Introduction
E-business strategy:
how to benefit from a
hype
Forecasts that predict the size of online
trading revenues in the near future vary
widely from a few hundred billion to a few
trillion dollars. Who might be right is a guess,
but one thing is sure, it will be big! When you
have to believe the articles that are written by
several Internet gurus, your business will not
exist any more in a few years’ time. Within
organisations the feeling prevails that one
cannot afford to sit back and wait. However,
it is often not possible to turn the organisation
around 180 degrees, as the gurus want you to.
This can be caused by lack of management
support, insufficient budgets, an
organisational culture that will not support
the changes needed to make it work, or many
other reasons. This paper presents a set of
tools to enable managers to identify where in
the organisation and how an organisation can
benefit from the e-business hype without
taking the revolutionary and radical path.
King and Clift (2000) argue that the ‘‘e’’ –
will soon be dropped and that e-business will
be business as it comes to be generally
understood. In this paper, various already
existing models and theories will be used. We
argue that these models and theories still
apply when looking from a new e-business
perspective. Examples will be given of
possible applications to demonstrate the use
of these models. However, we do not aim at
giving an exhaustive and complete
description; organisations are too different
from each other and new developments arise
every day. Every model and every example
will have to be adapted to fit within a specific
situation. We aim at providing a framework
that describes a process, which in the end will
give directions on where e-business
opportunities can be found.
Based on a definition used by IBM, we
define e-business as ‘‘a secure, flexible and
integrated approach to delivering
differentiated business value by combining
the systems and processes that run core
business operations with the simplicity and
reach made possible by Internet technology’’.
This implies that e-business is more than just
a Web shop on the Internet and can reach
into every aspect of the organisation.
As e-business will be introduced into an
existing organisation, there will be various
areas that have to be taken into account when
developing an e-business strategy. To
Floris P.C. van Hooft and
Robert A. Stegwee
The authors
Floris P.C. van Hooft is a student of Industrial
Engineering and Management and Robert A. Stegwee is
Professor and Chair of the Department of Business
Information Systems, University of Twente, Enschede,
The Netherlands.
Keywords
Business strategy, Strategic information systems,
Information management, Electronic commerce,
Information technology, Internet
Abstract
A fundamental approach to setting up an e-business
initiative is needed to fully utilise the capabilities of
Internet technology in a specific business setting. Such an
initiative has to build on the strengths of the organisation
and take full advantage of the opportunities in the
market, meanwhile identifying costly unsuccessful
projects and preventing unwanted market disturbances
introduced by carelessly designed e-commerce solutions.
In this paper, a method is presented for the development
of an e-business, based on research in the area of
strategic information systems planning. The proposed
method is designed to help clarify a strategic e-business
vision and to solicit management commitment to change
and take action on new business opportunities. In
addition, it takes into account the unique possibilities of
an organisation’s IT architecture, thus further advancing
the value of past investments in IT.
Electronic access
The research register for this journal is available at
http://www.mcbup.com/research_registers
The current issue and full text archive of this journal is
available at
http://www.emerald-library.com/ft
Logistics Information Management
Volume 14 . Number 1/2 . 2001 . pp. 44±53
# MCB University Press . ISSN 0957-6053
44
E-business strategy: how to benefit from a hype
Logistics Information Management
Volume 14 . Number 1/2 . 2001 . 44±53
Floris P.C. van Hooft and Robert A. Stegwee
describe this process we use existing strategic
information systems planning (SISP)
literature. SISP is defined as ‘‘the process of
deciding the objectives for organisational
computing and identifying potential
computer applications which the organisation
should implement’’ (Lederer and Sethi,
1988). E-business strategy is a new area that
recently came to attention; however,
information strategy has attracted interest
from the beginning of the 1980s. Much has
been written since then on how to integrate
information strategies with an existing
business. We found that many theories and
experiences related to information strategy
are also applicable to e-business strategy.
The basic alignment model for SISP is
displayed in Figure 1 (Stegwee and Van
Waes, 1990). In e-business terms the model
reads as follows. First we identify how
e-business influences the industry in which
the business operates. Thereafter, the current
situation of the business itself is analysed.
Taking new IT developments into account, a
vision is created on how e-business will affect
the business in the future. The circle that
touches all elements within the framework
illustrates the reach of the e-business vision.
Depending on the expected impact, the size of
the circle may change.
In order to realise the e-business vision, we
then draw on a method for information
strategy formulation to arrive at an e-business
strategy. This strategy will be the guiding
principle for further investigation of current
business architectures to identify e-business
application areas. By means of evaluating the
desired effects of specific applications, an
e-business portfolio is created. The portfolio
describes the necessary changes in the
organisation in order to accomplish the
Figure 1 E-business incorporated into the basic alignment model for SISP
strategic goals set forward by the e-business
vision. These changes are then integrated
with existing IT architectures, resulting in an
e-business plan. This all seems quite lengthy
and ambitious, but in our opinion it should be
possible to cover all this ground within a
limited number of weeks, depending on the
presence of an up to date information systems
plan. Also, the method lends itself well to an
adaptive and evolutionary approach for
e-business strategy formulation.
The structure of this paper follows the
different steps described above, from
formulating a vision to the description of the
adaptive and evolutionary approach, followed
by brief conclusions and recommendations
for follow-on research.
Formulating an e-business vision
A vision should describe the desired future
state of the organisation (Johnson and
Scholes, 1999). Two models that investigate
both the environment and the organisation
itself are presented. They provide us with the
information needed to formulate an
e-business vision.
Five forces analysis
To analyse the influence of the organisation’s
environment on the company, we use Porter’s
five forces model (Porter, 1985). This model
describes how the rules of competition are
embodied in five competitive forces:
(1) the entry of new competitors;
(2) the threat of substitutes;
(3) the bargaining power of buyers;
(4) the bargaining power of suppliers; and
(5) the rivalry among the existing
competitors.
Through identifying the possible impact of
e-business on each of these forces, the
influence on the organisation’s environment is
estimated. Reflecting these influences on your
specific situation will help in determining the
effects of e-business imposed on the existing
business within a specific industry.
Entry of new competitors
E-business can facilitate entry into new
markets. Through the Internet smaller
companies can cross borders and gain
customers in other parts of the world
(Hammer and Mangurian, 1987). Switching
costs will decrease for both customers and
45
E-business strategy: how to benefit from a hype
Logistics Information Management
Volume 14 . Number 1/2 . 2001 . 44±53
Floris P.C. van Hooft and Robert A. Stegwee
suppliers by using standards and open
systems. Further, the capital requirements to
enter a new market will decrease in most
industries (Tiggelaar, 1999).
.
.
.
.
Bargaining power of buyers
Stimulated by open Internet technologies,
high software investments strengthening the
relation between buyer and supplier are
mostly issues of the past. New technologies
enable forward and backward integration in
the value chain (Porter and Millar, 1985).
Especially the intermediaries are under
pressure because e-business enables direct
linkages across levels in the supply chain.
Because of these linkages and more easily
accessible systems, the transparency within
the market increases (Berryman and Wurster,
1998; Evans et al., 1999).
.
.
switching costs decrease significantly;
disintermediation has become a topic;
the information and service aspect of a
product gains importance to add value;
increased transparency leads to increased
competition;
it is easier to realize economies of scale;
more substitutes and cross-selling will
occur;
These influences increase the overall
competitiveness in the industry and the
competitiveness among existing competitors.
The weights relevant to your industry can be
identified by reflecting the general description
above on the specific environment in which
your organisation operates.
SWOT
Having identified the forces in an
organisation’s environment, we examine the
company in its present state. A SWOT
analysis is used to identify areas in which one
can exploit strengths, minimise weaknesses,
capitalise on opportunities, and minimise
threats. This SWOT assessment offers a
snapshot picture of the company’s strategic
position at the present time (Hackbarth and
Kettinger, 2000).
Making a general analysis of ‘‘the company’’
gives us too little indication of where
e-business can affect the organisation. It is
useful to carry out four individual SWOT
assessments to ensure that all relevant aspects
are covered; each assessment focuses on a
specific area. Both the organisation itself and
the product have to be investigated.
Karjalainen (1999) divides the value structure
of a firm’s offering into three value adding
components: product, transaction and
service. Taking these three components and
adding the organisational aspect leads us to
four aspects. These are defined in Table I.
Through interviews with relevant managers,
an overview can be obtained of each
component. The four SWOT analyses
together provide an overview of both the firm
itself and its offering regarding aspects
relevant to e-business. The example below
will illustrate the specific e-business aspects
for each of these analyses.
Bargaining power of suppliers
Influences described above for ‘‘the power of
buyers’’ can be mirrored to describe the
power of suppliers. Switching costs,
disintermediation and transparency of
information are issues that should be
examined. Suppliers will have to increase
their efforts to find, gain and retain
relationships with customers (Tiggelaar,
1999).
Threat of substitutes
Because of the increased transparency of
markets it is easier for companies to develop
substitutes for other markets. Also the
reduced switching costs contribute to an
increased likeliness of the entry of new
substitutes into the market. By applying new
(Internet)-technologies, huge amounts of
market data can be analysed, thereby creating
possibilities for ‘‘cross-selling’’ within and
between markets and industries (Tiggelaar,
1999).
Rivalry among the existing competitors
As stated above, the Internet enables
companies from other industries or other
countries to enter into new industries. This
results in more players in the same market,
thus increasing competitiveness. Using
Internet technologies can enlarge
differentiation between products, for example
by adding more information or extending
service to the product (Tiggelaar, 1999;
Molenaar, 1999)
Summarising the above analysis, one can
say that e-business can influence the five
forces in the following ways:
Formulating a vision
We have looked at what happens in the
industry (five forces), how this influences
opportunities and threats for the organisation
46
E-business strategy: how to benefit from a hype
Logistics Information Management
Volume 14 . Number 1/2 . 2001 . 44±53
Floris P.C. van Hooft and Robert A. Stegwee
Table I Four aspects of e-business SWOT analyses
Product
The ``core’’ product of the firm with the inseparable information needed for using it
(Karjalainen, 1999)
E.g. a physical sack of fertiliser or a car
Transaction
All transactions create costs and information. The primary function of the transaction is to
match the buyer’s demand and the vendor’s supply, and to take care of the actual
exchange of goods and remuneration
E.g. price quotation, credit assessment, ordering, invoicing, etc.
Service
Service includes all those activities that enhance or maintain the value of a product or
service (Johnson and Scholes, 1999). The service in itself may be non-value adding, but
transaction and service information becomes valuable when it is used to produce services
to the customer
E.g. installation, repair, training, spares, etc.
Organisation
The organisation that produces the product carries out the transactions and delivers the
service
E.g. structure, culture, knowledge, people, etc.
Formulating an e-business strategy
and where this creates chances to either
exploit strengths or minimise weaknesses
(SWOT). Now a vision can be created of
what role e-business could play for the
company in the future. This is not a ‘‘hard’’
and formal process and can be supported by
brainstorming sessions, discussions and
interviews. Two main questions will have to
be answered during this process:
(1) Looking at the five forces analysis, how
will e-business influence (both positive
and negative) our competitive position in
the future?
(2) Looking at the four SWOT analyses, how
can we best cope with this changed
situation?
We will illustrate this with an example. A
travel agency these days is faced with greatly
increased transparency, the danger of
disintermediation, and new competitors from
foreign countries, which may enter their
markets via the Internet. Looking at the four
aspects of the SWOT analysis, it could be
that, for example, the distributed sales
organisation which enables you to help people
in their local culture can assist in increasing
barriers to this increased competition.
Another example of an outcome could be that
e-business can help in better communication
with and understanding of the customer. An
e-business vision could then be: ‘‘utilising ebusiness to gain a better understanding of our
customer and increase the value of our
service’’.
How the formulated e-business vision can
be detailed into strategies and plans will be
shown in the next paragraphs.
47
In order to limit the range of possible
e-business applications to be considered in
creating an e-business strategy, it is helpful to
formulate some principles that assist in the
selection process. To this end we incorporate
parts of a specific SISP method called BeMI
(Boersma and Stegwee, 1994), which is
aimed at formulating strategic guidelines for
IT application rather than sophisticated IT
architectures. In the context of e-business,
BeMI helps in formulating specific statements
with respect to the application of e-business
opportunities, taking into account the
strategic policy and specific organisational
and resource limitations. When we return to
the example of the travel agency, the outcome
of information policy formulation can be
pictured as follows. The vision has been
formulated as: ‘‘utilising e-business to gain a
better understanding of our customer and
increase the value of our service’’. Because of
the decentralised structure (organisational
policy) and the limited availability of
personnel at the branch offices (resource
policy), this leads to the following refinement
into information policy statements:
.
E-business solutions shall be employed to
enable local branch-offices to have an upto-date profile of all relevant customers in
order to simplify the booking procedure.
.
In order to provide better prices to the
customer, e-business solutions will be
employed to negotiate with touroperators on the basis of consolidated
demand.
E-business strategy: how to benefit from a hype
Logistics Information Management
Volume 14 . Number 1/2 . 2001 . 44±53
Floris P.C. van Hooft and Robert A. Stegwee
.
In-depth and up-to-date information
about travel destinations is needed to
serve the customer better; this
information is to be gathered by local
branch-offices and made available to the
customer and the other branch-offices
through the Internet.
Such policy statements enable a specific focus
in the selection and development of e-business
applications. For example, e-business
solutions that focus on a direct sales channel
to the customer do not have to be considered,
as they do not fit well within the strategic
profile. Also, they provide a framework for the
assessment of initiatives in terms of the
contribution an application makes toward the
strategic goals of the organisation. For
instance, one of the key characteristics on
which to judge possible e-business
applications will be the integrated availability
of customer data throughout the network,
rather than the availability of financial data on
branch office performance.
Identifying e-business application areas
Having defined where e-business applications
fit best within the current organisational
policies, concrete application areas have to be
specified and the impact of such applications
has to be estimated. When examining the
company for the possible application of
e-business, one can focus either on internal
processes and systems or on the externally
oriented processes. If the main focus is to
reduce costs or prepare systems for future
e-business applications, the internal
perspective might fit best. If the aim is to
improve the customer’s perceived value, one
can best investigate the company’s buying
and selling processes.
Internal, e-business value chain
Taking the value chain (Porter and Millar,
1985) and placing e-business technologies
into the framework gives an insight into the
reach of these technologies into the value
activities (see Figure 2). The exact meaning of
all displayed ‘‘e-’’ applications is less relevant
as new applications arise every day and
definitions vary widely. This Figure is used to
illustrate that e-business reaches all activities
of the organisation and that some applications
cover multiple value activities. Linkages
48
already exist between activities; some of these
linkages have been integrated by using
e-business technologies, ultimately providing
a fully integrated e-business process. It is
important to realise that these new
applications have to be integrated with
supporting and, if applicable, primary
processes to prevent creating islands of
automation.
The physical processes might have to be
rearranged to better align the original value
chain to the new e-business oriented value
chain. Integration of the physical processes
and e-business applications is essential to
achieve maximum results. It is said that ‘‘a
business is profitable if the value it creates
exceeds the cost of performing the value
activities’’ (Porter and Millar, 1985).
Analysing the e-business value chain can help
in lowering the costs and increasing the value
of activities. It has to be kept in mind that the
supporting processes should be prepared for
future e-business developments before
embarking into large-scale ‘‘e-’’ systems.
Taking the Web marketplace as an
example, one can see that, if a marketplace
requires sound estimates for the delivery time
of a product, e-fulfilment systems have to be
in place and the factory floor automation has
to be capable of providing this information.
Supporting processes are not only the
technical infrastructure, but also the
databases holding all information and people
capable of working with the systems.
External, customer-supplier life cycle
To examine externally oriented processes we
use a theory introduced by Kettinger and
Hackbarth (1997). They designed a so-called
customer/supplier life cycle (C-SLC) to
provide a way of isolating a company’s buying
and selling activities to better understand the
interrelationships between customers and
suppliers’ business processes and their
interactions in the company. The C-SLC
framework is a particularly useful planning
tool to help structure a review of existing
business processes to determine the potential
for turning these into e-processes. Because
every company is both a customer and
supplier, the C-SLC can be used from both
the supplier and customer perspectives:
From a supplier’s perspective, it is important to
effectively target the market and advertise for
customers, evaluate their product and service
requirements and respond to their requests,
E-business strategy: how to benefit from a hype
Logistics Information Management
Volume 14 . Number 1/2 . 2001 . 44±53
Floris P.C. van Hooft and Robert A. Stegwee
Figure 2 The e-business value chain
deliver in a timely manner, and support
customers after a sale. Concurrently, customers
are searching for product and service
information with the intent of more clearly
specifying their own requirements, evaluating
and selecting a supplier, and ultimately ordering
and receiving a product or service (Kettinger and
Hackbarth, 2000).
These processes are shown in Figure 3.
Evaluating the current customer life cycle
with selected customers might give new
insights of where initiatives can best be made
to increase the value offered to the customer.
The same is valid for the supplier life cycle:
through discussions between the organisation
and its suppliers critical interactions can be
identified and analysed.
Integrating internal and external
perspectives
It can occur that both internal and external
processes become interconnected. For
example, the automation of procurement
(e-procurement) involves investigating the
buying activities but also involves integration
with internal processes and systems. So not
only do the processes themselves but also the
integration and automation through
Figure 3 The customer/supplier life cycle
e-business become a topic of investigation, as
is illustrated in Figure 4. The arrows between
the supplier or customer and the e-business
value chain show the interaction processes on
either side of the company. It should be noted
that these are not necessarily automated. The
circles around these arrows show the
interaction and automation of some of these
processes through the application of
e-business technology. The circle on the lefthand side, for example, indicates an
e-procurement system, integrating and
automating identification, evaluation, bidding
and billing. The circle on the right-hand side
is an example of a system aimed at helping a
customer to acquire product and service
information through a Web site. All other
processes remain unchanged.
It has been illustrated that one or more
interactions can be influenced by e-business,
and ultimately all interactions become
integrated into one e-business process. After
the focus on parts of the C-SLC has been
decided, the impact on current systems and
processes has to be assessed. The e-business
value chain (introduced in Figure 2) can help
in this assessment. Taking the example of
e-procurement, it can be seen that this system
affects both the supporting (procurement)
and primary (inbound logistics) processes; for
the example of the Web site, most linkages
exist with the marketing and sales activity. In
both cases it is important that the appropriate
supporting processes are in place. If an
Figure 4 Interactions between the C-SLC and the e-business value chain
49
E-business strategy: how to benefit from a hype
Logistics Information Management
Volume 14 . Number 1/2 . 2001 . 44±53
Floris P.C. van Hooft and Robert A. Stegwee
organisation’s processes consist of multiple
value chains, the steps described above can be
repeated for each chain.
Creating an e-business portfolio
After having identified areas where e-business
could be used to support the business
strategy, specific e-business applications have
to be specified. Expanding on an existing
framework developed by Hammer and
Mangurian (1987), a framework to identify
opportunities from Web-based electronic
commerce (EC) applications has been
developed by Riggins (1999). The framework
identifies five dimensions of commerce and
three types of value generation.
The five dimensions of commerce are
described as:
. . . by using various modes of interaction, firms
compete over both time and distance to provide
some product or service through a chain of
relations, which eventually ends with the end
customer. [. . .] Although many forms of
communications media and information
technology have the potential to impact these
dimensions, the use of Web-based online
storefronts provides firms with new ways of
altering the importance of each dimension
(Riggins, 1999).
Value is generated in three different ways, by
using EC applications to generate efficiency,
effectiveness and/or strategic benefits.
By combining the five dimensions of
commerce and the three dimensions of value
creation, a framework is introduced which
identifies 15 different ways in which Webbased applications could be used to generate
new business value.
We refer to the original article (Riggins,
1999) for a thorough description of each
value creating Web-activity. When looking at
the e-business value chain, which was
introduced in the previous paragraph, it can
be seen that Internet technology not only
affects the sales side of the organisation but
also has the potential to influence all primary
and support value activities. The original EC
value grid is limited to online storefronts (see
Table II). However, the definitions of the
dimensions do not necessarily constrain the
grid to only this part of the value creating
process. We argue that the dimensions of
commerce and the dimensions of value
creation apply to all areas of the e-business
value chain. When the perspective is changed
from the buying-side to the supplier-side of
the value chain, the EC value grid is turned
into an ‘‘e-procurement’’ value grid. Another
perspective is to define a customer as an
internal customer as opposed to an external
customer, thereby using the EC value grid to
identify Web-based applications that can help
to improve the internal interaction processes.
This paper does not aim at giving an
exhaustive definition of how the EC value grid
can be applied within each value activity
derived from the EB value chain. Two
examples will be given, after which a generic
model is presented.
In the first example we focus on the
‘‘e-procurement’’ value activity, in which the
relationship with suppliers is analysed. Taking
efficiency as the main priority, the
‘‘e-procurement’’ value grid gives us five
dimensions to look at. In Table III examples
are given of where and how Web-based
applications can help in improving the
efficiency of the procurement activity in an
organisation.
The second example focuses on an intranet
for salespeople and the commerce activity
‘‘interaction’’. In Table IV it is illustrated
which value generation activities could apply.
These two examples show how relatively
easy it is to use the original EC value grid and
to adapt it to describe organisational
processes other than only the selling of
products and services via online storefronts.
With this approach, the term EC value grid
can be changed for the better to e-business
value grid, emphasising the organisation-wide
reach.
Integrating the e-business value chain
and value grid
As demonstrated above, the e-business value
grid can be used to analyse the e-business
opportunities for different parts of the
organisation. In fact, the e-business value
chain and the e-business value grid can be
connected to form an e-business cubicle. The
cubicle puts possible e-business applications
into perspective by taking the value chain as
the primary point of view. In this way several
value grids are created, each focusing on a
certain part of the value chain. The value grid
cells should also connect when value activities
interconnect through e-business systems (see
Figure 5).
Based on the e-business vision, strategies
and application areas, one can select the
50
E-business strategy: how to benefit from a hype
Logistics Information Management
Volume 14 . Number 1/2 . 2001 . 44±53
Floris P.C. van Hooft and Robert A. Stegwee
Table II The electronic commerce value grid
Commerce
Efficiency
Value creation
Effectiveness
Time
Accelerate user tasks
Eliminate information float
Establish 24 £ 7 customer
service
Distance
Improve scale to look large
Present single gateway access
Achieve global presence
Relationships
Alter role of intermediaries
Engage in micro marketing to
look small
Create dependency to lock-in
user
Interaction
Make use of extensive user
feedback
User controls detail of
information accessed
Users interact via online
community
Product
Automate tasks using
software agents
Provide online decision
support tools
Bundle information, products
and services
Strategic
Source: Riggins (1999)
Table III Five ``e-procurement ’’-commerce activities in the efficiency dimension
Efficiency
Time
Distance
Relationships
Interaction
Product
Accelerate purchasing department tasks
Integrate separate business units (organisationally or physically distant from each other)
into one buying force
Buy directly at the manufacturer of raw-materials, change role of intermediary
Give extensive user feedback to supplier, to improve relationship
Supply customized software to be incorporated into the purchased products
Table IV Three intranet value activities in the interaction dimension
Interaction
Efficiency
Effectiveness
Strategic
Accelerate interaction
between subsidiaries
Salesperson controls detail
of information accessed
Salespeople interact via
online community
Formulating an e-business plan
relevant cells within the e-business cubicle
that need further analysis. Such an analysis is
carried out on the basis of a thorough
understanding of available or feasible
e-business applications. The result of the
analysis consists of an e-business portfolio of
specific applications that realise the
e-business vision and hence contribute to
attaining the strategic goals of the
organisation.
Having identified the portfolio of specific
e-business applications that need to be
developed from a strategic perspective, these
applications have to be brought into line with
the existing IT architectures. Commonly
identified IT architectures encompass the
following (Stegwee and Van Waes, 1990):
.
information architecture;
.
systems architecture;
.
IT infrastructure; and
.
organisational architecture.
Figure 5 The e-business cubicle
As a first step, the impact of the identified
e-business applications on the information
architecture has to be assessed. The
e-business applications can be integrated into
the information architecture, taking the
customary view of an information architecture
as ‘‘the description of information systems
areas in terms of the business processes they
support and the data they use’’ (Stegwee,
1992). Three possible situations can occur at
this architectural level:
51
E-business strategy: how to benefit from a hype
Logistics Information Management
Volume 14 . Number 1/2 . 2001 . 44±53
Floris P.C. van Hooft and Robert A. Stegwee
(1) An e-business application fits well within
one information systems area. This
means that the original information
architecture is still valid.
(2) An e-business application covers two or
more information systems areas. A
decision needs to be made whether to
merge the affected areas or to rearrange
them in such a way that the e-business
application falls into one new information
systems area, together with possibly
existing or projected other applications.
The relationships between information
systems areas have to be redefined in
order to arrive at a consistent information
architecture for the new situation.
(3) An e-business application does not fit in
any information systems area. A new
information systems area has to be
defined in terms of the business processes
supported and data items created and
used by the e-business application.
Careful analysis of possible relationships
with other information systems areas
within the information architecture is
needed.
A similar process has to be followed through
for the systems architecture. Specific
attention has to be given to the stewardship of
the data items (who controls the creation of
data, which mechanisms have to be in place to
control any occurring redundancy?) and the
integration of applications (how can we
provide a consistent interface to the users?).
The consequences for the IT architecture
might be more severe, as e-business
applications often call for substantially higher
degrees of scalability and security.
Accordingly, the required capacities and skills
for the supporting organisational architecture
may be very different from existing ones,
which often gives rise to a renewed
outsourcing discussion.
Through assessing the impact of e-business
applications on existing architectures, several
consequences are identified. Plans have to be
made to properly incorporate these
consequences within the IT architectures,
describing what changes are needed to
existing information systems, infrastructure,
new developments or organisational layout.
These consequences give rise to projects
within the overall IT project portfolio of the
organisation. As a result, the project portfolio
is populated with both e-business application
52
projects and projects that need to be carried
out in order to properly integrate the
e-business applications with the business
structures and IT architectures of the
organisation. Standard project portfolio
management techniques can be employed to
render a specific e-business plan for the
organisation. Two issues have to be stressed
in this context:
(1) In establishing the added value of a
project, one has to refer to the strategic
direction for e-business applications,
along the lines described in previous
paragraphs.
(2) Depending on the urgency of
implementing e-business solutions,
projects that are logical predecessors of an
e-business application project may be
postponed, provided that workarounds
are devised and appropriate steps are
taken to ensure the execution of the
postponed projects at a later stage.
Otherwise the consistency of the
architectures will be compromised with
possibly severe consequences for the
overall performance of the information
function in the near future.
Adaptive and evolutionary approaches
The method described in the previous
paragraph for fitting the e-business
applications into existing IT architectures can
be viewed as an example of an adaptive and
evolutionary approach. Such an approach is
needed because of the speed at which
e-business initiatives arise that have potential
influence on the information function of an
organisation. Moreover, one can view the
formulation of an e-business strategy as
adaptive and evolutionary in itself. Depending
on what new applications arise, one can trace
back to each of the individual stages of the
method presented in this paper. For example,
when a new e-business initiative surfaces
within the organisation, you can use the
e-business cubicle to assess the position of the
application in the value chain and the
contribution it makes to the two dimensions
on the e-business value grid. You can then
establish whether this new application
corresponds with the previously formulated
strategy. The correspondence is good when
the application is positioned in one of the cells
that have been identified as relevant to the
E-business strategy: how to benefit from a hype
Logistics Information Management
Volume 14 . Number 1/2 . 2001 . 44±53
Floris P.C. van Hooft and Robert A. Stegwee
References
strategy. If the application falls into a new
cell within the e-business cubicle, it might
be useful to rethink the e-business policy
and the specification of application areas
that led to the selection of cells to be
analysed.
It may well be that new e-business
initiatives, like the formation of an electronic
marketplace or the disintermediation of a
specific supply chain, have serious
implications for the overall strategic position
of the organisation. In that case, one is forced
to go back to the five forces model or the
SWOT analyses and reformulate the
e-business vision for the organisation. This in
turn will lead to new e-business policy
statements and a renewed assessment of
possibly valuable e-business applications.
Through impact analysis with respect to the
existing IT architectures and the portfolio
analysis of ensuing projects, a new agenda for
e-business implementation can be
established.
Conclusions and recommendations
In this paper we have presented a method for
the development of an e-business strategy for
organisations that do not want to take the
radical approach to e-business. Guided by the
general alignment model of SISP, the method
helps to articulate an e-business vision, to
formulate a strategy, to identify e-business
application areas, to put together a portfolio,
and to render a plan for e-business
implementation. Various already existing
models and methods have been used to
investigate the possible application of
e-business technology in the current
organisation and to respond to emerging
e-business initiatives in the marketplace. The
resulting implementation agenda builds upon
existing capabilities of the organisation and
will ensure a proper fit with the strategic goals
of the organisation as a whole. We expect this
method to aid organisations in taking full
advantage of the current hype around
e-business, while avoiding sexy projects which
turn out to be both costly and
disadvantageous. Empirical research will have
to be carried out to test the completeness and
suitability of this method in different
organisational contexts.
53
Berryman, K., Harrington, L., Layton-Rodin, D. and Rerolle, V.
(1998), ``Electronic commerce: three emerging
strategies’’, The McKinsey Quarterly, No. 1, pp. 152-9.
Boersma, S.K.Th. and Stegwee, R.A. (1994), ``BeMI: a
method for information policy formulation’’, in
Khosrowpour, M. (Ed.), Managing Social and
Economic Change with Information Technology:
Proceedings of the 1994 Information Resources
Management Association International Conference,
San Antonio, TX, 22-25 May, pp. 287-95.
Evans, P. and Wurster, T.S. (1999), Blown to Bits: How the
New Economics of Information Transforms Strategy,
Harvard Business School Press, Boston, MA.
Hackbarth, G. and Kettinger, W.J. (2000), ``Building an
e-business strategy’’, Information Systems
Management, Summer.
Hammer, M. and Mangurian, G.E. (1987), ``The changing
value of communications technology’’, Sloan
Management Review, Winter, pp. 65-71.
Johnson, G. and Scholes, K. (1999), Exploring Corporate
Strategy, 5th ed., Prentice-Hall Europe,
Hemel Hempstead.
Karjalainen, N. (1999), ``The effect of electronic commerce
on businesses’’, Master’s thesis, Lappeenranta
University of Technology.
Kettinger, W.J. and Hackbarth, G. (1997), ``Selling in the
era of the `Net’: integration of electronic commerce
in small firms’’, Proceedings of the 18th
International Conference on Information Systems,
Atlanta, 15-17 December.
King, P. and Clift, J. (2000), ``Time to distinguish between
e-business and e-commerce’’. www.pwcglobal.com.
Lederer, A.L. and Sethi, V. (1988), ``The implementation of
strategic ISP methodologies’’, MIS Quarterly, Vol. 12
No. 3, pp. 445-61.
Molenaar, C.N.A. (1999), Veranderingen door Internet:
branches in de toekomst, Samsom, Alphen aan den
Rijn.
Porter, M.E. (1985), Competitive Advantage: Creating and
Sustaining Superior Performance, The Free Press,
New York, NY.
Porter, M.E. and Millar, V.E. (1985), ``How information
gives you competitive advantage’’, Harvard Business
Review, July-August, pp. 149-60.
Riggins, F.J. (1999), ``A framework for identifying Webbased electronic commerce opportunities’’, Journal
of Organisational Computing and Electronic
Commerce, Vol. 9 No. 4, pp. 297-310.
Stegwee, R.A. (1992), ``Division for conquest: decision
support for information architecture specification’’,
dissertation, University of Groningen, WoltersNoordhoff, Groningen.
Stegwee, R.A. and Van Waes, R.M.C. (1990), ``The
development of information systems planning
towards a mature management tool’’, Information
Resources Management Journal, Summer, pp. 8-21.
Tiggelaar, B. (1999), Internet Strategie;
Concurrentievoordee l in de digitale economie,
theorie en praktijk, Addison-Wesley Longman
Nederland B.V.