional Requirement List • Response: Offer ID • Service Name: replyRFP • Input: OfferID, Contract Template ID, Proposed Template Variable Values, Additional Requirement List • Response: Accept | Reject | RevisedOfferID

  31. Monitoring - Session Manager

  32. NSS – Create Contract Template • System administrator create new contract template by entering different contract template variables

  33. NSS - Grouping & Auxiliary Variables • System administrator then input grouping and auxiliary variables

  34. NSS - Input Dependencies • System administrator then input dependencies among groups / issues

  35. Negotiation Based on Different Contract Templates GUI (1)

  36. Negotiation Based on Different Contract Templates GUI (2)

  37. UDDI Registry for the Prototype Access URI

  38. Sample Web Service

  39. Conclusions • An novel application of computer science techniques for a management problem • A novel approach of e-Negotiation of contracts based on e-contract template • A meta-model for e-Contract templates with the notion of template variables and their dependencies • A flexible meta-model for e-Negotiation processes • Feasibility of designing various practical e-Negotiation processes (viz., bargaining, auctions and request for proposals) • Derivation of effective and efficient negotiation plan • Application of contemporary Web Services technologies • Facilitate rapid implementation for e-Marketplaces supporting the cross-organizational process • NSS supporting both human and computer access

  40. Continuing and Future Work • Contract template dependencies (Cheung et al 2002) • One-to-many contract negotiation • Ranking of different types of issues and criteria for tradeoff issues • Decision making to reach an optimal and stable state for negotiators (Nash equilibrium) • Ontology support for negotiation • D.K.W. Chiu, S.C. Cheung, P.C.K. Hung and H.F. Leung. Facilitating e-Negotiation Process with Semantic Web Technologies, HICSS38, Jan 2005. • E-marketplace • D.K.W. Chiu, J.K.M. Poon, W.C. Lam, C.Y. Tse, W.H.T. Siu, W.S. Poon. How Ontologies Can Help in an E-marketplace, ECIS 2005, to appear. • Anonymity and Security • Real-life negotiation practice • Integration of NSS / e-Marketplace with EIS • Request for proposals (particularly with semantic support)

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