MIS 648 Presentation Notes: Lecture 7 Global E-Commerce Diffusion and Adoption MIS 648 Lecture 7 1 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 MIS 648 Lecture 7 2 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 MIS 648 Lecture 7 3 E-Commerce Definition B2C vs. B2B vs. other forms Platforms for E-commerce Two aspects of E-commerce Provider User MIS 648 Lecture 7 4 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. MIS 648 Lecture 7 5 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 MIS 648 Lecture 7 6 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) MIS 648 Lecture 7 7 Khalfan & Alshawaf MIS 648 Lecture 7 8 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. MIS 648 Lecture 7 9 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 MIS 648 Lecture 7 10 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 MIS 648 Lecture 7 11 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) MIS 648 Lecture 7 12 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 MIS 648 Lecture 7 13 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 MIS 648 Lecture 7 14 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. MIS 648 Lecture 7 15 Results-2: Org’l Context Project champion Employees’ lack of knowledge leading to “resistance.” Financial resources are a hygiene factor Company size not important MIS 648 Lecture 7 16 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 MIS 648 Lecture 7 17 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. MIS 648 Lecture 7 18 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 MIS 648 Lecture 7 19 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 MIS 648 Lecture 7 20 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 MIS 648 Lecture 7 21 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 MIS 648 Lecture 7 EC/ES Taxation Privacy/ Prot’n 22 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. MIS 648 Lecture 7 23 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? MIS 648 Lecture 7 24 Evolutionary Diffusion Model E-Commerce Dependency Customer E-C Propensity E-Payment Software Industry Telecommunications Delivery Transportation MIS 648 Lecture 7 Tradition of remote shopping Direct buying Standardized goods and services Trust issues solved 25 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) MIS 648 Lecture 7 26 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 MIS 648 Lecture 7 27 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 MIS 648 Lecture 7 28 “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 MIS 648 Lecture 7 Users 29 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 30 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. MIS 648 Lecture 7 31 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 MIS 648 Lecture 7 Buyers Where does IT contribute? Do things work differently “internationally”? What’s going on? 32 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. MIS 648 Lecture 7 33 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. MIS 648 Lecture 7 34