B2B e-Commerce adoption in Indonesia
Reyner J. Karnali
DIS - University of Melbourne
18 October 2011
Content
Introduction
The study
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Introduction
Framework
Case study and Findings
Conclusion and Contributions
Questions
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B2B EC Adoption in Indonesia
Reyner J. Karnali
Academic
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Bachelor of IT in 2006 - Fontys University, Eindhoven
Master of Science in IT and Business in 2010 - Leiden
University
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1 year exchange at University of Melbourne
Professional
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4 years Software Engineering background
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Current: Test Engineer
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Philips Healthcare - Worldwide leader in medical systems
Leadtec Systems - Australian market leader in B2B EDI
(www.leadtec.com.au)
B2B EC Adoption in Indonesia
Leadtec Systems Australia
Leading Australian B2B EC Service Provider/Software
house
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Grocery
Healhtcare
Automotive
Banking
1990 Products/Services
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EDI
Barcode Management System (Scanner/Software)
Data synchronization (GS1 AU/NZ)
Melbourne (HQ) and Sydney
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B2B EC Adoption in Indonesia
Leadtec Systems Australia
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B2B EC Adoption in Indonesia
Content
Introduction
The study
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Introduction
Framework
Case study and Findings
Conclusion and Contributions
Questions
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B2B EC Adoption in Indonesia
B2B E-Commerce
Definition: The use of information and communication
technologies (ICTs) to conduct business transactions
electronically between organisations.
Typically is used to manage supply chain activities
B2B e-Commerce is an inter-organisational system
(IOS)
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B2B EC Adoption in Indonesia
B2B E-Commerce Technologies
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B2B EC Adoption in Indonesia
B2B E-Commerce Initiatives
E-Procurement
EC-Enabled Business Process Reengineering (BPR)
 Vendor Managed Inventories (VMI)
EC-enabled Just-in-Time
 Efficient Consumer Response (ECR)
 Collaborative Planning, Forecasting and
Replenishment (CPFR)
Advanced Distribution Systems
 Cross-docking
 Flow-through
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B2B EC Adoption in Indonesia
Research Gaps
B2B EC has the potential to integrate developing countries into
the global economy, BUT
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Developing countries have lagged behind in IOS adoption
Advanced supply chain management cannot be achieved
without participation from trading partners
Limited in-depth studies of B2B EC adoption in
developing countries
B2B EC Adoption in Indonesia
The Study
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Aim: to obtain a rich understanding of e-Commerce technology adoption,
particularly B2B EC application, in Indonesia as an example of a developing
country.
Research questions:
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What B2B EC technologies / initiatives are currently adopted by
organizations within the Indonesian grocery industry?
What are the driving factors and the barriers to adoption of
these B2B EC technologies/initiatives?
How are these B2B EC technologies / initiatives adopted in
Indonesia?
Multiple case study with 8 organisations within the Indonesian grocery
industry
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B2B EC Adoption in Indonesia
Content
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Introduction
The study
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Introduction
Framework
Case study and Findings
Conclusion and Contributions
Questions
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B2B EC Adoption in Indonesia
Theoretical framework
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IOS Adoption Dyadic approach (Ali, Kurnia and Shanks 2009)
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B2B EC Adoption in Indonesia
Content
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Introduction
The study
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Introduction
Framework
Case study and Findings
Conclusion and Contributions
Questions
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B2B EC Adoption in Indonesia
Context
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B2B EC Adoption in Indonesia
Context: Indonesia facts
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Introduction
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Grocery Industry
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1990s, strong economic growth (7%/year)
Low percentage of GDP for IT investment
1995: 200 mill. people, 350 supermarkets (1 chain)
1998: Open for Foreign investment
2002: Retail sector amounts one-fifth of GDP (US$ 33.1
bn), employs 17.5m (17.7%) of total labor
Traditional market and Modern market (Hypermarket and
Minimarket)
B2B EC Adoption in Indonesia
Case study participants
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B2B EC Adoption in Indonesia
Dyads Overview
Dyad
Companies
Roles
EC-enabled SCM Initiatives
1
C–G
Manufacturer - Retailer
Barcode, Web Portal EDI
2
B–G
Manufacturer - Retailer
Barcode, XML EDI
3
E–G
Distributor - Retailer
Barcode, Web Portal EDI
4
B–H
Manufacturer - Retailer
Barcode, Text File EDI, VMI
5
A–G
Manufacturer - Retailer
Barcode, XML EDI, CPFR
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A–F
Manufacturer - Distributor
Barcode, PDA-based EDI, VMI, x-docking
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C–D
Manufacturer - Distributor
Barcode, PDA-based EDI, VMI, x-docking
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B2B EC Adoption in Indonesia
Research Methodology
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Data collection
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Oct 08 - Feb 09 (5 interviews) - Fellow assistant
Dec 09 - Jan 10 (7 interviews)
Feb 10 - July 10 (Follow up emails, phone interviews,
documentation)
Audio, Indonesian transcript, English summary
Data analysis
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3 Coding level (Neuman, 2006)
B2B EC Adoption in Indonesia
Driving factors
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B2B EC Adoption in Indonesia
How B2B EC is Adopted
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Appropriation of simple technology which fits
with the local business needs and culture
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“Salesmen with the PDA visit our retailers, calculate and estimate their
needs with the help of the software and discuss with the retailers. Then
they come up with a mutual agreement regarding the final orders.”
Managing Director, Manufacturer (Company C, Dyad 7)
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B2B EC Adoption in Indonesia
How B2B EC is Adopted
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B2B EC technologies and infrastructure are provided by
larger organizations
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Larger retailers (Companies G and H) help smaller suppliers print
barcode labels.
Company G provides its suppliers (Manufacturers) with a customized
B2B web portal for PO exchange and monitoring (EDI)
Large manufacturers (Companies A and C) provide distributors
(Companies D and F) with PDA systems.
B2B EC Adoption in Indonesia
How B2B EC is Adopted
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Collaboration leading to smooth adoption
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EDI Adoption (Web portal and XML)
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Dyads 1, 2, and 3, the Retailer (Company G) and
Manufacturers(Company C, B, and E) have good relationship and
trust).
Regular discussions about the EDI systems between Retailers and
Manufacturers
Company G offers introduction training and seminars on the usage of
the EDI systems.
B2B EC Adoption in Indonesia
How B2B EC is Adopted
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Collaboration leading to smooth adoption (cont’)
 PDA-Based EDI Systems
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Dyads 6 and 7: the Manufacturers and Distributors have strong
commitment and collaboration
A joint human-resource strategic agenda – covers work protocol,
employee training and development program, and Key Performance
Indicator (KPI) indicators
The manufacturers offer constant support and help
B2B EC Adoption in Indonesia
Barriers
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B2B EC Adoption in Indonesia
Content
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Introduction
The study
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Introduction
Framework
Case study and Findings
Conclusion and Contributions
Questions
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B2B EC Adoption in Indonesia
Conclusion
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Benefits of B2B EC are still appealing for
organisations in Indonesia
The Indonesian grocery industry is catching up with
B2B EC adoption despite various barriers
The socio-cultural conditions in developing countries
do not necessarily prohibit the adoption of B2B EC
initiatives
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B2B EC Adoption in Indonesia
Contribution
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Offers valuable insights for local players into the
current practice of IT-enabled SCM initiatives within
the Indonesian grocery industry
Offers guidance for organizations in developed
countries in devising appropriate strategies to best
deal with organizations within the Indonesian grocery
industry
Complements the findings of other previous studies
in the areas of B2B EC adoption
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B2B EC Adoption in Indonesia
Questions?
Contact: reyner.karnali@leadtec.com.au
reyner.jovian@gmail.com
LinkedIn: Reyner Jovian Karnali
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B2B EC Adoption in Indonesia
IOS Adoption framework
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Factor approach (Kurnia and Johnston, 2002)
Weaknesses
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Limited unit of analysis, Organizations as dependant variables
B2B EC Adoption in Indonesia
IOS Adoption framework
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Process approach (Kurnia and Johnston, 2002)
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Weaknesses
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Difficult in designing the study, high complexity
B2B EC Adoption in Indonesia
Research Methodology
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Nature
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Exploratory (How question, Explore new areas)
Explanatory (Driving forces and Barriers to adoption
process)
Theory-building phase (Shanks et al., 1994)
Multiple case study
Multiple units of analysis (Yin, 2003)
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Organization-level: What question (2nd & 3rd)
Dyad-level: How question (1st)
B2B EC Adoption in Indonesia
Data Analysis
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Open Coding
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Axial Coding
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1st iteration
Post-It notes to identify themes
Per Company Summary
Dyads coupling
B2B EC technology overview
Categories (Grouping of themes)
Selective Coding
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Cross-case analysis (Similarities/Differences)
2nd iteration
Remove irrelevant themes/categories
B2B EC Adoption in Indonesia
Future research
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Similar settings in other countries
Different industry
Longitudinal approach
Quantitative method
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B2B EC Adoption in Indonesia