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Sawhney, 2000). eHubs create value by aggregating buyers and sellers, creating marketplace liquidity, and reducing transaction costs.
:KLOHPDQ\¿UPVEHOLHYHHPDUNHWSODFHVZLOOEULQJEHQH¿WVPDQ\HPDUNHWSODFHVVXIIHUHGIURP WKHLULQDELOLW\WRJHQHUDWHVXI¿FLHQWUHYHQXHIURPWKLQWUDQVDFWLRQYROXPHV6XUYLYLQJHPDUNHWSODFHV are struggling to present compelling value propositions for participants. Hence, e-marketplaces need to LGHQWLI\SRWHQWLDOVRXUFHVRIYDOXHVWRVWD\LQWKHEXVLQHVVLQFOXGLQJHI¿FLHQWDOORFDWLRQRIUHVRXUFHV improved information collection and aggregation, quality service, and risk management.
As e-business business models and technologies develop, the supply chain dimension of e-business, called e-supply chain, has become one of the most discussed topics in the various industries (Kim et al., 2005; Nath & Angeles, 2005). E-supply chain emerged as a promising alternative to traditional supply chain and dramatically changed the way procurement is conducted. E-supply chain also opens up new opportunities for SMEs, considering the traditional proprietary EDI technology was not available for most SMEs. A study of organizational barriers to e-supply chain integration revealed that (1) internal bar-riers impeded e-integration more than either upstream supplier barriers or downstream customer barriers would and (2) e-integration has a positive effect on the performance (Frohlich, 2002). These barriers to LPSOHPHQWDWLRQDQGRUJDQL]DWLRQDOLVVXHVQHHGWREHDGGUHVVHGWRUHDOL]HSRWHQWLDOEHQH¿WV
(VXSSO\FKDLQHQKDQFHVVXSSO\FKDLQÀH[LELOLW\PXFKQHHGHGLQWLPHVRIK\SHUFRPSHWLWLYHEXVL-ness environments, sophisticated customer preferences, and widespread use of disruptive technologies. Based on a survey result of supply chain relationships in the IT industry, Gosain, et al. (2004) proposed two e-supply chain design principles: (1) modular design of interconnected processes and structured data connectivity, and (2) deep coordination-related knowledge. They also suggested that sharing a broad UDQJHRILQIRUPDWLRQZLWKSDUWQHUVLVFRXQWHUSURGXFWLYHWRVXSSO\FKDLQÀH[LELOLW\DQGWKDWRUJDQL]DWLRQV should instead enhance information quality.
Business-to-Consumer (B2C) E-Commerce
B2C e-commerce created many successful e-commerce startups with unique business models such as eBay, Amazon.com, and expedia.com. B2C e-commerce is characterized by intense competition, low market entry barriers, and a low degree of customer loyalty, which in part are the reason behind the de-mise of numerous B2C e-commerce startups in the late 1990s and early 2000s. Due to the rapid growth of the Internet population and online sales, most traditional retailers have been transformed into click and mortar organizations by establishing the B2C ecommerce web sites. For these B2C e-commerce organizations, understanding online consumer behavior is one of the most important tasks for their business success.
To understand online consumer behavior, a number of researchers have applied grounded theories and investigated web site characteristics, motivations, facilitators, inhibitors, trust, attitude, intention, and loyalty which underlie individual acceptance of B2C e-commerce applications (Kulviwat et al., 2006; Jih, 2007). Most of these empirical studies adapted Theory of Planned Behavior (TPB), Technol-ogy Acceptance Model (TAM), and SERVQUAL which have been widely used in IT adoption studies. 7KHVHVWXGLHVVKRZHGWKDWFRQVXPHU¶VDFFHSWDQFHRIHFRPPHUFHLVLQÀXHQFHGE\VXEMHFWLYHQRUPV perceived usefulness, perceived site quality, risk, vendor quality, security, reliability, assurance, privacy, and user’s web experience.
,QDGGLWLRQWRWKHDERYHPHQWLRQHGHFRPPHUFHDFFHSWDQFHVWXGLHVDQXPEHURIVWXGLHVVSHFL¿-cally focused on trust issues in e-commerce (Bhattacherjee, 2006; Pollard & Diggles, 2006). Four main
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DQWHFHGHQWVDUHNQRZQWRLQÀXHQFHRQFRQVXPHUWUXVWLQ%&HFRPPHUFH/HH 7XUEDQWUXVW-worthiness of the Internet merchant, trustworthiness of the Internet as a shopping medium, infrastructural FRQWH[WXDOIDFWRUVDQGRWKHUIDFWRUVVXFKDVFRPSDQ\VL]HDQGGHPRJUDSKLFYDULDEOHV7KHVH¿QGLQJV indicate that merchant integrity is a major positive determinant of consumer trust in online shopping, and that its effect is moderated by the individual consumer’s trust propensity. Psychological antecedents of LQVWLWXWLRQEDVHGWUXVWDUHFDWHJRUL]HGLQWR¿YHJURXSVRIIDFWRUVSHUVRQDOLW\EDVHGSHUFHSWLRQEDVHG attitude-based, experience-based, and knowledge-based (Walczuch & Lundgren, 2004). Perception-based factors were found to be the main determinants of consumer trust in e-retailing.
As B2C e-commerce technologies advance and consumers gain more online experience, e-services have drawn attention from researchers and practitioners (Gefen & Straub, 2003; Baida et al., 2007). E-services enhance consumers’ online shopping experience, and include Internet radio, web-based de-cision support, personalization, e-payment, online inquiry, electronic document sharing, and e-product support services. One of the major drawbacks of e-services is that e-services frequently lack a social SUHVHQFH)LQGLQJVRIDIUHHVLPXODWLRQH[SHULPHQWVKRZHGWKHSRVLWLYHLQÀXHQFHRIVRFLDOSUHVHQFHRQ trust and its ultimate contribution to online purchase intentions of e-services (Gefen & Straub, 2003). $QRWKHUVWXG\LQGLFDWHGWKDWVHUYLFHFRQYHQLHQFH:HEVLWHVHUYLFHTXDOLW\DQGULVNDUHVLJQL¿FDQWIDF-tors affecting consumers’ satisfaction level, which in turn affects intention to use e-services (Zhang & Prybutok, 2005).
C2C (Consumer-to-Consumer) E-Commerce
C2C e-commerce supports direct business transactions and information exchange between and among consumers. While the transaction volume of C2C e-commerce is relatively new and behind B2C and B2B, it is growing rapidly. The most successful example of a C2C e-commerce application is online DXFWLRQ2WKHU&&DSSOLFDWLRQVLQFOXGHMREERDUGVDQG¿OHVKDULQJ&&FRPPHUFHH[LVWHGORQJEH-fore the advent of e-business. The oldest form of C2C commerce is bartering that existed before people started to use currency. More contemporary types of C2C commerce include newspaper advertisements and traditional auctions. While C2C e-commerce creates many opportunities such as disintermediation and an expanded pool of buyers and sellers, it also brings with it a number of challenges (Strader, T., & Ramaswami, S., 2002). These challenges include connecting buyers and sellers, trust issues, and issues with payment methods.
While the main actors in C2C commerce are buyers and sellers, the presence of trusted interme-diaries is required to provide infrastructure for C2C e-commerce activities. Amazon.com and eBay are examples of successful C2C intermediaries whose revenue source is commissions paid by sellers. Reputation systems are used by C2C intermediaries to enhance trust. Unlike in B2C reputation systems where only consumers rate the e-commerce companies, evaluation in C2C reputation systems is two-way. Both buyers and sellers are able to rate their experience with the trading party. Then, evaluations DUHDYDLODEOHWRDOORWKHUXVHUV5HSXWDWLRQV\VWHPVDUHEHQH¿FLDOWRERWKEX\HUVDQGVHOOHUVWKH\FDQ be used to predict sellers’ behaviors (Bruce et al., 2004); they can be also used to predict the success of buyers’ transaction (Dholakia, 2005)
Consumer-to-consumer (C2C) e-commerce is a growing area of e-commerce. While B2C auction has been widely studied, C2C auction has been understudied. When studying online auction, a phenomenon FDOOHGWKH³ZLQQHU¶VFXUVH´FDQRIWHQEHREVHUYHG$ZLQQHU¶VFXUVHPHDQVWKHEX\HUDQDXFWLRQZLQQHU HQGVXSSD\LQJPRUHWKDQWKHPLQLPXP¿[HGSULFHIRULGHQWLFDOSURGXFWV6WXGLHVVKRZWKDWQHDUO\ percent of auction participants suffer from the winner’s curse for certain commodities (Oh, 2002)
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Three constructs from B2C research have been adapted to study satisfaction in C2C e-commerce (Jones & Leonard, 2007). The constructs include elements of the technology acceptance model (TAM), which includes perceived ease of use and usefulness; transaction cost analysis (TCA), which includes XQFHUWDLQW\DVVHWVSHFL¿FLW\DQGWLPHDQGVHUYLFHTXDOLW\6(5948$/ZKLFKLQFOXGHVUHOLDELOLW\ responsiveness, assurance, and empathy. The results show that TAM, TCA, and SERVQUAL all impact VDWLVIDFWLRQLQ&&HFRPPHUFH5HOLDELOLW\DQGUHVSRQVLYHQHVVLQÀXHQFHVDWLVIDFWLRQLQ&&HFRP-merce.
ELECTRONIC BUSINESS DEVELOPMENT AND DESIGN METHODOLOGIES
This section presents frameworks for e-business applications and design methodologies for e-business applications development.
Frameworks for E-Business Applications
Many of the information technology (IT) frameworks were developed before the advent of e-commerce. As electronic commerce grew rapidly and gained strategic importance, the existing IT infrastructure became inadequate in supporting the complex capabilities of e-business applications that need to lever-DJHLQWHU¿UPSURFHVVDQGIURQWHQGDQGEDFNHQGV\VWHPLQWHJUDWLRQ)XUWKHUPRUHGXHWRWKHYDULHW\ RIH[LVWLQJHEXVLQHVVPRGHOVLWVHHPVGLI¿FXOWWR¿QGDZLGHO\DFFHSWHGFDWHJRUL]DWLRQWKDWFDQEH analysed and assessed (Raisinghani et al., 2005). Bichler et al. (1998) are early researchers who in-vestigated the concept of component-based e-commerce technology as a solution to the e-commerce challenge at both system and application levels. Compared to a large pre-packed monolithic system equipped with all-encompassing features, component-based systems consist of a lightweight kernel to ZKLFKQHZIHDWXUHFRPSRQHQWVFDQEHDGGHGG\QDPLFDOO\5HDOL]LQJWKDWPDQ\¿UPVIDLOWRSURSHUO\SODQ WKHLUHFRPPHUFH,7LQIUDVWUXFWXUH5DJKXQDWKDQDQG0DGH\GHYHORSHGD¿UPOHYHOHEXVLQHVV management framework with six components: organizational e-commerce strategy, business processes transformation, information technology management, information management, customer management, and organizational knowledge management. The framework emphasizes component interrelationships to planning an e-business information systems infrastructure. In a similar modeling approach, an e-business architecture planning model was proposed with 12 generic e-business models and three axes of timeliness, FRPPXQLW\DQGLQWHJUDWLRQXSRQZKLFKGULYHUVRIWKHLQIRUPDWLRQDUFKLWHFWXUDOQHHGVRIHEXVLQHVV¿UPV fall. It was augmented with Sowa and Zachman’s Information Systems Architecture (1992) to further facilitate e-business information systems architecture planning (Pant and Ravichandran, 2001).
As e-business places greater emphasis on IT infrastructure, IT managers need to assess infrastructure and prioritize investment options more carefully. Weill and Vitale (2002) investigated the relationships between e-business models (namely, content provider, direct to customer, full service provider, inter-mediary, value net integrator, virtual community, whole of enterprise, government) and nine main IT infrastructure services (applications infrastructure, communications, data management, IT management, security, architecture and standards, channel management, IT research and development, IT education). Their analysis indicated certain business models require different IT infrastructures.
Design Methodologies for E-Business Applications Development
Traditional IT development approaches such as systems development life-cycle (SDLC) methods and functional team IT organization were outdated long before the advent of the digital economy. In response
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to the drawbacks of the traditional IT development approaches, various alternative systems development methods such as rapid application development (RAD) and object-oriented systems development were introduced in 1990s. While these new systems development methods, as well as the traditional IT de-velopment approaches, are used for e-business application projects, e-business application development presents unique challenges to systems designers. For example, there are differences in the preference for the type of virtual communities and the tool used by Chinese and U.S. communities, indicating that designers of global virtual communities must treat cultural differences with caution (Tan et al., 2006). Planning and designing an enterprise-wide database system for e-business is a critical task for the suc-cess of e-business oriented organizations (Yap, 2007).
,QWHUQHWFRPPHUFHGHYHORSPHQWPHWKRGRORJ\,&`0LGHQWL¿HVWKHPDLQUHTXLUHPHQWVRIPHWKRG-ologies for developing e-commerce applications and addresses a number of issues in many traditional V\VWHPVGHYHORSPHQWPHWKRGRORJLHVLGHQWL¿HGZLWKLQWKHOLWHUDWXUH6WDQGLQJ,&`0DGRSWVDQ HYROXWLRQDU\DSSURDFKWRV\VWHPVGHYHORSPHQWZKHUHVXEV\VWHPVSHFL¿FDSSURDFKHVFDQEHLQWHJUDWHG can address business and strategic focus, and can include a management structure as well as engineering aspects of e-commerce application development.
Web quality metrics have been developed to evaluate the quality of web sites (Barnes & Vidgen, 2002). Developing web quality index and measuring web quality can help stakeholders understand and improve e-business web sites. Web quality metrics have been developed and validated through various e-business applications. Some of the dimensions include web site usability, information quality, and service interaction quality. WebQual is grounded in the perceptions of web site users, and analysis of data collected from users is used to guide web site design.
(VHUYLFHVDUHLQWDQJLEOHDQGLWLVPRUHGLI¿FXOWWRGHVLJQDZHEVLWHIRUHVHUYLFHVWKDQSURGXFWRI-fering web sites (Baida et al., 2007). Furthermore, because most e-services involve multiple enterprises, creating a shared understanding of the service under consideration is a challenging task (Gordijn et al., 7KH¿UVWVWHSLQWKHHVHUYLFHVGHYHORSPHQWLVWRXQGHUVWDQGWKHHVHUYLFHLWVHOIEHIRUHWKH\FDQ build effective systems and support for these services. The complementary use of two requirements en-gineering techniques was recommended -- by using i* modeling, developers can explore strategic goals WKDW¿UPVKDYHDQGE\XVLQJH3YDOXHPRGHOLQJWKH\XQGHUVWDQGKRZWKHVHJRDOVFDQUHVXOWLQSUR¿WDEOH services for enterprises.
ELECTRONIC BUSINESS TOOLS AND TECHNOLOGIES
This section discusses web technology standards, agent technologies, and digital rights management (DRM) systems.
Web Technology Standards
One way to promote widespread adoption of e-business is to develop technology standards that can be XVHGWRPDNHLQIRUPDWLRQÀRZVHDPOHVVO\EHWZHHQDQGZLWKLQRUJDQL]DWLRQV([WHQVLEOH0DUNXS/DQ-guage (XML) is a simple, extendible text format derived from SGML. XML is extensible because it is QRWD¿[HGIRUPDWOLNH+70/HJGHYHORSHUVFDQFUHDWHWKHLURZQWDJVLQ;0/2ULJLQDOO\GHVLJQHG to meet the challenges of large-scale electronic publishing, XML allows the exchange of a wide variety of data on the Web and elsewhere and has become one of the key components in e-business systems integration (World Wide Web Consortium (W3C) Extensible Markup Language, 2008). A number of variations of XML have been developed. For example, eXtensible Business Reporting Language (XBRL) is an XML-based open standard which can be used to facilitate the process of the production, consump-
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WLRQDQGH[FKDQJHRI¿QDQFLDOLQIRUPDWLRQDPRQJEXVLQHVVRUJDQL]DWLRQVVRIWZDUHDSSOLFDWLRQVDQG accounting standards (Troshani & Rao, 2007).
Agent Technologies
In the agent-mediated electronic commerce, the roles of agents for online consumers included product brokering, merchant brokering, and negotiation (Guan & Zhu, 2007). Other agent technologies also LGHQWL¿HGZHUHVXSSO\FKDLQPDQDJHPHQWDJHQWVPRELOHDJHQWVHYROXWLRQDU\DJHQWVDQGGDWDPLQLQJ agents. He et al. (2003) analyzed state of the art agent-mediated e-commerce. The roles of agents in %%HFRPPHUFHZHUHLGHQWL¿HGLQSDUWQHUVKLSIRUPDWLRQEURNHULQJDQGQHJRWLDWLRQ+DYLQJLGHQWL-¿HGWKHUROHVIRUDJHQWVLQ%&DQG%%HFRPPHUFHVRPHRIWKHNH\XQGHUO\LQJWHFKQRORJLHVZHUH highlighted.
Papazoglou (2001) studied basic characteristics of e-business agents. Two major characteristics discussed were that an agent must have a model of its own domain of expertise, and that an agent must have a model of the other agents that can provide relevant information. E-business agents that possess intelligence exhibit distinguishing characteristics: delegation abilities and communication ability. Agents were categorized into four types depending on their functionality and competencies: application agents, system-level support agents, personal agents, and general business activity agents.
1HJRWLDWLRQLVDSURPLVLQJ¿HOGZKHUHHOHFWURQLFDJHQWVFDQEHXVHG(OHFWURQLFQHJRWLDWLRQVFDQ involve simple bartering to complex negotiation strategies concerning multiple product and service packages. Combined negotiations are applied when negotiators are interested in many goods or services simultaneously and engage in multiple negotiations at the same time. A Combined Negotiation Support System (CNSS) called CONSENSUS was developed to help negotiators conduct multiple negotiations simultaneously, which without software support put a considerable burden of coordinating and reconciling multiple negotiations on the agents (Benyoucef et al., 2001). The architecture of CONSENSUS consists RIZRUNÀRZWHFKQRORJ\QHJRWLDWLQJVRIWZDUHDJHQWVDQGUXOHHQJLQHWHFKQRORJ\6HPDQWLF:HEWHFKQRO-ogy was applied to automated negotiation for which negotiation agents are deployed (Tamma, 2005). Negotiation protocols were not hard-coded in the negotiation agents, but were expressed in terms of a shared ontology with an explicit and declarative representation of the negotiation protocol. Since agents have very little prior knowledge of the protocol, they were designed to acquire negotiation knowledge directly from the marketplace.
Digital Rights Management (DRM) Systems
Online delivery of creative digital media, such as audio or video, is now an important part in the music and publishing industries. Due to the possibility of unlimited copying in the digital domain and breach of intellectual property rights, digital rights management (DRM) systems have been developed to control the way digital content is used (Hartung & Ramme, 2000). DRM systems typically incorporate access control technologies such as encryption, conditional access, copy control mechanisms, and media iden-WL¿FDWLRQDQGWUDFLQJPHFKDQLVPV`LJLWDOZDWHUPDUNLQJZKLFKLVWKHSURFHVVRIHPEHGGLQJDX[LOLDU\ information into a digital signal, is an essential component of modern DRM systems. Several water-marking methods are available including spread-spectrum, quantization, and amplitude modulation. To enhance the robustness of digital watermarking, a watermarking scheme that utilizes error correction codes based on the redundant residue number system was proposed (Goh & Siddiqi, 2007).
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