MIS 648 Presentation Notes: Lecture 7

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MIS 648 Presentation Notes Lecture 7

• Global E-Commerce
• Diffusion and Adoption

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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)
• Heres 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

• No web page
• Home page
• Interaction
• Complete transactions

• Tornatsky Fleischer (1990)
• Three stages Initiation (gathering info),
  adoption (having an Inet connection and being
  capable of basic operations), implementation
  (capability level)

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Tornztzky Fleischer Influences on Tech Adoption
Technology Adoption
Competitive PressureRole of GovernmentTechnologi
cal Support Infrastructure
Financial ResourcesTechnological
ResourcesEmployees IS KnowledgeInnovation
ChampionCompany Size
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
Items in blue bold type are not typical of tech
adoption study findings

• 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.

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Results-2 Orgl 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 Envtl Context
Items in blue green type are not typical of tech
adoption study findings

• 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 commn, lack of
  trust in IT consultants

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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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The Model
Physical Infrastructure
TRUST Is key
Technical CSFs
Commn Infrastructure
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Travica
Article uses 1998/9 data newer info available
from CIA factbook.

• Case study of adoption of B2C e-commerce in Costa
  Rica from before 2002.
• Costa Rica is in Central America, near the US,
  democratic govt, 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.

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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-CommerceCustomerE-C PropensityE-PaymentSoft
ware IndustryTelecommunicationsDeliveryTranspor
tation
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The Situation in 2001
Culture Lack of product standards, no remote
buying tradition, shopping as a social act, F2F
preferred
Electronic Payments Credit cards limits, trust
issues
Software Industry Growth, key to economic
development
Telecommunications Govt operated, slow and
expensive
Delivery Poor mail, couriers, lack of addressing
Transportation Not great (better now than 2001)
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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
Content Images Data Items for Sale Experiences Fab
rications
Business Service Provider
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Dual (Multiple) Interest Web Methodology
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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Porters 5 Competitive Forces
New Entrants
Lock out via barriers to entry
Lock in via switching costs
Traditional Rivalry Among Firms
Lock in via switching costs
Suppliers
Buyers
Where does IT contribute? Do things work
differently internationally? Whats going on?
Lock out via barriers to entry
Substitutes
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Porter Revisited, Upgraded
Its cheap to get into E-Commerce. Whats
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.