Managing E-Business Transformation: Opportunities and Value Assessment

While the field of electronic commerce has often focused on the rise and fall of “dot coms,” a major transformation is under way in many traditional organizations that are investing heavily in Internet technologies in order to improve financial performance. While anecdotes in the business press suggest that some firms have achieved unprecedented benefits by leveraging the Internet, there is no systematic basis to guide managers through this transformation process. Based on IT business value research, we present a framework of electronic business value that enumerates linkages between performance drivers (e.g., Internet applications, processes, and electronic business readiness of customers and suppliers), and operational excellence and financial metrics. We argue that firms engaged in electronic business transformation must make synergistic investments and commit resources not only in information technology, but also must align processes and customer and supplier readiness to maximize the benefits. The model and the general approach provide a rich foundation for managers to analyze the types of electronic business initiatives that lead to better operational and financial performance. Further, management can use this model to benchmark their electronic business projects and to identify areas that may require attention and additional resources. ♣ Financial support for this research was provided by Dell Computer. Anitesh Barua thanks the Bureau of Business Research, McCombs School of Business, The University of Texas at Austin. Prabhudev Konana acknowledges support