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E-commerce implementation challenges: Small to medium-sized versus large

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Article  in  International Journal of Business Information Systems · January 2006

DOI: 10.1504/IJBIS.2006.008599 · Source: DBLP

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256 Int. J. Business Information Systems, Vol. 1, No. 3, 2006

E-commerce implementation challenges: small to

medium-sized versus large organisations

Mahmoud M. Yasin
Department of Management and Marketing
East Tennessee State University
P.O. Box 70619, Johnson City
Tennessee 37614, USA
Fax: (423) 439–5661
E-mail: mmyasin@etsu.edu

Andrew J. Czuchry*
East Tennessee State University
P.O. Box 70619, Johnson City
Tennessee 37614, USA
Fax: (423) 439–6671
E-mail: czuchry@etsu.edu
*Corresponding author

Maria Gonzales
East Tennessee State University
P.O. Box 70619, Johnson City
Tennessee 37614, USA
E-mail: mgon1@mindspring.com

Paul E. Bayes
Department of Accountancy
East Tennessee State University
P.O. Box 70710, Johnson City
Tennessee 37614, USA
Fax: (423) 439–5274
E-mail: bayes@etsu.edu
Abstract: E-commerce offers business organisations significant operational
and strategic opportunities. However, the implementation of effective
e-commerce-based business models is not without serious organisational
technological challenges. Some of these challenges tend to hinder the
implementation of e-commerce in small to medium-sized organisations. The
objective of this research is to shed some light on these challenges. Based on
the results of this study, some lessons learned and their practical implications
are underscored.

Keywords: e-commerce practices; planning; benefits; implementation;

organisation size.

Copyright © 2006 Inderscience Enterprises Ltd.

 E-commerce implementation challenges 257

Reference to this paper should be made as follows: Yasin, M.M.,

Czuchry, A.J., Gonzales, M. and Bayes, P.E. (2006) ‘E-commerce
implementation challenges: small to medium-sized versus large organisations’,
Int. J. Business Information Systems, Vol. 1, No. 3, pp.256–275.

Biographical notes: Mahmoud M. Yasin holds a PhD in Industrial

Management from Clemson University. He is Professor of Management at East
Tennessee State University. His research has appeared in such journals as the
Journal of Operations Management, OMEGA, International Journal of
Production and Operations Management, and Business Research. Dr. Yasin
currently serves on several editorial boards. He is the recipient of several
teaching and research awards and recognitions.

Andrew J. Czuchry received his PhD from the University of Connecticut in

1969. His concentration was in guidance and control systems engineering. He
has more than 20 years of experience as a Professional Manager in technical
innovation and the electronics manufacturing industry. Dr. Czuchry has been
the holder of the AFG Industries Chair of Excellence in Business and
Technology since joining East Tennessee State University in 1992. He has
published extensively in refereed journals and proceedings of professional
organisations related to his field.

Maria Gonzales is a Design Engineer who received a BS in Electrical

Engineering from the University of Alabama, and an MBA from East
Tennessee State University. She has more than ten years of work experience as
a control systems/instrumentation engineer for Fluor Daniel Corporation in the
biotechnology, foods and chemical industries.

Paul E. Bayes received his DBA in Accounting from the University of

Kentucky. He currently serves as Department of Accountancy Chair at
East Tennessee State University. He is a member of the American Accounting
Association and serves as the Assessment Committee Chair of the
Teaching and Curriculum Section and is the President-elect of the Southeastern
American Accounting Association. He has published or presented over 50
intellectual contributions in journals such as the Akron Business and Economic
Review, Independent Auditor, Journal of Education for Business, and The
Executive’s Journal.

1 Introduction

Despite the dot.com failures cited in the popular press (Useem, 2000), the potential
strategic ramifications of information technology and e-commerce must be addressed by
organisations seeking to realise a sustainable competitive advantage. Electronic
commerce experienced dynamic and rapid growth in the late 1990s. Growth in
internet sales has exceeded most expert estimates (Dutta and Segev, 1999). In
consumer-to-business applications, the amount of money spent by online shoppers is
nearly doubling each year and is expected to approach $100 billion by the end of 2005,
while business-to-business sales is expected to exceed $1.3 trillion. However, Doherty
and McAulay (2002) underscore the fact that e-commerce success is not guaranteed.
258 M.M. Yasin, A.J. Czuchry, M. Gonzales and P.E. Bayes

The emergence of e-commerce is redefining the way business is conducted. It offers

organisations new ways to expand the markets in which they compete, streamlines their
corporate business processes to deliver products and services more efficiently, attracts
and retains customers in new and innovative ways, and reduces costs of operations.
E-commerce is transforming the way customers, employees, and suppliers are relating to
one another. These changes are forcing organisations to craft new strategies and adopt
new methods of implementation.
Nearly one-fourth of small businesses that used the internet purchased a product
through it in 1997. However, only 5% of small businesses overall are selling products or
taking sales leads over the internet (Gala Group Inc., 1998). Many large organisations
have discovered the various advantages of electronic commerce, but the small and
medium-sized organisations are still cautious in terms of their involvement with
e-commerce (DeCovny, 1998; Poon and Swatman, 1999; Czuchry et al., 2002; Wilson
and Abel, 2002).
The objective of this preliminary investigation presented in this paper is twofold.
First, this study attempts to shed some light on the reasons behind the apparent reluctance
of small to medium-sized organisations to implement e-commerce business models.
Second, the experience gained from this initial investigation will be used to refine the
research instrument and expand the scope and reach of this investigation. As such, this
preliminary investigation is part of a stream of research aimed at understanding the
different facets of e-commerce. Lessons learned based on the results of this stream of
research may prove valuable for small to medium-sized organisations, as they attempt to
implement e-commerce business solutions.

2 Relevant literature
2.1 Usage and outcomes of e-commerce
Electronic commerce can be described as an emerging area that encompasses processes
directly and indirectly related to the buying, selling, and trading of products and services,
and information electronically. Kalakota and Whinston (1997,p.8) define electronic
commerce based on four perspectives. These four perspectives are: communication
perspective – electronic commerce is the deliverer of information, products/services or
payments over telephone lines, computer networks, or any other electronic means;
business process perspective – electronic commerce is the application of technology
towards the automation of business transactions and work flows; service perspective
– electronic commerce is a tool that addresses the desire of firms, consumers, and
management to cut service costs while improving the quality of goods and increasing the
speed of service delivery; and online perspective – electronic commerce provides
the capacity to buy and sell products and information on the internet as well as other
online services.
E-commerce involves the buying and selling of information, products, and services
(Nath et al., 1998; Gunasekaran et al., 2002; Poon and Swatman, 1999; Chang et al.,
2002; Phan, 2003; Cockburn and Wilson, 1996; Ngai and Wat, 2002; Foley and Sutton,
1998; Vieyra and Claycomb, 2001; E-commerce and business use of the internet, 2000).
It includes all aspects of trading including commercial market creation, ordering, and the
transfer of money (Gunasekaran et al., 2002; Sharma, 2002). Businesses have shown
 E-commerce implementation challenges 259

significant interest in using the internet as a means for building stronger relationships
with customers, suppliers, employees, and business partners (Decina and Trecordi, 1999;
Dutta and Segev, 1999; Hoover, 1999; Poon and Swatman, 1999; Chang et al., 2002;
Phan, 2003; Sharma, 2002; Cockburn and Wilson, 1996; Ngai and Wat, 2002; Wilson
and Abel, 2002; Moad, 1999; Foley and Sutton, 1998; Vieyra and Claycomb, 2001;
Gunasekaran et al., 2002; Singh et al., 2001).
E-commerce is also used as a low-cost product advertising and marketing tool (Nath
et al., 1998; Strader and Shaw, 1997; Cockburn and Wilson, 1996; Gunasekaran et al.,
2002). It allows ease of access and global reach (Nath et al., 1998), and the medium
works well since it can overcome time and geographic limitations (Poon and Swatman,
1999; Boyer et al., 2002; Sharma, 2002; Vieyra and Claycomb, 2001; Mariotti and
Sgobbi, 2001; Gunasekaran et al., 2002). E-commerce also poses minimal entry barriers
(Foley and Sutton, 1998; Nath et al., 1998; Chang et al., 2002).
E-commerce is significantly reshaping manufacturing organisations. It is changing
manufacturing systems from mass production to demand-driven, possibly customised
just-in-time manufacturing systems. Strategic flexibility enables an organisation to
provide customers with personalised products while retaining the economic advantages of
mass production (Chang et al., 2002; Boyer et al., 2002; Strader and Shaw, 1997). The
internet as an enabling force for improved supply chain management, offers efficiency
and cost reduction to business processes across industries and nations (Lancioni et al.,
2003). E-commerce provides manufacturers with a great opportunity to sell and distribute
directly to final customers (Gunasekaran et al., 2002).
Electronic commerce improves the flow of organisational information. It is especially
useful at gathering intelligence on customers, competitors, and potential markets (Roberts
and Mackay, 1998; Lichtenthal and Eliaz, 2003; Vieyra and Claycomb, 2001;
Gunasekaran et al., 2002; Lancioni, 2003). E-commerce increases an organisation’s
ability to sense and respond to the market needs by collecting and disseminating market
information throughout the organisation. With this information, the organisation could
accurately assess or stimulate market demand and search for new markets (Chang
et al., 2002).
The electronic medium associated with e-commerce has the potential of increasing
the speed in service delivery (Ngai and Wat, 2002; Nath et al., 1998; Lichtenthal and
Eliaz, 2003), transactions (Strader and Shaw, 1997), and communication (Wilson and
Abel, 2002; Lichtenthal and Eliaz, 2003; Gunasekaran et al., 2002). E-commerce enables
organisations to shorten procurement cycles, reduce development cycles, and accelerate
time to market through collaborative engineering, product and process design. This
dramatically reduces purchasing, production, and cycle time (Gunasekaran et al., 2002).
E-commerce allows organisations to quickly respond to customer needs through
reduction of the time to market, the time to produce, the time to deliver, and the time to
service (Jelassi and Leenen, 2003; Strader and Shaw, 1997).
Electronic commerce offers numerous organisational benefits including reduced costs
and improved customer service (DeCovny, 1998). The costs involved include
transactional (Chang et al., 2002; Mariotti and Sgobbi, 2001; Strader and Shaw, 1997;
Lichtenthal and Eliaz, 2003; Roberts and Mackay, 1998; Vieyra and Claycomb, 2001),
operational (Wilson and Abel, 2002; Mariotti and Sgobbi, 2001; Gunasekaran et al.,
2002), distribution (Gunasekaran et al., 2002), communication (Gunasekaran et al.,
2002), purchasing (Lancioni et al., 2003; Gunasekaran et al., 2002; Vieyra and
260 M.M. Yasin, A.J. Czuchry, M. Gonzales and P.E. Bayes

Claycomb, 2001), delivery (Gunasekaran et al., 2002), advertising (Nath et al., 1998;
Strader and Shaw,1997), administrative (Wilson and Abel, 2002), and management
(Mariotti and Sgobbi, 2001).
The capabilities and opportunities afforded by an internet-based electronic
marketplace significantly improve the productivity and competitiveness of participating
organisations (Gunasekaran et al., 2002; Wilson and Abel, 2002; DeCovny, 1998).
E-commerce-based organisations tend to have higher annual revenues in comparison to
other organisations (Neese, 1999; Lancioni et al., 2003; Gunasekaran et al., 2002).
E-commerce can also improve the quality of goods and services (Nath et al., 1998; Ngai
and Wat, 2002; Gunasekaran et al., 2002).
The role of a well-designed e-commerce strategy in the context of the strategic
deployment of information technology is critical. Despite dot.com failures, the potential
of information and telecommunication technologies to enhance operational efficiency and
strategic effectiveness cannot be overlooked (Czuchry and Yasin, 2003).

2.2 Challenges to effective implementation of e-commerce

The challenges to effective implementation of e-commerce are multiple and complex.
Dutta and Segev (1999) indicate that these challenges are more organisational in nature
as opposed to being technology related. In this context, a well-structured business
strategy is the backbone of organisational effectiveness regardless of the chosen business
model (Wilson and Abel, 2002; DeCovny, 1998). Therefore, organisations that integrate
e-commerce business models with their strategic orientation are more likely to have
successful e-commerce efforts (Chang et al., 2002; Phan, 2003). Successful e-commerce
strategies emphasise the importance of organisational innovation and willingness to
change (Cohen and Jordan, 1999; Kickul and Gundry, 2001). To implement e-commerce
solutions, it is necessary to have supporting information, and organisational infrastructure
and systems. In this context, organisational infrastructure needs to be designed with
sufficient flexibility to allow for adaptive change (Gunasekaran et al., 2002).
Another challenge to effective e-commerce implementation is the shortage of people
with the necessary information technology skills (Nath et al., 1998; DeCovny, 1998).
Consumers’ fear of a security breach represents another serious challenge to e-commerce
implementation (Cockburn and Wilson, 1996; Nath et al., 1998; Wilson and Abel, 2002;
Ngai and Wat, 2002; Gunasekaran et al., 2002; DeCovny, 1998). Some organisations are
still hesitant to transmit confidential information over the internet because of legal and
privacy concerns (Poon and Swatman, 1999; Wilson and Abel, 2002; Nath et al., 1998;
Ngai and Wat, 2002). Organisations may also lack the financial resources necessary to
pursue the endeavour (Nath et al., 1998; Wilson and Abel, 2002).
Other concerns and challenges are technological in nature. Some organisations may
lack the resources to integrate the e-commerce systems with their internal infrastructure
(DeCovny, 1998; Ngai and Wat, 2002). In such organisations, databases and data
warehousing systems often are not integrated (DeCovny, 1998). Other challenges involve
requirements for faster connection times, wider access, and informational overload
(Cockburn and Wilson, 1996; Wilson and Abel, 2002).
Organisational resources may be needed to overcome some of these challenges.
Therefore, the top management support of e-commerce is extremely important
(Nath et al., 1998; Poon and Swatman, 1999).
 E-commerce implementation challenges 261

In summary, the relevant literature suggests that in spite of dot.com failures,

e-commerce must be considered systematically in developing an organisation’s overall
competitive strategy. The literature provides several suggestions that could pave the way
for a smooth transition to e-commerce. It is recommended to start slowly and
methodically with caution. One needs to adequately protect one’s information assets to
secure customers’ data as well as organisational data from intruders and other potential
hazards. Lastly, it is important to allocate sufficient resources, both financial and human
resources, for the smooth operations of e-commerce.

3 Research framework and method

3.1 Research framework
Based on the literature reviewed, the research framework depicted in Figure 1 is
advanced to guide the investigation in this study. This framework emphasises the
multifaceted nature of the organisational e-commerce implementation effort. As such, the
framework views the effective e-commerce implementation effort as a systematic
organisational concern. Guided by this framework, this study will attempt to shed
some light on the activities and resources required to promote effectiveness of
e-commerce applications.

Figure 1 Effective e-commerce implementation of organisational dynamics

Environmental and Organisational planning

competitive for e-commerce
concerns implementation
• Reasons behind • Initiation
or lack of • Planning
e-commerce o Involvement
implementation
o Planning methods
and resources
o Factors considered
E-commerce effectiveness
• Outcomes
considered
Organisational
modifications
• Type of modification
E-commerce utilisation • Procedures and
• resources
Hindering factors

Due to the exploratory nature of this study and the lack of well-defined theoretical
relationship, the methodology described next is deemed appropriate for the purpose of
this study. The methodology selected is consistent with the practical nature and aim of
this study. The next phase of this research will utilise a larger and broader sample size to
allow for test hypotheses based on the initial result of the current study.
262 M.M. Yasin, A.J. Czuchry, M. Gonzales and P.E. Bayes

3.2 Research instrument

The research instrument used in this study was based on an extensive literature review
and feedback obtained from practitioners. A panel of practitioners and academicians
examined the instrument for face validity before it was used. The final research
instrument was consisted of 25 questions. Three questions were open-ended, eight used
categorical scales, and 14 utilised a Likert-type scale.

3.3 Procedure and sample profile

A research instrument was mailed to a random sample of 500 organisations in the
southeast region of the USA. Out of the 500 instruments mailed, 82 usable responses
were obtained. This resulted in a response rate of about 16.4%. Table 1 presents a sample
profile of the participating organisations in terms of internet sales and level of
information technology. The level of information technology in the industry for the
majority of the participating organisations was moderate.

Table 1 Sample profile in terms of internet sales and level of information technology

Variable Implementing (%) Not implementing (%)

Internet sales compose percentage of revenue (%)
0 41.8 62.5
1–10 29.9 25.0
11–20 7.5 12.5
21–50 3.0 0.0
Over 50 1.5 0.0
Do not sell products over internet 14.9 0.0
Do not know 1.5 0.0
Level of IT in the industry
Very high technology 8.7 0.0
High technology 21.7 0.0
Moderate technology 59.4 66.7
Low technology 10.1 22.2
Very low technology 0.0 11.1
Level of IT in the organisation
Very high technology 7.2 22.2
High technology 34.8 22.2
Moderate technology 53.6 33.3
Low technology 4.3 22.2
Very low technology 0.0 0.0
Note: The percentages for each variable do not add up to 100% due to rounding.
 E-commerce implementation challenges 263

For the combined sample of organisations that implemented e-commerce and those that
did not, 62% were in manufacturing. Twenty-five percent of the organisations that did
not plan to implement e-commerce were in the construction industry. On the other hand,
24% of service organisations had plans to use e-commerce. The average number of
employees in organisations that did not plan to implement e-commerce was under 100. In
contrast, the average number of employees for organisations that implement e-commerce
was 6000. The average annual sales for organisations that did not plan to implement
e-commerce was $12.59 million. In comparison, the average sales for organisations that
planned to implement e-commerce was $1.14 billion. Thus, organisations that decided
not to implement e-commerce were of the small to medium-sized type.

4 Results
4.1 E-commerce use and plans
Of the respondents surveyed, 88% were employed in organisations that were using or
planning to use e-commerce, while 12% were employed in organisations that did not plan
to use e-commerce. Table 2 presents results in relation to when the organisation plans to
implement e-commerce, or how long the organisation has been using e-commerce. Based
on the results, 60% of the organisations already use e-commerce. For those organisations
that are already using e-commerce, the usage time appears to be fairly distributed,
ranging from less than six months to over five years.

Table 2 Sample profile of e-commerce implementation

Variable Implementing (%) Not implementing (%)

When does your organisation plan to implement e-commerce
Never 0.0 100.0
Already use 59.4 0.0
0–6 months 10.1 0.0
6–12 months 8.7 0.0
1–2 years 10.1 0.0
2–3 years 7.2 0.0
Over 3 years 4.3 0.0
How long has your organisation been using e-commerce
Less than 6 months 19.3 0.0
6 months to 1 year 15.8 0.0
1–2 years 28.1 0.0
2–3 years 17.5 0.0
3–5 years 12.3 0.0
Over 5 years 7.0 0.0
Note: The percentages for each variable do not add up to 100% due to rounding.
264 M.M. Yasin, A.J. Czuchry, M. Gonzales and P.E. Bayes

4.2 Reasons behind the lack of implementation of e-commerce

The reasons behind the decision of some of the sampled organisations not to
implement e-commerce are presented in Table 3. The mean ranged from one to five,
where five refers to the respondent highly agreeing to the statement in question. The
major operational reasons behind the decision not to implement e-commerce centre
around the fact that the industry is not e-commerce-conducive, or that competitors do not
use e-commerce. Other major reasons for not implementing e-commerce are the
lack of customer and supplier demands, the customer infrastructure is insufficient,
and the employees do not feel technology leads to financial rewards. Several of
these e-commerce obstacles can be overcome, if approached strategically and
systematically. Organisations can work with suppliers and customers to establish the
needed infrastructure. Employees can be educated and trained in order to make them
e-commerce ready.

Table 3 Reasons for the lack of implementation of e-commerce

Category Variable Mean Standard deviation

Reasons for not implementing e-commerce
Operational Industry is not e-commerce conducive 4.44 1.33
Competitors do not use e-commerce 3.33 1.97
Lack of e-commerce knowledge 1.83 1.60
Lack of management support 1.8 1.79
Insufficient time to implement 1.6 1.34
Problems with proper policies and procedure 1.4 0.89
Suppliers Lack of supplier demand 4 1.67
Supplier infrastructure insufficient 2.57 1.99
Too many suppliers 1.6 1.34
Customers Lack of customer demand 4.29 0.95
Customer infrastructure is insufficient 3.78 1.72
Employees Lack of e-commerce experience 2.38 1.77
Necessity for training 1.83 1.33
Employee resistance to change 1.6 1.34
Unionisation 1.2 0.45
Technology Lack of technological resources 2 1.16
Lack of compatible-current and e-commerce 2 1.55
technology
Financial Employees do not feel technology leads to 3.88 1.81
financial rewards
High cost of technology 2.14 1.57
Lack of implementation funds 1.67 0.82
 E-commerce implementation challenges 265

4.3 Organisational entities involved in the initiation and planning

of e-commerce
Table 4 lists the organisational entities that were involved in the initiation and planning of
e-commerce. The highest involvement in initiating the e-commerce effort was associated
with executive-level management, the information technology department, the
sales/marketing department, and customers. Other parties involved in the initiation effort,
but at a lower level of involvement, are the accounting department and the purchasing
department. Perhaps this pattern of involvement in initiating the e-commerce effort
reflects both the strategic and the operational nature of e-commerce.

Table 4 Organisational entities involved in the initiation and planning of e-commerce

Variable Mean Standard deviation

Organisational entities involved in the initiation of e-commerce
Executive level management 4.15 1.11
Information technology department 3.84 1.46
Sales/marketing department 3.65 1.29
Customers 3.2 1.39
Accounting department 2.65 1.31
Purchasing department 2.63 1.47
Suppliers 2.14 1.22
Outside consultant 2.03 1.35
Production department 1.95 1.03
Organisational entities involved in planning for e-commerce
Information technology department 4.13 1.29
Executive level management 3.75 1.24
Sales and marketing department 3.33 1.3
Accounting department 2.58 1.5
Purchasing department 2.52 1.4
Customers 2.39 1.32
Outside consultant 2.36 1.54
Suppliers 1.93 1.15
Production department 1.78 0.97

4.4 Planning methods and resources utilised

Planning methods and nonfinancial resources utilised in association with e-commerce
efforts are shown in Table 5. The responses in association with the organisational
planning effort in preparation for e-commerce implementation, appear to stress the role of
well-defined and integrated plans both at the departmental and organisational levels. The
role of teamwork and project management approaches is also stressed during the planning
phase. In this context, planning for e-commerce appears to be an organisational effort
with emphasis on procedures and people involvement.
266 M.M. Yasin, A.J. Czuchry, M. Gonzales and P.E. Bayes

Table 5 Planning methods and resources used for e-commerce

Variable Mean Standard deviation

Planning methods used for e-commerce
Incremental approach 3.77 1.06
Well-defined business plan 3.21 1.16
Well-defined departmental or functional plan 3.18 1.05
Well-defined overall organisational plan 3 1.09
Integration of well-defined departmental, business,
organisational plan 2.8 1.12
Ad hoc effort (little planning) 2.28 1.24
Revolutionary approach 1.9 1.3
Time spent in planning for e-commerce 2.58 1.18
Planning resources used
Cross functional team 2.85 1.66
Top down planning approach 2.67 1.46
Top management planning only 2.66 1.4
Project management tools 2.53 1.39
Benchmarking 2.29 1.36
Business process reengineering 2.21 1.3
Decision support systems 2.19 1.33
Bottom up planning approach 1.72 0.99
Time spent in the implementation of e-commerce 2.86 1.23

4.5 Factors considered during planning for e-commerce

Factors considered in the planning for e-commerce are shown in Table 6. The most
important strategic factors considered during planning were the impact on competitive
standing in industry, on financial performance, and on market share. Operational factors
receiving the most consideration were impact on existing processes, on existing
procedures, and on existing organisational structures. Competitor factors included
competitive climate of market, and use of e-commerce by competitors. Current and future
use or lack of use by suppliers was also given consideration. Customer factors considered
during planning were customers’ current and future desire for e-commerce, customers’
current and future use of e-commerce, and ensuring confidentiality of transaction. Extent
of training and retraining required, and existing skills profile of employees, were
employee-related factors considered. These factors reflect both the internal and external
impact and outcomes of e-commerce.
Technology issues considered included integrating existing and new technology;
constraints due to existing technology; capacity needed; and factors dealing with system
downtime, power outages, cyber attacks, and other failures of technology. Legal issues
considered included maintaining security of transactions, protecting against violation of
privacy, establishing e-commerce policies and procedures, protecting intellectual
property, and potential legal action. Financial factors considered included maintaining
financial resources, and budgeting for technology on a short- and long-term basis.
 E-commerce implementation challenges 267

Table 6 Factors considered during the planning for e-commerce

Category Factor Mean Standard deviation

Factors considered
Strategic Impact on competitive standing in industry 4 1.1
Impact on financial performance 3.68 1.27
Impact on market share 3.29 1.32
Operational Impact on existing processes 3.32 1.27
Impact on existing procedures 3.25 1.27
Impact on existing organisational structure 2.75 1.23
Competitors Competitive climate of market 3.61 1.3
Use of e-commerce by competitors 3.25 1.3
Strategic alliances and joint ventures 2.57 1.36
Suppliers Suppliers’ current and future use of 2.73 1.51
or e-commerce
Impact on existing suppliers relationship 2.58 1.45
Availability of reliable suppliers 2.48 1.41
Customers Customers’ current and future desire 4.15 1.14
for e-commerce
Customers’ current and future use 4.08 1.14
of e-commerce
Ensure confidentiality of transaction 3.52 1.4
Employees Extent of training and retraining required 3.02 1.32
Existing skills profile of employees 3 1.37
Labor relations/union agreements 1.55 1.55
Technology Integration of existing and new technology 3.61 1.28
Constraints due to existing technology 3.3 1.31
Capacity needed (handle internet 3.26 1.38
volume + traffic)
Deal with system downtime, power outages, 3.11 1.37
cyber attacks
Deal with other failures of technology
Legal Maintain security of transactions 3.79 1.43
Protection against violation of privacy 3.59 1.44
Establish organisational e-commerce 3.28 1.28
policies and procedures
Protection of intellectual property 3.05 1.58
Consideration of potential legal action 2.75 1.51
Executing contracts online 2.15 1.4
Financial Maintaining financial resources 3.33 1.36
Budgeting for technology for short and 3.25 1.24
long term basis
Tax consequences of an e-commerce model 2.03 1.22
Insurance for online operations 2 1.15
268 M.M. Yasin, A.J. Czuchry, M. Gonzales and P.E. Bayes

4.6 Modification requirements and tools used for e-commerce

Modification requirement, methods used, and resources utilised in preparation for
e-commerce implementation are shown in Table 7. Strategic modifications utilised
included modifying existing business strategy and adding e-commerce needs to
short- and long-term budgets. Organisational modification efforts included
cross-functional teams, top-down planning approach, project management tools, and
business process engineering. Operational modifications necessary to e-commerce
implementation included developing new procedures, and modifying facility to combine
legacy layout technology with new technology. Supplier modifications included building
strategic relationship with key suppliers, and the introduction of new requirements for
suppliers. Modifications concerning customers included changing communication
patterns with customers, increasing capacity of contacts with customers, and
reengineering customer links to the organisation. Employee modifications included
training employees to use new procedures and equipment, and convincing employees of
the benefits and desirability of e-commerce.

Table 7 Modification required for e-commerce implementation

Category Variable Mean Standard deviation

Modification methods and resources used
Organisational Cross functional team 3.1 1.58
Top-down planning approach 2.73 1.32
Project management tools 2.71 1.52
Business process reengineering 2.69 1.49
Top management involvement only 2.56 1.33
Benchmarking 2.42 1.39
Bottom-up planning approach 2.07 1.23
Required modifications for e-commerce
Operational Develop new procedures 3.69 1.1
Modify facility to combine legacy 2.7 1.45
technology with new technology
Modify company layout and 2.58 1.39
equipment setup
Acquire insurance for online operations 1.73 1.1
Suppliers Build strategic relationship with 2.9 1.45
key suppliers
Introduce new requirements for suppliers 2.65 1.62
Reduce number of suppliers used 2.28 1.46
Customers Change communication method 3.64 1.29
with customers
Increase capacity of contacts with customers 3.43 1.33
Reengineer customer links to organisation 3.34 1.32
 E-commerce implementation challenges 269

Table 7 Modification required for e-commerce implementation (continue)

Category Variable Mean Standard deviation

Employees Train employees to use new procedures 3.37 1.33
and equipment
Convince employees of benefits/desirability 3.03 1.33
of e-commerce
Restructure reward system to encourage 1.79 1.1
e-commerce
Technology Purchase new software 3.92 1.1
Purchase new hardware 3.69 1.26
Integrate existing technology with 3.46 1.34
e-commerce technology
Create procedures to deal with downtime, 2.98 1.48
power outages
Create procedures to deal with cyber attacks
and failures of technology
Legal Create policies and procedures concerning 3.09 1.48
maintaining security
Create policies and procedures concerning 3 1.53
rights of privacy
Establishing overall e-commerce policies 2.82 1.38
and procedures
Create policies/procedures concerning 2.18 1.36
executing contracts online
Strategic E-commerce needs to short and long 3.14 1.41
term budget
Modified existing business strategy 2.96 1.31
Modified existing organisational structure 2.47 1.26

In the area of technology, purchasing new software, purchasing new hardware,

integrating existing technology with e-commerce technology, and creating procedures to
deal with downtime, power outages, cyber attacks, and failure of technology were needed
modifications. Legal modifications included creating policies and procedures concerning
maintaining security, creating policies and procedures involving rights of privacy, and
establishing overall e-commerce policies and procedures. The above strategic,
organisational, operational, and technological modifications underscore the fact that an
effective e-commerce business model does not just happen. Rather, preparations in form
of modifications for such model are very critical to its success.

4.7 Factors hindering the e-commerce implementation

Factors that hindered the implementation of e-commerce are shown in Table 8. Strategic
and operational factors that interfered with the implementation of e-commerce included
the lack of e-commerce know-how, lack of funds for implementation, and insufficient
time allocated to implementation. An important customer factor that interfered with
implementation is customer constraints. Lack of employee experience, training, employee
resistance to change, and lack of technological resources also interfered with the
e-commerce implementation process.
270 M.M. Yasin, A.J. Czuchry, M. Gonzales and P.E. Bayes

Table 8 Factors that hindered the implementation of e-commerce

Category Variable Mean Standard deviation

Factors that hindered the implementation
of e-commerce
Organisational Lack of e-commerce know-how 2.82 1.42
Lack of funds for implementation 2.71 1.37
Insufficient time allotted to implement 2.67 1.45
Poor budgeting for e-commerce 2.04 1.19
requirements
Failure to create and establish proper 1.96 1.16
e-commerce policies/procedures
Overall lack of planning 1.91 1.18
Lack of leadership 1.89 1.16
Hands on involvement of top management 1.84 1.08
Lack of top management support 1.43 0.76
Suppliers Too many suppliers 1.72 1.19
Failure to take advantage of 1.68 1.17
partnering opportunities
Lack of cooperation of suppliers 1.59 1
Customers Customer constraints 2.6 1.38
Changing customer demand 2.25 1.32
Employees Lack of experienced employees 2.98 1.38
Lack of training for employees 2.78 1.32
Employees’ resistance to change 2.56 1.39
Unionisation 1.26 0.85
Technology Lack of technological resources 2.51 1.36
Incompatible technology 2.07 1.29
Ineffective integration and conversion 2 1.3
of technology
Person overseeing technology operations did 1.76 1.09
not have proper background
Ineffective planning to handle 1.67 0.99
technology failures

4.8 E-commerce utilisation

Table 9 provides a summary of current utilisation practices of e-commerce among
the surveyed organisations. The results clearly show that organisations use e-commerce
to communicate with customers, employees, and suppliers. Also, these organisations tend
to moderately use e-commerce to purchase supplies, use customer data online, and
advertise products and services. The major reasons behind implementing e-commerce
based on the results from Table 9 were to improve speed and ease of transactions, to gain
competitive advantage, to reach new markets/customers, and to reduce cost. Other
reasons for implementing e-commerce were in response to competition, to reduce time to
 E-commerce implementation challenges 271

market, customer pressure, and internal pressure. These patterns of utilisation mirror the
reasons behind the implementation of e-commerce. They include both strategic and
operational features.

Table 9 Usage and reasons for the implementation of e-commerce

Variable Mean Standard deviation

Usage of e-commerce
Communicate with customer 3.6 1.36
Communicate with employees 2.84 1.63
Communicate with suppliers 2.69 1.45
Purchase supplies, inventory, materials 2.56 1.38
Acquire and use customer data online 2.53 1.47
Advertise products and services 2.52 1.48
Web-based technologies are embedded in supply chain 2.37 1.34
Communicate with shareholders and public 2.12 1.51
Sell goods and services 2.02 1.41
Hire employees via internet 2 1.31
Invoice of customer and pay creditors 1.79 1.05
Reasons for the implementation of e-commerce
Improve speed and ease of transactions 3.81 1.28
Gain competitive advantage 3.79 1.07
Reach new markets and customers 3.41 1.41
Cost reduction 3.33 1.47
In response to competition 3.1 1.39
Reduce time to market 3.1 1.61
Customer pressure 3.06 1.35
Internal pressure 3.03 1.39
Highly technologically oriented industry 2.39 1.35
Supplier pressure 2.05 1.12

4.9 E-commerce organisational outcomes

Organisational outcomes attributed to the implementation of e-commerce are shown in
Table 10. In terms of strategy, e-commerce implementation achieved the following:
improved competitive standing, alliances with other organisations, new market
penetration, and larger market share. In terms of operations, e-commerce implementation
achieved the following: improved overall efficiency, reduced costs, improved order
fulfilment times, and reduced time to market. Also, e-commerce implementation
improved relationships with suppliers, improved customer service, and developed
stronger customer relations. In terms of employees, e-commerce implementation
improved internal communication, made employees’ job easier and efficient, facilitated
teamwork, and most employees felt better off. These outcomes very much reflect the
rationale behind implementing the e-commerce business model of its patterns of
utilisation in the surveyed organisations.
272 M.M. Yasin, A.J. Czuchry, M. Gonzales and P.E. Bayes

Table 10 E-commerce implementation outcomes

Category Variable Mean Standard deviation

Benefits from the implementation of e-commerce
Strategic Improved competitive standing 3.22 1.37
Allowed for new alliances with other 2.63 1.37
organisations where feasible
Allowed for market penetration and 2.52 1.36
new markets
Larger market share 2.46 1.3
Improved financial performance/indicators 2.27 1.1
Operational Improved overall efficiency 2.71 1.31
Reduced costs 2.67 1.52
Improved order fulfilment times 2.53 1.39
Reduced time to market 2.46 1.37
Reduced change orders required 2.33 1.36
Suppliers Improved relationship with suppliers 2.45 1.47
Facilitated better service from suppliers 2.35 1.39
Lowered costs for both the organisation and 2.25 1.44
its suppliers
Customers Improved customer service 3.52 1.33
Stronger customer relations 3.46 1.27
Fewer customer complaints and grievance 2.7 1.53
Employees Improved internal communication 3.24 1.35
Makes employees’ job easier and 2.96 1.46
more efficient
Facilitates teamwork 2.76 1.45
Most employees feel better off 2.52 1.26
Fewer employee grievances and complaints 1.96 1.18
Less turnover 1.6 0.92
Less absenteeism 1.54 0.9

4.10 The e-commerce experience

Table 11 attempts to summarise the e-commerce experience of the surveyed
organisations. Based on the results in Table 1, most participants appear to think that the
e-commerce approach utilised in their organisation was both strategically sound and
operationally sufficient. Also, most participants felt that based on the e-commerce
experience of their organisations, they would recommend an incremental approach to
e-commerce implementation to others. Based on the e-commerce experience of the
participating organisations, it appears that those that have implemented e-commerce
would recommend it to similar organisations in the same industry.
 E-commerce implementation challenges 273

Table 11 The e-commerce experience

Variable Mean Standard deviation

E-commerce approach
The e-commerce approach utilised was both strategically 3.29 1.19
sound and operationally sufficient.
The e-commerce approach utilised was strategically 1.84 1.07
sound, but operationally insufficient.
The e-commerce approach utilised was strategically not 1.82 1.16
sound, but operationally sufficient.
The e-commerce approach was both strategically not 1.31 0.68
sound and operationally insufficient.
Organisation’s recommendation for e-commerce
Based on the e-commerce experience of this organisation, 4.18 0.88
I would recommend an incremental (step by step)
approach to e-commerce.
Based on the e-commerce experience of this organisation, 3.81 1.15
I would recommend e-commerce to similar organisations
in my industry.
Based on the e-commerce experience of this organisation, 2.04 1.34
I would recommend an approach to e-commerce that
redefines/changes every aspect of the organisation
(revolutionary or ‘all or nothing’ approach).

5 Conclusion and managerial implication

This preliminary research investigated reasons behind the apparent reluctance of small to
medium-sized organisations to implement e-commerce. Concerns which larger
organisations appear to overcome as they planned for e-commerce implementation were
also examined. Based on the literature and the results of this study, the following
conclusions are drawn. First, organisations that chose to implement e-commerce are
mostly larger organisations with moderate to high levels of technology. The literature
supports this finding (Poon and Swatman, 1999; Wilson and Abel, 2002). The majority of
the organisations that are using or planning to use e-commerce are in manufacturing. The
literature suggests that manufacturing organisations gain substantial benefits from
e-commerce (Gunasekaran et al., 2002).
Second, the results of this study underscore several reasons for the reluctance of
small to medium-sized organisations to implement e-commerce. These organisations
appear to rationalise such reluctance because their industry does not have the
characteristics needed for e-commerce, competitors do not use e-commerce, or
e-commerce technology does not lead to financial rewards. Other reasons include security
issues, privacy, shortage of people with the necessary skills, lack of financial resources,
and other technological issues.
Third, with regard to the planning and implementation of e-commerce, this study
identifies several issues that should be addressed. Most organisations agree that an
incremental approach to the planning and implementation of e-commerce is appropriate.
274 M.M. Yasin, A.J. Czuchry, M. Gonzales and P.E. Bayes

Also, a well-designed strategy and management support are important to achieve

successful e-commerce implementation. These findings are consistent with the literature
(Ngai and Wat, 2002; Wilson and Abel, 2002).
Fourth, the results of this study indicate that organisations used e-commerce
to communicate with customers, employees, and suppliers. Organisations also use
e-commerce to purchase products and advertise products and services. These findings are
consistent with the literature (Gunasekaran et al., 2002; Chang et al., 2002; Phan, 2003).
The findings of this preliminary research have practical implications for the
management of organisations that are either planning to, or have implemented
e-commerce. Managers of such organisations should consider the integration of different
organisational processes and resources through information technologies in support of an
effective e-commerce strategic choice. In this context, it is important to consider and
incorporate industry’s information capabilities in order to avoid outpacing the capabilities
of suppliers and customers.
Managers of organisations that are planning for e-commerce implementation need to
consider the strategic, operational, competitive, customer, and technological facets of the
e-commerce business model. Several types of organisational modifications are required
in order to bring about the effective organisational utilisation of e-commerce. Therefore,
systematic planning is required to ensure the consistency between e-commerce planning,
modification and desirable organisational outcomes. Toward that end, the results of this
preliminary investigation will be used to refine the research instrument and validate the
initial results obtained.

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