mis 648 lecture 71 mis 648 presentation notes: lecture 7 global e-commerce diffusion and adoption
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MIS 648 Lecture 7 1
MIS 648 Presentation Notes: Lecture 7
Global E-Commerce
Diffusion and Adoption
MIS 648 Lecture 7 2
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 3
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
MIS 648 Lecture 7 4
E-Commerce
Definition B2C vs. B2B vs. other forms Platforms for E-commerce Two aspects of E-commerce
Provider User
MIS 648 Lecture 7 5
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 6
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 7
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 8
Khalfan & Alshawaf
MIS 648 Lecture 7 9
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 10
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 11
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 12
The Theory
Tornatsky & Fleischer (1990) Three stages: Initiation (gathering info),
adoption (having an Inet connection and being capable of basic operations), implementation (capability level)
1. No web page2. Home page3. Interaction4. Complete
transactions
MIS 648 Lecture 7 13
Tornztzky & Fleischer: Influences on Tech Adoption
TechnologyAdoption
ExternalEnv’t
Tech’lContext
Org’l Context
Financial ResourcesTechnological ResourcesEmployees’ IS KnowledgeInnovation ChampionCompany Size
Competitive PressureRole of GovernmentTechnological Support Infrastructure
E-commerce BarriersE-Commerce BenefitsRelated Technologies
MIS 648 Lecture 7 14
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 15
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.
Items in blue bold type are not typical
of tech adoption study findings
MIS 648 Lecture 7 16
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 17
Results-3: Env’t’l Context
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
Items in blue green type are not typical
of tech adoption study findings
MIS 648 Lecture 7 18
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 19
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 20
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 21
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 22
TRUST
Is key
The Model
TechnicalCSFs
PhysicalInfrastructure
Comm’nInfrastructure
SocietalCSFs
Legal
Intell’lProperty
Political/Economic
Privacy/Prot’n
Bus & GovAwaren’s
TrainingStandards
Taxation
EC/ES
MIS 648 Lecture 7 23
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.
Article uses 1998/9 data; newer info
available from CIA factbook.
MIS 648 Lecture 7 24
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 25
Evolutionary Diffusion Model
E-Commerce
CustomerE-C Propensity
E-PaymentSoftware Industry
TelecommunicationsDelivery
Transportation
Dependency
Tradition of remote shoppingDirect buyingStandardized goods and servicesTrust issues solved
MIS 648 Lecture 7 26
The Situation in 2001
Transportation: Not great (better now than 2001)
Delivery: Poor mail, couriers, lack of addressing
Telecommunications: Gov’t operated, slow and expensive
Software Industry: Growth, key to economic development
Electronic Payments: Credit cards limits, trust issues
Culture: Lack of product standards, no remote buying tradition, shopping as a social act, F2F preferred
MIS 648 Lecture 7 27
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 28
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 29
“Chain of Command” and Interests
ContentImages
DataItems for SaleExperiencesFabrications
Business ServiceProvider
WebsiteDesigner
MarketingServices Other
Bus.Services
Infra-structure
Providers
Users
MIS 648 Lecture 7 30
Dual (Multiple) Interest Web Methodology
GetOperator
Commitment
Align Business Offerings
Refine and Revise Offerings
Define Community Image
GetCommunityInvolvement
Monitor and Approve Community
Content
MeasureNeed
CreateCommunity Support
Content
LaunchWebsite
Record Responses
Originally created to
understand the process of community e-
tourism
MIS 648 Lecture 7 31
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.
MIS 648 Lecture 7 32
Porter’s 5 Competitive Forces
TraditionalRivalryAmongFirms
Suppliers Buyers
Lock in via switching costs
Lock in via switching costs
Substitutes
New EntrantsLock out via barriers to entry
Lock out via
barriers to entry
Where does IT contribute? Do things work differently “internationally”? What’s going on?
MIS 648 Lecture 7 33
Porter Revisited, Upgraded
Porter speaks of barriers to ENTRY to keep out those nasty
competitors…
What Porter forgot was the expensive barriers to EXIT
that prevent graceful takedown
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 34
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.