A Study on the Value of B2B E-Commerce: The Case of Web-based Procurement

Abstract

Web-enabled business-to-business (B2B) e-commerce enhances inter-organizational coordination and results in transaction cost savings and competitive sourcing opportunities for the buyer organization. However, organizations are unsure if this is an improvement over existing information technology such as EDI. In particular, what is the value of B2B e-commerce to a buyer organization and how to measure this value? What factors most affect the realization of the value of B2B e-commerce? Using the case of Web-based B2B procurement system, we propose a framework to quantify and measure the value of B2B e-commerce system and identify the factors that determine this value. Our analysis indicates that, even though all stages of B2B procurement is affected by the Web, the value of Web-based procurement is most determined by the process characteristics, organization of business units and the “extended enterprise”.