Electronic commerce: Theoretical and practical approaches

INFOR, Feb 2002 by Juhani Iivari, Marius Janson

GUEST EDITORIAL

The idea for a special issue on electronic commerce arose at a time when many dotcom companies were undergoing their (un)timely demise. It seemed appropriate to pause, to take stock of the electronic commerce phenomenon, and to ponder what is theoretically possible while also being practicable. The articles presented here illustrate current thinking in business-to-business (13213) and business-to-consumer (B2C) electronic commerce concerning the aforementioned issues.

In the first article, "An Emergent Framework to Support Visioning and Strategy Formulation for Electronic Commerce," Peter Marshall and Judy McKay (both at Monash University) present findings of an exploratory investigation into the experiences of small-to-medium-sized companies (SMEs) concerning electronic commerce. An evaluation of some thirty case studies resulted in a framework that the investigators claim is useful to owners of SMEs for constructing practical and well-reasoned electronic commerce strategies.

The second article, "Business-to-Business eCommerce of Information Systems: Two Cases of ASP-to-SME eRental," explores the potential of advanced technology uptake in the form of electronic commerce by SMEs. The investigators refer to a 1970s practice whereby SMEs rented computing services from timeshare service bureaus to circumvent the then inexorably expense of owning computer hardware. It is argued that presently many SMEs cannot afford the state-of-the-art IS infrastructures required in the Internet-based economy and, hence, will find the use of application service providers (ASP) a necessity. Based on a careful analysis of the experiences of two SMEs with ASPs the article discusses the practical benefits and drawbacks of the ASP model.

The third article, "Determinants of Retail Electronic Purchasing: A Multi-Period Investigation," centers on retail electronic purchasing (REP). The authors cite several disappointing statistics concerning this form of B2C eCommece, the most important one being that two-thirds of potential customers who placed items in a virtual shopping cart abandoned the shopping process before completing the purchasing transaction. The gap between B2Cs potential as well as its practical realization motivated the investigators to undertake a survey-based empirical investigation into the factors that influence an individual's decision whether to buy on the Internet or through traditional channels. Based on a detailed analysis of the survey data the authors concluded that retailers could significantly increase eCommerce sales revenues by ensuring easily navigable websites and purchasing transactions that are easily performed by inexperienced buyers.

The fourth article picks up on a theme raised in the previous article, namely that of website design features. In a "Framework of Effective Website Design for Business-to-Consumer Internet Commerce," Katerattanakul (Western Michigan University) introduces "fitness for use" as a determining concept for website construction that focuses on three essential features: customer information search, consumer transaction support, and consumer enjoyment while online. Drawing on this framework the author then formulates practical website design guidelines that address the three aforementioned concerns.

In the fifth article, "Comparative Evaluation of Electronic Payment Systems," David Wright (University of Ottawa) examines mechanisms of making payment for products ordered and/or services received. The paper is a theory-based comparative study of a wide range of electronic payment systems, and their advantages and disadvantages to purchaser, merchant, payment service provider, and financial institution. The author describes a novel telephone-based payment system for purchases made on the Internet. It responds to the reluctance of some customers to provide credit card information on the Internet. The paper's conclusions are significant for both 13213 and B3C forms of eCommerce.

The final article, "Synchronous Online Open-Cry Auctions," is an interesting application of the traditional face-to-face open-cry auction in the Internet environment. The open-cry, also referred to as the English auction, results in the assignment of the for-sale-item to the highest bidder. The author presents a synchronous online open-cry auction model that encompasses four rules governing the bidding process. The paper concludes with the presentation of an open-cry auction prototype structure.

Juhani Iivari is Professor of Information Systems in the Department of Information Processing Science at the University of Oulu. Formerly, he had a professorship at the University of Jyvaskyla, Finland. He served as the national coordinator of the Finnish Doctorate Programme in Information Systems 1993-1994. Iivari's research has broadly focused on theoretical foundations of information systems, information systems development methodologies and approaches, including object-orientation, organizational analysis, implementation and acceptance of information systems, the quality of information systems, and knowledge work. Iivari has published in journals such as Communications of the ACM, Data Base, European Journal of Information Systems, Information & Management, Information and Software Technology, Information Systems, Information Systems Journal, Information Systems Research, MIS Quarterly, Omega, Scandinavian Journal of Information Systems and others.