Electronic Business: Concepts, Methodologies, Tools, and Applications (4-Volumes) P51 pptx

These SMEs depend mostly on the change agent or perceived change agent efforts, and they invest limited resources in the development and management processes.. Management enthusiasm and

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Well we’ve had some sort of Web presence for quite

a long time, about three years but we had made

progress over that period and redesigned the site

a number of times but we’d not taken it seriously

enough, I don’t think until probably this year when

we put a little bit more money into it and really

looked to it as something which would support

the value of the brand of magazine itself which

is [magazine name] It’s the only magazine (…)

publishers and the Web site was designed around

two themes in terms of supplementing the brand

itself, one was to provide additional information

on the product to the consumer and the second

was to provide information to other businesses for

example, potential advertisers in the magazine,

that sort of thing, contact details, up and coming

events, readers holidays and so on, some of which

they get through the magazine We deliberately

don’t put magazine content online, the idea is that

people pay for it and we see the site at the moment

as being free access (NP SME case 11).

Quayle (2002) argues that SMEs that

devel-oped e-commerce capabilities have not done so

VWUDWHJLFDOO\DQGKDYH\HWWRHQMR\VLJQL¿FDQWFRVW

and time savings This is evident from NP SME

(case 5) who owns two Web sites; a catalogue and

an e-commerce site which is not fully functional

The owner-manager is in continuous discussions

with the change agent to provide a technical

so-lution for the e-commerce site It can be argued

that developing e-commerce capabilities does

not depend only on internal factors, but equally

depends on the availability of external support

and type of ECT solutions provided and

acces-sible to SMEs

We have two Web sites, we have a catalogue, a

magazine if you like … and we have an email,

e-commerce thing The e-commerce site is SQL

server-based which means that if you actually

click it, you call up a database, a pick list if you

like and it is slow and we are talking just now to

[Consultant at Connect] he can improve potential

customer access to it in terms of speed of delivery

So we get sales from it [site] but most of them are from the magazine where we get email contact with enquiries….so we have had business through the catalogue but not through the e-commerce site …it is enquiries that lead to business but not directly, there is always a second stage in it,

we are not directly selling from the e-commerce site at all hence our continued discussions with Connect about its effectiveness… It’s still too slow but as I say that’s since last October, we’ve been trying to get that speeded up… [Consultant

at Connect] is aware of it, he himself has in the SDVWEHHQWU\LQJWR¿QGVRPHRWKHUPHWKRGIRU speeding up the server but although I ask him on

a regular basis, it’s never there next month and probably the month after, it’s not happening yet

(NP SME case 5)

Contrary, passive adopters are companies that mostly outsource update, management and rede-sign phases Some, passive adopters have gained Web authoring skills and manage minor content update Their Web sites are in a sporadic state of content update depending on circumstances and resources While other passive adopters update their site yearly; their Web sites are in a static state where limited or no content update is evident These companies have not established a clear business objective for their Web presence, and they are not aware of the need for any strategic planning to incorporate into Web site develop-ment and redesign These SMEs depend mostly

on the change agent or perceived change agent efforts, and they invest limited resources in the development and management processes These

TP SMEs had limited involvement in Web site development and testing, and they continue to have limited impact in update and management

We just had the pictures and told them [Connect] what we wanted and they designed it…we could have done anything we wanted to but we just left

it to them because we had no knowledge on it…We

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to make the changes ourselves…we tried to get in

to change a price and we lost a picture and there

was no way we could get that picture back, so I

went to Connect for some support and they said,

we’ll put it on for you this time but after this we’ll

need to charge you further … [When asked if they

would approach another Web design bureau]…

Not really, it would be too much, we are paying

about two hundred and something to stay with

them a year to host the site, so we wouldn’t like

to change (TP case 1)

SUMMARY OF FINDINGS

Findings presented in this chapter have shown

that NP SMEs and TP SMEs differ to a large

extent in their implementation process NP SMEs

are mostly internally motivated in their adoption

decisions Management enthusiasm and perceived

EHQH¿WVIURPDGRSWLRQHQFRXUDJHGPDQ\RZQHU

managers to gain awareness of the technology and

improve their Web authoring skills, either through

their personal efforts or through the change agent

training NP SMEs have a favourable opinion of

the technology, initiate the development of their

Web presence, and have more authority and

autonomy in their adoption and implementation

decisions However, these decisions are limited

by owner-manager Web authoring skills,

techni-cal knowhow, and knowledge of ECT solutions

Contrarily, TP SMEs are mostly externally

moti-vated by the change agent efforts and support TP

SMEs adopted a Web presence without forming a

favourable opinion of ECT They mainly wanted

to experiment with the new technology without

any objective evaluation of their business needs

and resource constraints Their Web presence was

developed by the change agent, and was mostly

LQÀXHQFHGJRYHUQHGDQGOLPLWHGE\WKHVROXWLRQV

provided by the change agent

SMEs implementation process can be grouped

into four main categories: strategic planning, ad

hoc decisions, sporadic state, and static state This categorisation is based on whether the company depends on internal resources or out-sources the development and management stages, and whether WKHFRPSDQ\LVDSDVVLYHRUDFWLYHPRGL¿HUStra-tegic Planning is evident in NP SMEs that had the initiative to develop their Web presence, and overtime developed a systematic approach to the Web site development and management These SMEs outsource the redesign of the Web site, regard the Web presence as a strategic business tool, and intend to gradually incorporate ECT functionalities that meet their business needs These SMEs have the chance of encompassing e-business These companies are larger in size and outsourced the redesign and development of the successive Web sites They have both technical and

¿QDQFLDOUHVRXUFHVWRPDQDJHWKHLU:HESUHVHQFH in-house Furthermore, the owner-manager and staff are better trained in managing their ECT adoption However, at the time of interview only one SME (NP case 11) falls in this category Generally, most NP SMEs have a tendency towards strategic planning, as they have clear business objectives that govern their maintenance process However, their implementation process

is primarily based on ad hoc decision Most NP SMEs fall within the ad hoc decision category 7KH\ DUH DFWLYH PRGL¿HUV DQG DUH LQWHUQDOO\ motivated in developing and updating their Web presence These companies have reached a stage

of self-reliance, either through their personal inter-est in Web authoring and/or change agent efforts These companies are actively and constantly FKDQJLQJ DQG XSGDWLQJ WKHLU VLWH WR UHÀHFW WKH company’s image and attract customer Web site changes and updates are driven by owner-manager enthusiasm, knowledge of Web authoring skills, and relative advantage gained These companies tend to take a pragmatic ad hoc approach to the development process The choices of ECT solution adopted are based on the owner-manager’s indi-vidual judgment and experience Although, these SMEs tend to outsource major redesign, however,

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they lack the resources to access professional

advice and encompass strategic planning

Most TP SMEs fall within the sporadic state

or static state These are companies that are

VWURQJO\ LQÀXHQFHG E\ H[WHUQDO IRUFHV QDPHO\

the change agent or any perceived change agent,

in both their awareness and adoption of ECT

Companies within the sporadic state have gained

ECT awareness, Web authoring, and knowhow,

primarily due to the change agent efforts

Simi-ODUO\ WKH ¿UVW :HE VLWH DGRSWHG ZDV WKH GLUHFW

result of the change agent services, in particular

the free Web authoring and hosting services These

companies can be described as passive adopters,

as they have limited technical skill to update Web

site content and actively change Web presence

functionality They update their Web presence on

a quarterly or yearly basis and tend to outsource

any major redesign Thus, their Web presence is

in a sporadic state of content update Companies

within the static state, share similar

implemen-tation background as companies in the sporadic

state In addition, these companies have limited

knowledge of Web presence development and

management They depend mostly on the change

agent efforts in the initial Web site developed,

Web site update and management, and subsequent

redesign Web sites These SMEs depend entirely

on external support and Web site in a static state

with minimum or no update

$QXPEHURIIDFWRUVLQÀXHQFH60(VFRQWLQX-ous adoption of a Web presence Both NP and TP

SMEs are encouraged to continue their adoption

due to the perceived and experienced relative

advantage gained, mostly from using the Web

presence as a promotional and communicational

means NP SMEs are internally motivated by the

owner-manager enthusiasm The owner-manager

is the main person developing and managing ECT

Peer pressure is motivating NP SMEs to adopt

ECT, but does not encourage further investment of

resources to develop a more competitive Web

pres-ence Lack of time and lack of technical resources

are among the common factors hindering both NP

and TP SMEs’ continuous adoption Moreover, 7360(VDUHPRVWO\H[WHUQDOO\LQÀXHQFHGGXH

to their dependence on outsourcing of Web site development and management rather than in-house expertise TP SME continuous adoption

is affected by cost of Web presence maintenance and subsequent redesign, trust in change agent services, lack of trust in independent service providers, and lack of awareness of alternative ECT solutions, and their dependence on change agent support for further awareness

7KH ¿QGLQJV SUHVHQWHG LQ WKLV FKDSWHU KDYH some limitations Mainly, the data was collected IURP 60(V WKDW KDYH EHHQ LQÀXHQFHG E\ WKH change agent efforts in the diffusion of ECT; either directly as in the case of TP SMEs or indirectly

as evident in NP SMEs The presence of external FKDQJHDJHQWVLQÀXHQFLQJWKHDGRSWLRQGHFLVLRQV and implementation process, might limit the conclusions only to similar scenarios where the involvement of a change agent, or any perceived change agent, is paramount Nonetheless, the

¿QGLQJVSUHVHQWHGDUHFRQVLVWHQWZLWKOLWHUDWXUH First, the factors that encourage implementation (e.g., management enthusiasm and relative advan-tage) and barriers to implementation (e.g., lack of resources, awareness, and trust) are in line with literature (Windrum & De Berranger, 2003), even

in the presence of a change agent that provides LQFHQWLYHVWRHQFRXUDJHDGRSWLRQ6HFRQG¿QG-ings are in agreement with the argument that SMEs underestimate the need for planning prior

to adopting e-commerce and that e-commerce strategy is missing from SME business plans (Quayle, 2002)

Finally, it is argued that in absence of a stra-tegic vision from within the company, external support can not always have the ability and desire WRSURYLGH³NQRZKRZ´NQRZOHGJHDQGDLGLQWKH formation of strategic planning (Jones, Hecker,

& Holland, 2003) This is clearly evident in the

¿QGLQJVSUHVHQWHG7KHFKDQJHDJHQWSURYLGHG knowhow knowledge and aided in creating aware-ness, but did not aid in developing ECT strategic

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planning, even in companies that host their Web

presence at the change agent’s Web directory and

are in continuous contact with the change agent

However, contrary to literature, where

implemen-tation is presented as a linear stage-based process,

the chapter presented a new dimension in SMEs

implementation of ECT, based on the allocation

of resources (in-house/outsourced),

develop-ment process (passive/active), and managedevelop-ment

practices (strategic planning, ad-hoc decisions,

sporadic state, and static state) Further research

ZLOO EHQH¿W IURP LQYHVWLJDWLQJ ZKHWKHU WKHVH

implementation patterns exist in the absence of

change agent involvement in the implementation

process

CONCLUSION

This chapter unravelled a different dimension to

SMEs implementation of electronic commerce

technologies The chapter focused on Web site

development and management practices and

explored the different Web presence

implementa-tion patterns among SMEs Two distinct groups

RI60(VDUHLGHQWL¿HG7KHPRUHDEOH1HHG3XOO

SMEs, who are aware of their business needs and

internal resources in developing and maintaining

their Web presence These companies update

and manage their Web presence based mostly

on owner-manager’s ad-hoc decisions and have

a tendency towards strategic planning Contrary,

the less able Technology Push SMEs, who have

EHHQLQÀXHQFHGDQGHQFRXUDJHGWRDGRSWD:HE

presence by change agent efforts in the diffusion

of ECT These companies gained ECT awareness

and some level of technical knowhow, due to

change agent training However, these companies

lack the technical knowledge to maintain their

Web presence in-house and depend largely on

external support, particularly the change agent

Their Web presence is either in a sporadic or a

static state of update and maintenance

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Chapter 2.8 BSC-Based Framework for

E-Business Strategy

Fen Wang

University of Maryland, Baltimore County, USA

Guisseppi Forgionne

University of Maryland, Baltimore County, USA

INTRODUCTION

E-business is far more about strategy than

technol-ogy (Raisinghani & Schkade, 2001) An effective

e-business strategy is concerned with e-business

multidimensional characteristics associated with

different levels, parties, elements, and growth

pattern features (Bakry & Bakry, 2001) In the

process, the strategy must incorporate the effects

of the instant and global Internet communication

mechanism on the company’s business

manage-ment architecture The global reach and

intercon-nectivity of the Internet have spawned new models

of e-business strategy and radically transformed

existing ones (Pant & Ravichandran, 2001)

In-deed, what distinguishes many of the dot-coms

is not their new technical power, but the radical

new business models (Hamel, 2000)

Aided by such innovative e-business models,

managers will be able to identify the major

deci-sion factors involved in their business strategies

and generate strategies that would improve their RYHUDOO SHUIRUPDQFH DQG SUR¿WDELOLW\ ,Q WKH current context, four essential perspectives are LGHQWL¿HG WR EH DVVRFLDWHG ZLWK DQ HEXVLQHVV VWUDWHJ\¿QDQFLDOFXVWRPHULQWHUQDOSURFHVVHV and learning and growth These four perspectives ZHUH¿UVWLQWURGXFHGLQHDUO\VDVWKHbal-anced scorecard concept (BSC) (Kaplan & Norton, 1992) Because the BSC methodology explicitly focuses on links among business decisions and outcomes, it is intended to guide strategy devel-opment, implementation, and provide reliable feedback for management control and perfor-mance evaluation This BSC rationale is thereby appealing to managers who face new challenges

in the current turbulent e-business climate The real challenge is to determine how the BSC can be successfully applied in the context

of e-business’s constantly changing environment

of interdependencies (Hasan & Tibbits, 2000) E-business introduces new business objectives

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and strategies and the old measures of success

may no longer apply It is anticipated that the

departure from the original BSC for a strategic

e-business management framework would be more

radical than the existing BSC adaptations (e.g.,

Martinson’s balanced IS scorecard; Martinsons,

Davison, & Tse, 1999)

BACKGROUND

Few, if any, precise and complete e-business

strategy models are available from the literature

(Dubosson-Torbay, Osterwalder, & Pigneur,

2001) There are a few theoretical academic

stud-ies with some empirical evidence on e-business

models success (Horsti, Tuunainen, & Tolonen,

2005) Generally, these e-business model studies

fall into two categories: subsystem research and

generic frameworks Examples of the subsystem

research include modeling for price structures

(Liu, Wynter, & Xia, 2003), customer needs

(Ols-son & Karls(Ols-son, 2003), process synchronization

(Park, 2002), and knowledge sharing (Koh &

Kim, 2004) Since these subsystem models deal

with a particular aspect of e-business, they do

not offer a global and complete view of

e-busi-ness strategy

There are several generic frameworks for the

development and analysis of e-business models

Whelan and Maxelon (2001) proposed that an

e-business architecture requires product, channel,

customer management, resource management,

and information elements Afuah and Tucci (2001)

presented a more detailed list of components

in-cluding scope, customer value, revenue sources,

connected activities, and so forth, but like Whelan

and Maxelon, they did not specify the

interre-ODWLRQVKLSV+DPHOVSHFL¿HGDFRPSOHWH

four-part framework with bridge components

that is geared toward guiding strategic choices

of management Similarly, Dubosson-Torbay et

al (2001) used a framework with four principal

components to analyze e-business: product

in-novation, customer relationship, infrastructure PDQDJHPHQWDQG¿QDQFLDODVSHFWV*RLQJEH\RQG the segment frameworks, De, Mathee, and Abra-ham (2001) developed a pragmatic framework that offers different perspectives for the analysis

of e-business including transaction costs, switch-ing costs, infrastructure investment, and revenue models and so on

For the most part, the generic models offer theoretical, not analytical, decision guidance for practitioners One exception is the BSC-based e-business framework, with preliminary empirical evidence, proposed by Hasan and Tibbits (2000) Their empirical evidence, which was gathered from a case study in an Australian state-govern-ment utility, gave four high-level perspectives EXWQRVSHFL¿FDQGH[SOLFLWPHDVXUHVZLWKHDFK perspective Currently, there is no comprehensive and concrete investigation that applies the tradi-tional BSC to e-business strategy

EBBSC FRAMEWORK SPECIFICATION

Considering a wide range of factors and relation-ships in this fast-changing e-era, we adapt the original BSC methodology into a comprehensive e-business strategy framework (EBBSC) con-sisting of four updated perspectives: business model, analytical e-CRM, process structure, and e-knowledge network (see Figure 1) The EBBSC framework links business strategies

to a broad range of innovations and measures, examines important business issues facing e-business managers, and provides a complete view

of e-business strategies The framework can be better understood by examining the components

in detail

Business Model Perspective

Although e-business models differ from the tra-ditional brick and mortar models in various ways,

Trang 9

the fundamental needs of consumers and

busi-nesses remain much the same Consumers want

the best deal by price and service comparison,

while businesses want to grow sales by targeting

the right e-shoppers On the other hand, traditional

rear-view and static planning and budgeting cycles

don’t measure up to the dynamic, competitive,

and compressed business cycles in the global

e-era E-business managers need to focus on a

IXWXUHRULHQWHGSUR¿WPD[LPL]DWLRQVWUDWHJ\WKDW

will support on-the-spot decision making at the

turning points

• 3UR¿W0D[LPL]DWLRQ3UR¿WLVHTXDOWRWKH

difference between the revenue and cost

Many intangible and tangible factors may

DIIHFW SUR¿W E\ LQÀXHQFLQJ UHYHQXH DQG

cost directly or indirectly, creating risk or

uncertainty in achieving the company’s

SUR¿WDELOLW\3DOPHU :LVHPDQ

• Revenue Increase: Revenue increase refers

to expanding and re-pricing product and

service offerings to achieve a higher value

added mix According to economics theory,

revenue equals the product of the purchases

and price Purchases equal the minimum of

the product quantity offered (quantity

sup-plied) and quantity customers are willing

and able to purchase (quantity demanded)

Quantity demanded is treated as a function

of the customer retention, marketing mix, and competition Customer retention mea-sures the company’s customer stickiness

or loyalty The marketing mix includes the company’s major marketing decisions Com-petition represents the rivalry between the company and other businesses in the target market Determinants of the quantity sup-plied include price, capacity, supply chain PDQDJHPHQWHI¿FDF\DQGVWDIISUR¿FLHQF\ E-business capacity measures not only the limit imposed by the equipment and/or avail-able personnel, but also the limit associated with the network technology Supply chain PDQDJHPHQWHI¿FDF\UHIHUVWRWKHHIIRUWRI the company in managing relationships with its suppliers

• Cost Reduction: The Internet age enables

businesses to reduce unnecessary or redun-dant buyer–seller costs Generally, cost is FRPSRVHGRI¿[HGFRVWZKLFKLQDQHEXVL-ness context can include e-busiFRPSRVHGRI¿[HGFRVWZKLFKLQDQHEXVL-ness system development and maintenance expenses, and variable cost, which equals the product of unit cost and quantity supplied

• Marketing Mix: Marketing effort helps

in identifying market opportunities and generating marketing strategies that support

Process Structure

Process intelligence &

-business

-CRM

-customer

e-Knowledge Network

E-business Strategy Business Model

Figure 1 Adapted four perspectives of e-business strategy

Trang 10

attainment of e-business objectives The

major factors involved in the marketing mix

include people, promotion, price, product,

presentation, and distribution effort The

RULJLQDO³3ODFH´IDFWRULVGHFRPSRVHGLQWR

presentation and distribution effort to

rep-resent e-market reality Prep-resentation refers

to the effort involved in online product

presentation and distribution Distribution

effort facilitates the connection of the

prod-uct with the target customer

• Sales Cycle Shortened: The sales cycle

consists of the time that elapses between

the customer interest and the purchase

de-cision In e-business, a shorter sales cycle

enables management to respond promptly

to emerging opportunities or threats The

major factors that impact the sales cycle

LQFOXGHWKHFXVWRPHUSUR¿OHSURGXFWSULFH

promotion, and presentation A customer

SUR¿OHLVDFRPSRVLWHYDULDEOHWKDWUHÀHFWV

the customers’ demographic

characteris-tics, preferences and behavior patterns

Generally, the more positive the customer

SUR¿OHLQGH[WKHORZHUWKHSURGXFWSULFH

the higher the product quality, the better

promotion methods and efforts, and the

more preferable presentation formats, the

shorter the sales cycle would be Figure 2

summarizes the business model perspective

in the framework

Analytic E-CRM Perspective

The Internet enables customers to conveniently

shop online, have a broader selection, get

com-petitive pricing and greater access to critical

business information (Chen et al., 2004) Online

retailing, however, is impeded by security and

privacy concerns, downloading time and other

technology barriers (Chen, Gillenson, &

Sher-rell, 2004) Furthermore, customers can switch to

other competitive URLs in seconds with minimal

¿QDQFLDOFRVWZKLFKPDNHVVXFFHVVIXOFXVWRPHU

management vital in e-business

• New Customer Acquisition: Customer

acquisition depends on precise and timely targeting that delivers valuable offers to prospects The factors involved in customer acquisition include the company’s marketing mix, HVHUYLFHTXDOLW\WKHFXVWRPHUSUR¿OH and competition Competition represents the company’s external relationship with the supplier, availability of other distribution channels, entry barriers, and product substi-tutes When addressing the factor, we have converted the original customer perspective from an external view (Kaplan & Norton, 1992) into a relationships perspective (Hasan

& Tibbits, 2000)

• Customer Satisfaction: 6DWLVIDFWLRQLVLQÀX-enced by lead time, product quality, service quality and competitive pricing (Kaplan

& Norton, 1992) Lead time measures the time required for the company to meet its customers’ needs, sometimes referred to as

³RUGHUWRGHOLYHU\ F\FOH WLPH´ $ SURGXFW with high quality and customization level and relatively lower price may increase the degree of the customers’ satisfaction E-service quality represents the level of the service offered in e-business

Figure 2 Business model perspective for e-busi-ness strategy