Benchmarking in electric-commerce

Citation

Gunasekaran, A. (2002), "Benchmarking in electric-commerce", Benchmarking: An International Journal, Vol. 9 No. 5. https://doi.org/10.1108/bij.2002.13109eaa.001

Benchmarking in electric-commerce

Benchmarking in electric-commerce

Electronic commerce (EC) is the buying, selling, or exchanging of products, services, and information via computer networks, most notably the Internet. EC includes such diverse activities as Internet banking, electronic funds transfer, online shopping, securities trading, job hunting and recruiting, traditional and reverse auctions, customer service and more. EC is a subset of a broader concept called e-business (EB) that encompasses other network-supported (Internet, intranet, or extranet) business processes and activities not directly related to the buying, selling, and exchanging of products. Collaborative work, video conferencing, electronic meeting, and online training are just a few of the processes/activities, supported by Internet technologies that comprise this broad area we now call e-business. To use these and other network based applications, it is necessary to have supporting information and organizational infrastructure and systems (Turban et al., 2000).

By the end of 2003, approximately 50-60 per cent of the USA will be online. In this same timeframe, business to business (B2B) e-commerce is projected to reach $600 billion in the USA, and $1.1 trillion worldwide. It is noteworthy that B2B is the fastest growing form of EC. These figures highlight EC’s potential contribution to business growth and its likely impact on organizational competitiveness. Unfortunately, many companies suffer from a lack of expertise in EC, and best practice in this important area is not well documented. With the possible exception of assistance provided by high priced consulting firms, there is little guidance for firms wanting to implement EC to improve competitiveness (Rayport and Jaworski, 2001).

Companies could increase the likelihood of success with EB and EC by developing sound strategies and conducting systemic project analysis before implementing EC applications. Too many firms have simply plunged headlong into EC with little planning and analysis. Some failed, while others eventually succeeded, but not before wasting time and valuable resources. Firms wanting a “piece of the action” in cyberspace sorely need guidance. This is particularly true for small to mid-sized organizations that lack the resources to obtain the services of consulting firms.

EB and EC are evolving quite rapidly and suitable standards and systems are needed. Benchmarking is an important methodology for establishing suitable performance standards (measures and metrics) to guide companies in developing strategies and systems for the successful implementation of EB and EC. For EC operations non-financial measures like the number of online tracking requests processed by DHL or UPS are important. Financial measures that relate profits to online activities are needed, yet commonly accepted, tried and proven financial measures, tailored to the needs of EB are only beginning to surface. The benchmarking methodology has much to offer in the development of financial and non-financial measures of EC and EB performance. Benchmarking could contribute to improved performance in the following areas, and more:

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  strategic planning for EC;

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  implementation of EC;

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  selection of suitable EC business models;

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  selection of appropriate EC infrastructure;

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  outsourcing of EC development;

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  effective EC Web site design;

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  selection and implementation of appropriate hardware, software, communications and security;

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  portal development and use;

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  maximizing the visibility of EC sites;

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  customer relationship management in cyberspace;

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  EC operations management;

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  human resource management in EB.

All of the above would benefit from improved knowledge of best practice in EC and EB. To implement any EB strategy, managers need to understand the elements of EC and EB. More generally, guidance is needed in strategic, tactical and operational planning, implementation and operation of EB and EC. In addition to the areas identified above, the following offer opportunities for the application of benchmarking:

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  EC technologies (Internet, intranet, extranet, markup languages, search engines and Web portals).

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  EC models (B2B, business to consumer, consumer to consumer, business to government and government to consumer).

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  EC payment systems.

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  Security, the law and ethics in EB and EC (relating to viruses, hacking, copyright protection, employee and customer privacy, etc.).

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  EC market development and management.

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  Customer relationship management in cyberspace.

The Editors of BIJ welcome articles and special issue proposals covering performance measures, metrics, benchmarks and best practice in EB and EC. Topics need not be limited to the above-mentioned areas. Many other areas of EC and EB performance could be improved by benchmarking. Please feel free to contact us regarding your articles or special issue proposals.

A. Gunasekaran Editor R. McGaugheyInternet editor