The increasing trend in the use of Internet-based emarketplace applications has created tremendous opportunities for businesses to manage effective supply chain management. An electronic market exists when a supplier provides goods and services to a customer in a transaction partially or fully automated by information technology. E-Marketplaces can be defined as a digital infrastructure that supports industrial commerce, such as auctions, catalogues and exchanges (Ivang & Sorenson, 2005). IDC predicts IT and e-marketplace spending will reach $496.7 billion in the U.S. and $1.3 trillion globally by the year 2009. Despite extensive research on this topic, there has been limited work in the realm of e-marketplace security. These e-marketplaces are generally implemented on the Internet, whose original purpose was to provide a robust heterogeneous distributed computing environment for applications that may not yet be developed. Previous researchers have noted that the formation of electronic marketplaces has been declining and that the failure rates are high. For instance, Dai and Kauffman (2002) suggest that only one-fifth of the electronic marketplaces in operation would succeed since firms have to face serious technical challenges. Theoretically e-marketplaces should enable firms to trade and collaborate more efficiently. The reason for this is due to the proliferation of affordable technology and the explosive growth of B2B transactions that have allowed buyers and sellers to conduct transactions electronically and to generate substantial savings and revenue for participants and owners (Sharifi, Kehoe, & Hopkins, 2006). Nevertheless, in reality, many emarketplaces disappeared during major consolidation phase (Tran, 2006).This study aims to examine the nature of security in e-marketplaces. We identify four types of risks, namely economic, technological, implementation, and relational risks in seven e-marketplace firms from a cross-section of different industries. We then present the control measures as in the responses that the seven firms enforced in order to reduce and manage their risks. The contribution of this study is the development of a security framework based on the findings for e-marketplace participation.
Definition Of E-Marketplaces
White and Daniel (2003) describe e-marketplaces as Web-based systems that enable automated transactions, trading, or collaboration between business partners. According to Bakos (1998), an electronic marketplace is an interorganizational system that allows participating buyers and sellers to exchange information about processes, products, and services. O’Reilly and Finnegan (2005) defined e-marketplaces as an organizational intermediary that electronically provides value added communication, brokerage, and integration services to buyers and sellers of direct and/or indirect products and/or services in specific horizontal or vertical market functions, meeting management needs for information and process support, and/or operating the required IS/IT infrastructure.
Table 1 presents the definitions of e-marketplaces from different sources.
Key Terms in this Chapter
Folksonomy: A collection of tags (terms) to describe objects of a domain; these are created by a community and not as taxonomies, which are created by experts of a domain.
Web 2.0: A number of recent Internet technologies used to improve the interactivity of Web browsers and the user-friendliness of current Web information systems.
Syndication: An activity to monitor and feed an application from a number of structured Internet sources.
Social tagging: Collaboratively defining tags as a meta-information on shared Internet resources.
Wiki: An Internet blackboard system where users collectively create a number of interlinked Web pages.
Social Software: Software for a certain class of information systems that support the creation of virtual communities.
Web Service: A software component or procedure in the Internet that can be called by other software programs; the component and its usage conditions may be announced in a registry. Input and output arguments, as well as service level agreements, are described with XML.
Social Bookmarking: A kind of collaborative indexing of Web pages where users share their Web bookmarks with other members of a community.
Mash-up: A social software application that uses components of other applications to offer new aggregated services to its members.