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 Ecommerce (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
1.
2.
3.
4.
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
External
Env’t
Competitive Pressure
Role of Government
Technological Support
Infrastructure
Technology
Adoption
Financial Resources
Technological Resources
Employees’ IS Knowledge
Innovation Champion
Company Size
Org’l
Context
Tech’l
Context
E-commerce Barriers
E-Commerce Benefits
Related 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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Items in blue bold
type are not typical
of tech adoption
study findings
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.
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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
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 comm’n,
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
Standards
TRUST
Legal
Bus & Gov
Awaren’s
Societal
CSFs
Technical
CSFs
Intell’l
Property
Comm’n
Infrastructure
Training
Is key
Political/
Economic
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EC/ES
Taxation
Privacy/
Prot’n
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Article uses 1998/9
data; newer info
available from CIA
factbook.
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.
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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
Dependency
Customer
E-C Propensity
E-Payment
Software Industry
Telecommunications
Delivery
Transportation
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Tradition of
remote shopping
Direct buying
Standardized
goods and
services
Trust issues
solved
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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: Gov’t 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
Fabrications
Business Service
Provider
Infrastructure
Providers
Marketing
Services Other
Website
Bus.
Designer
Services
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Users
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Dual (Multiple) Interest Web
Methodology
Measure
Need
Define Community
Image
Get
Community
Involvement
Monitor and
Approve Community
Content
Create
Community Support
Align Business
Offerings
Content
Launch
Website
MIS 648Responses
Lecture 7
Record
Originally
created to
understand
the process of
community etourism
Get
Operator
Commitment
Refine and
Revise Offerings
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One Additional Complexity
 There is a risk involved in entering an ecommerce 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
Lock out via
Lock in via
switching
costs
Suppliers
New Entrants
barriers to
entry
Traditional
Rivalry
Among
Firms
Lock in via
switching
costs
Lock out via
Substitutes
barriers
to entry
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Buyers
Where does IT
contribute? Do
things work
differently
“internationally”?
What’s going on?
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Porter Revisited, Upgraded
What Porter forgot
was the expensive
barriers to EXIT
that prevent
graceful takedown
Porter speaks of
barriers to ENTRY to
keep out those nasty
competitors…
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.
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