Moses Niwe
Department of Computer and Systems Science, Stockholm University and Kungliga Tekniska Högskolan
Forum 100, SE-164 40 Kista, Stockholm, Sweden
Keywords: Business to Business e-commerce, adoption.
Abstract: This case study research presents the preliminary findings from an explorative study concerning challenges,
benefits and problems in adoption of business-to-business e-commerce. In this case study research two
United States (U.S.) organizations are analyzed. Case one is a sporting goods company that has been doing
Business to Business (B2B) based transactions since 1970s. Case two is a shipping and transportation
company doing B2B transactions for over 3 decades. Both cases have gone through B2B transaction stages
of growth; however management is still faced with tasks of understanding the drivers of B2B adoption.
The value of business to business (B2B) e-
commerce technology as a solution to cutting costs
and maximizing profits is appreciated by most firms
in this digital economy. Traditional supply chains
with their inefficiencies have been responsible for
the recurrent need for firms to find better options
and hence the great keen interest in the B2B e-
commerce model that works at addressing these
problems. (Cox and Ghoneim, 1996; Archer, and
Yuan, 2000)
Despite the predictions and promises of B2B e-
commerce the road to B2B e-commerce adoption is
littered with failures (Teo and Ranganathan, 2004).
Hence understanding B2B e-commerce adoption has
become of paramount importance. Past failures has
been attributed with focusing only on operational
and implementation issues in some instances and
ignoring the strategic aspects (McEwan, 2001; Yau,
2001; Chan and Swatman 2004). Aspects would
include the people requirements as far as B2B e-
commerce adoption is concerned, key points of
strategic planning, where is the company, where do
you want to be and how the organisation competes
in relation to sector standard technologies, proven
methodologies, finding B2B collaborating business
partners and the process requirements as far as B2B
e-commerce adoption is concerned (Niwe, 2006).
Underlying this is a fact that the B2B sector is faced
by lack of common protocols and standardized
platforms, for communication of business messages
(McGann, et al 2005). Although XML is gaining
increasing use in today’s world, its extensibility is
causing some interoperability issues (Nelson, and
Shaw, 2005). Hence in this study we address the
problems pertaining to the adoption process and
In previous work (Niwe, 2006), diffusion of
innovation theory by (Rogers, 1995) is proposed to
understand the adoption process. This theory broken
down in five stages starts with the awareness stage,
where the individual or organization learns about the
innovation; second, they must be persuaded of the
value of the innovation; then they must decide to
adopt it; the innovation must then be implemented;
and finally, the decision must be reaffirmed or
With this background, the principal objective of
this paper is to examine the issues and challenges
faced by firms in adopting B2B e-commerce. To
understand the solutions qualitatively, we examine
cases from different industries namely a sporting
goods company plus a shipping and transportation
company. The data was collected through electronic
mail correspondences and company documentation.
The cases selected were largely due to their
willingness to participate in this study. From
previous work, (Niwe, 2006; 2007), the organization
adoption of X12 standard as the widely accepted
Niwe M. (2007).
In Proceedings of the Third International Conference on Web Information Systems and Technologies - Society, e-Business and e-Government /
e-Learning, pages 196-199
DOI: 10.5220/0001263201960199
U.S. B2B e-commerce standard in the last 20 years
was used as the unit of analysis.
Case one is a leading manufacturer and distributor of
sporting firearms. This company has been in
business for over 200 years. Today they have
multinational presence and face the urgent need to
keep business partners abreast of important
information and responding to them accurately,
consistently and quickly. It has been using B2B
based transactions since 1970s.
Case two is a shipping and transportation
company. They have been doing B2B transactions in
form of Electronic Data Interchange (EDI) for over
3 decades. They have thousands of suppliers and
they use B2B technology to do their purchasing and
to sell products.
The cases in point were examined on what model of
business to business works best for them. Case one
started with a transaction based model (main mode
of communication between the two businesses is
based on the transactions) but they believe that the
strategic relationship based model (two or more
organisations join with an aim of achieving strategic
advantage).works best for them. Strategic
relationship is more approriate because it is more
integrated enhances building particpation. This in
turn makes it more accomodating and also flexible.
Case two works with the transaction based model.
Item 2, examines where things normally go
wrong in the B2B e-commerce supply chain with the
business partners for the organization. Case one
cited third parties (such as a VAN) that perform the
translation as the main point of problems in the
supply chain with business partners. Case Two;
identified changes along the way which are forced
by changes in marketing, ways to differentiate
Item 3 examines the most significant
opportunities with usage of B2B e-commerce. Case
one; they believe that coordinating internal systems
with the external environment would be the most
significant opportunities with the usage of B2B e-
commerce. In this case link their enterprise resource
planning (ERP) system-- SAP R/3--of the firm, to
include the firm's major suppliers. Case two; the
most significant opportunities include enhancing or
replacing traditional linkages between supply chain
participants (e.g. e-procurement); streamlining
internal processes (e.g. reducing costs); coordinating
internal systems with the external environment;
However cost avoidance and increased productivity
is the most visible (and appreciated) by
Item 4 examines the level of B2B e-commerce
usage. Both cases exchange structured documents
with minimum human interference. Key data is
transmitted to receiver electronically.
Item 5 deals with stage of B2B e-commerce
adoption. In this section we examine the progress in
B2B usage. Case one; use standard based EDI for
supply chain execution or management. Case two;
processes and logistics are largely automated using
Internet technology, creating a seamless chain of
communication and management. However most is
data transferred by EDI via mainframe processes or
Value Added Networks (VANs). They do some
secure File Transfer Protocol (FTP) transfers via
internet or by web-portals in their applications, but
most communication such as mail boxing, protocol
conversion, standard conversion, and other value-
added services like reliability, security,
administration, implementation assistance, auditing,
is via VANs.
Item 6, addresses Internet use; case one; the
Internet usage is still in terms of a basic website in
terms of e-commerce activities. Case two; uses
Internet for technical data exchange, interactive
website, web based customer service, website
payment systems, extranet – supply chain
management, Internet EDI, Inventory/stock
management, supply chain logistics, and B2B trade
Item 7, addresses application areas; case one; the
applications area in the B2B e-commerce practise
includes order receiving; logistics; invoicing and
payment. Case two; application areas in their B2B
ecommerce practice vary from e-procurement, to
office banking. Just about everything done is at
some point conveyed via EDI, from transportation
tender from shipper, to inter-carrier movement
instructions, to interchange advise to billing of
Item 8, deals with how the organization rates the
benefits in their B2B technology usage, case one;
B2B technology usage has been used to eliminate
clerical tasks, speed information transfer, reducing
data errors, and eliminate business processes. Case
two; the Internet is allowing the company to save
money in the buying process. They post what we
they need done, and contractors that are qualified to
do that kind of work respond.
Item 9, examines the main incentives to
increasing the use of B2B e-commerce within the
company. Case one; the main incentive to increase
the use of B2B e-commerce within the company
includes maximizing supply chain economics. Case
two; cost avoidance and increase productivity.
Doing it faster, easier, and cheaper are the main
triggers to increasing the use of B2B e-commerce
within the company.
Item 10 deals with the main barriers to increasing
the use of B2B e-commerce within the company.
Case one; Lack of understanding of supply chain
concepts are concerned as barriers in increasing B2B
usage in the organisation. Case two; the main
barriers to increasing the use of B2B e-commerce
within the company were identified as
implementation with major partners, probably
working around the implementation costs for the
small and medium enterprises. They are
increasingly pushing these to web-portals for input
which feeds into current EDI processes rather than
pushing to do conventional EDI.
Item 11, deals with how the company is planning
for the future in terms of utilizing B2B e-commerce
tools. Case one; as for the future they plan to have
B2B e-commerce tools incorporated in the overall
strategic plan. Case two; the organization is planning
for the future in terms of utilizing B2B e-commerce
tools by cost avoidance of VAN charges, and direct
transfer options via Internet.
Item 12 addresses the motivation for adoption in
terms of benefits that can be seen from effective use
of B2B e-commerce i.e. in day to day operations,
administration, internal communication etc. And
subsection to that the main external incentives in
relationships with customers and suppliers, when
conducting research or marketing, etc. Case one;
lowering costs of the supply chain were identified as
the main motivation behind internal incentives for
effective use of B2B e-commerce. While external
incentives include increasing sales and closer
relationships with customers. Case two; cost
avoidance and increase productivy for them too,
allows transfer of information in a usable format
without human intervention.
And final Item 13 examines the major obstacles
presented for the business in the transition from the
traditional methods of communication (mail, email,
fax, etc). Case one; the major obstacles presented for
the business in the transition to B2B e-commerce
include lack of understanding by business personnel
of e-commerce supply chain best practices. Case
two; obstacles include implementation costs and
lack of data collection within the implementation
The initial perception of case two was to act as an
individual or with industry competitors through
creating its own network in an attempt to leverage
buying power more successfully. Hence they had to
deal with numerous interoperability issues and
struggling financially to meet the heavy costs
involved in the private network VANs. With time
the company addressed these problems though using
internet-based applications. For example sending out
requests for service contractor bids via Internet; with
repairs needed to be done on something, such as a
bridge, contractors are able to submit proposals over
the Internet. They also use Internet based B2B e-
commerce to auction scrap and surplus materials.
Qualified scrap buyers submit bids into the company
mainframe. Buyers are then given instant feedback
as to the status of their bids. Whoever has the
highest bid at the specified closing time is awarded
the material and given a quote for transportation
costs. The company uses the Internet frequently to
find competitive prices. For example, when they
were not happy with a vendor's quoted prices for
communication equipment, a new qualified source
was found on the Internet, and money was saved.
While case one like many other organizations was
pressured into adopting by the Industry rather than
seeing the benefits. Global market and industry
pressure coming from trading partners (distributors,
suppliers, and customers) that invest heavily in
introducing systems for business-to-business
transactions are responsible for pressuring
organizations into joining to cut their trading costs.
The problem is most companies do EDI because
they have been forced into it and it is not because
they see the value.
The industry pressure forces
firms that want to keep the business relationships
going, to do this. Hence failure rates attributed to
failure to change the internal procedures. Therefore
case one sees the urgent need to map strategic
Business Process Reengineering (BPR) plans for
their B2B technology to be taken to another level.
All this said and done, Internet based B2B does
not necessary buy you anything. B2B is a very
complex heavy set of message standards, with so
many variations that they differ from VAN to VAN,
from Industry to Industry, and are quite expensive to
interface with all its variations. They have generally
WEBIST 2007 - International Conference on Web Information Systems and Technologies
been designed for batch transmission and
processing. As case two has proved over the years of
their Internet B2B applications, that just adding their
EDI to the Internet doesn't really do much to solve
the problem, or to add any real benefit. It has been
like saddling the Internet with a heavily laden paper-
based system - e.g. sending faxes to people rather
than emails. We infer that adopters need to learn
how to extend their core applications such as
customer relationship management, with their
business partners. Recognize the role and impacts of
collaboration, in the implementation of B2B e-
commerce solutions. Strategic alliances still deliver
results such as leading B2B e-commerce solution
providers, Commerce One and Microsoft were
reported to form a strategic alliance to address
technical barriers to adoption.
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