474 B2C Failures what customers expect; (2) not knowing the right service design and standards; (3) not delivering to standards; and (4) not matching performance to standards (Zeithaml & Bitner, 2003). While these approaches are insightful, they do not fully address the problems that B2C technology innovations pose to sellers as well as buyers. We DUJXHWKDWLQSDUW%&¿UPVIDLOHGEHFDXVHWKH\ failed to perceive correctly the nature and scope of their innovation, and this eventually led to the problems of matching consumer expectations as the context of innovation changed. This is particu- larly important in the context of high-technology innovations where the question of the precedence of technology voice or customer voice remains a contested issue. We extend the current discus- sion on innovations, combine high-technology product development literature, and present a new framework to show an additional dimension of GLI¿FXOW\UHJDUGLQJSHUFHSWXDOSUREOHPVFUHDWHG by the nature and scope of the innovation itself. Our model explores the problem of concordance and discordance between buyers and sellers about the innovation in different innovative contexts. Our model adds texture and substance to the theory of diffusion and service quality model in the context of technology innovation. Viewing the Initial B2C Wave as Innovation As a global concept, B2C represents a major inno- vation in the way marketing is done. It offers goods and services to consumers through the Internet. It reduces search costs. It is convenient, quick, easily accessible, and less expensive. In this sense it is a ³ Q HZVHU Y LFHL Q Q R YDWLRQ´ IRUFRQVX P H U V D V ZHOODV WKHZRUOG:KHQ¿UPVRIIHUWUDGLWLRQDOSURGXFWV such as books, CDs, groceries, and toys via the Internet, they are not merely marketing known products to known customers. They are offering instead fast, highly competitive, interactive, and technologically facilitated means of informa- tion access and transaction. Using such means, consumers are able to shop, make comparisons, and receive door-to-door service at a reasonably ORZSULFH7KHIDLOXUHRI%&¿UPVFDQWKXVEH construed as a failure of an entirely new class of Internet-mediated service, not just a failure of the SDUWLFXODU¿UPVLQYROYHG&RQFHSWXDOO\WKHUHIRUH the B2C debacle needs to be seen as a failure of a new service product. Putting this observation into the overall context of innovation research, however, it is evident that this experience is not unique. Failure rates of new products generally continue to be as high as 95% (Brown & Eisenhardt, 1995). When viewed as a major innovation in marketing methods, B2C systems are equally susceptible to such punishing rates of failure. Newness of Innovative Solutions and Needs Addressed by Innovations In the 1980s, Hewlett-Packard (HP) found that successful innovators had a deep understanding of user needs. HP also found that the primary FDXVH RI GLI¿FXOWLHV LQ WKH PDUNHWSODFH ZDV D failure to understand user needs, and the clarity reached in understanding user needs was the key determinant of new product success (Leonard- Barton, Wilson, & Doyle, 1995). But the process RI¿JXULQJRXWQHHGVLQYDULHGPDUNHWFRQWH[WVLV GLI¿FXOW7KHGLI¿FXOWLHVDUHFRPSRXQGHGZKHQ markets are new. New products entering existing markets ad- dress known needs. In such cases, satisfaction JDSV ZLWK H[LVWLQJ SURGXFWV FDQ EH LGHQWL¿HG with relative ease and incorporated in the new product. But in new markets, customer needs are uncertain, and the needs and products co-evolve, giving rise to four need-solution contexts (as elaborated later in Table 2). These are respectively an improved solution for a known need, a new solution for a known need, a new solution for an anticipated need, and an evolving solution for an uncertain need (Leonard-Barton, Wilson, & Doyle, 1995). 475 B2C Failures Concordant and Discordant Perceptions of Innovations What should drive new product development: technology or customers? Views of innovators and customers regarding the nature of product ³EUHDNWKURXJKV´ PD\QRW EH FRQFRUGDQW 6XFK mismatch in innovator-customer perceptions could lead to failure of innovations (Rangan & Bartus, 1995). Breakthroughs usually employ new technol- ogy, create new markets, and represent concep- tual change. Conversely Increments represent a continuation of existing products or practices. )XUWKHUPRUHVXSSOLHUVDQGFXVWRPHUV¿QGLWHDV\ to understand increments (Rangan & Bartus, 1995), while breakthroughs — requiring technol- ogy and applications development — are driven by technologists (and may be less readily under- stood by customers). Hence increments tend to evolve from the demands of customers, and the customer’s voice (rather than the technologist’s voice) guides incremental innovations. Additionally performance at a price, rather than performance per se, usually becomes a de- sign criterion for incremental innovations. Hence when one side thinks a particular innovation is a breakthrough while the other thinks it is an increment, we have the potential for discordance. C l e a r l y f a i l u r e s a r e m o r e l i k el y i n s u c h d i s c o r d a n t settings. In the initial B2C wave, there were many pos- sibilities for discordance:  /DUJH¿UPVWUHDWHG%&H[WHQVLRQVOLJKWO\ as mere increments, but their customers did not. • B2C startups were enamored of the technol - ogy and thought they had breakthroughs on hand. Conversely customers felt they were buying regular products (clothes, detergents, books, CDs, toys). The only difference was that these were being presented through a different channel. Understanding of the B2C e-commerce success vs. failure phenomenon increases substantially when we integrate concordance in buyer/seller perceptions with the need-solution context (Table 2). If innovations are to succeed, not only must the perceptions of sellers and buyers of innova- tions match, but innovators must also recognize WKHLQKHUHQWXQFHUWDLQW\LQ¿QGLQJVROXWLRQVIRU customer needs in situations where contexts change. Technology Continuum B uyer/Seller concur that the innovation category is: Buyer/Seller disagree about newness NEE D-SOLUTION CONTEXT B REAK THROUGH I NCREMENTAL M IS MATC H Incremental Solution/ Known Need F ALSE D AWN C ONCORDANT I NNOVATIONS D ISCORDANT I NNOVATION Innovative Solution/ Known Need M INOR B REAKTHROUGH U NDERESTIMATED INNOVATION D ISCORDANT INNOVATION Innovative Solution/ Anticipated Need C ONCORDANT I NNOVATIONS U NRECOGNIZED P ROMISE D ISCORDANT I NNOVATION Incremental (Evolving) Solution/Uncertain Need P ERILOUS O PTIMIS M C AUTIOUS O PTIMIS M D ISCORDANT I NNOVATION Table 2. Concordant and discordant states of innovations/markets Source: Authors’ integration of ideas from Leonard-Barton, Wilson, and Doyle (1995) and Rangan and Bartus (1995) 476 B2C Failures Integrative Innovation Theory Framework Table 2 is thus constructed using four dimensions: (1) customer need (known to uncertain); (2) nature of solution (improved to evolving); (3) the scope of innovation (incremental to breakthrough); and (4) buyer-seller agreement (concordance to discordance). These four dimensions on which the framework is constructed give rise to 16 cells. Table 2 shows only 12 cells because the right-hand column (where buyer/sellers disagree about newness) shows only four cells instead of eight cells. To save space, unlike the left column, we have not bifurcated the rightmost column into breakthrough and increment columns. Also, each of the eight cells in this right column has a ³GLVFRUGDQW´HQWU\7KXVORRNLQJDW7DEOHDVD whole, we see that in the buyer/seller agreement column, there are only two concordant situations: one under breakthrough and the other under increment. The remaining six cells are false perceptions, overly optimistic assessments, or overly pessimistic assessments. These cases are unlikely to lead to success. In the buyer/seller disagreement column on the right, all eight cells (only four of which are shown) show discordance with high chance of failure. The three right-hand columns of Table 2 char- acterize the level of concordance or discordance of the buyer and the seller about the perceived newness of the innovation. The left-hand column UHÀHFWVDNLQGRIWHFKQRORJ\FRQWLQXXPUDQJLQJ from the relative comfort of low-tech/known- need to the opposite extreme of high-tech/high- uncertainty. Concordant innovations occur when needs are known, and both sellers and buyers agree the solution is incremental (and therefore un- derstandable and quickly adopted) and chances of success are high. But when one party thinks it is a breakthrough while the other thinks it is an incremental solution, we have discordant expectations with greater chances of failure. In rare cases, there may be the possibility of a ³IDOVH GDZQ´ZKHQDQLQFUHPHQWDO LQQRYDWLRQ is misperceived as a breakthrough by both sides and there is concordance — where failure occurs after a bubble of enthusiasm. When needs are unknown, both parties must think it is a breakthrough, otherwise perceptions will be discordant and success will be unlikely. 7KHUHLVDOVRWKHUDUHSRVVLELOLW\RI³XQUHFRJQL]HG promise,” when sellers and buyers both see only LQFUHPHQWDOEHQH¿WVLQDWUXO\LQQRYDWLYHVROX- tion, which may remain under-promoted and under-appreciated. As Table 2 shows, for each solution/need pair, there are concordant and discordant conditions. However, it is proposed here that the concordant condition is more likely to lead to success, while the discordant condition will most likely lead to failure. It should be noted that the framework pre- sented here will behave differently in different market conditions faced by buyers and sellers. Competitive conditions will make the problem of new services and goods marketing certainly more complicated. We are, however, addressing a central issue in high-technology products and services development literature, which argues that — for success of innovations — concordance between buyers and sellers is essential. How that concordance is to be created depends on the need/solution context of the innovation. It should be further noted that the framework in Table 2 also suggests that if all cells were equally likely, concordance is possible in only two out of 16 pos- sibilities, or about 12% of the time. Discordance is likely 88% of the time. It is not surprising therefore WR¿QGWKDWPRVWLQQRYDWLRQVIDLO:KHQZHVHH WKH¿UVWZDYHRI%&HFRPPHUFHLQWKLVOLJKW as a service innovation, we can explain the high failure incidence of this wave. Understanding such failure then will help managers to conceive and plan the development of their innovations better. In the next section we examine published evidence to validate the various dimensions of this model. 477 B2C Failures Evidence of B2C Innovation Discordance There is evidence of considerable discordance in B2C settings. In early 2000, Josh Harris, founder of the streaming-media company Pseudo.com, declared with certitude on the CBS television show ³0LQXWHV´WKDWKHZDVWKHUHWRSXWFRPSDQLHV like CBS out of business (Useem, 2000). At the WLPHWKH,QWHUQHWZDVVHHQDVD³GLVUXSWLYH´RU ³ EU HDN W K URXJK´WHFKQRORJ \WKDWZRXOGI DYRUQHZ  entrants and send old-line brick-and-mortar com- panies scurrying for cover. Pseudo.com of course no longer exists, but streaming media are being used extensively on the Internet along with other media. In hindsight, the discordance inherent in such views is obvious. Many established merchants perceived B2C as breakthrough innovation and deliberately FUHDWHG ³SXUH SOD\´ LH SXUHO\,QWHUQHWEDVHG commerce) divisions, insulated from the parent. Examples include Borders.com and Grainger.com. Subsequent learning has often apparently changed WKHVHSHUFHSWLRQV)RUH[DPSOHDIWHUWKH¿UVWÀXVK of enthusiasm, WW Grainger, a Chicago-based warehousing company, later reabsorbed Grainger. com. According to Grainger’s president, it became obvious that the Internet unit needed greater interdependence with the originating company (Useem, 2000). Michael Dell was far more insightful. He created an independent online division within WKH¿UP6FRWW(FNHUWWKH&(2RIWKH,QWHUQHW company, used highly creative strategy to get the RUJDQL]DWLRQDVDZKROHWRDGRSWWKHÀHGJOLQJXQLW once it became a success, and integrated the divi- sion in their existing business groups and made it DSDUWRIWKHODUJHU¿UP+DUYDUG%XVLQHVV6FKRRO Publishing, 1998). Dell clearly saw B2C as a new JURZWKRSSRUWXQLW\IRUKLV¿UPEXWRQO\DVDQ extension of existing Dell-Direct business and not a breakthrough. In direct contrast to Dell, many B2C start- ups mostly assumed they were breakthroughs and spent enormous capital on acquiring new customers and upgrading technologies. Some estimate that customer acquisition costs of online ¿UPVZHUHIRXUWLPHVDVKLJKDVWKRVHRIRIIOLQH companies (Useem, 2000). Agarwal, Arjona, and Lemmens (2001) also found that companies spent three to four times the amount a customer spent at the Web site to acquire a new customer. The presumption here was that customers, once acquired, will soon learn the wonders of the breakthrough technology and eventually will spend enough money at the Web site to justify the acquisition costs. Customers were probably looking for price and good delivery experience. Discordance in perception set the stage for gaps in expectations to arise, leading to dissatisfaction ZLWKWKH¿UPV Boo.com is the prototypical breakthrough-en- amored B2C startup. It got entangled in creating the best aesthetic Web site possible, but failed to incorporate the basic desire of customers to view and compare fashion products quickly in order to make the buying decision. Launched with a blaze of publicity, it burned through $135 million even before it went public (Isaacs, 2001). Insiders say Boo.com failed because it spent too much money on marketing (Isaacs, 2001). While Boo.com Web designers fretted about aesthetics, customers were actually looking for good deals and fast delivery service. Discordance carried the day. Petstore.com, Pets.com, Toysmart.com, and other similar ventures also failed to take off. They offered nothing new by way of services to the customers. These Web sites had neither in- expensive products, nor inexpensive and reliable delivery systems. They targeted ultra-thin product niches for which demand had never been proven (Isaacs, 2001), and they also did not augment their offers with high quality and timely service. Toysmart.com did not have a chance in a crowded space occupied by Toys-R-Us and other e-tailers (Isaacs, 2001). These B2C e-commerce companies addressed a known need, but their offer did not match either customer expectations of better and 478 B2C Failures cheaper service or the offers of already existing QHZDQGWUDGLWLRQDOVXSSOLHUV(7R\VIDLOHG¿UVWWR forecast demand, and then overreacted and over- stocked products that quickly became obsolete. It FRXOGQRWIXO¿OOFXVWRPHUH[SHFWDWLRQVGHVSLWH the fact that its top management team consisted of experienced Disney executives. Here again we see examples of innovative companies and their customers, where perceptual discordance eventually led to service quality failure. Misperceptions about Breakthroughs and Network Externalities 7KH³EUHDNWKURXJK´QRWLRQSURPSWHGE\WKHLGHD that the Internet was a disruptive technology, DOVR VSDZQHG WKH ³LQVWDQWFRPSDQ\´ DSSURDFK 8VHHPUHVWLQJRQLOOXVRU\¿UVWPRYHUDG- YDQWDJHVDQGQRQH[LVWHQW³QHWZRUNH[WHUQDOLW\´ effects (i.e., the positive impact on all members of an ever-expanding network). These ideas led companies to build major brands supported by marketing and advertising expenditures. Only some networks, however, are capable of positive network externalities (Arthur, 1996). Networks where members are not interdependent do not exhibit positive externalities. B2C seller-buyer networks are usually star-shaped, where each buyer is connected to a single seller. An increasing membership base does not therefore necessarily FRQIHUQHWZRUNH[WHUQDOLW\EHQH¿WV ,QWKH¿UVW%&ZDYHWKLVZDVWKHFDVH B2C players did not have specialized partners — transporters, parcel couriers, third-party ORJLVWLFVSURYLGHUVIXO¿OOPHQWKRXVHVSD\PHQW systems, and producers of main and peripheral SURGXFWV /DFNLQJ VXFKVHUYLFHV ³WKHH\HEDOOV the Web sites managed to attract did not turnout to be loyal” (Useem, 2000, p. 84). For example, CDNow, a music e-tailer, had 83% name recogni- tion, but only 17% loyalty. Under such conditions, EUDQGSURPRWLRQGLGQRWWXUQLQWR¿UVWPRYHURU network advantage. A notable trend is that these hard-learned les- sons have made subsequent and surviving B2C players attentive to how networks function. The survivors created partnerships to provide interde- pendent services and have learned to differentiate their products on the Internet. Misperceptions about First-Mover Advantages Because the Internet offers instant market ac- FHVVLWFDQDOVRLQVWDQWO\ZLSHRXWWKH¿UVWPRYHU advantage of B2C pioneers. In general, me-too FRPSHWLWRUVFDQHQWHUMXVWDVUDSLGO\DVWKH¿UVW PRYHUVGLG2QO\¿UPVFDSDEOHRIFUHDWLQJVXV- tainable advantages can hope to build customer loyalty. Perceptions that B2C offerings in a sector are interchangeable commodities, quite logically, generate commodity like response from the cus- tomers. In such contexts, savvy second movers sometimes win the competitive game. Breakthrough on the Customer Relationship Side While B2C methods may not be the disruptive ³EUHDNWKURXJKV´WKDWWKHLQLWLDOZDYH%&SOD\HUV believed them to be, they are certainly different because they bring the sellers and the buyers together in new ways. B2C methods disrupt old ways of doing business and change the customer- company relationships. Given this, in B2C set- tings the customer’s voice must take precedence over technology’s voice. B2C settings create new demands on managers regarding listening DQGUHVSRQGLQJWRWKH³YRLFHRIWKHFXVWRPHU´ This is not easy. A Deloitte Consulting study RI WRS¿UPV 5HHG IRXQG WKDWRQO\ 13% of the companies paid attention to creating customer loyalty networks (integration of market- ing and servicing activities through technology) and supply chain collaborations (streamlining of ¿QDQFHDQGKXPDQUHVRXUFHVDQGWKHFUHDWLRQ of e-chain connectivity involving collaboration 479 B2C Failures and customization of manufacturing and supply processes amongst supply chain partners). ,QSUDFWLFHWKH¿UVWZDYHIDLOHG%&¿UPVDS- pear to have seen themselves merely as providers of goods by alternative means. Late entrants and survivors were substantially more customer cen- tric. They focused on basic product presentation, FXVWRPHUVHUYLFHRQWLPHDQGHI¿FLHQWGHOLYHU\ no hassle returns, and so on. In other words, they designed their services and aligned them with the needs of the customers, thus creating concordance. IMPLICATIONS FOR MANAGERS AND FOR FURTHER RESEARCH B2C retail methods offer low start-up costs, ease of entry, and greater geographic exposure, but these advantages do not make B2C business models simple. For example, Amazon.com, the leading B2C survivor, has increased the assortment of goods offered. Amazon is continually augment- LQJ WKH ³%& LQQRYDWLRQ´ E\ DGGLQJ IHDWXUHV such as full-text search of books, recommenda- tion engines, reviews and ratings, time-based Gold Box specials, referral bonuses, payment system discounts, political campaign coverage and contribution channels, and so forth. Amazon has realized that:   7 K H ¿ U V W ZDY H % & L Q Q RYD W LRQZ D V D Q L Q F U H - ment. 2. It is essential to keep pushing this innovation VRWKDWWKH³$PD]RQFRPVKRSSLQJH[SHUL- ence” moves towards the two highlighted concordant cells of Table 2. By 2004, Amazon had still not met conven- WLRQDO UXEULFV RI UHWDLO SUR¿WDELOLW\ EXW LW ZDV inching towards that goal. The foregoing discussion has several implica- tions for B2C managers. In relation to its brick- and-mortar counterpart, the B2C operation must be viewed and studied as an innovation. In most cases, such an innovation would turn out to be more incremental than breakthrough in nature, at least from the customer perspective. It therefore EHFRPHVQHFHVVDU\WR¿JXUHRXWWKHVHJPHQWVRI customers to whom the B2C option will deliver clear (and more than incremental) advantages. Amazon found this segment amongst book buyers. The B2C advantages, however, cannot be static. Such advantages need to be constantly augmented and communicated to the customers. Rather than lapsing into techno-euphoria, the baseline posi- tion of B2C managers should be this: it is going WREHH[FHHGLQJO\GLI¿FXOWWRFUHDWHDQGPHHWKLJK customer expectations. E-Toys thought it would present serious competition to brick-and-mortar toy sellers like Toys-R-Us by removing the hassle of shopping, especially during frenzied holiday periods. This created expectations of a fail-proof service. In practice, however, E-Toys ran out of key inven- tories, stocked the wrong inventories, and failed to process orders correctly. The result was that customers were subjected to serious delays, particularly during the busy holiday gift-giving season. If E-Toys had positioned its innovation incrementally, say as an online birthday toy gift registry, perhaps it could have engendered and successfully met the lower expectation levels, and thus remained in business. I n s u m m a r y, w e h a ve u s e d h i s t o r i c a l e x a m p l e s in an eclectic cross-sectional fashion across the B2C retail sector to illustrate our proposed innova- tion theory-based framework for B2C success and IDLOXUH:HVWDUWHGE\TXHVWLRQLQJWKH¿QGLQJVRI UHFHQWHPSL ULFDOVW XG LHVDVWRZK\VRPDQ\¿ U PV with so much talent and easy access to capital, failed to use time-tested management principles. Why did they fail to realize that managing a B2C e-commerce required acumen similar to that required in the conventional brick-and-mortar world? What was it about this new technology and service delivery method that most B2C managers misread? Why could these companies not convert 480 B2C Failures YLVLWRUVLQWRSUR¿WDEOHDQGOR\DOFXVWRPHUV":H have argued that it is not incompetence that led to the collapse of many of these ventures, but a misperception of their basic business on the one hand and a mistaken positioning of their innova- tive services for their customers. These errors we believe led to discordance in perceptions between buyers and sellers, and misallocation RIUHVRXUFHVZLWKLQWKH¿UPPRUHVRDWWKHIURQW end for customer acquisition and technology than on customer retention and delivery. These problems eventually resulted in serious lapses in service quality, and customer desertion and the customers’ abandonment of the B2C method. Our framework captures the problem of creating concordance between buyers and sellers in the context of high-tech innovations, and shows by implication that managers have to be aware of the nature and scope of the innovations and then ensure that they are in concordance with their customer base. The framework underlines the necessity of correctly choosing between the voice of the customer and the voice of technology. For known needs and improved solutions, attention to customer voice tends to lead to concordance. But as needs become uncertain and solutions are evolving, customers know less about the needs and will depend on the technology to address their problems. But if managers assume they have breakthrough innovations, and chances of this are high in high-tech settings, they will alienate their clients and will not succeed. The framework thus can be of great use to managers involved in developing and marketing innovative products and services, especially in the e-com- merce context. They can carefully assess the need-solution context in which they are operating and then strive for concordance and avoid false optimism or pessimism. While such an approach has value, it also has obvious limitations. First, there are reasons other than innovation failure that potentially help to explain the dot.com B2C crash phenomenon. These alternative approaches warrant further continuing and in-depth study to understand the colossal economic collapse of the dot.com era. Second, even within the innovation theory framework that we offer, there is need for further systematic in-depth studies that go deep into spe- FL¿F%&FDVHV0RUHV\VWHPDWLFFRPSDULVRQVRI B2C failures are also needed. REFERENCES Achrol, R.S. & Kotler, P. (1999). Marketing in the network economy. Journal of Marketing, 63(Special Issue), 146-163. 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Weekly Corporate Growth Report, 11068(1118), 11057. Useem, J. (2000). Dot-coms: What have we learned? Fortune, (October 30), 82-104. Varianini, V. & Vaturi, D. (2000). Marketing les- sons from e-failures. The McKinsey Quarterly, (4), 85-97. Zeithaml, V.A. & Bitner, M.J. (2003). Services marketing: Integrating customer focus across WKH¿UP Boston: McGraw-Hill-Irwin. 482 Copyright © 2009, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited. Chapter 2.11 Procedure for Modeling and Improving E-SCM Processes Patcharee Boonyathan University of Melbourne, Australia Latif Al-Hakim University of Southern Queensland, Australia ABSTRACT Today’s managers are turning to the functions of the supply chain to improve margins and gain competitive advantage. The explosion of the In- ternet and other e-business technologies has made real-time, online communication throughout the entire supply chain a reality. Electronic supply chain management (e-SCM) is a reference to the supply chain that is structured via electronic technology-enabled relationships. This chapter concentrates on the development of a procedure referred to as eSCM-I for e-SCM process im- provement. The procedure focuses on process mapping and relies on principles of coordination theory. It is based on SCOR to standardize the process and take advantage of this technique of benchmarking/best practices potential. The procedure employs IDEF0 technique for mapping the processes. INTRODUCTION Supply chain management (SCM) is a network of entities that encompasses every effort involved LQSURGXFLQJDQGGHOLYHULQJD¿QDOSURGXFW from the supplier’s supplier to the customer’s customer (Supply Chain Council, 1997, in Lum- mus & Vokurka, 1999). A key principle is that all strategies, decisions, and measurements are made considering their effect on the entire supply chain, not just individual functions or organiza- tions (Towill, 1996). The association of supply chain manage- ment with e-business offers new challenges for marketing. The explosion of the Internet and other telecommunication technology has made real-time, online communication throughout the entire supply chain a reality. The Internet allows 483 Procedure for Modeling and Improving E-SCM Processes companies to interact with customers, and col- lect enormous volumes of data and manipulate it in many different ways to bring out otherwise unforeseen areas of knowledge (Abbott, 2001). Poirier and Bauer (2000) refer to the term ‘elec- tronic supply chain management’ as a reference IRUWKH³QDWXUDOFRPELQLQJRIVXSSO\FKDLQDQG e-commerce.” Electronic supply chain manage- ment (e-SCM) is a concept introduced to the need RIDGDSWDELOLW\DQGÀH[LELOLW\LQDKLJKO\G\QDPLF e-business environment which focuses on network integration. E-SCM refers to the supply chain that is built via electronic linkages and structurally based on technology-enabled relationships (Wil- liams, Esper, & Ozment, 2002). Poirier and Bauer (2000) highlight three constituents in the preparation and execution of e-SCM: 1. E-network: Business networks should sat- isfy customer demands through a seamless (fully connected end-to-end) supply chain to serve the end consumer (see also Towill, 1997). 2. Responses: Customer responses form the central theme of the supply chain strategy. The market value of the supply chain can be dramatically enhanced by jointly creating SUR¿WDEOHUHYHQXHJURZWKWKURXJKLQWHJUDWHG inter-enterprise solutions and responses. 3. Technology: Each of the above constitu- ents can achieve the purposes and goal of the supply chain by being supported with leading-edge technology, particularly e- commerce. The three constituentse-network, customer responses, and technologycould be seen as the ³LQSXW´LQWRH6&0ZRUNLQJWRJHWKHUWRDFKLHYH the ultimate aim (output) of the supply chainthat is, customer satisfaction. In synergy with the model developed by Goldman, Nagel, and Preiss (1995) and Meade and Sarkis (1999) for agile manufacturing, Figure 1 models the dimensions of an e-SCM environment within the context of the IDEF0 process mapping modeling technique. Murillo (2001) and Helms, Ettkin, and Chap- man (2000) indicate that the problem in pursuing supply chain construction efforts is not a lack of ideas about what to do, but instead about how to coordinate the efforts throughout the supply network. It was drawn by Peppard (1995) that a business process approach can act as a catalyst for bringing together the various things that have been occurring in the organization and management areas over the past decade. He further suggests that a process focus can provide an integrative mechanism. Process management involves plan- ning and administering the activities necessary to achieve a high level of performance in a process, and identifying opportunities for improving qual- ity and operational performance. Ultimately it includes translating customer requirements into product and service design requirements (Evans & Lindsay, 2002). *ROGPDQHWDOUHFRJQL]HWKHVLJQL¿- cance of employees as a company asset and em- phasize the importance of leveraging the impact of people and information for an agile enterprise. Evans and Lindsay (2002) show direct correlation between employees’ (people) satisfaction and customer satisfaction, and argue that ‘people’ DUHWKHRQO\RUJDQL]DWLRQDVVHWWKDW³FRPSHWLWRUV cannot copy; and the only one that can synergize, that is, produce output whose value is greater than the sum of its parts.” Evans and Lindsay (2002) also emphasize that the two key components of service system quality are employees and in- formation technology. Meade and Sarkis (1999) state that people and information are the most valued resources. It follows that the mechanism that converts the input of the e-SCM environment to its output (i.e., customer satisfaction) includes three constituents: process, people, and informa- tion sharing. In an analogy with agile enterprise dimensions (Goldman et al., 1995; Meade & . innovations occur when needs are known, and both sellers and buyers agree the solution is incremental (and therefore un- derstandable and quickly adopted) and chances of success are high. But. technol- ogy and applications development — are driven by technologists (and may be less readily under- stood by customers). Hence increments tend to evolve from the demands of customers, and the. customers expect; (2) not knowing the right service design and standards; (3) not delivering to standards; and (4) not matching performance to standards (Zeithaml & Bitner, 2003). While these