Organization, Strategy and Business Value of Electronic Commerce: The Importance of Complementarities

Abstract

Many corporations are reluctant to adopt electronic commerce due to uncertainty in its profitability and business value. This chapter introduces a business value complementarity model of electronic commerce. The model relates high level performance measures, such as business value, first to intermediate performance measures, such as value chain and company strategy, and then to the e-business performance drivers as business processes and complementary technologies. The model argues that complementarities among the different activities of the value chain, corresponding business processes and supporting technologies should be explored to reach a better fit among strategy, business model and technology investments when entering the electronic commerce field. The exploration of such complementarities should lead to investments in electronic commerce systems that best support the company strategy, thus minimizing failures. From a practical point of view, managers could use this framework as a methodology to increase the business value of electronic commerce to a corporation.