B2B E-commerce: How information quality affects the relation between order fulfilment dimensions and buyer's

Master’s Thesis Supply Chain Management

University of Groningen, Faculty of Economics and Business June 26, 2017

B2B E-commerce: How information quality affects the relation between order fulfilment dimensions and buyer's

satisfaction?

Agata Nowak Student number: s3206254 E-mail: a.e.nowak@student.rug.nl 1 ^st supervisor: drs. J.C. van Leeuwen

2 ^nd assessor: prof. dr. D.J. Power

Table of content

Abstract ... 3

1. Introduction ... 4

2. Theoretical background ... 6

2.1. Order e-fulfilment - Dimensions of customers value ... 6

2.1.1 E-procurement ... 7

2.1.3. Delivery performance ... 8

2.1.4. Customer service ... 9

2.2. Information quality ... 10

2.3. Buyer satisfaction ... 13

2.4. Conceptual framework and hypotheses ... 13

3. Methodology ... 14

3.1. Research design ... 14

3.2. Sample selection ... 15

3.3. Data collection ... 16

3.4. Data analysis and interpretation ... 17

4. Results ... 19

4.1. Control variables ... 19

4.2. Multiple Regression Analysis... 21

4.3. Reasons behind not using e-commerce ... 22

5. Discussion ... 23

6. Conclusion ... 25

6.1. Limitations and further research ... 26

7. References ... 27

8. Appendix ... 35

Abstract

Nowadays, more companies realise the benefits of adopting the e-commerce into their strategy. B2B journeys tend to be complex, long, and consist of multiple touch points between suppliers and their business customers. There is a need to understand the influence of various e- fulfilment dimensions on buyer satisfaction in order to provide a service level buyers expect to receive. This research aims to investigate the impact of information quality as a factor, which could affect relationships between selected order fulfilment dimensions and buyer satisfaction. In order to research this phenomenon, a survey was conducted among construction companies in the Netherlands.

The results of 63 samples confirmed direct relationships between e-procurement, delivery

performance, and customer service and buyer satisfaction. The most significant relationship occurred

between customer service and buyer satisfaction. Surprisingly, information quality does not affect

these relationships, however it has direct impact on buyer satisfaction. As buyer satisfaction leads to

buyer loyalty and consequently repurchase intention, companies should strive to enhance the

performance of e-procurement, delivery, customer service and information quality.

1. Introduction

The transition from being a brick-and-mortar to a brick-and-click organization is becoming a standard business strategy for firms to enhance their existing business processes and remains competitive on the market (Ansari et al., 2008; Kumar & Petersen, 2006; Rust & Kannan, 2003; Yang et al. 2013). According to Chiang et al., (2006) web stores, where buyers place orders by means of the Internet, have become a prevalent sales channel. Web-based e-commerce is more affordable than EDI and more business partners can be reached through online platforms (Turban et al., 2017). Turban et al., (2017) also present other benefits of e-commerce in B2B context which include new sales opportunities, elimination of paper and administrative costs, lower search costs and time for buyers to find products and vendors, reduction of marketing and sales costs, reduction of inventory levels and costs, reduction of procurement costs etc. Kumar and Petersens (2006) argue that “e-commerce improves the availability of information, reduces processing errors, reduces response times, lowers costs of services, and raises effectively customer

satisfaction”. Introducing online channels increases competitive advantage and eventually all companies will have to make this transition to remain competitive in the market (Kumar & Petersens, 2006; Rust & Kannan, 2003). Figures presented by Statista illustrate that in 2015 the gross merchandise volume of B2B e-commerce transactions reached

$6.9 trillion USD and it is expected to increase to $7.7 trillion USD in 2017. To compare with B2C E- commerce the prediction is to reach $2,1 trillion USD in 2017. B2B e-commerce constitutes a majority of global e-commerce activity, however, there is little academic attention given comparing to B2C e- commerce (Lawrence et al., 2016). Report of Forrester Research presents that nearly 75% of B2B buyers would rather purchase from a website, which is more convenient than buying from a sale representative and 93% of B2B buyers say that they prefer to buy online when the decision concerning a purchase has been already been made (Hoar, 2015). According to Bilgihan et al. (2016) “a significant amount of potential revenue is lost due to poor online customer experiences, resulting in e- commerce not reach its potential”.

Satisfaction of customers is generated similarly by online service and offline order fulfilment (Semeijn et al. 2005). E-fulfilment is all about meeting customer expectations and its impact on their satisfaction (Ha et al, 2010; Tarn et al. 2003). Order fulfilment consists of multiple stages from the moment of buyer’s purchase decision till final delivery – right product, in right place at the right time (Pyke et al., 2001; Tarn et al. 2003). Jain et al. (2017) argue that there is a need to understand the influence of various e-fulfilment dimensions on customers to provide a high service level.

Study of Zhou et al. (2014) show that firms should align supply chain practice (like sourcing and delivery) with the level of information quality to accomplish good business performance. Low

1

“Buyers” and “customers” are used interchangeable in this research

quality can have severe consequences such as lost orders, increased claims, delayed payments and subsequently lower supplier ratings (Gounaris, 2005; McKnight et al., 2017; Mehta & Durvasula, 1998). To overcome any problems concerning order fulfilment, companies should pay extra attention to the information quality (Chapman et al., 2003; Zailani & Rajagopal, 2007), which has a significant impact on overall business performance and buyer satisfaction. There have been many studies conducted concerning information quality in the context of information sharing in supply chain (Li &

Lin, 2006; Marinagi et al., 2015; Zhou & Benton, 2007) and information quality in information systems (Iivari, 2005; Miller, 1996; Naumannn, 2001; Petersen, 1999; Petter et al., 2008; Scheepers et al., 2006; Wixom & Todd, 2005; Wu & Wang, 2006;). Previous studies confirm a strong relationship between information quality and customer satisfaction (Chen et al., 2015; Petter et al., 2008).

However, to my knowledge there has not been any research conducted which simultaneously investigate the impact of information quality on relations between order e-fulfilment dimensions and buyer satisfaction in B2B context. Therefore, this paper introduces selected dimensions of order fulfilment, which constitute the critical touch points with buyers and have significant impact on their satisfaction. Based on the literature review, key dimensions such as e-procurement, delivery performance and customer service are presented. The aim of this paper is to introduce how information quality plays an important role in order fulfilment and subsequently in the relationship between buyers and suppliers in e-commerce in B2B context. Consequently, this research will attempt to answer the following research question:

How information quality affects the relation between order fulfilment dimensions and buyer's satisfaction?

This research is composed as follows. Chapter two provides theoretical background and hypotheses.

Chapter 3 deploys research methodology; chapter 4 illustrates results and chapters 5 and 6 present the

discussion and conclusion respectively.

2. Theoretical background

Recent articles state that there is a significant lack of research conducted for B2B context (Abdul-Muhmin, 2005; Lilien, 2016; Pen & Lu, 2017). Lilien (2016) claims that there are difficulties in collecting data, especially from the consumer perspective, and conducting the research requires close cooperation with companies. Author also argues that there is a huge disproportion in academic research concerning B2B to compare with B2C domain. Wiersema (2013) conducted research among academics and practitioners to investigate what could be the key to success of B2B companies in the future and points out research domains, which depicts the high potential for academic researchers in the B2B field. One of the trends was “dramatic increases in customer power, the latter due largely to advances in digital information technologies (DIT)” which shifts the spotlight of research directions from products and supplier technology towards customer-facing functions (Lilien, 2016). Minkara (2015) presents in his research report that 37% of B2B E-Commerce organizations state that they

“need to differentiate themselves from competitors through delivering dynamics and transformative digital shopper experiences”. Nowadays, customers are becoming more demanding and their expectations are very high. Buyers’ expectations, in terms of service delivery, are increasing what can be influenced by B2C practises (Raymond, 2016). Companies compete to gratify buyer needs and they need to be constantly changed to achieve competitive advantage on the market. Nunes and Cespedes (2003) claim that customers are more supported by information and technology, thus they are more qualified to make favourable decisions in the selection of the provider. This is why it is very important for companies to understand what customers in B2B environments value the most.

2.1. Order e-fulfilment - Dimensions of customers value

According to Jain et al. (2017) “consumer research should focus on meeting the customer

expectations during pre-purchase, at-purchase and post-purchase processes with the understanding of

how to benchmark and improve the e-fulfilment dimensions.” Authors provide seven dimensions

concerning e-fulfilment: "e-business quality, product quality, pricing, availability, timeliness,

condition and ease of return and explored its linkages with shopping satisfaction and repurchase

intention of customers in e-tailing.” Illustrated scope helps companies to improve specific

dimensions “to enhance customer experience that may help them to retain the customers in the long

term” (Jain et al. 2017). The results of other empirical studies show aspects on which customer focus

during selection of the supplier: technical quality products, favourable price, the stated delivery time,

payment terms, after sales service, and wide range of offered products (Urbaniak, 2015). Ramanathan

(2010) uses the following factors (e-commerce assessment factors and customer loyalty): on-time

delivery, satisfaction with claims, customer support, ease of returns/refunds, customer service

accessibility, payment process, comparative prices, privacy experience. Agatz et al. (2008) depict four dimensions, which define e-fulfilment as purchasing, warehousing, delivery and sales stages of the supply chain. Companies “often try to differentiate themselves by providing excellent service in one or more dimensions of the e-fulfilment process and influencing customers’ shopping satisfaction, repurchase intention, behavioural intention and loyalty” (Jain et al. 2017). Differing from off-line shopping, online shopping can be divided into various sub-processes such as website navigation, searching for information, ordering, online transaction, delivery, customer service interactions and satisfaction with the ordered product (Chen et al., 2013; Lee & Lin, 2005; Wolfinbarger &

Gilly, 2003). For the reason that there is a deficiency of literature about customers’ value dimensions concerning order e-fulfilment in business-to-business contexts, few studies contained in this research are from business-to-customer perspective, however, they provide excellent insights in the framework of B2B e-commerce domain. Dimensions presented above are illustrated with the other factors in Table 1 (Appendix A) and grouped in the following dimensions: e-procurement, delivery performance and customer service. Companies should find ways to improve their performance of all these touch points with the consumers, while it can help differentiate them from competitors (Xing & Grant, 2006).

2.1.1 E-procurement

In the world dominated by Internet and access to countless amounts of e-commerce platforms, it is exceedingly important to differentiate business from competitors and possess customer loyalty, which is essential to business endurance (Reichheld et al., 2000, Semeijn et al. 2005). The use of the Internet allows for reducing logistics costs and an increase in customer satisfaction. In 2014 B2B researcher demographics a change occurred where 46% people are in age 18-34 (Snyder, 2015) who grew up in the world soaked by Internet. Therefore 89% of researchers use the Internet during the inquiry process (Millward Brown Digital, 2014). Suppliers understand the need for improvement of their digital tactics and potential of practises used by B2C market which can be beneficial for buyer satisfaction (Mitchell, 2016). According to Ramanathan (2010) efficient websites can better convert logistics performance into customer loyalty, therefore managers of e-commerce platforms should ensure that goods ordered via their website are delivered with high level of logistics performance.

“Internet-based purchasing has not only been fast and efficient, but is also cheaper than conventional methods, leading to a rise in e-procurement” (Shamout & Emeagwali, 2016).

According to McKnight et al. (2017) vendors can differ in quality of information such as accuracy,

consistency, and completeness during the ordering process. These aspects can encourage purchasing agents

meet their expectations. “Providing relevant information, such as detailed product descriptions, quantities on the hand, and information about related products can make ordering more pleasant and interesting process”

(McKnight et al., 2017). Szymanski and Hise (2000) conducted a research, which obtained information on online purchasing behaviour, satisfaction levels and shopping elements, which influence buyer satisfaction.

E-satisfaction as the result of online customers’ perceptions of online purchasing process comprises convenience – online shopping time and ease of browsing, quantity and quality of product information, site design and financial security (Subramanian et al., 2014; Szymanski & Hise, 2000).

According to Cho (2014) a well-designed home page allows buyers to “easily locate desired information and shortens the time required to do so”. Valuable hyperlinks presented on the website, which transfer buyers to critical information such as payment information, shipping details, and customer service, makes their search for information much simpler (Cho, 2014). Lately, many companies provide possibilities to view the order status and issues with customers’ orders without the need to contact sales representative (Kumar & Petersen, 2006).

2.1.3. Delivery performance

Although the delivery performance has significant impact on customer satisfaction, it is considered as one of the most inefficient parts of order fulfilment. Delivering goods is the touch moment between provider and buyer that affect the success of the company. The delivery process is pricy and troublesome, however is very important as it has significant influence on customer's perception of the entire service and may constitute as a business card of the company. Zijm (2016) mentions, “meeting the continuous pressure on fast delivery is only possible by an excellently functioning logistics network”. Andrews (2001) states “globalization and the move to e-commerce have challenged logistics with demand for smaller loads, more shipments and faster delivery.”

According to Sawhney and Piper (2002) companies, which focus on the delivery, processes based on

customer values, achieve better business performance by meeting customer satisfaction. They present

four dimensions, which are seen as essential for creating value for customers: “defect-avoidance, cost-

minimization, on-time delivery, and short lead-times”. A report prepared by Bain & Company states

that customers are willing to pay extra costs for more reliable delivery (Mewborn, 2014). On-time

delivery is a critical success factor when selecting a provider (Andrews, 2001). Peng and Lu (2017)

conducted research based on delivery dimensions like reliability and speed (“on-time delivery rate,

early delivery inaccuracy, late delivery inaccuracy, and delivery speed”). They state that each

dimension can vary by buyers’ specific futures and have diverse influences on their operations. In the

case of manufacturers, late delivery can complicate their internal performance concerned

manufacturing processes, while trade companies can experience shortages on stock and ‘lose’ potential

customers who can purchase a product faster from competitors (Peng & Lu, 2017; Sawhney & Piper, 2002). Suppliers should be aware of buyers’ expectations; otherwise they might focus on improving dimensions “which are not aligned with customer needs” (Peng & Lu, 2017). Furthermore, improved overall delivery performance can be achieved by higher information quality and higher level of investment in information sharing support technology (Zhou et al., 2007). Therefore, companies should provide the customers the possibility to track their online order status (Liu & Arnett, 2000).

2.1.4. Customer service

“B2B journeys tend to be long, complex, and quite technical, and consist of a continuous interaction of services and sales touch points” (Maechler et al., 2016). According to Setia et al. (2013) customer service performance is critical for a firm’s survival, considering that 40% of customers who experience poor customer service discontinued doing business with the target company. Negash et al.

(2003) claim that customer support is essential to remain competitive on the market, which has become more global and service oriented. Companies want to be closer to their customers by trying new ways to create value for them, and endeavouring to convert the customer relationship into one of solution finding and partnering rather than one of selling and order taking (El Sawy & Bowles, 1997).

The customer service process contains the set of activities that involves communication between customers and employees of a firm when customers make inquires, request changes to the procedures, or conduct final transactions (Ray et al., 2005; Setia et al. 2003). According to El Sawy and Bowles (1997), customer support and service includes the way that a product is delivered, bundled, explained, billed, installed, repaired, renewed and redesigned. Setia et al. (2013) define customer service as a set of activities that are associated with the creation and delivery of products and services to customers.

The research of Kumar and Petersen (2006) shows that there is a direct relationship between the use of e-commerce and improved customer service. They state that e-commerce improved “the availability of information, reduced processing errors, reduced response times, lowered cost of services, and has effectively raised customer satisfaction and the level of service customers expect to receive”.

Consequently, these factors allow companies to minimize their operational costs by reducing the number of customer service representatives and support personnel (Kumar & Petersen, 2006).

In the order-fulfilment stage, the supplier delivers the goods ordered through the Internet and

provides customer services during or after delivery (Cho, 2014). The after-sales stage is critical for

business customers (Vinhas et al., 2010). Agatz et al. (2008) claim that delivery and after-sales

services are becoming key components of the product offering.

Companies which use the Internet benefit in delivering customers better access to the information they need in an expedited manner (Kumar & Petersen, 2006). The home page on the website should have a hyperlink to customer service information, where detailed service information, such as channels in the case of delivery problems or order returns (Cho, 2014). Today, buyers ordering through online channels are able to check the status and issues with their orders without the need to continually contact the firm’s representative (Kumar & Petersen, 2006). Seta at al. (2013) introduce two customer service capabilities – customer orientation capability and customer response capability.

Orientation capability stands for monitoring needs of its customers and enable its business strategies with focus on customer needs (Narver & Slater, 1990), and response capability is defined as quickly and effectively respond to customer needs and wants (Jayachandran et al., 2004). Maechler et al.

(2016) argue that digitalization and the rising use of smartphones are forming new standards for fast, seamless customer service in all settings. Real time responsiveness and easy-to-use apps are setting a high bar for speed and ease of doing business in B2C industries, and these expectations are migrating to B2B (Maechler et al. 2016). Customer relationships are improving through e-commerce and the use of the online channel does not impair customer service even though verbal communications may diminish between companies and their buyers (Kumar & Petersen, 2006).

2.2. Information quality

“Information quality is the response time of the Web age” by using this axiom Naumann (2001) concludes that information quality has an important role in the new era of digitalization.

Information quality has gained importance due to its ability to reduce costs, improve efficiency and increase responsiveness in the supply chain (Chopra & Meindl, 2001; Zailani & Rajagopal, 2007).

According to Zailani and Rajagopal (2007) information quality is critical for the success of firms and plays a more central part of their strategies. In order to meet expectation of business customers, which expect quick delivery, flexibility, quality, cost effectiveness and timeliness, many companies seek to improve information quality in order to attain these requirements (Zailani &

Rajagopal, 2007; Pollard & Hayne, 1998). “Information quality measures the degree to which the information exchanged between organizations meets the needs of the organizations” (Petersen, 1999;

Zhou et al., 2007). Based on extensive literature review, this research provides a framework that identifies the dimensions for information quality. A number of studies have identified several important characteristics of information quality (Chen et al., 2017; McKnight et al., 2017; Miller, 1996; Scheepers et al., 2006; Wixom & Todd, 2005; Zailani et al., 2009; Zheng et al., 2013; Zhou &

Benton, 2007). Zailani et al., (2009) conducted comprehensive research concerning the influence of

the dimensions of quality information on buyer-supplier relationships. They present numerous

dimensions, which characterize information quality by means of accessibility, appropriate amount of information, believability, completeness, lack of error, interpretability, objectivity, relevance, reputation, security, timeliness, understandability and added value. Zhou and Benton (2007) measured information by accuracy, availability, real-time, completeness, relevance and accessibility. Looking at other perspectives, information quality also can be defined in terms of content (Scheepers et al., 2006), format (Miller, 1996; Petter et al., 2008; ; Scheepers et al., 2006; Wixom & Todd, 2005; Zheng et al.,2013) , reliability (Zailani et al., 2009; Zheng et al., 2013), richness (Zheng et al., 2013) and usability (Petter et al., 2008). Information quality criteria are presented in Table 2. Sum et al. (1995) claim that accuracy has significant impact on operating efficiency, customer service and overall success. Chen et al., (2017) and Zailani et al. (2009) present in their studies the amount of information as a quality factor, however, the amount of information available can lead to an information overload (Nachmias & Gilad, 2002; Trenz, 2015) “as companies have access to more information than they are accustomed to managing, potentially resulting in confusion and additional uncertainty in the connected environment” (Golicic et al., 2002). Thus appropriate amount of information, which is easy to use and understand, can improve the business efficiency (Zailani et al., 2009).

Website design also has significant impact on buyer satisfaction (Chen et al., 2015; Van Riel et al., 2004). The home page should be presented in an organized manner with key information about the company, their products and services, which match the buyer’s specific needs and guides them to place the order online (Cho., 2014). In case of problems, customers should be able to find solutions fast and efficiently (Riel et al., 2004). According to Cho et al. (2014) effective home page presentation has significant impact on search efficiency and allows customers easily and fast to locate desired information. They also depict critical pieces of information, such as payment information, shipping details and customer service, which should be easily accessible by means of convenient menu bars or efficient hyperlinks which makes the customer’s search for information much simpler.

Information Quality

Dimension Definition Author

Accessibility Information that can be obtained when needed

Miller, 1996; Zailani et al., 2009;

Zhou&Benton, 2007

Accuracy Buyer’s perception that the information is correct

Chen et al., 2017; Li&Lin, 2006;

McKnight et al., 2017; Miller, 1996 Monczka et al., 1998; Scheepers et al., 2006; Wixom&Todd, 2005; Zailani et al., 2009; Zhou&Benton, 2007;

Adequacy Li&Lin, 2006; Monczka et al., 1998;

Availability Petter et al., 2008; Zailani et al., 2009;

Zhou&Benton, 2007;

Coherence Miller, 1996

Compatibility Miller, 1996

Completeness

Complete set of information, the degree to which system provides all the necessary information

Chen et al., 2017; McKnight et al., 2017;

Miller, 1996; Wixom&Todd, 2005;

Zailani et al., 2009; Zhou&Benton, 2007

Conciseness Petter et al., 2008; Zailani et al., 2009

Content Scheepers et al., 2006

Credibility/

trustworthiness

Degree to which the information is accepted as correct

Li&Lin, 2006; Monczka et al., 1998;

Zailani et al., 2009

Format

Information is presented in a consistent form, clear in meaning and formatted concisely; how well the information is presented

Miller, 1996; Petter et al., 2008;

Scheepers et al., 2006; Wixom&Todd, 2005; Zheng et al., 2013

Objectivity Information is not biased and

presents impartial view Zailani et al., 2009; Zheng et al., 2013 Quantity/amount of

data Size of the results Chen et al., 2017; Zailani et al., 2009 Relevancy Information is informative and

valuable

McKnight et al., 2017; Miller, 1996;

Petter et al., 2008; Zailani et al., 2009;

Zheng et al., 2013; Zhou&Benton, 2007;

Reliability

Information is trustworthy, free of errors and comes from reputable sources

Wixom&Todd, 2005; Zailani et al., 2009;

Zheng et al., 2013

Richness

Information contains a wide range of topics/subjects, information is in- depth for a given topic

Zheng et al., 2013

Security Miller, 1996; Zailani et al., 2009

Timeliness/currency

The degree to which the

information on the website is up-to- date

Chen et al., 2017; Li&Lin, 2006;

McKnight et al., 2017; Miller 1996;

Monczka et al., 1998; Scheepers et al., 2006; Wixom&Todd, 2005; Zailani et al., 2009; Zheng et al., 2013; Zhou&Benton, 2007;

Understandability Information can be comprehended

by the user - ease of understanding Petter et al., 2008; Zailani et al., 2009

Usability Petter et al., 2008

Usefulness Chen et al., 2017

Validity Miller, 1996

Value-added Added amount of benefit the use of

the information provides Zailani et al., 2009; Zheng et al., 2013

Table 2: Information quality criteria

2.3. Buyer satisfaction

Semeijn et al. (2005) have confirmed that there is a significant bond between customer satisfaction and loyalty, consequently this increase has a positive impact on customer repurchase behaviour ( Ha et al, 2010; Naumann, 2009; Khalifa & Liu, 2007; Reichheld & Teal, 2001 ). T herefore, providers should be aware of customer expectations concerning order fulfilment and what creates the greatest value for them in order to retain existing customers and acquire new customers. Literature states that an increasing satisfaction between two parties makes the relationship stronger and has a positive impact on competitiveness, information exchanges and trust (Abdul ‐Muhmin, 2005; Ha et al, 2010). By maintaining relationships with customers, companies can customize services and strengthen ties with buyers building long-term cooperation. Bauer et al. (2002) claim that formation and conservation of relationships can lead to mutual benefits and can determine the success of the company. Numerous examples of influencing buyer satisfaction are presented in previous paragraphs.

2.4. Conceptual framework and hypotheses

The research of Liu et al. (2008) presents eight constructs of online purchasing processes occurring in the information search stage, purchase stage and post-purchase stage, which have significant impact on customer satisfaction, namely – information quality, website design, merchandise attributes, transaction capability, security/privacy, payment, delivery, and customer service. They also found that delivery has the greatest impact on satisfaction. Previous studies confirm a strong relationship between information quality and customer satisfaction (Chen et al., 2015; Petter et al., 2008).

Based on the theoretical review, the following hypotheses were developed:

H1: Effective e-procurement performance has a positive effect on buyer’s satisfaction

H2: Effective delivery performance has a significant positive influence on buyer’s satisfaction H3: Customer service has a positive effect on buyer’s satisfaction

H4: Information quality has a positive influence on the relationship between e-procurement and buyer’s satisfaction

H5: Information quality has a positive influence on the relationship between delivery performance and

buyer’s satisfaction

H6: Information quality has a positive influence on the relationship between customer service and buyer’s satisfaction

Figure 1: Conceptual framework

3. Methodology

This section will introduce the research method, which helps in getting an answer on the research question. The purpose of this study is to investigate if information quality affects the relationship between e-procurement, delivery performance, customer service, and buyer satisfaction in B2B and e-commerce context. In order to test the already presented hypotheses, a survey was conducted among companies in the construction industry. In the first part, the research design, reasoning behind a choice of sample, and detailed description of the data collection are presented.

Subsequently, the reliability and validity of the collected data is presented to ensure appropriateness of the constructs.

3.1. Research design

According to Karlsson (2016), survey research should be considered when knowledge of the

topic is extensively known. In this case, where a detailed literature review is performed, conducting a

survey provides significant value for scientific contribution. This method is suitable for testing already

outlined phenomena. Theoretical background provides extensive knowledge concerning hypotheses

H1, H2 and H3 where previous studies already investigated that three of the chosen order fulfilment dimensions; e-procurement, delivery performance and customer service and their impact on buyer satisfaction. The purpose of this study is to research how information quality affects these relationships. To achieve a reliable outcome, direct relationships between the selected order fulfilment dimensions and buyer satisfaction will be measured and subsequently the moderating effect of information quality on these relationships will be investigated. These mutual interactions are presented in the conceptual framework presented in Figure 1.

The survey consists of items, which were mostly based on questions developed and studied in prior research papers (Cho, 2014; Chen et al., 2017; Ramanathan et al., 2016; Sawhney & Piper, 2002;

Setia et al., 2013; Zhou et al., 2014) and few of them derived from literature review. This combination helped to build five constructs, which intend to answer the research question. There are many ways to collect data in survey research such as interviews and questionnaires, which can be administrated personally, by telephone or through the web, and can be posted or e-mailed to the respondents (Forza, in Karlsson, 2016). This research uses an e-mailed questionnaire which have the following advantages: “they are inexpensive; can be completed at the respondent’s convenience; they can ensure anonymity; they can reduce interviewer bias; and respondent has more time to consider his/her responses” (Forza, in Karlsson, 2016). The questionnaire created in Qualtrics consists of 5 control questions (the use of internet platform –yes/no, the size of the company, the frequency of buying through online platform, the amount of money spent per purchase and the advance of IT in the company), 24 closed questions divided in 5 construct groups and only one open question where respondents could add any comments concerning survey or researched subject. Each item of constructs was measured by means of the Likert scale tool. Likert scales are a common measurement instrument for data collection in surveys where respondents rank how much they agree or disagree with the given statement (Allen & Seaman, 2007; SurveyMonkey, 2017). Moreover, this measurement tool has the ability to be easily understood by respondents and is capable of measuring intangible and behavioural aspects, which makes this instrument perfectly suitable for this type of research. In this paper the 5- point scale was implemented with the response range for answers from “Strongly disagree” up to

“Strongly agree”. Companies needed approximately 5 minutes to complete the survey.

3.2. Sample selection

This research is based on the construction industry in the Netherlands. The construction

industry is not performing on par with other industries in using e-commerce, however there is huge

potential and gradually appearing number of initiatives to bring the traditional construction processes

online (Bhutto et al.,2005; Laryea & Ibem, 2014).

Solanke and Fapohunda (2015) claim that the traditional method of material procurement is inefficient considering the increased innovation and diversity of materials available for construction.

Construction materials usually accounts for 40-50% of the total construction costs, which highlights the importance of materials procurement and cost minimisation related to it (Samarasinghe et al., 2012). According to Samarasinghe et al. (2012) the importance of construction materials and the selection of appropriate procurement strategies deserve special attention. Ineffective purchasing practises can result in various setbacks, such as: loss of profit due to time, labour consumption, loss of material information and high level of process uncertainty which can negatively affect competitive level of the constructors in the business market (Kasim, 2011; Ren et al., 2012; Solanke & Fapohunda, 2015).

This sector is chosen to get interesting insights about what buyers value the most with regard to order e-fulfilment and this paper can provide the managerial implication to companies who struggle to acquire new buyers who are still using the traditional way to purchase their products.

3.3. Data collection

The survey method was chosen due to its advantages to obtain large amount of quantative data that can be used to test the proposed hypotheses.

Lilien (2016) claims that there are difficulties in collecting data especially from the consumer perspective and conducting the research requires close cooperation with companies. For this reason, few suppliers were contacted in order to conduct research among their customers, however none of them agreed to the collaboration. Therefore, the research was conducted using a huge database of construction companies in the Netherlands, found on the website www.bouwendnederland.nl. Under these circumstances randomness could have been preserved, which is associated with the ability of the sample to represent the population-of-interest (Forza, in Karlsson, 2016).

First, the survey was designed in English and afterwards translated to Dutch in order to make it easier for the respondents and thus increase the probability of their participation in the survey. The survey link was distributed via e-mail and sent to 3277 construction companies. The e-mail contained a cover letter in order to provide a detailed view of the content and to ensure the participants of the confidentiality of their responses. Contact information was provided in case of respondents need for clarifications or for the other reasons. The response rate was extremely low and reached a merely 4%.

Karlsson (2016) pointed out that a disadvantage of posted questionnaires is a low response rate

compared with other methods and involves longer time periods. From the observations and several

responses arose that companies receive an enormous amount of surveys daily, which leads to

frustration and reluctance to fill in any questionnaires. During data screening, incomplete surveys and

responses with no variance were removed. Of the 140 returned questionnaires, 112 were considered as

valid and appropriate. To verify the ratio of construction companies which are using electronic channels to purchase their materials, the first question required an answer if companies use online platforms. From 112 responses, 63 companies make use of e-commerce while 49 responded they do not. To achieve interesting insights, companies, which do not use online platforms, were requested to answer a few questions that indicate the reasons behind it. Consequently, to test proposed the hypotheses; the data analysis is based on 63 samples.

3.4. Data analysis and interpretation

The validation process for the survey instrument had a number of steps to verify appropriateness of measures, namely: unidimensionality, convergent validity, discriminant validity and reliability.

To verify the adequacy of survey, the Kaiser-Meyer-Olkin Measure was performed and reached 0.765, which is higher than the recommended value of 0.5. Unidimensionality, which determines whether the items represent a common factor, was established with an exploratory factor analysis. Factor loadings in the range of 0.30 to 0.40 are considered as a minimum to define a construct, loadings above 0.50 are considered practically significant, and loadings exceeding 0.70 indicate well-defined structure (Hair et.

al., 1998). According to Hair et. al. (1998) to accomplish a significance of sample size 60-70, the factor loadings with values 0.65-0.70 are needed, and this research has met these requirements. In the Table 3 below the survey items are presented with their factor loadings, which except two items achieved significance above value 0.70.

The most used reliability indicator in Operation Management survey research is Cronbach’s alpha (Karsslon, 2016). Cronbach’s alpha was calculated for the items of each construct and these values, with the rest of descriptive statistics, are also presented in Table 3. The value of 0.7 is considered as acceptable and above 0.8 as good.

Constructs Survey items Loading Cronbach's

alpha AVE Mean SD

E-procurement

The website provides information on price and stock availability

.887

0.822 0.661 3.8056 0.77179 It is easy and quick to place an order from

the web store .832

We have an access to order status

information .771

Payment terms are clear .756

Delivery performance

We receive products within the promised time frame

.887

0.833 0.695 3.963 0.73106 Our suppliers have a short lead times .878

We receive good and undamaged

.846

There is an automatic identification during the delivery process to track order status

.713

Customer service

Customer service representatives provide reliable information

.884

0.848 0.633 3.6349 0.66482 Our claims are handled fairly .845

Customer services representatives are

able to convey trust and confidence .796 There are multiple contacting channels in

the case of any problems .757

Condition and ease of returns are

satisfactory .679

Information quality

Suppliers provide complete set of information

.839

0.879 0.586 3.7211 0.52984 The information provided by suppliers is

accurate

.838 We have an access to all information we

are interested in

.797 Information provided on the website is

up-to- date

.783 Provided products information are

compatible with reality

.782 We can easily locate desired information

on the website

.720 The amount of information is

overwhelming on the website (R)

.565

Buyer satisfaction

We will continue purchasing from our suppliers

.879

0.857 0.708 4.0595 0.55669 We would recommend our suppliers to

the others .849

We are satisfied with quality of

information provided by our suppliers .844 We are overall satisfied with our suppliers .790

Table 3: Factor analysis, reliability and descriptive statistics As can been seen, all the items have an acceptable factor loading (above 0.5) which confirms convergent validity of this study. In addition, Average Variance Extracted (AVE) values for all constructs were above the threshold of 0.5, so yet again convergent validity was approved.

Accordingly, discriminant validity was established as there was no cross loadings and any correlations

between the factors greater than 0.7. In conclusion this survey is considered as valid therefore results

can be presented.

4. Results

4.1. Control variables

In order to achieve interesting results, respondents were also required, beside questions related to the constructs, to answer control questions. To ensure that the responses will be related to the research of e-commerce, the first question was concerning the use of online platform. For the purpose of this study, 63 samples are used, which consist 56,25% of all responses.

Table 4: Ratio of buyers who use online platform to non-users

The next control variable is intended to verify if output will vary by the size of the company. The most common distinction of firm size is the number of employees who also reveal labour intensity (Sawhne

& Piper, 2002). Eurostat (2017) presents distinctions of size of enterprises as follows:

- Micro enterprises: with less than 10 people employed;

- Small enterprises: with 10 to 49 people employed;

- Medium-sized enterprises: with 50 to 249 people employed;

- Large enterprises: with 250 or more people employed.

Size of the company (amount of employees) Do you use the internet platform to

buy products from a supplier? Frequency Percent Valid Percent

Cumulative Percent yes Valid 1-9

10-49

14 35

22.2 55.6

22.2 55.6

22.2 77.8

50-249 8 12.7 12.7 90.5

more than 250 6 9.5 9.5 100.0

Total 63 100.0 100.0

Table 5: Size of the company

Micro and small enterprises consist of 77.8% of all respondents. As the purpose of this study is to investigate perspective of the buyers, who make a use of online platforms, the results illustrate only this target group. However, the results concerning buyers who acquire materials through other

Do you use the internet platform to buy products from a supplier?

yes N Valid 63

Missing 0

no N Valid 49

Missing 0

channels are presented in Appendix B. The comparison between these groups can bring interesting insights and inspire further studies.

Other control variables were verifying the frequency of making a purchase through internet platform, the amount of money spent per purchase, and advance of IT system.

The frequency of making a purchase through internet platform Do you use the internet platform to buy

products from a supplier? Frequency Percent Valid Percent

Cumulative Percent

yes Valid Every week 29 46.0 46.0 46.0

Every month 21 33.3 33.3 79.4

Few times per year 13 20.6 20.6 100.0

Total 63 100.0 100.0

Table 6: The frequency of purchase

The amount of money spent per purchase through online channel Do you use the internet platform to buy

products from a supplier? Frequency Percent Valid Percent

Cumulative Percent

yes Valid 1-500 euro 29 46.0 46.0 46.0

501-1000 euro 18 28.6 28.6 74.6

1001-5000 euro 14 22.2 22.2 96.8

More than 5000 euro 2 3.2 3.2 100.0

Total 63 100.0 100.0

Table 7: The amount of money spent per purchase

Advance of IT system Do you use the internet

platform to buy products from

a supplier? Frequency Percent Valid Percent

Cumulative Percent

yes Valid low 12 19.0 19.0 19.0

medium 43 68.3 68.3 87.3

advanced 8 12.7 12.7 100.0

Total 63 100.0 100.0

Table 8: Advance of IT system

Unfortunately, none of these control variables reached significant value, which would enable

to use them in the further analysis. One of the reasons behind this could be a small sample size.

4.2. Multiple Regression Analysis

In order to test the research hypotheses, multiple regression analysis was performed. First, direct relationships between e-procurement, delivery performance, customer service and buyer satisfaction are tested. Buyer satisfaction is the dependent variable and is regressed against the three previous mentioned independent variables. To examine the correlations and significant values among all variables, correlation analysis was executed. The most important values of all steps are presented in Table 9 below.

Table 9:Results of hypotheses testing

Hypotheses H1 H2 H3 H4-H6

β β β β β

Independent variables

E-procurement .227* -0.036 0.100

Delivery performance .290* 0.102 0.224

Customer service .633*** .609*** .318*

Moderator/ interaction of variables

Information quality .253*

Inf. Quality * E-procurement -0.163

Inf. Quality * Delivery performance -0.96

Inf. Quality * Customer Service 0.054

R² .051 .084 .400 .407 .490

Adjusted R² 0.036 .069 .391 .376 0.425

Dependent Variable: BuyerSatisfaction N = 63

*p<0.05 **p<0.01 ***p<0.001

Direct effect

The values presented in the table confirm the direct relationships of each construct with the buyer satisfaction. Customer service has the most significant effect on buyer satisfaction (β = 633, p<0.001 ).

The results show that all three order fulfilment dimensions are significant in explaining buyer satisfaction, what means that first three hypotheses (H1, H2 and H3) are supported.

Moderating effect of information quality

The second model was intended to examine moderator effect of information quality. The interaction

effect of each dependent variable and information quality upon buyer satisfaction was tested. The

results illustrate that hypotheses 4,5, and 6 cannot be supported, as the interaction effect is statistically

insignificant (p>0.01).

Moreover, information quality has yet again a positive effect on buyer satisfaction (β = 253*), thus is concluded that is positively associated. Although this research was not intended to measure this relationship, the given results confirm theories depicted in literature review, which shows that information quality has significant impact on buyer satisfaction.

4.3. Reasons behind not using e-commerce

Although answers of respondents who do not use online platform were not considered in these analyses, they bring interesting insights related to the research. One of the purposes of this study is to bring the light to what has the biggest impact on buyer satisfaction. On the other hand, this paper is directed to the providers who would like to know which aspects of order fulfilment play the most important role, how information quality impacts their processes, and how to improve online platforms in order to satisfy and acquire more buyers. Companies who do not use online platforms were requested to answer a number of questions. One of them was reasoning why they refuse to use web stores. Results are presented below in Table 10.

# Answer %

1 No trust 4.11%

2 Bad experience 0.00%

3 Not available by the supplier 19.18%

4 No waiting time for delivery 8.22%

5

Lack of personal contact, such as advise or

customization 57.53%

6

Lack of physical control of the quality and variety of

products 15.07%

7

The quality of information is not always good on the

website 12.33%

8 The websites of our suppliers do not meet our needs 5.48%

9 Others, namely: 21.92%

Total 100%

Table 10: Answers of companies who do not use online platforms

To the “other reasons” belong inter alia: larger purchases are based on bidding, specialized materials are not available through online channel, no experience, other ordering methods - interfaces with suppliers, direct consultation more convenient, too many platforms or too many suppliers.

Some of the answers show what could be improved in online service delivery that could attract more

customers to use online platforms.

5. Discussion

According to Chiang et al., (2006) web stores have become a prevalent sales channel. A report from Forrester Research presented that nearly 75% of B2B buyers would rather purchase from a website, which is more convenient than buying from a sale representative (Hoar, 2015). However, this research depicts that only 56.25% of companies in construction industry decide to buy their materials through online platforms. One of the reasons could be that construction companies are still lagging behind other industries in using e-commerce (Bhutto et al.,2005; Laryea & Ibem, 2014) and they are sluggish with realizing the benefits, which could be gained from making e-commerce their primary source for material procurement (Bianchi, 2015). On the other hand, results show that companies who do not use online platform spend more money per purchase than companies who use e-commerce.

Some of the respondents pointed out that larger purchases are based on a bidding process or that they have own information system, which is linked to the suppliers. To the question why they don’t use an online channel, 57,53% responded with: “Lack of personal contact, such as advise or customization”.

One of the managerial implications could be information for suppliers, that they should provide online tools, which would provide more advices on the website concerning their materials, creating a specialized forum or implement chats with the experts.

It is very important for companies to understand what customers in B2B environments value

the most. Jain et al. (2017) argue that there is a need to understand the influence of various e-

fulfilment dimensions on customers to provide a high service level. This paper presented several

dimensions, which were grouped in three the most important order fulfilment dimensions, namely e-

procurement, delivery performance and customer service. Companies try to differentiate themselves

by providing excellent service in one or more dimensions of the e-fulfilment process to influence

customer satisfaction (Jain et al. 2017). This research presented that e-procurement, delivery

performance, and customer service have direct impact on buyer satisfaction. Although delivery

performance was preserved as satisfactory, not all suppliers provide an automatic identification during

the delivery process to track order status. However, this paper shows that what customers value the

most is reliable delivery (Mewborn, 2014), which can be seen as on-time delivery of good and

undamaged products (Andrews, 2001; Ramanathan et al., 2016; Sawhney & Piper, 2002). Results

illustrate that the most significant impact on buyer satisfaction has customer service (β = 633,

p<0.001). In the order-fulfilment stage, the supplier delivers the goods ordered through the Internet

and provides customer services during or after delivery (Cho, 2014). According to Vinhas et al.,

(2010) the after sale stage is critical for business customers. Thus hypothesis 3 referring to customer

satisfaction is aligned with theory of Setia et al. (2013) that customer service performance is critical

for firm’s survival. Negash et al. (2003) claim that customer support is essential to remain competitive

put more emphasis on condition and the ease of return process while this factor was found less satisfactory than the other factors.

By sending the questionnaire to construction companies (buyers) in the whole of the Netherlands, the randomness of the sample and the ability to represent the population-of-interest have been preserved (Karlsson, 2016). To get an insight about specific characteristics of respondents and to examine if the results vary by these characteristics, control variables were comprised in the questionnaire. Buyers were requested to indicate their company size, frequency of making purchase, the amount of money spent per purchase and advance of IT. These control variables did not reached statistic significance, thus not affecting any relationships presented in this research. However, they give information about population of construction companies, which use online platforms. Micro and small enterprises consist of 77.8% of all respondents. Companies purchase products through online channels relatively often – 46% buy every week, while 33% every month. Another intriguing aspect depicts that companies who do not make use of an online platform spent much more money per purchase than buyers acquiring their products through web stores. The ratio of buyers who spent money in the range of 1001-5000 per purchase significantly varies between those two groups, namely:

25,4% of online buyers and 67,4% of non-online buyers.

Approaching the main subject of this study, information quality plays an important role in buyer satisfaction. According to Zailani and Rajagopal (2007) information quality is critical for the success of firms and plays a more central part of their strategies. In order to meet expectation of business customers, which expect quick delivery, flexibility, quality, cost effectiveness and timeliness, many companies seek to improve information quality in order to attain these requirements (Zailani &

Rajagopal, 2007; Pollard & Hayne, 1998). To summarize, the theory presented in literature review says that information quality has strong relationship with the buyer satisfaction is also confirmed in this study. However, this research demonstrates that information quality does not affect relationships between order fulfilment dimensions and buyer satisfaction. Thus, despite the direct effect on buyer satisfaction, information quality surprisingly has no impact on relationships between e-procurement, delivery performance, and customer service and buyer satisfaction. Business customers may have a higher knowledge concerning the products, thus information quality does not have significant impact on these relationships like in case of the B2C context. B2B buyers are more familiar with their suppliers, making purchases on regular basis and most of their processes are constantly repeated.

Companies who do not find the satisfactory level of information quality on the websites concerning

products, purchasing process or delivery, likely contact customer service or decide to use offline

channels. In the case they need detailed information concerning products or services, customized

advice or designated transportation, they rather have personal contact with the suppliers. It can also be

a sign for suppliers that they should equip their websites with additional tools, which will meet the needs of buyers and allow for acquiring new buyers. Information quality plays an important role in the B2C context, where customers can easily switch between providers in case of dissatisfaction, while in the B2B environments buyers are often tied to their suppliers. Taking into consideration that the construction sector is still seen as traditional and behind other industries in using e-commerce, many buyers do not have the experience or the current level of web stores is a basic expectation they have for online purchases.

To achieve the generalizability of these results, presented research should be conducted also among other industries.

6. Conclusion

This study aimed to investigate the role of information quality on relationships between order fulfilment dimensions and buyer satisfaction in the e-commerce context. For this purpose, an extensive literature review and survey were conducted. Due to the lack of research from the business-to- business perspective, a survey was conducted among companies in the construction industry in the Netherlands. Online platforms, by which companies place their orders, are used by 56,25% of respondents, resulting in 63 samples. First of all, direct relationships between e-procurement, delivery performance, and customer service and buyer satisfaction were tested. All these order e-fulfilment dimensions have a direct impact on buyer satisfaction. Therefore companies should strive to understand customers’ needs and deliver high-level service to remain competitive on the market.

Accordingly to the outcome of this research, special attention should be paid to customer service, which had the most significant impact on buyer satisfaction. As customer service performance is critical for a firm’s survival (Setia et al., 2013), suppliers should provide high standards of before and after sale customer service, which are becoming key components of product offering. Subsequently, the moderating effect of information quality on the relationship between previously presented order e- fulfilment dimensions and buyer satisfaction were tested. Surprisingly, there is no statistically significant impact upon these relationships. However, information quality has a direct impact on buyer satisfaction, which has been already proven by prior studies (Petter et al., 2008; Chen et al., 2015).

The excellence of information quality enhances buyer satisfaction and overall business performance.

Companies should strive for providing high-level performance of dimension presented in this research,

because they are the critical touch points with customers. Semeijn et al. (2005) have confirmed that

there is a significant bond between customer satisfaction and loyalty; consequently this increase has a

positive impact on customer repurchase behaviour (Ha et al, 2010; Naumann, 2009; Khalifa & Liu,

2007; Reichheld & Teal, 2001). All of these factors consist on the success of a business and its

6.1. Limitations and further research

This research paper has several limitations, which should be considered when interpreting the findings. In addition, these limitations provide insights, which future researchers should take into account. First of all, the sample size was too small, especially considering the amount of items included in this research. By using a greater sample, control variables could be significant in interpreting results. A number of companies purchase their products through online platforms of various suppliers, who have a different degree of performance, which could create confusion in answering the questionnaire. For this reason, the close collaboration with the suppliers who would allow for contacting their customers could bring more reliable responses. To obtain new interesting insights and to delve into the studied topic, numerous interviews with buyers are recommended. This research is based only on one industry; therefore the outcomes cannot be generalized. Although the construction industry seemed to be an attractive object for the research, testing the e-commerce phenomena could be more consistent in industries, which use the online channel in a bigger scale.

Accordingly, further research should include several sectors. On the other hand, the construction industry can be further investigated, taking into consideration buyers who do not use online platforms.

Further research could study why this sector is still behind the other industries in using e-commerce.

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