E-business competencies in SMEs Conceptual model and empirical results HØGSKOLEN I AGDER Agder University College Dr. Dag H. Olsen Agder University College.

E-business competencies in SMEs

Conceptual model and empirical results

HØGSKOLEN I AGDERAgder University College

Dr. Dag H. OlsenAgder University College

Overview

• The ANTRA project

• Motivation

• E-business and Small and Medium sized Enterprises (SMEs)

• IT competence

• Empirical findings


The ANTRA project• Project to assist SMEs in the strategic use of

e-business technology

• January 2000 - December 2002

• Identify critical competencies

• Identify supply of training related to e-business

• Establishment of a dynamic tool to assist SMEs in self-assessment of ICT (e-business) competence and training needs


Motivation

• National and international programs to help SMEs adopt e-business– Leonardo (EU), eNorge, VeRDI

• The success of SMEs is important for tomorrows economy

• Competitiveness of Norwegian economy, European economy


E-business and IT investments• IT is the most important tool for restructuring and

increased productivity– innovativity and competitiveness

• Large potential benefits from IT-investments are not achieved– critical competence is missing

• The largest productivity gains from IT investments come in organizations that combine it with training and process redesign

• This subject is still too little investigated and understood


IT competence in SMEs

• European companies’ lack of knowledge and competence is the most important inhibitor of adoption of e-business (Forrester Research, 1999)

• SMEs have little access to training due to low capacity and inability to define relevant training needs. One important reason is the missing overview over the need for IT competence (European report 1224, 1997)


Meta-level models

Business strategy

Organizational processesand e-business solutions

Technology

Strategic level

e-business modelsAwareness

Systems and Technological level

Solutions, Applications and technology


Initial conceptual

model

Conceptual model

Operationalmodel withindicators

Survey instrument

Literature reviewColleagues

Interviews with SMEsObservationPeer reviews

PopulationSettingMeasurement scaleindex generation

Literature review

Operational model

Colleagues

Phases in the development of a conceptual model and survey instrument.


Conceptual work

• Literature reviews on:– the e-business concept and models to find ways

to classify e-business. We proposed an E-business model hiererchy

– E-business competence– Competence in general and competence related

to the use of IT in organizations

• Synthesized a e-business competence model and operationalized it


Previous research on IT competence

• No consensus about:– what IT competence consists of– whether it should be seen as a general and

normative concept or context dependent– whether we should address the individual or the

organizational level


The concept of competence

Competence

Comptence in the use of IT/IS in organizations

Skills -- Capabilities -- Know-howExplicit -- Tacit

Organisation level Strategic

Individual level

IS/IT managers

Business managersHØGSKOLEN I AGDER

Agder University College

Table 1Approaches to the study of IS competence

Level of analysis Definition of competence

Van der Heijden (2000) Organizational level and ITmanagement

IT core capabilities:organization-specific routines,processes, skills and resources

Feeny and Willcocks (1998) Organizational level and ITmanagement

IS core capabilities:organization-specific routines,processes, skills and resources

Sambamurthy and Zmud (1994) Organizational level and ITmanagement

Capabilities, skills and tacitknow-how

Bharadwaj, Sambamurthy andZmud (2000)

Organizational level Critical IT capabilities

Basselier et al. (2001) Individual level and businessmanagers

IT related explicit and tacitknowledge

Lee and Trauth (1995) Individual level and ISprofessionals

Critical knowledge and skills


E-Business competence in SMEs

Strategy and vision

IT-Business integration

IT Management

Systems and Infrastructure

Sourcing and Alignment

E-Business

SMB


Strategy andVision

Processes integrationIT and business

Systems andInfrastructure

Alignment

E-businessSuccess

Sourcing

IT management

Figure 1: The conceptual model


Interviews with SMEs in Norway

• Interviews as a relevance test, and to guide the focus of the items under each category of competence.

• The responses pointed to the same competencies

• Increased level of detail and additional items for the categories Strategy and vision, Sourcing and alignment and IT-business process integration

• Lower level of detail for the other categories.


STRATEGY AND VISIONThe concept of e-business

Our company has a high level of knowledge: totally totally N/A

6. about how e-business technologies disagree agree

can be of value to our business 1 2 3 4 5 6

7. about how our main competitor(s)

use IT to support similar business areas 1 2 3 4 5 6

8. In general, the concept of e-business

is well understood by our company 1 2 3 4 5 6

Strategic planning

Our company has: totally totally N/A

9. a high level of knowledge in disagree agree

strategic planning 1 2 3 4 5 6

10. a well developed set of strategic

planning techniques 1 2 3 4 5 6

11. in general, strategic planning is well

understood by our company 1 2 3 4 5 6


SOURCING AND ALIGNMENT

Sourcing competencies

in our company we have a high level of knowledge: totally totally N/A

12. on issues related to outsourcing of disagree agree

activities to business partners 1 2 3 4 5 6

13. on how to use competencies in our

business partners 1 2 3 4 5 6

14. in general, we are very skillful in utilizing

competencies in our business network 1 2 3 4 5 6

Alignment competencies

in our company: totally totally N/A

15. business and IT managers very much agree disagree agree

on how IT contributes to business value 1 2 3 4 5 6

16. there is effective exchange of ideas between

business people and IT people 1 2 3 4 5 6

in general, we are good at using:

17. the competencies we already have

in my company 1 2 3 4 5 6

18. the competencies represented in our

business partners 1 2 3 4 5 6


IT-BUSINESS PROCESS INTEGRATION

Competencies in Process Integration

19. in our company we are actively working totally totally N/A

with the impact of e-commere on disagree agree

our business processes 1 2 3 4 5 6

20. in general, we are good at working smarter

to utilize new information technology

in my company 1 2 3 4 5 6

MANAGEMENT OF IT

in our company:

21. our IT resources are effectively managed 1 2 3 4 5 6

22. we are good at achieving the anticipated

benefits from IT investments 1 2 3 4 5 6

SYSTEMS AND INFRASTRUCTURE

in our company:

23. our systems infrastructure is very flexible

in relation to future needs 1 2 3 4 5 6

24. our IT systems make us able to effectively cooperate

electronically with business partners 1 2 3 4 5 6


E-BUSINESS SUCCESS

Efficiency

As a result of our e-business strategy: totally totally N/A

25. we have reduced costs by using electronic, disagree agree

online order taking 1 2 3 4 5 6

26. we can deliver faster 1 2 3 4 5 6

27. we have a more efficient

market communication 1 2 3 4 5 6

Complementarities

As a result of our e-business activities: totally totally N/A

28. our products or services complement disagree agree

those of our business partner 1 2 3 4 5 6

29. our business partner offer products or

services that complement ours 1 2 3 4 5 6

30. our supply chain has been strongly

integrated to our partners’ supply chain 1 2 3 4 5 6

Lock-in


31. business partners have high switching costs disagree agree

(i.e. replacing us creates extra costs) 1 2 3 4 5 6

32. products and services offered to customers

are personalized 1 2 3 4 5 6

Novelty


33. our company is recognized as a pioneer in disagree agree

utilizing e-commerce solutions 1 2 3 4 5 6

34.we cooperate with our business partners

in a new and innovative way 1 2 3 4 5 6

General

35.in general, we have very positive effects from

our e-business efforts in our company 1 2 3 4 5 6


OTHER/CONTROL

Leader vs. Follower totally totally N/A

36. our company has to adjust to what our major disagree agree

partners decide in relation to e-business 1 2 3 4 5 6

37. our company is good at implementing

changes in our organization 1 2 3 4 5 6

38. overall, my company’s competence for

utilizing e-business technology is very good 1 2 3 4 5 6

Preliminary findings

• Our research model is supported

• General theory is supported

• We find relations between competence and success in the adoption of e-business


Preliminary findings and implications

• Success factor: Efficiency

• 65% varaince explained by:– Working with the impact of e-business on

business processes– Ability to cooperate effectively electronically

with business partners



• Success factor: Complementarities

• 54% of the variance explained by:– competence about competitors’ use of IT to

support similar business areas– the understanding of the e-business concept– the ability to implement changes in the

organization.



• Success factor: Lock-in

• 33% of the variance explained by:– investments in systems that makes it possible

for suppliers to see information about supply and demand

– ability implement changes in the organization



• Success factor: Novelty

• 29% of the variance explained by:– size (number of employees)– effective exchange of ideas between business

people and IT people



• Sourcing and Alignment– both factors were found to have positive

correlation with e-business success

• Size positively correlated to success

• Governance negatively correlated to alignment


Implications

• SMEs must be treated different from bigger companies

• Some SMEs may see less e-business success due to dictates from dominant business partner

• More research needed

• Stimulation programs must take SME characteristics into account

E-business competencies in SMEs Conceptual model and empirical results HØGSKOLEN I AGDER Agder University College Dr. Dag H. Olsen Agder University College.

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