Msc. International Business and Management
Msc. thesis
Groningen,
06-12-2011
MODELING THE DEVELOPMENT AND
IMPLEMENTATION OF B2B E-COMMERCE
A multiple case study
University supervisor:
Dr. I. Kalinic
2nd University supervisor:
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ABSTRACT
The present research contributes to the recent literature on B2B e-commerce and investigates how organizations implement B2B e-commerce as part of their business model. Furthermore, the organizational elements technology, structure, people and process are used to create a model that global organizations can use for B2B e-commerce development and implementation. This was developed by combining the outcomes of earlier literature with the empirical evidence from three global organizations (multiple case-studies). As a result, firstly risk turned out to be an unnoticed important element. Secondly, B2B e-commerce is seen as a globalized product and finally, B2B e-commerce cannot exist as an isolated business model or structure.
Keywords: B2B e-commerce, B2B e-commerce culture, B2B e-commerce entry strategy,
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ACKNOWLEDGEMENTS
‘’If I have seen further it is by standing on the shoulders of giants’’
(Letter from Isaac Newton to Robert Hooke, 5 February 1676, as transcribed in Jean-Pierre Maury (1992) Newton: Understanding the Cosmos, New Horizons)
This thesis is not only the conclusive part of my study International Business and
Management, but also marks the end of my life as a student at the University of Groningen
and the internship within Power-Packer Europa. The five years in Groningen have personally and academically been a steep learning curve and I will look with great memories back at this unforgettable time.
On behalf of Power-Packer Europa I studied the field of B2B e-commerce and developed an academic model that enables B2B organizations to successfully develop and implement e-commerce into their existing business model. Furthermore, I feel that the combination of doing and internship and studying was a perfect addition to my studies since it contributed to a larger skill - and mindset for international business.
The realization of this thesis would not have been possible without the help of many people I would like to thank. First of all, special thanks go to my first university supervisor dr. Igor Kalinic and my second supervisor dr. Marjolein van Offenbeek for reviewing and providing extensive comments on this thesis. Additionally, I would like to thank my supervisors at Power-Packer Europa; Nico Hofte and Gert Boers, for their guidance, time and support.
Finally, I would like to thank my family, friends and colleagues for their infinite support and motivating speeches throughout this process. Special thanks go to my father, who passed away during my studies, for his everlasting support, motivation and making me the person who I am today.
I look with great satisfaction back on my study and internship. Moreover, with great motivation and confidence I am looking forward to the next step in my life.
Mark Meijerink
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ABSTRACT ... II ACKNOWLEDGEMENTS ... III LIST OF FIGURES, TABLES AND APPENDICES ... VI
1. INTRODUCTION ... 1
2. LITERATURE REVIEW ... 3
2.1. E-commerce... 3
2.2 B2B E-commerce ... 4
2.2.1 Disruptive technology ... 5
2.2.2 Web 2.0 and Social networking ... 6
2.2.3 B2B e-commerce marketplaces ... 7
2.2.4 Implementation of B2B E-commerce ... 9
2.2.5 Risk ... 10
2.3 E-commerce strategy ... 10
2.4 Culture and E-commerce ... 15
2.5 New Market Entry strategies ... 16
2.6 Change management ... 18
2.7 Literature gap and objective ... 21
3. METHOD ... 23
3.1 Type of research ... 23
3.2 Data Collection ... 24
3.2.1 Sample ... 24
3.2.2 Data from interviews ... 25
3.2.3 Data from documents and records ... 25
V 4.2 Enerpac ... 36 4.2.1 Technology ... 37 4.2.2 People ... 38 4.2.3 Structure ... 38 4.2.4 Implementation ... 40 4.2.5 Conclusion ... 41 4.3 Del City ... 44 4.3.1 Technology ... 44 4.3.2 People ... 45 4.3.3 Structure ... 46 4.3.4 Implementation ... 47 4.3.5 Conclusion ... 47
5. ANALYSIS AND DISCUSSION ... 50
5.1 Cross-case analysis ... 50 5.1.1 Structure ... 52 5.1.2. People ... 52 5.1.3 Technology ... 53 5.1.4 Process ... 54 5.1.5 Implementation ... 54 5.2. Discussion ... 56 5.2.1 Discussion on phase 1 ... 57 5.2.2 Discussion on Phase 2 ... 57 5.2.2.1 Structure ... 57 5.2.2.2 People ... 58 5.2.2.3 Technology ... 59 5.2.2.4 Risk ... 59 5.2.3 Discussion on phase 3 ... 60 6. CONCLUSION ... 61 6.1 Managerial implications ... 63
6.2 Limitations and suggestions for further research ... 66
7. REFERENCES ... 67
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LIST OF FIGURES, TABLES AND APPENDICES List of figures
Figure 1. Dimensions of e-commerce ... 4
Figure 2. The generations of B2B e-commerce ... 6
Figure 3. Types of e-commerce ... 7
Figure 4. Antecedents and consequences for B2B e-commerce success ... 9
Figure 5. Three level B2B e-commerce assurance model ... 10
Figure 6. Antecedents and drivers of export venture marketing strategy ... 11
Figure 7. Developing an e-commerce strategy ... 14
Figure 8. Optimal entry strategies ... 17
Figure 9. Innovation process model ... 19
Figure 10. General-commerce model ... 20
Figure 11. Evolution of an e-commerce model ... 21
Figure 12. Communication by questioning ... 25
Figure 13. Stage gate model for B2B e-commerce implementation. ... 32
Figure 14. IT structure for the e-commerce platform of Enerpac ... 37
Figure 15. Amount of dollars processed in 2011 in the Enerpac Website ... 41
Figure 16. Prescriptive model on B2B e-commerce development and implementation ... 51
Figure 17. Three phases for discussion of the prescriptive B2B e-commerce model ... 56
List of tables Table 1. Advantages of B2B e-commerce for buyers, sellers or both... 8
Table 2. Classification of B2B e-commerce models based on trading mechanisms and ownership ... 12
Table 3. Entry strategy advantages and disadvantages ... 18
Table 4. Summary of issues and success factors for Powergear ... 35
Table 5. Options within the Enerpac e-commerce website ... 36
Table 6. Summary of issues and success factors for Enerpac ... 43
VII
List of appendices
Appendix A – Step by Step research process ... 71
Appendix B - Data collection process ... 72
Appendix C - Questions for guiding the interviews ... 73
Appendix D - Del City marketing model ... 74
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1. INTRODUCTION
Nowadays, the importance and dependence of the internet is rapidly increasing in people’s lives. Additionally, all kinds of products can be bought online and, from a business perspective, having a web shop is becoming more a necessity rather than an additional service. Therefore, e-commerce is a booming business with a rapidly changing environment and companies constantly need to adjust their strategies. However, there is large difference between Business to Consumer (B2C) and Business to Business (B2B). Whereas B2C e-commerce is a fast growing environment with high customer adoption rates B2B e-e-commerce is considered more conservative due to fears for failure and the lack of information on implementation and adjustment.
According to the literature there are multiple forms of B2B e-commerce (Whinston, Stahl & Choi, 1997) that can be applied, depending on the type of organization. Additionally, Turban, King, Lee, Liang and Turban (2010) discuss the importance of B2B e-commerce and, in accordance with Chang, Easley and Shaw (2009), state that different B2B marketplaces are available. However, the literature mentions that there are several factors like risk (Kazanchi & Sutton, 2001), type of e-commerce (Turban et al., 2010), IT structure (Epstein, 2004), internal drivers (Gregory, Karavadic & Zou, 2007) and market entry strategy (Roberts & Berry, 1985) that play an influential role in the development for successful B2B e-commerce. Nonetheless, the level of importance and how to combine these factors has not been analyzed in depth.
Ekeledo and Sivakumar (2004) report that there is an overload of literature available on B2B e-commerce that can be considered outdated. Therefore, due to fast changes in the environment constant research and reconsiderations are necessary. Additionally, Zhou and Muller (2003) mention that each organization is unique and should develop their own model that is adjusted to their own needs and level of innovation they want to implement.
Hence, the objective of this research is to identify key variables for B2B e-commerce development and implementation within the elements technology, people, structure and process. Additionally, a model for organizations that want to implement B2B e-commerce is developed.
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Thirdly, a risk analysis is perceived as an essential key element for the implementation process of B2B e-commerce. And finally, the importance of culture in B2B is decreasing since it is perceived more and more as a globalized product.
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2. LITERATURE REVIEW
2.1. E-commerce
Before the dotcom bubble the big money was expected to be in the field of e-commerce. 1000 to 1500 companies were set up and waiting to enter this new booming market. Apparently, the expectations were not met and the field of B2B e-commerce appeared to be more complicated than originally thought off (The Economist, 2004). Several years later the business is growing fast and a research of the IAB Online Ad spend study (2010) is stating that digital advertisement is growing rapidly and e-commerce is heading towards a takeover of the traditional ways of doing business. In order to keep up with recent developments companies should invest in their e-commerce possibilities what is inherent to an increase in sales and market share.
E-commerce is defined by Chaffey (2009) as all electronically mediated information exchanges between an organization and its external stakeholders. In addition, it is aimed at enhancing the competitiveness of an organization by deploying innovative information and communications technology throughout an organization. Furthermore, Turban, King, Lee, Liang and Turban (2010) refer to business and commerce as separate definitions where e-commerce is defined as the process of buying, selling, or exchanging products, services or information via computer. Furthermore, business is seen as a broader definition of e-commerce that includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organization.
Furthermore, Whinston, Stahl and Choi (1997) mention the availability of different types of e-commerce organizations as displayed in figure 1. These organizations can be defined as brick-and-mortar, click and mortar and virtual whereas brick and mortar organizations are doing purely physical business and virtual organizations are purely driven on e-commerce.
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2.2 B2B E-commerce
As mentioned, the field of e-commerce is expanding rapidly and different segments of e-commerce can be considered. Therefore, in order to do a better research the scope of this thesis will be narrowed down to B2B e-commerce.
According to Turban et al. (2010) B2B commerce is considered a different field of e-commerce since it has special characteristics, models, components and concepts. Therefore, it is defined as transactions between businesses conducted electronically over the internet, extranets, intranets or private networks (Turban et al. 2010).
Furthermore, Pine and Gilmore (1998) argue that the competition for market share shifts from quality of services towards a creation of memorable experiences. Therefore the competitive position of a company depends to a large extend on its ability to generate impressive experiences through innovative delivery channels as argued by Lindgreen, Vanhamme and Beverland (2009). A current fast developing technology like internet is seen as an enabler of these unique experiences. In the next section the most important elements of B2B e-commerce will be described and explained.
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2.2.1 Disruptive technology
As mentioned, in the 90s the internet was about to change the traditional ways of doing business since new ‘’online’’ possibilities arose. Therefore, e-commerce is more than just another way of enhancing existing business practices but it is rather a paradigm shift, a disruptive innovation that has changed the traditional way of business. (Lee, 2001)
However, In 2000-2002 the field of B2B e-commerce went through major consolidation but experts predict that the global B2B market will reach 15 trillion dollar by the end of 2012. (Turban et al. 2010) In addition to that, they mention that approximately 10 to 15 % will be online sales in all types of industries and business areas. This implies that e-commerce is becoming a commodity which cannot be ignored anymore. Therefore, more and more organizations are trying to discover how e-commerce can be of help in their growth and innovation strategy.
Nevertheless, according to Charitou and Markides (2003) the field of B2B e-commerce is not easy to enter successfully and depends for a large amount on how companies react. They determine five possible responses, to new disruptive technologies, that should be considered and adopted:
1. Focus and invest in the traditional business 2. Ignore the innovation – not part of the business 3. Attack back , disrupt the disruption
4. Adopt the innovation by playing both games at once 5. Embrace the innovation completely and scale it up
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2.2.2 Web 2.0 and Social networking
Currently half of the internet users is using social media interfaces like Facebook ,LinkedIn and Twitter. Additionally there is a substantial number of companies that use social networking in the B2C field (Forrester, 2007). On the contrary, in B2B this is not as common, however, applications that offer business potential are added daily.
Social media gives organizations the possibility to expose the brand voluntarily and the biggest advantage is that consumers take the role of marketers and commercialize goods and services. Obviously, this can be done in a positive as well as a negative way. Therefore, De Geyter, (2008) mentions that building a social reputation online is of high importance and if positive, it will create brand awareness and a larger customer base. However, using B2B social networking should depend on, and be in line with, the organizational goals, strategy and risk (Turban et al. 2010). Moreover, social networking is especially a helpful tool when entering new markets due to the fact that a large number of people can be reached in a short amount of time. However as mentioned before, a separate e-commerce strategy is in this case indispensable. In order to develop the proper strategy it should be defined how the future marketplace will look like. Therefore, different market places are discussed underneath.
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2.2.3 B2B e-commerce marketplaces
In B2B e-commerce most innovations come from new marketplaces and services. This is due to the fact that these are considered to increase price competition and reduce seller monopoly power (Bakos, 1997). Moreover, it results in more demanding customers who are less willing to compromise on their preferred product. Turban et. al (2010) mentions four basic types of B2B e-commerce as displayed and explained in figure 3.
- One-to-Many and Many-to-one: Private E-marketplaces:
In this type of marketplace one company does either do all of the selling (sell-side market) or all of the buying (buy-(sell-side market). This type of e-commerce is referred to as company-centric e-commerce
- Many-to-Many: Exchanges:
In this e-marketplace there are many buyers and sellers that meet electronically for the purpose of trading with one another. These are often called exchanges or trading communities.
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- Supply chain improvers and collaborative commerce:
This is not a true marketplace as has been mentioned in the a foregone examples. E-commerce can also be used as a purpose beyond just selling or buying. Collaborative commerce is an example where communication, design, and planning information is shared.
Furthermore, having chosen the proper marketplace is one of the most important things to consider when entering B2B e-commerce since the true benefits will arise most of the time as a result of tight collaboration with trading partners (Cooper & Slagmulder, 2003, Lee et al. 2001). Other major B2B e-commerce benefits are listed by Turban et al. (2010) in table 1.
Table 1. Advantages of B2B e-commerce for buyers, sellers or both (Source: Turban et al 2010).
Nevertheless, it should be taken into account that benefits will only arise when the proposed strategy is proper implemented and executed.
Creates new sales (purchase) opportunities
Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time
Lower search costs and time for buyers to find products and vendors Increases productivity of employees dealing with buying and/or selling Reduces errors and improves quality of services
Makes product configuration easier Reduces marketing and sales costs Reduces inventory levels and costs
Enables customized online catalogs with different prizes for different customers Increases production flexibility, permitting just-in-time delivery
Reduces procurement costs
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2.2.4 Implementation of B2B E-commerce
As stated before, the implementation of an e-commerce strategy should not be underestimated. As Chaffey (2009) mentions, implementing e-commerce is a new type of business from where companies should be internally and externally prepared. For example, in foreign market entry strategy there are several boundaries to e-commerce strategies that should especially be taken into consideration (Jackson, Harris & Eckerley, 2003). However, e-commerce possibilities can arise and might be profitable if the proper technology and processes are in place (Amor, 2002).
Furthermore, globalization and e-commerce are the largest drivers for growth (Wei-lun, Yuan & Hsu, 2010; Gregory, Karavdic & Zou, 2008). Therefore, Gregory et al. (2008) investigated the implications for the marketing export strategy concerning the emergence of e-commerce technologies. They conclude that internal E-e-commerce drivers are positively related to greater distribution and price competitiveness. However, it should be noted that the implementation of e-commerce strategies is part of a change management procedure whereas internal and external company processes are subject to change that should therefore be guided properly (Mahadevan, 2003).
Considering all arguments mentioned above, the model developed by Epstein (2004) as shown in figure 4 gives a good and clear summary on the antecedents and consequences of e-commerce success. As can be seen, for a successful implementation of e-commerce Epstein (2004) considers leadership, strategy, structure and systems as critical success factors.
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Nevertheless, opportunities for B2B e-commerce are widely discussed but there are also critical risk factors that influence the road to success as described in figure 5. This will be more clarified in the next section.
2.2.5 Risk
Although the positive outlooks for B2B e-commerce, the majority of large organizations is requesting a risk analysis before entering new markets through e-commerce. However, in the recent literature there is not much information available on risk factors for B2B e-commerce. Therefore, Sutton, Khazanchi, Hampton and Arnold (2008) focus in their study on the critical risk factors that can be used to assess the impact on overall enterprise risk of B2B e-commerce.
Furthermore, Kazanchi and Sutton (2001) propose an assurance services model based on three levels of perceived B2B risk. As you can see in figure 5, these are technical level risk, application-user level risks, and business level risks. Furthermore, they prove that these three risk factors are interrelated and positively related to each other.
To conclude ,it can be said that perceived risk should be part of the route to success.
Especially concerning technology, people, structure, process risk is noted in all variables, this diminishes the perceived profitability and implementation success.
2.3 E-commerce strategy
In order to solve entrepreneurial, engineering and administrative problems every organization has its own unique strategy for their chosen markets (Miles & Snow 1977). Additionally, as Terpstra and Sarathy (2000) already mentioned, the success of entering foreign markets starts with choosing the appropriate strategy. This should especially be considered when entering through e-commerce since Folkwein (2011) mentions that in the field of e-commerce the development of the business model is the most powerful factor.
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In the case of entering a market through e-commerce it is most likely that besides the new market the technology is also considered a new challenge. This process of innovation implementation might have large scale organizational implications if the proper strategy is lacking (Roberts & Berry, 1985). Therefore, the research from Gregory et al. (2007) presents a framework on the direct and moderating effects of commerce drivers for exporting the e-commerce marketing strategy (figure 6). This model suggests that several determinants should be assessed and in place in order to pursue a successful global e-commerce strategy.
Amongst the determinants are commerce drivers which are the key to global e-commerce success (Folkwein, 2009). However with today’s fast developing computer and communication technologies this is not easy to determine. Nevertheless, it opens up new marketing methods and strategies.
In addition, Ekeledo and Sivakumar (2004) investigated the impact of e-commerce on entry mode strategies for service firms and argue that a lot of marketing models and concepts lack the impact of digitization and argue that more research is desirable in order to determine which marketing ideas are still valid and which ones are in need for an update. Therefore, as
Figure 6. Antecedents and drivers of export venture marketing strategy
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argued by Folkwein (2011) and Epstein (2004), a good IT strategy is a key success factor whereby the following considerations should be made:
• Finding the right IT-strategy starts with being able to find innovative and risk-taking strategies to address customer needs.
• In order to stay ahead of the competitors regular IT investment is necessary.
• Develop and maintain IT policies throughout the organization to prevent IT solutions that do not fit the corporate strategy.
• Pursue an IT strategy that fits your audience and market.
Furthermore, finding the right strategy also has to do with the perceived success and effectiveness what is measured by cost reduction or profit gain. Therefore, from a customer’s point of view the research conducted by Chang, et al. (2009) state that if organizations want to exploit the cost-advantages out of B2B E-commerce they face a variety of strategic options. The two most stressed issues are in line with the article of Roberts & Berry (1985). These are firstly, how does a buyer select a suitable B2B E-commerce channel, and secondly, how does a buyer manage a B2B E-commerce channel for gaining the highest transaction level buyer-surplus?
Additionally, concerning these questions, Mahadevan (2003) pointed out that if companies want to benefit the most from e-commerce a market structure choice should be part of the strategy. The most updated channel structures are mentioned by Chang et al. (2009). They propose a framework with channel structures that are available in the B2B e-commerce market (table 2). However, they stress that the buyer is in this case the leading factor for the decision. Therefore, customer research and commitment is necessary to determine the proper marketplace. Underneath the marketplaces suggested by Chang et al. (2009) are defined and explained.
Table 2. Classification of B2B e-commerce models based on trading mechanisms and ownership
(Source: Chang et al. 2009)
Trading Mechanisms/ Market
ownership Company owned e-hub Independent e-hub
Fixed price WP: Web-based Procurement AG: Aggregation Model
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Chang et al. (2009) define the four market structures as follows:
1. PE Market: this is a system that is owned and operated by a single company, which invites suppliers to log and compete in reverse auctions. It can combine integration and process management, web service connectivity, and document standardization into a single trading interface; however it faces challenges in attracting and integrating suppliers.
2. WP Market: Creates direct computer links to a company’s dedicated suppliers so that order forms and catalogs are readily accessible online, enabling discounting through aggregation, reducing transaction costs, and facilitating control. Web models can be operated by major suppliers or major buyers
3. AG Market: This market involves the intermediation of transactions between suppliers
and buyers and provides related services such as sourcing, fulfillment, inspection, financing, or shipping. It may consolidate catalogs from a diverse set of suppliers. Furthermore, it may aggregate demand for many buyers.
4. EX Market: This is operated by independent companies and provides a virtual place
where buyers and sellers come together to negotiate prices on a dynamic and real-time basis. The focus is on providing communication tools as well as price discovery and match mechanisms for its customers; however, in this model the buyers and sellers undertake most of the work, cost, and risk.
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Figure 7. Developing an e-commerce strategy (Epstein,2004)
Considering everything that has been said above there are several strategies possible and as said before, every organization should adapt to a unique strategy (Miles & Snow, 1977). However, the book of Epstein (2004) intensively describes several E-commerce strategies and stresses explicitly that companies with specific structures and strategies should follow a certain path to assess the critical elements of an e-commerce strategy (Epstein, 2004). Nevertheless, a successful e-commerce strategy must include considerations of a company’s traditional business strategy.
Figure 7 displays how a B2B e-commerce strategy should be developed. In addition, while developing the proper e-commerce strategy the following key success factors should be taken into consideration. (Epstein, 2004)
1. It does not matter if there will be chosen for full integration, partial corporate integration or business unit integration. All types of integration have their up and downsides. However, it should fit the business and the strategy.
2. Multi-channel coordination is not only a key success factor in formulating and implementing an e-commerce strategy, but also in integration throughout company operations.
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4. The biggest advantages of e-commerce are the amount of available products that can be displayed and at the same time meeting particular customer needs through customization and personalization.
5. Even if customer service is not a core component of a company’s overall strategy, when doing business through e-commerce, special customer service attention is definitely a key success factor.
6. In order to gain a competitive advantage a proper balance between commoditized solutions and unique use of e-commerce technologies should be found.
As can be seen, lots of considerations should be made for the development of a B2B e-commerce strategy. However, there are also aspects where no attention has been paid to. For example, especially in the recent global business environment, culture is a variable that is playing an important role in strategy development. Nevertheless, is has not been taken into consideration in recent B2B e-commerce models.
2.4 Culture and E-commerce
In international business, culture has always been playing an important role. In this field the dimensions of Hofstede (1980) and Hall’s (1981) proposal on high versus low contextcultures are still important and widely used. Applying this to e-commerce Kabasakal, Asugman & Develioglu (2006) found that there is a positive relationship between e-communication and ‘’low context’’ individuals. Furthermore, it is proven that the higher the level of internationalization the more likely a company is building on an e-commerce technology.
According to Evans, Mavondo and Bridson (2008) physic distance in terms of culture and business are of high importance and several authors stress the importance of trust and satisfaction in e-commerce (Cyr, 2008; Conoloy & Bannister, 2007; Liao, Proctor & Salvendy, 2008; Kim & Benbasat, 2010; Gefen, 2000). In addition, Connolly & Bannister (2007) and Gefen and Heart, (2006) confirm in their research that trust beliefs and cultural factors are closely related. This implies that there is a correlation between e-commerce and culture that is in need for investigation.
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In addition, the research done by Liao et al. (2008) confirms the cultural differences in international commerce and proves there are different customer preferences regarding e-commerce websites that should be taken into consideration. As an extension this thesis can conclude out of the above mentioned that it does not matter if B2C or B2B e-commerce is addressed. In both cases it is important to approach the customer physically and electronically in an appropriate way.
Furthermore, what need to be considered is that according to market information Europe and the US are the countries with the highest level of e-commerce transactions (Cornet, Milcent & Roussel, 2000). Although these two tend to be more or less the same, Europe is likely to follow a different pattern in the development of e-commerce. This is described by Cornet et al. (2000) in threefold. Firstly, the technological and cultural infrastructures are much more heterogeneous in Europe than in the US. Secondly, European players had the possibility to see what went wrong in the US and finally, since Europe was entering the e-commerce market at a later point in time they richly benefited from better techniques. Moreover, Singh, Jayashankar and Singh (2001) argue that the US is by far the leading continent on e-commerce due to the treatment of cultural differences, different business environments and different economic environments. This statement is supported by the US research of Fomin et al. (2005) in which they conclude that significant differences in e-commerce attitudes and experience between Europe and the US are a result of cultural differences.
2.5 New Market Entry strategies
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Furthermore, Evans, Mavondo, and Bridson (2008) finds that centralization and international experience are of influence to the choice on which entry strategy would be most appropriate. Concerning the choice of entry mode Ekeledo & Sivakumar (2004) proof that the level of control a firm desires determines the entry mode. Therefore, it can be argued that more centralized organizations prefer entry strategies that provide a high level of control for the global headquarters. However, on the contrary, Osland, Taylor, and Zou (2001) found that international experience is of no influence on the entry strategy mode.
Concerning the different types of entry strategies it is proven that the type of entry strategy is positively related to the strategic effectiveness (Brouthers, 2003; Evans et al.,2008). Several new business entry strategies are discussed by Roberts and Berry (1985) and these can be seen in table 3 as are their main advantages and disadvantages. In addition, they developed a 9-square scientifically proved matrix where they propose optimal entry strategies for new business development alongside market factors and technology or service familiarity (figure 8).
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New Business Development Mechanisms
Major Advantages Major Disadvantages
Internal
Developments - Use existing resources - Time log to break even tends to be long (on average eight years) - Unfamiliarity with new markets may lead to errors
Acquisitions - Rapid market entry - New business area may be unfamiliar to parent
Licensing - Rapid access to proven technology - Reduced financial exposure
-Not a substitute for internal technical competence -Not proprietary technology -Dependent upon licensor Internal Ventures - Use existing resources
- May enable a company to hold a talented entrepreneur
- Mixed record of success - Corporation’s internal climate often unsuitable
Joint Ventures or
Alliances - Technological/marketing unions can exploit small/large company synergies
- Distribute risk
- Potential for conflict between partners
Venture Capital and
Nurturing - Can provide window on new technology or market - Unlikely alone to be a major stimulus of corporate growth Educational
Acquisitions - Provide window and initial staff - Higher initial financial commitment then venture capital - Risk of departure of entrepeneurs
Table 3. Entry strategy advantages and disadvantages (Source: Roberts and berry, 1985)
2.6 Change management
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According to Melymuka (2000) high failure rates for e-commerce implementation starts with the problem that there is no clear base for e-commerce in the corporate structure. As a result, key managers are most of the time left alone for the identification of the e-commerce strategy and implementation. Additionally, Melymuka (2000) and Davis, Siau and Dhenuvakonda (2003) acknowledge that a specific skill set is necessary for e-commerce change management procedures. However, this is often been underestimated and it is hard to find the right people for the job. Especially when taking into consideration that there is a knowledge gap between employees that have a considerable amount of experience and employees who developed a skill set to facilitate change management procedures throughout an organization (Davis et al. 2003). According to Kabasakal, et al. (2006) and Melymuka (2000) change management is changing the people within the organization and stress that organizational as well as country culture are key factors in this process.
In addition, change management procedures often find resistance and ignorance. According to Davis et al. (2003) one of the main reasons is that the rapid growth of e-commerce causes a surprise effect to professionals and academic institutions. This makes them unable to respond with feasible strategies and programs.
Nevertheless, if disruptive technologies like e-commerce are accepted it is the internal organization that should manage the innovation process. Therefore, Tidd, Bessant and Pavitt (2005) created a simplified model on how to manage the innovation process (Figure 9).
However, according to Tidd et al. (2005) factors like company size, context (national, regional, local), and the system the organization is part of make that they cope differently with the innovation process.
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Finally, taking e-commerce and change management into account Zhou and Muller (2003) suggests that the organizational framework for e-commerce consists out of digital transformation, or in other words, digitalizing the business processes of a firm internally as well as externally. However, Zhou and Muller (2003) acknowledge there are a lot of limitations of the generalized e-commerce model (Figure 10) and therefore conclude that companies should design their own model which is in line with company and market characteristics. To conclude, they developed a process on the evolution of an organizational e-commerce model (figure 11).
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2.7 Literature gap and objective
Considering the literature review as described above it can be seen that plenty of information is available on e-commerce strategies, methods, and models. However, it has also been noted that the field of e-commerce is developing fast and new technologies and applications are added daily (Turban et al, 2010). Therefore, academics and global businesses are in need for new and up-to-date reconsiderations of the existent theories.
In the existing literature an up to date and well founded model that combines B2B e-commerce variables as mentioned above cannot be found. Concerning the literature review there are four models this research uses to analyze the cases and develop conclusions for B2B e-commerce development and implementation. Firstly, figure 4 developed by Epstein (2004) is describing antecedents and consequences in order to explain B2B e-commerce success. This model holds that there is a certain input of elements that will lead to corporate profitability. This study focuses on the key variables within these elements and investigates the influence on success if the input is changing. Secondly, as is shown in figure 5, the model of Khazanchi and Sutton (2001) is explaining that risk is an important element or variable that is in need for more research. Therefore, this study investigates if risk is perceived as an important element or key variable for B2B e-commerce development and implementation. Thirdly, figure 6 adapted from the research of Gregory et al. (2007) also describe certain elements as inputs. However, it adds that there should be several drivers for e-commerce in place in order to successfully implement a global B2B e-commerce strategy. This study finds if these e-commerce drivers are also seen as key variables in the globalization process of the B2B e-commerce projects within the investigated organizations. Finally, as Tidd, (2005) is explaining, the development and implementation of B2B e-commerce is an innovation
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process (Figure 9). This study investigates how is dealt with this innovation process and if there are key variables that are of influence on this process.
Due to the fast changing environment and short life expectancy of B2B e-commerce models the objective of this thesis is to identify key variables for B2B e-commerce development and implementation within the elements technology, people, process and structure. Additionally, a model for organizations that want to implement B2B e-commerce is developed. The model ranks the elements to its importance and discusses the proper sequence in which they should be addressed.
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3. METHOD
In order to develop a model for the implementation and development of B2B e-commerce a multiple case study within three global organizations has been done. The companies that have been selected implemented B2B e-commerce as part of their business model and by analyzing the process, implementation and their success, this study identifies key variables that are translated in a model that B2B organizations can use for development and implementation of B2B e-commerce. Below are the type of research, data collection process and sample described. Finally, an introduction to the cases is given. In appendix A, a step by step graphical representation of the research process is given.
3.1 Type of research
The purpose of this study is to extend and update the recent literature with new insights and reconsiderations gained from practical examples. Therefore, as mentioned by Thomas (2004) an explanatory case study would be the appropriate method. Hence, this research is structured according to the triptych definition on explanatory case study research of Yin (1981):
1. An accurate rendition of the facts of the case is given.
2. Some considerations of alternative explanations of these facts are made
3. Finally, a conclusion will be given based on the single explanation that appears most congruent with the facts.
According to Eisenhardt and Graebner (2007) case study research is a suitable method for this study since cases are the basis from where to develop theory inductively and according to March et al. (1991) external lessons can already be learned from one case study. Furthermore, a case study is desired when studying one or a small number of instances (Thomas 2004) and Eisenhardt and Graebner (2007) mention that papers that build theory from cases are often regarded as ‘’highly interesting’’ research and are therefore also the most cited pieces in the Academy of Management Journal.
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3.2 Data Collection
In order to draw reliable conclusions and inductively build new theory on B2B e-commerce development and implementation this study is done by means of a multiple case study from where qualitative data is gathered out of primary and secondary sources. The objective of this study is to identify key variables for B2B e-commerce development and implementation, the primary data source (Eisenhardt, 1989) is qualitative data from semi-structured interviews held with B2B e-commerce managers and experts.
In addition, to ensure the replication logic for theory building as mentioned by Eisenhardt, (1989) this case study research treated each case as a distinct experiment that stands on its own as an analytical unit (Eisenhardt and Graebner, 2007). Therefore, the same data collection process throughout the case studies was used. A graphical representation of this process can be seen in Appendix B. Finally, after this process general conclusions are drawn and the objective, as stated in the introduction, met.
3.2.1 Sample
In recent literature the number of case studies within one research study is widely discussed (Eisenhardt & Graebner, 2007 ; Thomas, 2004). Since this study develops a model for all kinds of B2B organizations there is chosen to conduct a multiple case study amongst several companies within different industries and with different characteristics.
In line with Thomas (2004), Yin (1994) state that multiple case studies typically provide a stronger base for theory building and as argued by Eisenhardt, (1991) using multiple case studies gives a better clarification on whether the findings are idiosyncratic or consistently replicated throughout several cases.
For this study, the selected sample consists out of three businesses that are part of Actuant Corporation which is based in Menomonee Falls, Wisconsin. Actuant Corporation is a diversified industrial company with an annual turnover of $1.5 billion across 30 countries. Furthermore, Actuant has 31 businesses and is a market leader in several niche markets like hydraulic and electrical tools; specialized products and services for energy related industries and highly engineered position and motion control systems. The reason for choosing Actuant lies in the fact that they are a specific B2B corporation that is involved in all kinds of B2B interactions and has multiple businesses that implemented B2B E-commerce.
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Europe and the US have been interviewed. In the next section a more detailed description of the data collection process is given.
3.2.2 Data from interviews
As mentioned above, this study uses interviews as the main data collection method. In order to obtain the proper information from the interviewees the interviewer uses the constructionist model mentioned by Thomas (2004). This method holds that both questions and answers are open for interpretation and that the question-answer sequence is a way of exchanging meanings. This process is described in figure 12. The reason for this interview method is twofold. Firstly, this research investigates multiple case studies from where the interviewer wants to know in detail how B2B e-commerce is developed and implemented. Since there is no prescribed path and it is likely that the cases differ considerably there should be room for interpretation for both the interviewer and the interviewee. Secondly, the interviews are conducted through video conference calls and according to Meijerink (2010) this is not the optimal method of interviewing through a stimulus response model (Thomas, 2004) because this might diminish the quality of the information. The questions asked to the interviewees can be seen in Appendix C.
3.2.3 Data from documents and records
Besides the qualitative data that results from the interviews with B2B e-commerce experts and managers this study also uses secondary data gathered from the case companies. Amongst these are Word documents and PowerPoint presentations that are available for internal use within the organizations. The documents describe processes and ideas on the
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implementation of B2B e-commerce strategies and are therefore considered a high value resource (Thomas, 2004). As acknowledged by Thomas (2004), these are not influenced by the researcher and since it are internal company documents actually used for the development and implementation of B2B e-commerce they can be considered reliable.
3.3 Case Selection
As mentioned, this study was done by means of a multiple case study amongst three businesses within Actuant Corporation. Concerning the case selection, the selected companies have a global presence and sales force in order to research the global influence and applicability of the developed model. Furthermore, all organizations implemented a large scale B2B e-commerce business model into their existing business practices.
As a result, the companies Powergear, Enerpac and Del City were selected. Additionally, these specific companies were selected because they have different types of customers and needs. Due to this selection it was possible to research the development and implementation of B2B e-commerce on a wide and large scale level. Underneath, more information on the selected companies is given, together with a small introduction on their B2B e-commerce project.
3.3.1 Powergear
Power Gear is a global market leading supplier of customized engineered solutions specialized in fluid power and mechanical and electro-mechanical actuation systems. They serve OEM and aftermarket customers in the recreational vehicle (RV) industry and have special distribution partners that sell their products in Europe, Australia, and Asia.
Concerning their e-commerce opportunity, they added online purchase availability as part of their service. To realize this initiative and make the project as easy as possible Powergear made use of the expertise and distribution channels of a sister company. Furthermore, they developed a process model on how to market their products and services online.
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3.3.2 Enerpac
Enerpac is a global industrial leader in high-force tools and equipment. They operate from 28 facilities in 22 countries and have over 1000 employees. Additionally, their products are distributed globally through 1200 distributor partners with catalogs that are available in 19 languages. Their tools and equipment are sold in all industrial segments and range from small cylinders to computer controlled systems for lifting huge products. Examples of their recent activities are lifting the Golden Gate Bridge in the USA, Launching the Milau Viaduct in France, and raising the roof of the Bird’s Nest stadium in Beijing.
Concerning e-commerce, Enerpac recently build a global web portal for their customers to let them order and track their products. Furthermore, they reorganized the internal organization in order to let this platform function throughout the whole organization.
Eileen Scharenborch is the global marketing and communications manager for Enerpac worldwide and she is able to provide lots of information due to her position as the project manager for the global e-commerce project.
3.3.3 Del City
Del City is a US based direct marketer of electric wiring products and is headquartered in Milwaukee. Additionally, they have two warehouse distribution centers located in Charlotte and Sparks in the United States. In 1998 they got acquired by Actuant and they serve the OEM as well as end user businesses. Their main competencies can be considered order flexibility and fast service. They sell their products mainly through internet however; phone and fax sales are not excluded yet.
Concluding, they can be considered a pure e-commerce company (Turban et al. 2010) since their main strategy is based on gaining revenue through B2B e-commerce. Moreover, due to all the variables mentioned above Del City is regarded as the e-commerce specialist within Actuant.
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3.4 Data analysis
For the analysis of the qualitative data gathered through documents and interviews the focus point of the analysis is on the four organizational elements technology, structure, people and process. Additionally, these variables form the basis of the developed model on B2B e-commerce development and implementation.
In qualitative research there is no pre determined route to follow for the analysis of the data (Thomas, 2004). Due to the high diversity of data in this research, interpretation is more important rather than calculation. Nevertheless, in accordance with the data collection process the analysis is systematically done in the sequence of the elements technology, people, process and structure. As a result, relevant and valid conclusions throughout the cases can be drawn (Thomas, 2004).
The starting point of the analysis is the background information of the organization which is gathered at the initial contact and open sources like the internet. Subsequently, this information is analyzed, summarized and categorized before conducting the interviews in order to establish a proper interview structure. As a result, more in depth information during the interviews is collected.
Furthermore, since the objective is to develop a model for the development and implementation of B2B e-commerce Yin’s (1984) method of pattern-matching for case analysis is used. This entails that this research is comparing the patterns found in the data with theoretical predictions. Furthermore, this research will make use of within case analysis and cross-case analysis before drawing general conclusions (Eisenhardt & Graebner, 2007).
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4. CASE STUDIES
In this section an analysis is given on the B2B e-commerce development and implementation of the chosen organizations. As mentioned, the analysis consists out of information gathered from interviews and documents of the companies. Thereafter, a cross case analysis is done to determine the differences and similarities across the three cases.
4.1 Powergear
In November 2010 Powergear launched its e-commerce initiative with the idea to increase sales by targeting different customers apart from their regular distribution channel, targeting the so called ‘’low hanging fruit’’. However, entering the field of e-commerce was heavily underestimated and the initial two month project lasted nine months until in August 2011 the first products of Powergear were sold through the distribution channel of an e-commerce sister company called Del City. Due to Del City’s large e-e-commerce platform and their type of customers the products of Powergear were able to fit into their strategy.
The initiative consisted out of an unusual construction where Del City would purchase the products from Powergear as being a normal customer. In other words, Del City would stock the products and take the financial risk if Powergear would provide all that is necessary to make their product easily transferable to the web. Additionally, special arrangements were made in order to make the strategy cooperative. In addition, to include their current customer base in the e-commerce business Powergear launched a new informative website with login possibilities, maintenance schedules, and detailed product and system information.
The development of the strategy and implementation was done by following a stage gate model and after eleven months of hard work, cooperation and delays, the products are now sold through the website. Furthermore, Del City is initiating marketing plans. Due to Del City’s large database 35000 people can be reached through e-mail and the first sales figures give the impression of a positive future. Furthermore, new steps that have already been looked at are the demands for a new online product line of Powergear products.
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4.1.1 Technology
As mentioned, Powergear is a US based company that is globally trading its products through a strong dealer and distributor network. Due to their strong B2B orientation and minimal technological experience they are not designed and equipped to develop suitable e-commerce technologies. For that sake, Del City is an ideal technological partner since the type of products and customers are somewhat similar. Therefore, Del City is capable of developing and implementing the technological part into their own business model. Additionally, the actual strategy contains that Powergear is in charge of the product online transferability and Del City makes sure e-commerce assets and infrastructure are in place.
Furthermore, for the development of B2B e-commerce Powergear acknowledges the importance of a well-functioning e-commerce infrastructure and if it was not for Del City the project would have taken years instead of months. However, they also found that their infrastructure and assets limits the desired strategy to follow. Therefore it is explained that
‘’for an optimal e-commerce platform the technology should be fitted to the strategy and internal possibilities instead of the other way around’’ (Source: Angie Biritz )
4.1.2 People
In this section is described how Powergear deals internally with their people, how important the communication process for implementation is and how they deal with cultural differences in their B2B e-commerce development.
Concerning the people that executed the initiative, Powergear appointed a project manager to be responsible for the development and implementation of the website and e-commerce platform. However, soon became clear the process was harder than expected and more resources where necessary in order to succeed. Due to the open company culture and enthusiasm within Powergear there was a lot of cooperation what helped to speed up the process and limited the delays.
Furthermore, they experienced that the communication between all parties involved is one of the key success factors for development and implementation. At first Del City and Powergear where working independently while communicating through telephone and e-mail. This has caused confusing and misunderstanding. However, once they had met and sat together to discuss the exact (communication) process, strategy and task distribution the
‘’quality and speed of the process heavily increased.’’(Source: Angie Biritz)
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online. Therefore, in cooperation with the largest distributors an e-commerce pricing strategy was developed. This caused a high percentage of satisfying business partners.
Concerning a global e-commerce strategy Powergear does not believe that cultural factors should be taken into account in the development and implementation process. However, concerning their distributor business they believe in cultural differences and explain this is one of the benefits of a global distributor network since the local distributor can deal with cultural issues if necessary. The e-commerce customer is according to them interested in the product and therefore globally oriented. i.e. the product is important not where it originates. Furthermore, they don’t believe in a copy- paste website and emphasize that a look, feel and language adaption gives an additional competitive advantage. However, since Del City is handling the technological part it is not in their control. Therefore, in order to reach global customers Google is according to Powergear the most powerful marketing tool.
4.1.3 Structure
Concerning the structure of the e-commerce initiative the most important part was the development of the cooperation with Del City. This was not as easy as it looked since price, product selection, logistics and internal issues had to be solved and agreed upon.
In cooperation with Del City, Powergear developed the structure of the e-commerce strategy. As mentioned, Del City purchases the Powergear products against a favorable price; in return, Del City sells the products through their website against a pre negotiated price and Powergear is in charge of delivering the product information for the online environment of Del City. Moreover, on a suggested sell and stock list Del City is able to risk-free order a limited amount of products. Additionally, if desired all other products can be ordered on their own risk.
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As mentioned, the main strategy for Power-gear was to find new dealers which were not in their existing network. However, they experienced that entering e-commerce with the wrong pricing strategy could cause cannibalism and move recent dealers instead of gaining new customers. Therefore, pricing strategy was the most difficult hurdle to overcome. This is also due to the fact that price consensus had to be agreed upon with Del City, the market and the current distributors.
Furthermore, with taking Del City as their e-commerce partner Powergear also took a step in entering different markets and countries due to Del City’s global e-commerce presence. However, as is the problem with e-commerce, shipping costs make it unlikely their products will be purchased on the other side of the world. Since Power Gear has to rely upon Del City they have no ability to speed up this globalization process. This is perceived by Powergear as a disadvantage of the cooperation.
4.1.4 Implementation
First of all, the total process from the start of the development to the implementation took longer than initially expected and instead of two months the project took eleven months. Therefore, Powergear emphasized that it is important for organizations to make time for the implementation of an e-commerce process since rushing can have large consequences.
During the process most time consuming stages were the online product transferability and the pricing strategy. Concerning the first, they created part numbers and had to prepare the organization to work with it. Additionally, every part number should had all the information needed to go online. These are amongst others, product info, bullet points, specific technical considerations, weight, size and pictures. The realization of this process was heavily underestimated since it was never done before. In addition, concerning the implementation, a strategy needed to be developed on how to display the products and how to be found on Google. Therefore, analyses where done amongst customers and website track records in order to determine the most successful online keywords. Furthermore, the website of Power-gear was updated and renewed in order to fit their recent strategy and culture. Part of this is that most information on the products is available through catalogs on the Powergear
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website and when needed, support is easy accessible. For ordering the products customers are redirected to the Del City platform or have the possibility to order through an ordering form which can be downloaded from their website.
The second pitfall was the pricing strategy; since this could decline their own business they involved their largest distributors in the negotiation to make sure all parties are satisfied. Furthermore, the initial e-commerce strategy to opt for ‘’low hanging fruit’’ was emphasized.
The implementation process was well thought but they acknowledge that there is a lack of detailed strategy and future development. ‘’We see this e-commerce process as
continuous improvement however it is more trial and error to see what works and what doesn’t’’(Source: Angie Biritz). This is due to a lack of resources with the proper skill set and
knowledge. It is mentioned that the help of Del City and the stage gate model has been very helpful for the development as well as the implementation. Furthermore, it is emphasized that in order to complete and implement such projects successfully it is very important to work through the stages and stick to them no matter what.
Currently, Del City’s database of 35000 addresses is consulted and an active e-mail marketing strategy for sustainable growth is developed.
4.1.5 Conclusion
As a conclusion it can be said that the project was and still is a success, even though the project took longer than initially expected. Important lessons learnt are that having a partner like Del City has lots of advantages since they take over marketing, sales and most important, technological aspects. However, they also mention disadvantages in the way that they do not have the freedom to develop their own strategy and idea’s due to their dependence on Del City.
Nevertheless, emphasized is that developing your own e-commerce platform is more time consuming whereby lots of extra resources are necessary. For the aspirations of Powergear this project met the demands.
The underestimation of internal consequences led to delays in the process. As they thought Del City would only be a normal customer their focus was solely on Del City and their needs. However, it turned out that the needs of Del City also had an effect on the internal organization since the products needed to be produced and transferred in such a way it was easy to distribute over the web.
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strategy. This development process was excellent executed and is seen as one of the key success factors for the e-commerce project.
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Table 4. Summary of issues and success factors for Powergear
Development and implementation of technology has been outsourced to
Del City
Only one project manager was available
for the process. More resources were needed
in the development as well as the implementation process
Concerning the structure of the implementation not
expected internal issue came up due to misperception of the
workload.
During the whole development and implementation, taking
the time is essential. Rushing these projects
will only make the project take longer Especially for the
development clear and regular face to face
communication is viable for the speed of
the process
Pricing strategy and the consensus between multiple partners was seen as highly important in the development phase
for the success of the project.
For a smooth process clear task distribution needs to be defined. Most
critical in this case were the pricing strategy and
the online product transferability For the development
culture is seen as not important. For the implementation only look, feel and language
might be viable As Powergear experienced, if a good development and implementation structure is in place many additional (structural) advantages may arise.
In the development phase it is important to define the project as continuous
improvement. It is impossible to design the
project flawless at the first time.
The process was designed on continuous improvement, however in
the development it was not defined how and therefore there is a lack of
future strategy after the implementation.
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4.2 Enerpac
Due to recent globalization and the focus on customer service and satisfaction Enerpac decided in October 2010 to start a large B2B e-commerce project and build an e-commerce platform to fulfill the strategy what was named as ‘’Easy to do business with’’(Source: Eileen Scharenborch). This had double implications; firstly, internal processes needed to be improved and secondly, the system would give an increase in customer service and ordering.
What was actually built was an easy access, 24x7 e-commerce website where distributors had several options (table 4) that would keep them up to date with order acknowledgements and order status updates through e-mail notifications. As a result, phone calls on information updates heavily decreased and customer satisfaction went up. Additionally, it is used as a fast information portal for promotions and the push out of new products to the distributor.
Table 5. Options within the Enerpac e-commerce website (Source: Internal Enerpac document )
The complete implementation had its ups and downs and the main pitfall was the underestimation of the difference between B2B and B2C e-commerce. Therefore, several months were added to the initial launch date. However, due to the good structure and process the project was experienced as very successful and in six month time they processed for $610.183 on sales orders through their web portal.
Possibilities within the Enerpac e-commerce website:
- Check distributor ‘’net’’ pricing
- Check inventory availability and estimated shipping dates - Enter orders for standard products
- Check status of online orders - Supports traditional PO’s only
- Near real time updates with ERP System - Email status updates
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4.2.1 Technology
Concerning technological issues an important lesson learned by Enerpac is that an ideal e-commerce implementation would be done using the latest technology. Since an organization in B2B e-commerce is dealing with other business it is important to take customer systems into consideration. In the case of Enerpac, legacy systems where used what caused delay and customer churn due to misalignment with customer systems.
For the start of the project the platform code for the website was bought in order to save time and development costs to implement the ‘’shopping cart’’ principle. Additionally, Enerpac opted for a complete integration and visibility of order purchasing and tracking. Therefore, before the implementation a connection between the different ERP systems within the organization needed to be established. Furthermore, they provided a secure user login that needed to be separated from the ERP system authentication. This is according to Enerpac the base that has to be stable in order to let the system work smoothly.
Additionally, the look and feel was changed according to Enerpac’s likings and all the systems were connected and thoroughly tested before going live. Due to this testing procedures the system was launched and implemented with virtually no issues and was completely intuitive to use. However, due to the use of legacy systems incremental changes had to be made. As a result, customer satisfaction and adoption went up faster than expected. This is appointed as a key success factor for B2B e-commerce implementation.
Finally, an important factor to consider is that a large amount of global data is exposed in the system. Therefore, security is a delicate issue and made Enerpac decide to add additional security by implementing a ‘’port restricting web proxy server’’. The result was an airtight successful system as is displayed in figure 14. Due to trust issues they believed this also helped to reach the high levels of customer adaptation and satisfaction.
Figure 14. IT structure for the e-commerce platform of Enerpac
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4.2.2 People
The Enerpac project is executed by two teams of dedicated people divided in a business project team and an IT project team. Both teams are considered essential throughout development and implementation. However, they underestimated the complexity of a B2B versus a B2C system and therefore people with a wrong skill set where hired. This added several months to the development project. Furthermore, a positive experience was the close working relationship between the dedicated teams and business stakeholders. They emphasize the importance of the communication process in order for each participant to understand the roles and responsibilities. However, even with a dedicated team, realistic planning is crucial and rushing is not feasible in these kinds of projects. In the case of Enerpac there were other high priority IT projects running parallel what means that completion was achieved by non-dedicated resources. However, what is important is that the whole team stays committed throughout the complete project. This was achieved through weekly meetings and updates to keep track of the project. Moreover, to gain more value out of an e-commerce project Enerpac mentions that having people with the right skill set in place is a huge advantage and can shorten the implementation process significantly.
Since Enerpac is a large global player in the industry they experience a lot of cultural differences and acknowledge that understanding these are of high importance for the way of doing business and its success. However, in the development and implementation of B2B e-commerce they do not adapt to any cultural issues since they believe this is of non-importance. In fact, they started the project to overcome these barriers and approach distributors in the same way. According to Enerpac e-commerce contributes to globalization and is accessible from everywhere in the world without cultural barriers apart from the language. In the case a different approach is needed there is still the regional manager that can take care of the business. Therefore, Enerpac states that they established a successful hybrid way of doing business between e-commerce and traditional methods.
4.2.3 Structure
