Collaborative Commerce

Collaborative Commerce

Ta-Tao Chuang (Gonzaga University, USA), Kazuo Nakatani (Florida Gulf Coast University, USA) and Duanning Zhou (Eastern Washington University, USA)
Copyright: © 2006 |Pages: 6
DOI: 10.4018/978-1-59140-799-7.ch019
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Abstract

In the past few years, collaborative commerce (c-commerce) has been widely touted by practitioners and has caught researchers’ attention. The business press constantly reported successful stories of c-commerce in which companies in various industries employed collaborative technologies to reap potential benefits. A recent report on the software market for c-commerce indicated that software for creating c-commerce would be the next stage of growth in the enterprise application business (Bellini, Gravitt, & Diana, 2001). The report estimated that the size of the c-commerce market would grow from $5.8 billion in 1999 to $36.5 billion in 2004 (estimated by AMR and IDC). Another report (Ferreira, Schlumpf, & Prokopets, 2001) showed that about 60% of 356 survey respondents considered c-commerce as critically important to their businesses in the year of 2001-2002 and 78% of the companies planned to implement c-commerce to improve supplier and customer interaction. Meanwhile, findings of academic research on issues surrounding c-commerce have been sporadically reported. Welty and Becerra-Fernandez (2001) investigated the issue of managing trust and commitment in collaborative relationships. Kumar (2001) delineated the features of information and communication technologies for supporting c-commerce. Chuang and Nakatani (2004) identified different types of c-commerce and the driver for each type of c-commerce. Extending the concept of inter-organizational collaboration (Himmelman, 1996), Chuang and Nakatani (2004) defined c-commerce as an IT-enabled process in which organizations share information and resources, adjust their activities and augment each other’s capabilities in order to reap mutual benefits while assuming common responsibilities, risks, and rewards. Johnson and Whang (2002) used the term “e-collaboration” to refer to the collaborative activities between businesses; however, Johnson and Whang placed emphasis on the role of the Internet and the concept of sharing. It is worth noting that while there are overlappings between the boundaries of collaborative commerce and electronic commerce, the difference between both lies in the fact that c-commerce is focused on joint intellectual effort, but e-commerce is oriented to more transaction processing, such as selling/buying activities. Even though c-commerce could be considered as one of ramifications of electronically conducting commerce over the Internet, its emergence is most likely driven by the globalization of economy, the competition, the need for efficient customer response, and the advent of collaborative technology. From the managerial perspective, globalization means that decisions on allocation and/or acquisition of resources are considered and made on a global scale. Thus, international sourcing is commonly considered as an option for improving organizational performance, which subsequently necessitates the need for collaborative planning (Fliedner, 2003). The fierce competition on global economy spurs businesses on to create strategic partnership with complementary enterprises in which creating collaborative advantage is as, if not more, important as creating competitive advantage (Spekman, Kamauff, & Myhr, 1998). The proliferation of strategic partnerships has resulted in the appearance of competition between business networks or between supply chains (Kumar, 2001). In this context, paradoxically, the fiercer the competition is, the more important collaboration becomes. Meanwhile, fierce competition redirected businesses’ energies toward the fulfillment of customer’s needs and the reduction of operating cost accrued through the supply chain (Fliedner, 2003). Finally, the availability of greater bandwidth of telecommunication facilitates the use of network and the Internet to connect businesses and create a collaborative platform on which “advanced planning systems” are employed to analyze and optimize the flows of supply chain (Kumar, 2001). In brief, the emergence of c-commerce could be driven by business needs and sophisticated IT capability.

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