An E-Commerce Systems Integration Framework

By Capozzoli, Ernest A.; True, Sheb L. | Southern Business Review, Spring 2001 | Go to article overview

An E-Commerce Systems Integration Framework

Capozzoli, Ernest A., True, Sheb L., Southern Business Review

E-Commerce is deploying computer and communications technologies to support an organization's sales process (Capozzoli, True, & Pritchett, 2000). It can be dichotomized as Business to Consumer (B2C) and Business to Business (B2B), is increasing at a rapid rate, and is expected to continue although estimates vary substantially. For example, (2001) estimates that B2C activity will grow from $60 billion in 2000 to $428 billion in 2005, and Goldman Sachs (, 2001) is estimating $2.1 trillion for the same period. In 2000, worldwide B2B Internet commerce surpassed $433 billion. That total is projected to reach $919 billion in 2001 and $8.5 trillion by 2005 (Gartner Corporation, 2001). The requirement of systems integration is being driven by this growth.

The success of E-Commerce activity is directly affected by system integration efforts associated with traditional back office and web-based systems. The potential benefits of enterprise-wide E-Commerce activities (e.g., customer relationship, inventory, and process management) to an organization emphasize the need for system integration beyond individual sales transactions. Indeed, the range of business processes that represent a more complex and dynamic business arrangement in which advancing technologies should be effectively integrated into the planning process is broad. Unfortunately, many organizations are not capitalizing on the synergistic advantages of integrated systems (Maruca, 1999). Fewer than one-third of Internet retailers have integrated their back office inventory databases with their front-end web systems (Spieler, 2001). Despite the apparent lack of integration, some organizations are attempting to coordinate such customer activities. Wal-Mart has established a goods returns policy that allows a customer the option to return merchandise purchased on-line to any WalMart store (Wal-Mart, 2001).

Planning for and integrating ECommerce technologies are essential to an organization's survival. The success of a strategy depends on doing many things well and integrating those activities (Porter, 1996). According to Mintzberg (1994), an organization must do three things better than the competition: it must know itself, have robust business systems, and have both an internal and external focus. Following these guidelines is made more difficult by a rapidly changing and advancing technological environment. E-Commerce capabilities have enabled both buyers and sellers of products to obtain more and better information faster. This shifting of the channel power structure is creating chaos in traditional business processes and in the development and maintenance of internal (e.g., employee) and external (e.g., customer and supplier) relationships. The goals of these systems are to improve financial performance and to create and sustain competitive advantages. Thus, organizations need to better understand the system as a whole. One means of accomplishing this is via planned periodic reviews of ECommerce activities as they relate to existing business processes and systems.

Capozzoli, True, and Pritchett (2000) set forth an initial framework for describing the relationship between E-Commerce activity and systems integration that is categorized in five levels. A Level-1 company makes little or no use of computers and/or communications technology, and a Level-5 firm makes extensive, cutting-edge use of these tools (see Figure 1). The purpose of this paper is to further develop this framework for positioning organizational business processes and technological capabilities consistent with Mintzberg's and Porter's guidelines. Framework Discussion E-Commerce activities, both B2C and 13213, can address different requirements and must be identified, managed, and measured as such. Understanding these distinctions is crucial because they can influence system integration requirements, but current measurement indicators are incomplete and may give erroneous and unreliable output. …

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