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Developing e-Negotiation support with a meta-modeling
approachin a Web services environment
Shing-Chi CHEUNGPatrick C.K. Hung
Dept. of Computer Science Hong Kong University of
Science & [email protected]
Sherina Y. Y. ChiuK. K. Chung
Dept. of Computer Science & Engineering,
Chinese University of Hong Kong
Dickson ChiuSenior Member, [email protected]
DSS 40(2005) 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
DSS 40(2005) 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
DSS 40(2005) 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
DSS 40(2005) 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
DSS 40(2005) 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.
DSS 40(2005) 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
DSS 40(2005) 8
Overall Meta-modeling Approach1. Based on business experience and requirements, contract
templates (with variables) are abstracted from previous contracts
2. Administrator models a contract template as an e-Contract template
3. 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
4. Designed e-Negotiation processes are executed with the support of a NSS (e.g., exchange bids via Web Services)
5. Each successful e-Negotiation will lead to an e-Contract
DSS 40(2005) 9
Meta-Model of an e-Contract Template
e-ContractTemplate
*1
1..* TemplateVariable
2..*
involves
*
refines
Obligation Permission Prohibition
*
*
depends
e-Contract Party
Contract Clause
references
DSS 40(2005) 10
A Sales e-Contract Template as an Instance of the Meta-model
insurance premium:Template Variable
freight:Template Variable
quantity:Template Variable
delivery date:Template Variable
return policy:Template Variable
unit price:Template Variable
deposit:Template Variable
dependsPurchaser:Party
Supplier:Party
involves involves
Sales:e-Contract Template
Shipping & Insurance:Contract Clause
Pricing:Contract Clause
Delivery:Contract Clause
Deposit Payment:Contract Clause
consists of
DSS 40(2005) 11
Conceptual Model of e-Negotiation and e-Contract
TemplateVariable
Party Negotiation
Accepted Alternative Value
Alternative Value
makes
1
1..*
1..*has
1..*
1..*
*
logrolls
1..*
2..*
involves
Issue1
1
*
*
Contract Clause
AuxiliaryVariable
precedes
Variable
Accepted Offer
maps to
PlanOffer
*
e-Contract Conceptual
Model
e-Negotiation Conceptual
Model
1
1..*
1 **
**
resolves1..*Task 1
consists of
specializes
DSS 40(2005) 12
A Meta-Model of e-Negotiation Process in UML Activity Diagram
select e-Contracttemplate
derive variablerelations
define issues and criteria
for eachcollectionof co-relatedissue
make offers &counter offers
validateconsistency
formulateplan
organize tasks
all issueshave beenmapped
[consistent][inconsistent]
creation ofe-Contract
[reach consensuson all variables]
[quit]
How we carry out e-Negotiation in general …
Pre-negotiationphase
Negotiationphase
DSS 40(2005) 13
System Architecture
Web / WAP Access
Web Service Server
XSLT Processor
Web Front-end
Web Services Programmatic
Access
Public UDDIRegistry
Enterprises
Internet
Criteria& Issues
EditorSearchEngine
e-ContractTemplate Editor
criteria,issues
e-Contracttemplatee-Negotiation
Data & Repository existing
e-Contracttemplate
e-Contract Template Management
VariableDependency
EditorTasks
Organizer
e-NegotiationProcess
Generator
e-Contract template, template variables variable
dependency
taskdependency
e-NegotiationMatchingSubsystem
e-ContractGenerator
e-NegotiationSession Manager
e-NegotiationExecuting Subsystem
e-Negotiation process
e-Contract
revised e-Contract template,
template variables
bids & offers
e-Negotiation process
End users on Multi-platformDevices
XSLT Stylesheets
e-Marketplace
DSS 40(2005) 14
Bargaining e-Negotiation Process (1)
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.
select e-Contracttemplate
derive variablerelations
define issues and criteria
for eachcollectionof co-relatedissue
make offers &counter offers
validateconsistency
formulateplan
organize tasks
all issueshave beenmapped
[consistent][inconsistent]
creation ofe-Contract
[reach consensuson all variables]
[quit]
DSS 40(2005) 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
DSS 40(2005) 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
DSS 40(2005) 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
Negotiate: Who pay freight
/ insurance
Negotiate: Unit price, Quantity,
Delivery date
Compute Freight
Check Insurance Premium
Negotiate: Return policy
Negotiate: Payment terms,
Deposit
DSS 40(2005) 18
Derivation of Negotiation Plan
leaseperiod
facilitiesprovision
basic rent
start date
additional fee1
mgt feeinclusion
additionalfee2
Landlord
Tenant
rent
deposit
numOfMonths
{facilities provision, lease period, basic rent}
{start date, additional fee1}{management fee inclusion, additional fee2}
{rent}{numOfMonths}
{deposit}
Partial ordering of variables (sets)
DSS 40(2005) 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
DSS 40(2005) 20
Make Offer and Counter Offer
Identify the issue(s) to be next negotiated in the
plan
Preparereservation
prices
Make offer /counter-offer
Evaluate offer /counter-offer[offer received]
[counter-offer received]
Notify counterparty
of failure
Quit?
Revise reservation
prices
[false]
[true]
[unacceptable prices]
Have all issues been negotiated?
[false] Successfulnegotiation
[true]
[acceptable prices]Notify counterpartyof acceptance
[acceptance received][failure received]
start a new negotiation cycle
[ready to make an offer]
DSS 40(2005) 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
DSS 40(2005) 22
Auction Process (1)
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
select e-Contracttemplate
derive variablerelations
define issues and criteria
for eachcollectionof co-relatedissue
make offers &counter offers
validateconsistency
formulateplan
organize tasks
all issueshave beenmapped
[consistent][inconsistent]
creation ofe-Contract
[reach consensuson all variables]
[quit]
DSS 40(2005) 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.
DSS 40(2005) 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)
DSS 40(2005) 25
Auction Process (4)
Make Offer and Counter Offer (i.e. the bidding race)
Compare with Reservation Price
Fail
Received Valid Bid
Time Out
Received Valid Bid
Time Out or Exceeding Max. round (if any)
Success
[Price too low] [Valid Final Price]
Wait for Next Bid
DSS 40(2005) 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.
DSS 40(2005) 27
Request for Proposals (RFP) (1)
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
select e-Contracttemplate
derive variablerelations
define issues and criteria
for eachcollectionof co-relatedissue
make offers &counter offers
validateconsistency
formulateplan
organize tasks
all issueshave beenmapped
[consistent][inconsistent]
creation ofe-Contract
[reach consensuson all variables]
[quit]
DSS 40(2005) 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.
DSS 40(2005) 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
DSS 40(2005) 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
DSS 40(2005) 31
Monitoring - Session Manager
DSS 40(2005) 32
NSS – Create Contract Template
System administrator create new contract template by entering different contract template variables
DSS 40(2005) 33
NSS - Grouping & Auxiliary Variables
System administrator then input grouping and auxiliary variables
DSS 40(2005) 34
NSS - Input Dependencies System administrator then input dependencies among groups / issues
DSS 40(2005) 35
Negotiation Based on Different Contract Templates GUI (1)
DSS 40(2005) 36
Negotiation Based on Different Contract Templates GUI (2)
DSS 40(2005) 37
UDDI Registry for the Prototype
Access URI
DSS 40(2005) 38
Sample Web Service
DSS 40(2005) 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
DSS 40(2005) 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)