Assessing the benefits from e-business transformation through effective enterprise management
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Assessing the benefits from e-business transformation through effective enterprise management Colin G. Ash1 and Janice M. Burn1 1 Edith Cowan University, Churchlands, Perth, Australia.
Correspondence: Colin G. Ash, Edith Cowan University, Churchlands, Perth 6018, Australia. Tel: +618 9273 8718; Fax: +618 9273 8332; E-mail: [email protected]
Abstract This paper reports on research carried out in 1999–2001 on the use of ebusiness applications in enterprise resource planning (ERP)-based organisations. Multiple structured interviews were used to collect data on 11 established organisations from a diverse range of industries. The findings are analysed according to the level of sophistication of e-business models and their transformational impact on the organisation. Early adopters of e-business show a trend towards cost reductions and administrative efficiencies from eprocurement and self-service applications used by customers and employees. More mature users focus on strategic advantage and generate this through an evolutionary model of organisational change. Two complex case studies of ebusiness integration with global suppliers and their corporate customers are analysed to identify specific stages of benefits accrual through the e-business transformation process. Collectively, the set of case studies is used to demonstrate the increased benefits derived from an e-business architecture based on a network of ERP-enabled organisations. European Journal of Information Systems (2003) 12, 297–308. doi:10.1057/ palgrave.ejis.3000476 Keywords: e-Business benefits; B2B interaction models; e-ERP implementation; organisational transformation and change
Introduction
Received: 15 May 2002 Revised: 31 January 2003 Accepted: 18 July 2003
Enterprise resource planning (ERP) technology has been profoundly influenced and transformed by the Internet. Until recently, the ERP paradigm was largely confined within the walls of the traditional business enterprise. The Internet serves to extend the original value proposition of ERP, by breaking down institutional barriers and rendering cross-organisational boundaries almost obsolete (Gonzalez, 1998; Larsen, 2000). Internet technologies offer an ERP-based organisation the opportunity to build interactive relationships with its business partners, by improved efficiencies and extended reach, at a very low cost (Hesterbrink, 1999; Perez et al., 1999). Organisations that fail to seize this opportunity become vulnerable as rivals establish themselves first in the electronic marketplace. They may eventually be forced to participate in Internet commerce by competitors, customers or consumers (Hoffman et al., 1997). The early adopters of e-business applications typically focused on improved efficiencies, realising the benefits from procurement and selfservice applications. For example, Statoil expects savings of 30% from a 2 billion US$ annual purchases bill and British Biotech has reduced the time to fill an order from ten to less than two days. As organisations mature in
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