Snapshot of e-commerce’s opportunities and threats E-commerce: reason for reconsideration of business processes. Successful e-commerce implementation requires new business strategies YVO A. SAANEN, A. VERBRAECK AND HENK G. SOL Keywords: e-commerce, bottlenecks, opportunities, business processes A b s t r a c t E-commerce offers opportunities to change the way of doing business. However fully utilizing these opportu- nities and overcoming the bottlenecks, requires more than just getting online. The currently low Internet trade vol- umes confirm this. This paper gives a snapshot of opportunities and bottle- necks for e-commerce, regarding the internal organization as well as the organization within a larger business network. How should organizations in- tegrate e-commerce into their current business processes? Which strategies should be followed to be successful on electronic markets? Which roles within the business network should and can be played utilizing e-commerce? Appar- ently new business models and strate- gies are required, but the engineering question is open for the future. The identified bottlenecks and opportunities, placed in a research framework of analysis, can serve as a handle in these reengineering projects. A u t h o r s Yvo A. Saanen (y.a.saanen@ sepa.tudelft.nl) has a masters degree in systems engineering and is currently attached to the faculty of Technology, Policy and Management of Delft University of Technology. He is a partner of a consulting firm in the field of business processes and logistics. Henk G. Sol (h.g.sol@sepa.tudelft.nl) is emeritus dean of the faculty of Technology, Policy and Management of Delft University of Technology and professor in Systems Engineering. His field of research covers Information Systems, E-commerce and Simulation. Alexander Verbraeck (a.verbraeck@ sepa.tudelft.nl) is associate professor at the faculty of Technology, Policy and Management of Delft University of Technology His field of research covers logistics, business processes and simulation. Copyright © 1999 Electronic Markets Volume 9 (3): 181–189. www.electronicmarkets.org E-COMMERCE: MORE THAN TECHNOLOGY Traditionally e-commerce has been fostered by a strong technology push; implementing electronic channels be- tween businesses, governmental orga- nizations and individuals. This digitization of ordering and product information has implications for trans- action costs and information availabil- ity. But there is more. E-commerce offers profound opportunities if it is properly integrated in the current business processes. If not, the risk of increasing costs and mismanagement are immediate. Therefore, we try in this paper to identify the opportu- nities offered by e-commerce, as well as the bottlenecks and pitfalls one should be aware of when integrating e-commerce into the current business processes. These opportunities and bottlenecks are being discussed using a theoretical framework that departs from the value chain metaphor (Porter 1985). FRAMEWORK OF ANALYSIS We define e-commerce as ‘the whole of business activities, carried out by electronic means within customers’ and business processes, for the pur- pose of marketing, production, supply and payment of products, information content, and services’ (Franken and Biemans 1998). E-commerce contains five elements (Nissen 1995), but not all five have to be implemented: · electronic information-providing to customers (marketing); · electronic ordering (e.g. via Inter- net sites); · electronic delivery (only applicable for certain goods); · electronic payment (currently im- mature); · electronic service (currently only in- formation service). The framework that will be used to structure and categorize the implica- tions, opportunities and also bottle- necks consists of four levels or perspectives (Hoogeweegen 1997; Kambil 1992; Porter 1985) (see Fig- ure 1): · internal organization; · dyad (supplier-buyer relationship); · business chain; · business network. The first level refers to the internal business processes of an organization. The dyadic level refers to the value- adding relationship between two or- ganizations, a seller and a buyer, which is typical for a value-adding chain. This level of analysis can be extended to the supply chain level of analysis by incorporating the supplier’s supplier and so on (Hoogeweegen 1997). The most encompassing level – the business RESEARCH Downloaded By: [German National Licence 2007] At: 14:31 11 March 2010