An Approach to Evaluating E-Business Information Systems Projects

Capital investments in the e-business infrastructure add complexity to the IT payoff question because e-business interorganizational investments are deployed across multiple platforms, projects, vendors and partners. Traditional MIS research has been devoted to measuring the payoff from information technology (IT) investment without any specific focus on e-business. Flaws in the mature MIS performance measures seem to yield weak guidance for managers when evaluating IT success, thus diluting the potential for these measures to be adapted for use in the new e-business environment. A review of the conventional MIS payoff literature indicates that these measures may be incomplete, inaccurate, or inefficient for application to electronic commerce investments. This paper brings four new points to the e-business IT investment evaluation dialogue: (1) we first explore performance measurement validity flaws in our long established measures; (2) the paper discusses a two-by-two matrix delineating the gap between the quantitative versus qualitative performance measures of management information systems (MIS) initiatives; (3) sample e-business payoff techniques are discussed and reviewed in light of these historical imperfections, and (4) fourth, the paper proposes and describes an innovative framework derived from production theory economics for future research in evaluating e-business MIS implementations.     

Commodity or competitive advantage? Analysis of the ERP value paradox

A true e-business enabled firm needs the support from a well-tuned enterprise resource planning (ERP) system for providing real time data. However, many companies complain that after their huge investments in ERP systems, they found the ERP systems do not bring them new orders, new profits, or competitive advantage as ERP vendors claim. Academic studies also found mixed results regarding ERP’s payoff. In line with resource based view (RBV), the study proposes an integrated model to shed light on the ERP value paradox. We try to answer “With what organizational resources and by building what firm specific capabilities, the investment in ERP systems may bring firms competitive advantage”. Using a sample of 150 ERP and e-business adopters in the US, we found that (1) organizational resources such as managerial skills and organizational change management play a more important role than IT resources (ERP, e-Business technologies) in generating business integration capability. (2) However, neither IT resources nor organizational resources directly provide firms with competitive advantage. Instead, business integration capability built from the two resources plays a mediating role through which business achieves competitive advantage.     

A cost/benefit model for investments in inventory and preventive maintenance in an imperfect production system

In this research, a cost/benefit model is developed for supporting investment strategies about inventory and preventive maintenance in an imperfect production system. The effect of such investments on the return is expressed as a function of measurable variables. Using this model, the decision maker can decide whether investments in inventory and preventive maintenance are necessary and how much to invest. This investment model is developed for an imperfect production system with imperfect product quality and supplied quantity. Investments in inventory and preventive maintenance increase service level for the customer and reduce the proportion of defective products, and hence affect stockout and backlog of supplied products and the delivery time to the customer. This model includes in its scope investment in inventory and preventive maintenance, manufacturing cost, inventory cost, backlog cost, stockout cost, and delay cost. This model can be used to evaluate the effects of investments on the financial cost/benefit and other relevant critical performance measures. This model can be solved by an iterative process using the Sequential Quadratic Programming Method. The optimal investment in inventory with respect to the service level and the optimal investment in preventive maintenance with respect to the proportion of defective items can be obtained first, and then other relevant costs can also be obtained.     

基于网格技术的电子商务平台研究

随着计算机技术尤其是网络技术的飞速发展以及全球经济一体化步伐的加快,电子商务得到了越来越广泛的应用.但是资源分布的不均衡性造成企业内部和外部存在大量的信息孤岛,严重制约了电子商务的进一步发展.本文主要分析了目前电子商务发展中存在的问题,探讨了网格技术对电子商务的影响,并给出了基于网格技术的电子商务平台模型的初步设计.     

本体集成的研究

本体技术在智能信息检索,电子商务,网上协作等信息技术领域的应用前景正越来越广。许多应用要求对相关信息源进行综合查询,因此必须解决这些异构数据源的语义互操作。由于同一领域的不同信息源的本体创建者采用的语义不同,将它们集成涉及许多复杂因素。本文通过对集成过程中需解决的问题进行分析,提出本体集成的框架,并给出实现方法。     

e-Business process interleaving: Managerial and technological implications*

The emergence of Internet as the hub of e-business has made business process integration another important frontier of information management and technology. As a result, the management of inter-organizational business processes is now a major concern of corporate managers. We envision that the new and complex ways of interactions among business partners in a supply web will need to be managed effectively as the next generation of the Internet makes cross company workflow a reality. Consequently, business managers are confronted with new issues and new decisions in the strategic and operational aspects of process integration. To facilitate the understanding of these issues, we introduce a new paradigm of business computing referred to as E-business Process Interleaving, which emphasizes the complex and dynamic integration of e-business processes across company boundaries. In this paper, we outline various impacts of this new phenomenon on information management and technology and investigate the enabling technologies of e-business process interleaving. We believe that our work can help the development of the next generation of corporate information infrastructure that enables greater degree of e-business process integration.This research was partly supported by CITM grants including the DoD contract (2000–2001), N00244-00-C0108, and by the State of California NGI Program.     

Assessing the benefits from e-business transformation through effective enterprise management

This paper reports on research carried out in 1999–2001 on the use of e-business applications in enterprise resource planning (ERP)-based organisations. Multiple structured interviews were used to collect data on 11 established organisations from a diverse range of industries. The findings are analysed according to the level of sophistication of e-business models and their transformational impact on the organisation. Early adopters of e-business show a trend towards cost reductions and administrative efficiencies from e-procurement and self-service applications used by customers and employees. More mature users focus on strategic advantage and generate this through an evolutionary model of organisational change. Two complex case studies of e-business integration with global suppliers and their corporate customers are analysed to identify specific stages of benefits accrual through the e-business transformation process. Collectively, the set of case studies is used to demonstrate the increased benefits derived from an e-business architecture based on a network of ERP-enabled organisations.     

Real options analysis of the timing of IS investment decisions

Many information systems (IS) investments belong to a class of capital budgeting problem where there is an option: the investment may be made straight away or delayed for some period. A real options analysis could allow decision-makers to add value to these investment decisions by providing a framework that explicitly recognises uncertainty. This paper uses options pricing theory to determine the optimal timing of IS investments and to explore the effect of different investment review cycles. The findings provide support for the common industry practice of demanding short payback periods for IS investments.     

Information security in networked supply chains: impact of network vulnerability and supply chain integration on incentives to invest

Recent supply chain reengineering efforts have focused on integrating firms’ production, inventory and replenishment activities with the help of communication networks. While communication networks and supply chain integration facilitate optimization of traditional supply chain functions, they also exacerbate the information security risk: communication networks propagate security breaches from one firm to another, and supply chain integration causes breach on one firm to affect other firms in the supply chain. We study the impact of network security vulnerability and supply chain integration on firms’ incentives to invest in information security. We find that even though an increase in either the degree of network vulnerability or the degree of supply chain integration increases the security risk, they have different impacts on firms’ incentives to invest in security. If the degree of supply chain integration is low, then an increase in network vulnerability induces firms to reduce, rather than increase, their security investments. A sufficiently high degree of supply chain integration alters the impact of network vulnerability into one in which firms have an incentive to increase their investments when the network vulnerability is higher. Though an increase in the degree of supply integration enhances firms’ incentives to invest in security, private provisioning for security always results in a less than socially optimal security level. A liability mechanism that makes the responsible party partially compensate for the other party’s loss induces each firm to invest at the socially optimal level. If firms choose the degree of integration, in addition to security investment, then firms may choose a higher degree of integration when they decide individually than when they decide jointly, suggesting an even greater security risk to the supply chain.     

Measures for e-business value assessment

Companies are investing heavily to leverage the Internet and transform their traditional businesses into e-businesses. Senior managers are increasingly under pressure to justify e-business costs. Do these investments pay off? And if so, how can a company make sure they keep paying off? Managers in successful companies struggle to articulate where benefits come from, and those without success strive to find a way to turn things around and cash in on e-business initiatives. We previously discussed results from an extensive survey about how eight key drivers affect a company's e-business success. Researchers from the Center for Research in Electronic Commerce at the McCombs School of Business, the University of Texas at Austin, conducted the survey to assess e-business value in small, medium, and large companies across the US and Europe. The study identified critical links between e-business drivers, operational excellence measures, and financial success measures. We describe these links in detail, showing that e-business initiatives improve operational excellence, which in turn improves financial performance     

An enterprise integration methodology

As more and more organizations pursue the benefits of e-business, they are looking to a process called enterprise integration, or EI, as a key technical enabler in transforming their business processes. A typical form of EI is Webification; in this scenario, a company wants to offer its existing products and services over the Internet, so it builds Web front-end systems and integrates them to its backend legacy systems. (In this article, we use "legacy system" to mean any IT system already in operation.) A more complex El scenario involves enterprise application integration. By this process, the organization links up previously separate and isolated systems to give them greater leverage. For example, an organization might integrate a customer-relationship-management system, a call center system, and legacy customer account systems to give the organization a consolidated view of its customers. An emerging EI scenario is business-to-business (B2B) integration (also called extended enterprise models), which occurs when an organization integrates its own business processes with those of its business partners to improve efficiency within a collaborative value chain.     

Collaborative integration in e-business through private trading exchanges (PTXs)

Collaborative integration is e-business process integration with supply chain partners such that there is a tightly-coupled collaborative relationship among all partners, deep visibility across all tiers of the supply chain, and near-real-time information exchange and knowledge sharing around supply chain processes. Enterprises seek to implement collaborative integration in order to realize the value-added benefits and cost savings of superior supply chain management, while enabling intelligent action and faster response to environmental variability. Increasingly, supply chain leaders are building private trading exchanges (PTXs) in order to more effectively enable and manage such collaborative integration. This paper examines the value proposition and the spectrum of solutions and services around collaborative integration through PTXs. The paper first identifies the challenges of collaborative integration in near-real-time supply chains. It then describes the building blocks of a PTX solution. It develops a comparative value proposition for collaborative integration. It then provides an illustrative case example from Viacore Inc. The paper ends with an examination of the future of collaborative integration in lean e-business environments.     

Investments in information systems: A contribution towards sustainability

Empirical research has determined that information systems (IS) can abate far more emissions than they produce. By using its transformative power, Green IS can build energy efficiency along the entire business value chain and thus contribute to sustainable development that goes well beyond that of Green Information Technology (Green IT). However, from a business perspective there is still prevailing uncertainty with regard to the economic viability and optimal extent of Green IS investments. In this paper, we conceptualize a decision model for an IS investment that increases a company’s energy efficiency. We analyze and compare the costs associated with the investment and the realized energy cost savings. Furthermore, we examine the influence of fluctuating energy prices on investment decisions. By integrating risk and return into one decision calculus, we determine an optimal degree of investment, which avoids over-investment while promoting energy efficiency, and therefore establishes the long-term coherence of economic and environmental sustainability. Finally, we demonstrate that reduced exposure to risky energy prices results in comparatively larger investments, thereby implying a higher optimal investment degree, assuming the involvement of risk-averse decision-makers.     

e-Business systems integration: a systems perspective

Systems science has emerged as a meta-discipline and a meta-language, correspondingly, which can be applied to discuss issues in e-business systems and relevant enterprise architecture and enterprise integration. A lot of researches on enterprise architecture and enterprise integration in e-business systems have their theoretical findings and effective practices naturally influenced by systems theory and relative methodologies. This paper strives to review the contribution of systems theory to enterprise architecture and integration. It also tries to summarize methods or tools applied on enterprise systems level, and to investigate many crucial scopes, concepts and their interrelationship in e-business systems integration activities. Finally, this paper presents new prospects in enterprise architecture and integration for e-business systems. All of these may be useful to deal with the increase complex informatics issues of modern enterprises.     

Information Systems Offshore Outsourcing: An Exploratory Study of Motivations and Risks in Large Spanish Firms

Prior research has documented that IT investment increases market returns. Economic theories predict such returns to be recognized in accounting profitability; this relationship remains ambiguous in prior literature. We reexamine the relationship between IT investment and firm profitability. Our approach is unique in that we examine complementarities between distinct IT components. We document that a firm’s investments in IT components exhibit different impacts on its profitability conditional on the level of investments in complementary components.     

Valuing information technology infrastructures: a growth options approach

Decisions to invest in information technology (IT) infrastructure are often made based on an assessment of its immediate value to the organization. However, an important source of value comes from the fact that such technologies have the potential to be leveraged in the development of future applications. From a real options perspective, IT infrastructure investments create growth options that can be exercised if and when an organization decides to develop systems to provide new or enhanced IT capabilities. We present an analytical model based on real options that shows the process by which this potential is converted into business value, and discuss middleware as an example technology in this context. We derive managerial implications for the evaluation of IT infrastructure investments, and the main findings are: (1) the flexibility provided by IT infrastructure investment is more valuable when uncertainty is higher; (2) the cost advantage that IT infrastructure investment brings about is amplified by demand volatility for IT-supported products and services; (3) in duopoly competition, the value of IT infrastructure flexibility increases with the level of product or service substitutability; and (4) when demand volatility is high, inter-firm competition has a lower impact on the value of IT infrastructure.     

Why one big picture is worth a thousand numbers: measuring intangible benefits of investments in augmented reality based assistive technology using utility effect chains and system dynamics

The body of literature in the area of IT/IS investment evaluation proposes a variety of methods and techniques for the ex-ante assessment of IT/IS investments. However, the financial evaluation of intangible benefits associated with IT/IS investments in general and investments in innovative IT/IS in particular still remains a problem area of high relevance to decision makers. As a consequence, investment decisions are still taken by practitioners as an “act of faith”. With this in mind, it is our primary aim to develop a quantification model for the financial assessment of intangible benefits concerning investments in innovative IT/IS. Based on an augmented reality and smart glasses application scenario from the construction domain, we demonstrate how intangible benefits of innovative IT/IS investments can be visualised and measured more effectively by means of utility effect chains and system dynamics prior to their incorporation into a cost–benefit analysis. Based on design science research, the quantification model is developed by means of a systematic literature review and evaluated using the augmented reality application scenario in construction. The model can serve as an aid to the managerial decision making process by providing an enhanced understanding of the various tangible and intangible benefits associated with the investment.     

Information flow in reverse logistics: an industrial information integration study

With the coming of low-carbon society, the reverse logistics of used batteries for lowering the carbon emission becomes an important research topic; in which, information integration of reverse logistics is the key for implementing reverse logistics systems. Currently there are not many enterprises that are capable of using enterprise systems or e-business systems to manage reverse logistics. In the framework of industrial information integration engineering, this research investigates the process of reverse logistics of used batteries, with an emphasis on the information integration of reverse logistics of used batteries.     

Supporting process design for e-business via an integrated process repository

Business process design is an integral part of e-business engineering. Given that e-business models usually involve a wide range of business processes across different business functions with complex activities, events, and documents, process design for e-business is a very challenging task. Although various process reference models (PRMs) have been developed to provide guidelines for process design, research on leveraging multiple PRMs to support process design for e-business has been scant. In this paper, we demonstrate that the diverse process design requirements in e-business are best satisfied by utilizing multiple PRMs via a case study. Then, we propose a collaborative approach grounded in knowledge management theory to integrating multiple process reference models to better support process design in e-business. We equip the integrated process repository with a set of novel features based on Web 2.0 technologies to enhance its utility, efficiency, and quality for process design support. A prototype system is developed and user experiments are conducted to evaluate the system.     

Making business sense of electronic commerce

Although its infrastructure is still very young, e-commerce continues to create new business models and innovative marketing and technology strategies. To avoid unraveling their core processes, organizations considering e-commerce applications must take time out to evaluate the many facets of adoption and integration. Arguments for not investing in e-commerce are rapidly dissolving. It is now widely accepted that a business cannot ignore e-commerce investment without incurring heavy penalties over the long run. We believe organizations that want to invest in e-commerce must have a significantly higher degree of technological fluency and a bolder approach to experimentation with unfamiliar business models than they would for investments in other areas. Successfully exploiting e-commerce requires creatively linking an organization's strategy and its supporting technology as well as managing pervasive IT applications that change very quickly and are becoming increasingly integrated and convergent. Only then can enterprises achieve the flexible and adaptive behavior that is central to effective e-commerce