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A Study Of The Value And Impact Of B2B

International Journal of Electronic Commerce / Summer 2002, Vol. 6, No. 4, pp. 19' 40.
Copyright © 2002 M.E. Sharpe, Inc. All rights reserved.
1086-4415/2002 $9.50 + 0.00.
A Study of the Value and Impact of B2B
E-Commerce: The Case of Web-Based Procurement
Chandrasekar Subramaniam and Michael J. Shaw
ABSTRACT: Web-enabled business-to-business (B2B) e-commerce enhances
interorganizational coordination, resulting in transaction cost savings and competitive
sourcing opportunities for the buyer organization. However, organizations are uncertain
whether this is an improvement over existing information technology, such as EDI. In particular,
what is the value of B2B e-commerce to a buyer organization, and how can it be
measured? What factors most affect the realization of the value of B2B e-commerce?
Using the case of Web-based B2B procurement systems, a framework is proposed to
quantify and measure the value of B2B e-commerce systems and identify the factors that
determine it. The methodology is applied to help a major heavy-equipment manufacturer
located in the midwestern United States evaluate the potential of its Web-based procurement
system. The preliminary results indicate that, even though all stages of B2B procurement
are affected by the Web, the value of Web-based procurement is most determined by
the process characteristics, organization of business units, and the “extended enterprise.”
KEY WORDS AND PHRASES: Extended enterprise, interorganizational information systems,
value measurement, Web-based procurement.
Web-enabled applications for business-to-business (B2B) electronic commerce
are expected to enhance interorganizational coordination and improve relationships
among business partners. Transaction cost savings and competitive
sourcing opportunities are the potential benefits of B2B procurement. However,
organizations are still unsure whether a Web-based B2B e-commerce
system can deliver the promised benefits. For example, is the...