Profiling E-Business Groups A Cluster Analysis Ilias Vlachos [email protected] Syros, 12-15 July, 2007.

Profiling E-Business Groups A Cluster Analysis

Ilias [email protected], 12-15 July, 2007

Research Questions

Can we suggest that There are different types of companies

(business groups), with consistent e-business behavior?

Such as leaders, laggards, etc? If yes, which are their characteristics in

terms of demographics (size, sales, etc), budget expenditure on icts, etc

What determines consistent behavior? Size, values, expertise?

Theoretical Background Innovation Adoption

Theoretical Background

BENEFITS Efficiency, “which allows users to work faster and

often at measurably lower costs”

Effectiveness, “which allows users to work better and produce higher quality work”, and

Transformations that “change the basic ways that people and departments work and even change the very nature of the business enterprise” (p.21-23).

Gibson, C. F., and Jackson, B. B., The information imperative, D.C. Heath and Co., 1987.

Innovation Factors

Intention to adopt

Adoption/rejection decision

Organisational & Socio-political

factorsExternal pressure

Evaluation StageAwareness

StageDecision Stage

Rejection

IgnoranceStage

Adoption

Organisations ignore E-Business's existence

Organisations become aware of E-Business existence. No evaluation has yet taken place.

Organisations evaluate E-Business in order to decide whether to adopt or reject it. The intention to adopt/reject it, based on the perceived net relative advantage of E-Business and, socio-political factors that put pressure to comply with what trading partners (others) do.

Organisations take a formal decision to adopt or reject E-

Business.

Relative advantageCostCompatibility ComplexityTrialability

Organisational sizeChampioningreadiness in SMEInadequate resources Limited educationTop management support------------------------------Power and dependencyPeer supportTrustCustomer pressurePeer pressure

postpone

Methods

• Empirical Research• E-BusinessWatch• Date: 2006, spring (http://www.ebusiness-watch.org/)

• Sample: 407• Demographics

– Sector (Food and beverages 25,1%; Footwear 7,9%; ICT Construction 29,7%; Tourism 29,2%; Telecommunications 4,2%; Hospital activities 3,9%)

– Size (1-9: 31,2%;10-49: 43,0%; 50-249: 17,4%%; 250+: 6,6%)

METHODOLOGY The data collection of this study was based on the research

project of European e-Business Market Watch 2006 (www.ebusiness-watch.org) in the European Union (EU)

Questionnaire Data Description Module A:Module A: ICT infrastructureICT infrastructure Module B:Module B: e-Skills Development e-Skills Development Module C:Module C: ICT Expenditure and InvestmentICT Expenditure and Investment Module D:Module D: Online Sourcing and ProcurementOnline Sourcing and Procurement Module E:Module E: Online Marketing and SalesOnline Marketing and Sales Module F:Module F: e-Standards and interoperability issuese-Standards and interoperability issues Module G:Module G: ICT Impacts, Drivers and InhibitorsICT Impacts, Drivers and Inhibitors

VARIABLES Demographics

Sector Size

ICT & E-Business Initiatives: WebSite Intranet ERP (Enterprise Resource Planning System) Knowledge Management Software EDM (Enterprise Document Management System) CRM (support marketing or sales processes by using specific IT solutions) SCM (Supply Chain Management System) E-Orders (how large a share of the total volume of your orders is placed online) E-Invoices (Please estimate the percentage of invoices your company sends) E-Invoices (Please estimate the percentage of invoices your company receives) Internet Access (Which technology does your company use to connect to the

internet) ICT Budget (What was the share of your ICT budget, including hardware,

software, services and personnel as percentage of your total company costs in 2006?

CLUSTER ANALYSIS

CLUSTERS N %

1 64 16,0%

2 104 26,0%

3 59 14,8%

4 36 9,0%

5 81 20,3%

6 56 14,0% BIC CRITERION BETWEEN CLUSTER 1=17413,623 TO CLUSTER 6=30,140

Cluster 1(n=64)

Cluster 2(n=104)

Cluster 3(n=59)

Cluster 4(n=36)

Cluster 5(n=81)

Cluster 6(n=56)

Website97% 67% 49% 97% 62% 29%

Accounting Software 88% 86% 95% 82% 70% 64%

Intranet86% 65% 53% 11% 0% 0%

ERP81% 37% 27% 25% 0% 0%

CRM 63% 7% 9% 17% 5% 0%

SCM50% 13% 31% 6% 0% 0%

EDM47% 15% 29% 0% 0% 0%

Knowledge Management 33% 9% 24% 3% 0% 0%

0%

20%

40%

60%

80%

100%ICT budget

Website

Accounting Software

Intranet

ERPCRM

SCM

EDM

Knowledge Management

Cluster 1

Cluster 2

Cluster 3

Cluster 4

Cluster 5

Cluster 6

Cluster 1(n=64)

Cluster 2(n=104)

Cluster 3(n=59)

Cluster 4(n=36)

Cluster 5(n=81)

Cluster 6(n=56)

56K (analogue) 0% 3% 17% 22% 16% 11%

ISDN13% 23% 31% 31% 33% 52%

broadband via DSL or Cable 53% 64% 47% 39% 46% 16%

Direct fibre connection & wireless 33% 5% 0% 0% 0% 0%

Cluster 1 Cluster 2 Cluster 3 Cluster 4 Cluster 5 Cluster 6

Average Personnel 220 104 11 33 46 4

ICT budget 12% 7% 9% 8% 6% 6%

Size (employees) Distribution across clusters

1-9 2% 1% 45% 9% 0% 43%

10-49 16% 37% 1% 10% 35% 1%

50-249 31% 38% 0% 7% 24% 0%

250+ 44% 41% 4% 4% 7% 0%

Sector within cluster

Food & beverage 22% 24% 29% 22% 23% 34%

Footwear 0% 9% 5% 14% 14% 7%

Construction 17% 33% 41% 6% 25% 41%

Tourism 41% 26% 19% 50% 33% 18%

Telecommunications 17% 1% 3% 8% 0% 0%

Hospital activities 3% 8% 3% 0% 5% 0%

Sector Distribution across clusters

Food & beverage 14% 25% 17% 8% 19% 19%

Footwear 0% 28% 9% 16% 34% 13%

Construction 10% 30% 21% 2% 18% 20%

Tourism 22% 23% 9% 15% 23% 8%

Telecommunications 65% 6% 12% 18% 0% 0%

Hospital activities 13% 50% 13% 0% 25% 0%

0%

5%

10%

15%

20%

25%

30%ICT budget

Website

ERP

CRM

SCM

EDM

Know ledge Management

Average Personnel

Cluster 1

Cluster 2

Cluster 3

Cluster 4

Cluster 5

Cluster 6

0%

10%

20%

30%

40%

50%

60%

70%ICT budget

Website

ERP

CRM

SCM

EDM

Know ledge Management

Average Personnel

Cluster 1

Cluster 2

Cluster 3

Cluster 4

Cluster 5

Cluster 6

0%

20%

40%

60%

80%

100%ICT budget

Website

ERP

CRM

SCM

EDM

Know ledge Management

Average Personnel

Cluster 1

Cluster 2

Cluster 3

Cluster 4

Cluster 5

Cluster 6

0%

20%

40%

60%

80%

100%ICT budget

Website

ERP

CRM

SCM

EDM

Know ledge Management

Average Personnel

Cluster 1

Cluster 2

Cluster 3

Cluster 4

Cluster 5

Cluster 6

0%

20%

40%

60%

80%

100%ICT budget

Website

ERP

CRM

SCM

EDM

Know ledge Management

Average Personnel

Cluster 1

Cluster 2

Cluster 3

Cluster 4

Cluster 5

Cluster 6

0%

20%

40%

60%

80%

100%ICT budget

Website

ERP

CRM

SCM

EDM

Know ledge Management

Average Personnel

Cluster 1

Cluster 2

Cluster 3

Cluster 4

Cluster 5

Cluster 6

0%

20%

40%

60%

80%

100%

ICT budget

Website

ERP

CRM

SCM

EDM

Know ledge Management

Average Personnel

Discussion

Cluster 1 leaders

Large Companies (220), Telecommunications, extensive use of e-business

Cluster 2 effectivenessmedium-sized (104), various sectors, CRM

7%, SCM 13%, ERP 37%

Cluster 3efficiency-

internalsmall-size (11), various sectors, 9% budget to

ICT, website (49%), SCM (31%), CRM 9%

Cluster 4efficiency-

externalmedium (33), 50% tourism, website 97%,

CRM 17%

Cluster 5Laggards-

technologicmedium (46), various sectors (tourism 33%),

website 62%, rest-->0%

Cluster 6 Laggards-sizemicro (4%), food (34%), website (29%),

accounting (64%)

Questions Remain…

Is this solution (6 groups) consistent? Is this solution suggest there are business

groups based on their values (long-term characteristics: strategy, vision, innovativeness, etc)

Comparison across countries, sectors? Future:

Test/compare across-within sectors, countries Test more variables…