34 Managing E-Business Change BACKGROUND In trying to bring about e-business change: “man- agers would do well to recognise the complemen- tary nature of technology, business models, and e-business readiness throughout the value chain from their suppliers to their customers” (Barua, Konana, Whinston, & Yin, 2001, p. 39). Theoretical Framework The study used an established theoretical frame- work (Figure 1) from business process change case-based research (Guha et al., 1997), for identifying and examining the facilitators and inhibitors of successful e-business projects. The model represented by Figure 1 was adapted from previous research on business process change by Guha et al. (1997, p. 121) to include e-business change. Also it acknowledges the existences of inter-relationships between components, as sug- gested by Kaplan and Norton in developing their Balanced Scorecard (2000, p. 168, 2004, p. 55). Research Approach The research proposed three questions: 1. Which components of eBC framework fa - cilitate and/or inhibit success of e-business projects? 2. What are the critical success factors of e- Business projects? Figure 1. Model of e-business change (Adapted from Guha et al., 1997, p. 121) 35 Managing E-Business Change 3. Is the eBC framework appropriate for iden- tifying patterns of change? Embedded multiple case study analysis was chosen to investigate the research questions con- cerning the complex phenomenon of e-business change projects, in eight organisations (Yin, 1989). Embedded approaches enlist the use of multiple units of analysis: (1) the company (strategy), (2) the project team, and (3) the project. This triangulation attempts to validate primary data (Eisenhardt, 1989). The case study selection criterion required a major e-business project, which had organisational implications. Also, as the focus was on studying antecedents to organisational performance, a set of projects having a range of B2B initiatives with variance across cases, but with the same outcome measures was required: cost reductions, respon- siveness and customer satisfaction, shareholder value, and other e-business metrics (Venkatraman & Henderson, 1998, p. 34). Case information for this study was gathered from three data sources: 1. Primary Data: From interviews using an established semi-structured questionnaire with questions that map the eBC items in Table 1, conducted between June and July 2000. 2. Secondary Data: From company documents collected or sent via e-mails in 2001. 3. Tertiary Data: From case articles written by authors and other researchers in 2002. Data-collection methods included a semi- structured case protocol as; (1) a qualitative interview questionnaire, (2) multiple documents and archival records, and (3) telephone inter- views. Such triangulation reduces bias and is recommended in case research (Kean & Parent, 1998, p. 308). Case Selection Eight cases were used for an initial assessment of WKHFRPSRQHQWVRIWKHH%&IUDPHZRUN$³6XP- mary of Comments” table was constructed for each case by identifying key comments captured from case interviews. In each case, the components were DVVHVVHGIRUWKHLUFRQWULEXWLRQRULQÀXHQFHWRWKH project success, using a 3-point scale. Four cases out the eight that participated were selected to provide the detailed content for analysis against the eBC model. Halliburton is the representative of the four cases that exhibited little or no inter-organisational focus; that is with ‘nil’ B2B interaction: • Case 1, Halliburton: [nil] business-to-em - SOR\HH%(³Employee Tracking” • Case 2, British Biotech: [low] business-to- VXSSOLHU%6³B2B Procurement” • Case 3, Fujitsu-Siemens: [mod] business- WRFXVWRPHU%&³Online Sales”  &DVH'HOO/6,>KLJK@%6%&³ B2B E-Commerce Integration” CASE SUMMARIES Case 1 )RU+DOOLEXUWRQWKHSULPDU\EHQH¿FLDULHVZHUH the offshore project managers who needed access to the HR employee tables for personnel manage- ment and gained this through the innovative use of web-based technology. The result was one of considerable cost savings and improvement of staff resourcing through improved decision making by the project managers when working off shore. The intrinsic motivation and self-management of autonomous knowledge within the development team played an important role in the successful implementation. The emphasis was much more on collective performance rather than individual, 36 Managing E-Business Change but at the same time, development and mainte- nance of personal and professional reputations ZDVDVLJQL¿FDQWGULYHU,QWHUHVWLQJO\ZKLOHWKH project was rated highly successful there was strong opposition from their partner operations to implement the same system. This came from the counterpart HR staff who had not been ex- posed to the participative development process. The organisational management was luke-warm in their support initially, viewing the proposed system as a threat to a strongly centralised control FXOWXUH2QFHWKHEHQH¿WVEURNHGRZQWKHLULQLWLDO reluctance, management assumed responsibility for the success and leadership for global imple- mentation. We are very proud of our Web-based Personnel reporting system. (SAP project manager) Case 2 British Biotech is a research and development stage pharmaceutical company based in the UK. Its mission is to create partnerships with pharmaceutical companies to complete the development and marketing of its compounds. The B2B Procurement project was able to ease the workload of the company’s procurement department by automating the old, paper-bound purchasing process. The next step of the project was to negotiate more favourable conditions with the slimmed-down vendor base and build up closer business relationships with each one. $SDUWIURPPRUHHI¿FLHQWSXUFKDVLQJSURFHGXUHV the company’s buyers have a more interesting job. Biotech’s scientists should be relieved of routine p a p e r w or k , e na b l i ng t he m t o c o n c e n t r a t e m o r e o n research. B2B Procurement is expected to broaden day-to-day task base (Shaw, 2003). They’ll have more time to spend on nurturing relationships and working on optimisation of projects and other duties. (manager of SAP B2B project) Case 3 Fujitsu-Siemens Computers (FSC) showed how a computer technology division within a large global organisation succeeded in making the sell-side e-business processes available over the Internet. An order and request (extranet) system was developed as an appropriate online sales system by leveraging the power of graphics and Internet technology, thus extending the reach for FURVVGLYLVLRQDOXVHUV7KHHI¿FLHQF\JDLQVFDPH from speed, accuracy and security of order trans- DFWLRQV7KHSULPDU\EHQH¿FLDULHVZHUHWKHRWKHU business partners (divisions) and independent partners. The result was one of considerable cost saving and greatly improved online sales, through any time, anywhere access (Siemens, 1999). Interestingly, while the project was rated moderately successful the opposition came from the partner reluctance to implement the same sys- WHPGXHWRWKHFRQÀLFWRIWKHHVWDEOLVKHGRIÀLQH sales channels. Further, the lack of a coordinated corporate wide strategy by the parent company was viewed as the main obstacle for uptake of the system by the business partners. The lessons learned were two fold; (1) the use of a common platform needs the agreement of all functions, (2) The internal and external market- ing of the facility is essential to the acceptance of divisional business network and to foster end-user acceptance of the technological change in business S U DF W LF H 2 QF H WK H L Q L W LD O E H Q H ¿W V E U R N H G RZ Q X V H U  UHOXFWDQFHPDQDJHPHQW³DVVXPHG´UHVSRQVLELOLW\ and leadership for a new global strategy. It high- lights the need to evolve a coordinated corporate VWUDWHJ\DQGHQFRXUDJHVWKHEDODQFLQJRIFRQÀLFW- ing organisational knowledge when contemplating the adoption of e-business solutions. We are beginning to recognise the potential EHQH¿WVRIOHYHUDJLQJRXUHEXVLQHVVSURFHVVHV and functionality through the new Web-based environment. (SBS manager) 37 Managing E-Business Change Case 4 ,Q'HOOSLRQHHUHGLWV¿UVW%%³HEXVLQHVV integration” with an established customer compa- ny, LSI. This case demonstrates a comprehensive approach to inter-enterprise computing. This is an example of an integration architecture made possible through a variety of backend systems and procurement systems. LSI, was able to leverage its existing backend system and SAP business connector supported by Web technology to com- municate directly with Dell’s e-business system. The integration between LSI’s SAP system and B2B e-procurement application to Dell catalogues automated the procurement of Dell products via the Internet (Dell, 2000). :HDUHEHJLQQLQJWRUHFRJQLVHWKHSRWHQWLDOEHQH¿WV of leveraging our partners SAP R/3 business pro- cesses and functionality through B2B e-Commerce integration. (Dell’s B2B project manager) FINDINGS AND IMPLICATIONS 7KHRYHUDOO¿QGLQJVVKRZWKH'HOO&RUSRUDWLRQ achieved most success, Fujitsu-Siemens Comput- ers achieved moderate success, while Halliburton was least successful. Assuming these ratings UHÀHFWWKHSUHVHQFHRIIDFLOLWDWRUVDQGLQKLELWRUV WKHQWKHLQLWLDO¿QGLQJVLQGLFDWHWKDWDVXFFHVVIXO project should have facilitators in all components, including the business environment and project management, (e.g., Dell). Further there is the implication that the least successful e-business projects will have inhibitors in the areas of cul- tural readiness and change management practice, (e.g., Halliburton). Evaluation of E-Business Project Success Table 1 summarises the data captured on each construct. Consistent with the research objec- WLYHVVSHFL¿FSUREHVZHUHPDGHFRQFHUQLQJWKH constructs of each component of eBC. In addi- tion, any construct that had a positive or negative LQÀXHQFH RQ FRQGXFWLQJ H%& RU RYHUDOO H%& effectiveness, was documented with either a plus (+) or a minus (–) sign. These positive or negative LQÀXHQFHVZHUHLGHQWL¿HGDQGFURVVYDOLGDWHGHL- ther through direct statements by the respondents during the interview or from other data sources. In some cases, both positive and negative (+ & –) contributions were found from one component variable. For Halliburton leadership was found to exhibit (+ & –) contributions. Table 1 is especially useful in separating those constructs that have variance across the range B2B Interactions and those that have none. For stimuli all four case were the same, proactive but reacted very differently to stimuli. To be success- ful, eBC management must support a proactive way the organisation reacts to the stimuli. While most successful organisations had positive char- acteristics, not all characteristics were seen to be HTXDOO\LPSRUWDQWRULQGHHGWRGLUHFWO\LQÀXHQFH success. Some constructs such as cross-functional cooperationZHUHVHHQDV³VDWLV¿FLQJ´IDFWRUVWKDW is, they needed to be present but not necessary to be excellent. These involve components other than strategy and cultural readiness. Lessons Learned In Table 1, Dell is rated as the most successful project consistently showing positive facilitators in all components of the eBC model. In contrast, FSC acknowledged many inhibitors, and is rated moderately successful. Inhibitors to eBC were clustered in the areas of cultural readiness and change management. 7KHVHUHVXOWVFRQ¿UPWKDWWKHPRUHVXFFHVV- ful projects were found to have facilitators in all components of the eBC framework, including the change environment and project management. Further, there is the implication that the least suc- cessful e-business projects will have inhibitors in 38 Managing E-Business Change 7DEOH'HWDLOHG¿QGLQJVIRUHDFKFRQVWUXFWZLWK±LGHQWL¿HG eBC Components constructs Case #1 Halliburton Case #2 Biotech Case #3 FSC Case #4. a Dell & LSI b Strategic Initiatives stimuli + pro-active? + pro-active + pro-active + a pro-active b + formulation scope incremental incremental revolutionary a incremental, revolutionary b decision making autocratic (centralised) + champion emergence - autocratic + a champion emergence b strategy led eventually onset -onset + a onset b + Cultural Readiness change agents + & - + leadership - leadership a + leadership risk aversion welcomed welcomed cautious -? + a welcomed b + extent of open communictn. + + ? + Learning Capacity improve efficiency learn by doing learn by doing learn by doing + a learn by doing b adaptation + learning from others response to IT change response to IT change + a learning from others response to IT b learning type double-loop + double-loop single-loop + a double-loop single-loop b + external information use boundary spanners technology gate keeper boundary spanners, customers + + a boundary spanners, technol. keeper b declarative knowledge knowledge base R&D resources IT R&D resources IT, knowledge- base + a focus on core competencies b eBC Components constructs Case #1 Halliburton Case #2 Biotech Case #3 FSC Case #4. a Dell & LSI b IT Leveragability role of IT +enabling & socio-technical dominant factor dominant factor + a enabling b + use Internet technology + superior + adequate + adequate + a superior b + Network relationships inter-organisational linkages + cooperative + cooperative cooperative + a cooperative b + cross-functional cooperation adequate + superior adequate + a adequate b + Change Mgt Practice mgt’s. readiness to change participative committed - participative + a committed, participative b pattern of change + + - + a scope of change improvement radical change improvement a improvement, radical change b managed change alleviation of dissatisfaction + a well managed change process a vision for change, a well managed change + a evolutionary, revolutionary change tactics b + e-Bus. Mgt Practice e-business measures improvement feedback loop improvement feedback loop e-business info. capture + a use e-bus metrics, audit b use of e-business tools and techniques + adequate adequate + superior + a superior, adequate b use of team structure + + + + a Key: + = facilitator, - = inhibitor, + & - = facilitator and inhibitor, ? = unknown 39 Managing E-Business Change both dimensions, especially in the area of cultural readiness and change management (Farhoomand, Markus, Gable, & Khan, 2004). The cases highlight the need to evolve a co- ordinated corporate strategy and encourage the EDODQFLQJRIFRQÀLFWLQJRUJDQLVDWLRQDONQRZOHGJH when contemplating the adoption of e-business solutions. While this research found an important role for IT in support of eBC, the message from these case studies is that IT should not drive e- business projects. $ OW K RXJ K D OOIRX UFD V H VUH S RU WH GD³SURD F W LYH´  response to the strategic stimuli construct, each reacted very differently to stimuli. In manag- ing eBC, the organisation needs be proactive in reacting to stimuli. While the most successful organisation had positive characteristics in all components, not all characteristics were seen to EHHTXDOO\LPSRUWDQWRULQGHHGWRGLUHFWO\LQÀX- ence success (Markus, Axline, Petrie, & Tanis, 2000). This is viewed as a satisfying condition for success. A MODEL FOR MANAGING E-BUSINESS CHANGE :KLOHWKHVWXG\XVHGDÀDWPRGHORIH%&ZKHUH all constructs in Table 1 were considered anteced- ents to success, the results from the case analyses VXJJHVW D PRUH VRSKLVWLFDWHG FRQ¿JXUDWLRQ RI interrelated components. A dynamic model for managing eBC is proposed for future studies where the focus is on inter-relationships between the components of eBC within three core levels of business activity: strategy, development and management. Figure 2 represents a new conceptual frame- work for managing eBC distilled from the case ¿QGLQJV,WLOOXVWUDWHVKRZVWUDWHJ\GULYHVGHYHO- opmental and management activity, management supports developments in e-business, which in turn provides feedback to strategic planning (Kaplan & Norton, 2004; Kaplan & Sawhney, 2000). Strategy/Planning Level Strategic Initiatives 7KHUH WHQGV WR EH VWUDWHJLF ³VWLPXOL´ UDQJLQJ from competitive pressures, continued market leadership, customer expectations, employee dis- VDWLVIDFWLRQDQGRUJDQLVDWLRQLQHI¿FLHQFLHVWKDW trigger managers to undertake eBC:  $FFRUGLQJWRWKHVH¿QGLQJVPDQDJHPHQW of eBC does not have to be proactive to be successful, but rather by the way the organi- s a t i o n re a c t s t o t h e s t i m u l i . T h is i s v i e we d a s DVDWLV¿FLQJFRQGLWLRQIRUPDQDJLQJH%& • Incremental eBC can work but appears to be appropriate when risk aversion is welcomed. Also incremental projects were perceived as revolutionary in nature. • Successful eBC projects establish an objec - tive and unbiased team or individual cham- pion that continues to push the organisation DQGJURXSVWR¿QGQHZLQQRYDWLYHSURFHVVHV Figure 2. A model for managing e-business change 40 Managing E-Business Change These champions must be empowered to implement the changes within a culture of e-business readiness (Segev & Gebauer, 2001). Cultural Readiness To address complexities of change, each com- ponent must be aligned, along with the enabling technology, to the strategic initiatives (Hester- brink, 1999): • An organisation attempting to change per - formance radically seems to require some ³VHQVHRIXUJHQF\´LQWKHLUEXVLQHVVVLWXD- tion, which translates in turn into a compel- ling vision that is espoused throughout the organisation (Farhoomand et al., 2004). • To overcome pockets of reluctance to change, an organisation’s vision for change must provide an atmosphere of communication where individual concerns are not seen negatively but rather welcomed (Craig & Jutla, 2000) • An important ingredient in the right cultural m i x f o r s u c c e s s f u l e B C i s l e a d e r s h i p f ro m t h e top and initiatives from employees, together w i t h a n a t m o s p h e r e o f o p e n c o m m u n ic a t io n , participation, committed cross-functional access to experts, and committed inter- organisational focus (Farhoomand et al., 2004). Development Level 1. Learning Capacity: Successful eBC proj- ects are enabled in organisations that: • have a propensity to learn from best practice and customer needs, • exhibit learning whereby employees LQGLYLGXDOO\ DQG FROOHFWLYHO\ UHÀHFW on their past experiences, modify their course when necessary, and discover new opportunities, a new culture of the learning organisation. 2. Relationship Building: Successful eBC projects require commitment between partner organisations to use common IT platforms and sharing of corporate informa- tion (Oliver et al., 2003). 3. Knowledge Capability: Successful eBC projects are enabled in organisations that leverage external information and experts, and focus on core competencies. 4. IT Leveragability: Successful eBC involves the coalescence of ‘IT’ and e-business best practice, whereby IT plays a supportive, but n o t a l w a y s c o m m a n d i n g r o l e t h a t i s l i n k e d t o the business case for eBC. Balanced consid- eration of the social, technical, and business value elements should be maintained during implementation (Hesterbrink, 1999). Management Level $ZHOOGH¿QHGWUDQVSDUHQWPDQDJHPHQWDSSURDFK should include a documented methodology of FKDQJH XVH REMHFWLYH DQG TXDQWL¿HG PHWULFV showing the value of change, continuously com- municate process metrics to senior management, and possess a well-documented rollout of the new e-business design (Dell, 2000, Farhoomand et al., 2004). To achieve this requires continuous articulation and recognition of the value of reporting results, as well as monitoring each individual’s contribu- tion and accountability to the overall company’s change effort. At this individual level, concern should be placed on how the eBC will improve employee satisfaction and the quality of work life (Guha et al., 1997). The nature of change was reported to be participative change resulting in an evolutionary FKDQJHWDFWLF7KLVZDVYLHZHGDVD³ZDWHUIDOO´ progression of change, starting with an alleviation of dissatisfaction by employees and eventually 41 Managing E-Business Change working towards a well-managed e-business implementation from: (1) the alleviation of dis- satisfaction, (2) with a vision for change, (3) by evolutionary change tactics, and (4) a well- managed process for change (Guha et al., 1997; Farhoomand et al., 2004). FUTURE TRENDS :KLOHWKHVWXG\XVHGDÀDWH%&PRGHO)LJXUH 1) where all constructs were considered ante- cedents to success, a new model (Figure 2) was GHYHORSHGIURPFDVHWKH¿QGLQJV7KLVG\QDPLF model for managing eBC is recommended for use in future studies. It suggests an investigation of inter-relationships between the three levels of strategic planning, organisational development and management, as well between the components embedded within the levels. The cases presented used an established research framework for gathering evidence to identify the factors for success of an e-business project. This research framework demonstrated its ability to examine complex phenomena. It is seen as evolutionary in nature, and was content driven. It is essentially a diagnostic tool for identifying factors contributing to success of new e-busi- QHVVPRGHOV,WVSHFL¿FDOO\XVHIXOIRUH[SORULQJ the phenomena related to the success of learning organisations where the key issues remain as people oriented organisational issues. CONCLUSION 7KHUHVXOWVFRQ¿UPWKDWDVXFFHVVIXOSURMHFWZDV found to have facilitators in all components of the eBC framework, including the change environ- ment and management practice. Further, there is the implication that the least successful e-business projects will have inhibitors in both components, especially in the area of e-business readiness and change management. While broad generalisations from the four case studies are viewed as premature, various patterns of constructs were developed as indicators that have implications for both research and practice. These patterns represent indicators for: success, failure, a tendency to mediocrity, and variances across B2B interaction, where the latter is regarded DVWKHPRVWVLJQL¿FDQWLQGLFDWRU The eBC framework (Figure 1) and associated semi-structured interview protocol was found to be a useful research tool for exploring the complex phenomena of eBC. A new model for managing eBC (Figure 2) is recommended to other research- ers in exploring the topic further. REFERENCES Barua, A., Konana, P., Whinston, A. B., & Yin, F. (2001, Fall). Driving e-business excellence. Sloan Management Review, 36-44 Craig, J., & Jutla, D. (2000). E-business readiness: A customer-focused framework. UK: Addison Wesley Longman. Retrieved from http://www. awl.com/cseng/titles/0-201-71006-4/ Dell (2000). 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KEY TERMS Change Management: The coordination and action by management required to lead the change of organisational systems and structures in order to support a new business activity or effort. Cultural Readiness: The preparedness of an organisation’s culture of its people and processes (past and present) to facilitate or inhibit change. E-Business Change: The processes surround- ing the effective management of different stages of online business development and growth. E-Business Outcomes: E-business forces change to occur in three corporate domains; technology, process, and people–at strategic and operational levels. E-Business Performance Gains: The im- provement in; corporate resourcing, employee work life and customer satisfaction. 43 Managing E-Business Change E-Readiness or E-Business Readiness: The preparedness of an organisation’s technology, processes, and people to facilitate or inhibit e- business development. This work was previously published in Encyclopedia of E-Commerce, E-Government, and Mobile Commerce, edited by M. Khosrow-Pour, pp. 729-735, copyright 2006 by Information Science Reference (an imprint of IGI Global). . qualitative interview questionnaire, (2) multiple documents and archival records, and (3) telephone inter- views. Such triangulation reduces bias and is recommended in case research (Kean & Parent,. accuracy and security of order trans- DFWLRQV7KHSULPDUEHQH¿FLDULHVZHUHWKHRWKHU business partners (divisions) and independent partners. The result was one of considerable cost saving and. of cultural readiness and change management (Farhoomand, Markus, Gable, & Khan, 2004). The cases highlight the need to evolve a co- ordinated corporate strategy and encourage the EDODQFLQJRIFRQÀLFWLQJRUJDQLVDWLRQDONQRZOHGJH when