MIS 648 Lecture 7 1

MIS 648 Presentation Notes: Lecture 7

Global E-Commerce

Diffusion and Adoption

MIS 648 Lecture 7 2

AGENDA

Goals of the Lecture Definitions of E-commerce The Networked Economy Adoption of E-commerce; some

examples from Italy, the developing world and Costa Rica

Multiple Interest model

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Goals of the Lecture

Understanding the global nature of E-commerce (also lecture 8)

Understanding the networked economy as a basis for e-commerce (also lecture 8, in more detail)

Discussing how e-commerce is adopted in a variety of countries and settings

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E-Commerce

Definition B2C vs. B2B vs. other forms Platforms for E-commerce Two aspects of E-commerce

Provider User

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The Networked Economy

The infrastructure that provides instant communication using a variety of formats.

Impacts will be part of next lecture “Reach” is the scope of individuals

(businesses, people, etc.) that can be contacted. “Richness” is the range of media and presentation styles available.

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Richness vs. Reach

Relationship between content and audience; used to be fixed; now is virtually unlimited

Concept used to explain “instant globalization” by the Internet in 1999

Reality is that richness is obtained partly by downloading costs of users

There is still a fixed amount of time available, but reach is virtually limitless

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Adoption of E-Commerce

By Providers (cf. Molla and Licker) By Users (cultural influences,

economics) Global E-commerce architecture (public

vs. private networks, role of private business, government)

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Khalfan & Alshawaf

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Scupola

The adoption of Internet commerce by SMEs in the south of Italy.

Environmental context plays a strong role in adoption and implementation for small and medium-sized enterprises in this geographical region, more so than technological and organizational ones.

This contradicts Molla and Licker (2005) Study confirms institutional results.

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Purpose

What drives B2B e-commerce adoption in SMEs

What about southeastern Italy? (Puglia) Here’s the Wikipedia entry And another view Sort of a backwater within a developed

country

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The Context

SME employs 500 or fewer people (EU definition)

E-commerce: the sharing of business information, maintaining business relationships and conducting business transactions by means of telecommunication networks.

Focus is on B2B

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The Theory

Tornatsky & Fleischer (1990) Three stages: Initiation (gathering info),

adoption (having an Inet connection and being capable of basic operations), implementation (capability level)

1. No web page2. Home page3. Interaction4. Complete

transactions

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Tornztzky & Fleischer: Influences on Tech Adoption

TechnologyAdoption

ExternalEnv’t

Tech’lContext

Org’l Context

Financial ResourcesTechnological ResourcesEmployees’ IS KnowledgeInnovation ChampionCompany Size

Competitive PressureRole of GovernmentTechnological Support Infrastructure

E-commerce BarriersE-Commerce BenefitsRelated Technologies

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The Research

Seven interviews (90-180 mins.) in seven companies

All interviewees were CEOs Companies were volunteers Only some contacted cos. volunteered “Home Page” was visited

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Results-1: Tech Context

Barriers: lack of competence, knowledge or awareness; fear of exposure to competition via website

Benefits: internationalization, visibility, market potential (via contacts), cost savings

Technologies: support technologies such as scanners, cameras.

Items in blue bold type are not typical

of tech adoption study findings

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Results-2: Org’l Context

Project champion Employees’ lack of knowledge leading to

“resistance.” Financial resources are a hygiene

factor Company size not important

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Results-3: Env’t’l Context

Government: financial incentives, information, training, knowledge of English [!]

“Public Admin”: “priming the pump” External Pressure: competitive

pressures, desires from large client(s) Tech services: Poor quality and comm’n,

lack of trust in IT consultants

Items in blue green type are not typical

of tech adoption study findings

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Summary

Cost is a hygiene factor Company size is not a factor Fear of exposing products and access to

support technologies seem related to small size and lack of familiarity (a throw-back to earlier times?)

Knowledge of English as a factor might be unique to e-commerce

All other factors are common to technology adoption studies.

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Simon

Critical Success Factors for Electronic Services

CSF is necessary but not individually sufficient for success.

Long history of study in IT. This study focuses on electronic services Natural place to look:

Non-proprietary via Internet Faster, better than post/fax

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E-services

Services with rich information content Can be delivered over non-proprietary network Include data entry, data cleansing, data

summaries, data interpretation (radiology, eg.), report preparation (accounting, taxation), proofreading, editing, transaction facilitation, software creation and testing, training.

See “Intermediation” presentation

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Some Unusual Ideas

Model is outsourcing of services to 3rd world.

Data entry for accounting in Uganda Homework tutoring in Togo Call centers in Cameroon Most are done in French-speaking Africa Costs are very low, uses VOIP Pay is very high for locals

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TRUST

Is key

The Model

TechnicalCSFs

PhysicalInfrastructure

Comm’nInfrastructure

SocietalCSFs

Legal

Intell’lProperty

Political/Economic

Privacy/Prot’n

Bus & GovAwaren’s

TrainingStandards

Taxation

EC/ES

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Travica

Case study of adoption of B2C e-commerce in Costa Rica from before 2002.

Costa Rica is in Central America, near the US, democratic gov’t, market economy, highly literate, teledensity around 50, internet use now over 25% of population.

Probably the best bet in Latin America for progress through e-commerce.

Article uses 1998/9 data; newer info

available from CIA factbook.

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The Research

Problem: Finding barriers to diffusion of e-commerce “beyond North America into adjacent regions.”

Old study, from 1998-2000 efforts. Useful for historical purposes

Based on idea that e-commerce evolution reflects “transaction cycle”. Is this justified?

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Evolutionary Diffusion Model

E-Commerce

CustomerE-C Propensity

E-PaymentSoftware Industry

TelecommunicationsDelivery

Transportation

Dependency

Tradition of remote shoppingDirect buyingStandardized goods and servicesTrust issues solved

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The Situation in 2001

Transportation: Not great (better now than 2001)

Delivery: Poor mail, couriers, lack of addressing

Telecommunications: Gov’t operated, slow and expensive

Software Industry: Growth, key to economic development

Electronic Payments: Credit cards limits, trust issues

Culture: Lack of product standards, no remote buying tradition, shopping as a social act, F2F preferred

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Multiple Interest Model

Each IT offering involves a set of interests.

E-commerce complicates matters by having at least four interests represented and one is uncontrolled

There are potential conflicts among these interests

Most noticeable in case of tourism

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Multiple Interests

Content Providers Provide the data, pictures, source

Business Service Providers Make the sale, are the business Use other business service providers such

as website designers Infrastructure Providers

Technology providers, also in business Users

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“Chain of Command” and Interests

ContentImages

DataItems for SaleExperiencesFabrications

Business ServiceProvider

WebsiteDesigner

MarketingServices Other

Bus.Services

Infra-structure

Providers

Users

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Dual (Multiple) Interest Web Methodology

GetOperator

Commitment

Align Business Offerings

Refine and Revise Offerings

Define Community Image

GetCommunityInvolvement

Monitor and Approve Community

Content

MeasureNeed

CreateCommunity Support

Content

LaunchWebsite

Record Responses

Originally created to

understand the process of community e-

tourism

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One Additional Complexity

There is a risk involved in entering an e-commerce venture.

Because barriers to entry are low, almost everyone can get into a business.

But exiting a business can bring problems locally.

Hence local concerns may dominate global ones.

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Porter’s 5 Competitive Forces

TraditionalRivalryAmongFirms

Suppliers Buyers

Lock in via switching costs

Lock in via switching costs

Substitutes

New EntrantsLock out via barriers to entry

Lock out via

barriers to entry

Where does IT contribute? Do things work differently “internationally”? What’s going on?

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Porter Revisited, Upgraded

Porter speaks of barriers to ENTRY to keep out those nasty

competitors…

What Porter forgot was the expensive barriers to EXIT

that prevent graceful takedown

It’s cheap to get into E-Commerce. What’s expensive is getting out: loss of prestige, face, actual money for contracts, loss of customers’

confidence, etc.

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Agency Theory

Managers act as agents for owners In community tourism, the community is

the “owner” of the “property”, although this is questionable.

The operators “manage” the business. There is an inherent conflict of interest.