Academic journal article Journal of International Technology and Information Management

The Enabling Role of E-Business Technologies in Strategic Operations Management

Academic journal article Journal of International Technology and Information Management

The Enabling Role of E-Business Technologies in Strategic Operations Management

Article excerpt

INTRODUCTION

The emergence of the Internet with its open commercial exchange approach has revolutionized the business world by introducing information and communication i.e., e-business technologies (ICT), ushering in the business Information Age. Internet usage has continued to grow with 24.7% of the world's population accessing the Internet on regular basis (World Internet Usage, 2009). Despite being in recession and economic down turn, e-business remains one of the fastest growing industries. According to the Forrester Report, the US e-tail sales revenues are expected to grow from $156 billion in 2009 to $229 billion by 2013. Information Data Center predicts that e-commerce spending will reach $496.7 billion in the United States and $1.3 trillion globally by the year 2009 (Ratnasingam, 2008). Jorgenson (2001, 2007) found that ICT "contributed 59 percent of the growth in labor productivity from 1995 to 2000 and 33 percent from 2000 to 2005."

Although many firms have adopted these technologies to address specific problems, firms especially of small/medium size feel pressure to determine the optimal level of ICT adoption and to develop a coherent e-business strategy (Beckisale et al., 2006; Chong & Pervan, 2007; Johnston et al., 2007, Magal et al., 2009). To understand these ever-evolving technologies and figure out how to put them together strategically remains a formidable task, which has led both to serious tactical errors, causing many firms to fail across the globe (Phan et al., 2005; Hernandez et al., 2009) and to some managers reducing their initial efforts to adopt ICT (Caniato et al., 2009). Kaplan et al. (2010) warns against IT budget cuts and emphasizes targeted investments to increase efficiencies and thereby, revenues, especially during the economic downturns. Many firms have realized that successful adoption of ICT and a coherent e-business strategy depends largely on a firm's operations effectiveness in fulfilling the customer orders by harnessing Internet connectivity across supply chain members (Kumar et al., 2007; Barnes et al., 2003; Dedhia, 2001; Hall, 2000).

This paper attempts to fill this gap. To begin, it briefly discusses the role of ICT adoption in operations management; our intention is to show that ICT is at the heart of operations function of a firm and to propose a possible e-business framework to manage operations. The next section briefly discusses the role of ICT in strengthening a firm's business strategy; the paper suggests mass customization as a viable e-business strategy. Since functional level (e.g., operations, marketing, finance) strategies must be consistent with business level strategies, the main section of this paper shows how ICT adoption influences key OM decisions and thereby, ensures sustainable competitive advantage in terms of OM objectives (i.e., quality, efficiency, flexibility and dependability). The concluding section discusses challenges to adopting ICT and developing an e-business strategy from the operations viewpoint.

ICT and E-business: An operations management perspective

The hyphenated E in term e-business implies the applications of information and communication technologies to change, improve, and (to an extent) automate internal as well as external business processes of a firm. The term simply implies doing business digitally using an ever-proliferating variety of internet-, intranet- and extranet-based devices such as mobile internet phones, pagers, hand-held computers, in addition to desktops, laptops, and servers (Brache & Webb, 2000; Baltzon et al., 2009). Figure 1 explains how ICT adoption level influences a firm and has potentials for transforming operations and consequently the business model of a firm (Lilischkis et al., 2009).

[FIGURE 1 OMITTED]

competitive advantage in terms of dependability, efficiency, flexibility, and quality (Hayes et al., 2005).

Figure 2 shows a possible e-business framework using electronic means and platforms to manage a company's external business processes as they come in contact with customers and suppliers as well as its internal business processes involving product development, production planning and scheduling. …

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