An emergent framework to support visioning and strategy formulation for electronic commerce

INFOR, Feb 2002 by Peter Marshall, Judy McKay

ABSTRACT

The research described in this paper reports on some of the outcomes of qualitative and exploratory studies into the experiences of small & medium enterprises (SMEs) with respect to electronic commerce (EC). A framework is subsequently presented, based on empirical findings, to guide and structure the thinking of businesses approaching the planning and implementation of an EC capability. The framework encourages the kind of holistic, systematic and integrated thinking with respect to EC visioning and strategy development that the researchers found was both so necessary but also so often lacking in EC implementations amongst many of the SMEs participating in this study. A discussion of how the framework can be used to shape a "strategic conversation" about the implications and requirements of a move into EC, based on a preliminary action research study, is offered as a conclusion to the paper.

Keywords: strategy formulation-, electronic commerce; e-visioning

RESUME

Cet article fait etat de certains resultats d'etudes qualitatives et exploratoires sur les experiences des petites et moyennes entreprises (PME) dans le domaine du commerce electronique (CE). Nous presentons ensuite une approche fondee sur des constatations empiriques visant a guider et a structurer la pensee strategique des entreprises qui s'engagent dans la planification et la mise en service de ressources de CE. Cette approche favorise une pensee holistique, systematique et integree propice au developpement d'une vision et d'une strategie de CE qui, selon les chercheurs, est absolument necessaire, mais fait souvent defaut aux solutions de CE raises de l'avant par bon nombre des PME qui ont participe a cette etude. En conclusion a cet article, nous proposons une analyse qui explique comment on peut utiliser cette approche pour amorcer une > sur les implications et les exigences d'une transition dans le monde du CE, fondee sur une etude preliminaire axee sur la recherche active.

Mots-cles : formulation de strategies; commerce electronique; vision strategique du CE

INTRODUCTION

This paper describes a holistic and integrated framework for planning the adoption and implementation of electronic commerce (EC) in organisations. The empirical research that underpins this framework was totally conducted within small and medium enterprises (SMEs): the framework to support EC strategy formulation grew out of the host of issues encountered by SMEs as they embarked on a variety of EC initiatives. As the researchers conducted more and more case studies (a total of 30 cases are underpinning the framework), it was noticed that patterns of issues, problems and challenges with respect to EC were being repeated in many of the organisations studied. The framework that will be described in this paper was thus developed in response to these repeated patterns of issues encountered in SMEs. However, the question which can fairly be posed is "Why restrict this framework to SMEs?" The researchers are firmly of the opinion that indeed, this framework may well prove more universally useful and applicable than just to SMEs. Having said that, it needs to be stressed that it grew out of empirical SME-based research, and so the assertions and arguments developed through this paper are based only on our experiences in SMEs, and not on our belief that the framework is generalisable beyond the SME context. That would need to be the subject of future research.

GENERAL BACKGROUND

There can be little doubt that EC has had, and will continue to have, an enormous impact on the commercial, social and economic fabric of society. The past decade has seen exponential growth rates in most metrics of EC (US Department of Commerce 1999; Andersen Consulting 1998, DOCITA 2000a), and generally speaking, most forecasts predict that this growth will continue, if not increase, over the next few years (DOCITA 2000b; Ernst & Young 2000a). This rise in the importance of the Internet both as a source of information exchange and commerce leads us inexorably closer to a truly global community, and hence notions such as globalisation and a global economy increasingly manifest themselves in actual commercial and information exchanges. For business, EC and a global economy offer the prospect of access to worldwide marketplaces and hence exciting opportunities to expand its reach cost effectively, operating free of time and location constraints (24 x 7 x 365), and potentially building and leveraging communities of interest (Rayport & Jaworski 2001). Operating globally, however, poses challenges and threats, in addition to these opportunities. For example,, it exposes businesses to increased competition as foreign operators lure local consumers with a range of goods and services offered over the Internet. Thus organisations and those with whom they trade (customers and suppliers) cross physical, temporal and legal boundaries in a manner that has no precedent in history. In so doing, an organisation must manage a range of policy, regulatory, and social issues including consumer privacy, security, fair trading, taxation, intellectual; property rights, conflicts of international law, the status and enforceability of electronic contracts, international liability, establishing trust, and cross-cultural communication issues (Jarvenpaa and Tiller 1999, APEC 1999, Currie 2000, Bidgoli 2002). The "new economy" may present significant opportunities to organisations, but to be successful businesses must rise to meet the challenges identified above.

For SMEs, the Internet has much to offer as a business vehicle as it can serve as a relatively efficient and effective channel for information provision and exchange, advertising, marketing, completing transactions, and in some cases facilitating or directly supporting the distribution of goods and services to global trading partners and customers (Czerniawska & Potter, 1998, Ernst & Young, 2000b, OECD 1998, Baldwin et al. 2001). However, it is argued that SMEs do not always seem to appreciate that ignoring EC because the current level of transactions is relatively low and few short-term benefits are being derived (Poon and Swatman 1999) puts them at risk of becoming uncompetitive in the medium and long-term, and hence of failing in the future (Crawford 1998), perhaps succumbing to more aware and aggressive international operators. Combined with reported feelings that SMEs owner-managers often lack the requisite technological knowledge and skills, are unsure of whether their businesses are suited to EC, and fearful of alienating vital intermediaries, and so on (NOIE 2000, Baldwin et al. 2001), this lack of achievement of substantial benefits in the short-term does not act as much of a motivator for SME owner-managers. This is particularly so against a backdrop in which current media interest in organisations, both large and small, that have failed in terms of their EC initiatives (Bryant 2001, Hughes and Needham 2001), which only serves to undermine confidence with respect to EC initiatives.