E-Commerce Maturity Model (compariosn of Four Models)

Contents

Introduction 2

Wrycza et al.'s Research (2007) 3

Rao et al.'s research (2003) 5

Prananto et al.'s research (2004) 7

Alonso Mendo and Fitzgerald's research (2005) 9

The usefulness of using E-Commerce Maturity Model (ECMM) 11

Conclusion 14

Reference 14

Introduction

In today's economy, organisations try to gain strategic and operational advantages over other competitors in their industry because of the rapid advance of technology and globalisation. Companies can have great opportunities to sell their products to new customers, to buy cheap raw materials from new suppliers and to have new business partners in other countries via internet. Therefore, many organisations have introduced E-business as a critical part of business strategies. E-business is not a jargon, which can be used in technical ways within a particular group of people, anymore. Frank (1997, cited in (Ramsey and McCole, 2005) described the new age without internet enabled capabilities as "trying to compete today without a sales force or a telephone." Willcocks et al (2000) emphasise that it is wrong to ask "What are you doing about e-business?" instead of "What should I be doing about e-business?". Introducing E-business is not an option, but an imperative for survival in competitive today's economy.

According to CENSUS (2000, 2007) in US, retail e-commerce sales have been significantly increased from $29 billion in 2000 to $108 billion in 2006. E-marketer (2007) also reports that the total retail online sales were $132.9 billion in 2006 and they will reach approximately $407 billion in 2011. In addition, 80 % of global economic growth is originated in SMEs and 99% of North America and Europe's businesses are SMEs (Jutla et al., 2002). Thus, US, European Union and other governments has encouraged and supported e-business adoption to SMEs, as a new growth engine of global economy (Rao et al., 2003; OECD, 2001). However, despite of the advantages of e-business and government supports, small and medium-sized enterprises (SMEs) are hesitant to introduce e-business due to limited budget, potential business risks, internal resistance, lack of technical expertises and security issues, while large enterprises have quickly adopted it (Papazafeiropoulou et al., 2002, Ramsey and McCole, 2005, Wrycza et al., 2007)

In order to solve slow e-business development in SMEs, many researchers have recently proposed different E-Commerce Maturity Models (ECMM), including a stage (ladder) development model and a contingent (transforter) model. ECMM can describe facilitators and barriers to adopt advance e-commerce, and suggest a guideline of efficient and effective e-commerce adoption to SMEs which are planning to introduce e-commerce technologies at the first time or to move to a further stage. In this paper, four different researches about ECMM for SMEs will be discussed and criticised with their strength and weakness, and then the usefulness of using models to decide e-commerce maturity in organisations will be assessed in the business and strategy perspective.

Wrycza et al.'s Research (2007)

This paper specially focuses on the use of two dominant ECMMs, such as the stage model and the contingent model, in European region. On the basis of conducted researches in the stage model, authors present five steps of model as followed:

 "Internet access (e-mail and browser)

 Creating a company portal

 E-commerce- purchasing and selling of goods and services

 E-business- EB=EC+BI+CRM+SCM+ERP

 Network organisations, virtual enterprises and digital ecosystems"

(Wrycza et al., 2007)

They also define the contingent model with two important factors.

 "Plans of business growth

 Evaluation of the usefulness of internet technology"

(Wrycza et al., 2007)

They executed the survey about which model is popularly used in 341 SMEs in European region. The result shows that the stage model is generally adopted by SMEs and the usage of the contingent model is rare. In the Figure 1, we can see the situation of stage model adoption in Pomeranian SMEs.

Figure 1. The adoption of a stage model by Pomeranian SMEs (Wrycza et al., 2007)

However, the survey also indicates that there is awareness of using the contingent model with technology parks, which bring the innovative e-business concepts, as the central figure.

The stage model in this article clearly classifies the level of e-business maturity into five stages from internet access to digital ecosystems. It will provide a future roadmap of e-business development to SMEs which do not especially have theoretical or technical expertise in e-business. For IS/IT mangers and senior management, even though they do not have expertise related to e-business, they can easily understand this simple model and have a blueprint for the future (Parnanto et al., 2003). Moreover, Figure 1 indirectly shows that the e-business adoption of SMEs follows the ladder shaped (staged) model.

However, this stage model is oversimplified. Target audiences, such as IT managers, CIO and CEO, can not know in detail when they are able to move to the next stage, which conditions should be satisfied to go forward and which barriers they might face in their movement. Mehrtens et al (2001) stresses that there are three important factors, which can influence SMEs' decision making in internet adoption, including "perceived benefits", "organisational readiness" and "external pressures". When companies are aware of current benefits from their internet technology (e-mail, information searching), potential benefits from advanced technology (buying or selling online, business processes integration), and pressures from