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It is becoming increasingly important for organizations to take advantage of electronic commerce (e-commerce). Retail e-commerce sales worldwide have been estimated to rise by 23.2% to $2.29 trillion in 2017 and are likely to account for 10% of total global retail sales (eMarketer, 2017). Sales are likely to hit $4.48 trillion which will account for 16% of total global retail sales in 2021 (eMarketer, 2017). E-commerce includes trade between business-to-consumers (B2C), consumer-to-consumer (C2C) as well as business-to-business (B2B) trade and utilizes technologies such as the Web, the Internet, intranets, extranets, and electronic data interchange (EDI) to support commercial activities (Cao, Lu, Gupta, & Yang, 2015; Osmonbekov, Zhang, & Dang, 2016; Tan & Ludwig, 2016). E-commerce provides hospitals with increased opportunities for enhancing organizational activities such as exchanging information, coordinating logistics and communications via international hospital supply chains (Elbeltagi, Hamad, Moizer, & Abou-Shouk, 2016; Kurnia, Choudrie, Mahbubur, & Alzougool, 2015). Commonly adopted e-commerce technologies include the Internet, EDI, Electronic Funds Transfer (EFT) and barcodes (Kurnia, Choudrie, Mahbubur, & Alzougool, 2015; Zeng, Wen, & Yen, 2003). E-commerce uses the open Internet and existing information technology to expand customer value by giving organizations easier access to their internal business systems (Lee, Lim, & Tan, 1999; Yeh, Lee, & Pai, 2015). It also provides the opportunity for organizations to attain a greater degree of Internet connectivity at a fraction of the cost of an in-store trade, and it is an effective mean to share and exchange data and information (Hoque & Boateng, 2017; Lee et al., 1999; Tsao, Lin, & Lin, 2004). In addition, it assists organizations such as hospitals and healthcare organizations to purchase medical supplies in real time as well as to utilize it as a cheaper alternative to enter into new markets (Kurnia, Choudrie, Mahbubur, & Alzougool, 2015; Raisinghani et al., 2005).
Outsourcing of e-commerce/IT systems has often been used by hospitals and healthcare organizations to control their costs and remain competitive. According to Gartner, global the IT outsourcing service market grew by 4.6% to reach approximately US$285.5 billion in 2016 (Huntley & Blackmore, 2017). The percentage of the total IT budget spent on IT outsourcing increased from 10.6% in 2016 to 11.9% in 2017 (Computer Economics, 2017). However, only 28% of healthcare organizations engage in IT outsourcing activities, which is well below the average for all industries at 53% (Computer Economics, 2017). Nevertheless, IT outsourcing has increasingly become a popular business strategy for all types of organizations (Moon, Choe, Chung, Jung, & Swar, 2016). In particular, it has more impact on hospital productivity in the short run, with the optimal level of IT outsourcing being between 50% and 80% of overall IT spending (Lee, 2017). However, difficulties in quantifying the intangible benefits of e-commerce/IT outsourcing projects are the major concern for hospitals (Cutler & Sterne, 2000; Standing & Lin, 2007; Stockdale, Lin & Stoney, 2005; Torres, 2017). Although the adoption of e-commerce/IT projects can be seen as a strategic move to gain a competitive advantage and boost organizational performance, the difficulty in measuring the less precisely defined technology of e-commerce is problematic for organizations since the physical boundaries between trading partners are usually difficult to separate (Barua, Konana, & Whinston, 2004; Liu, Huang, & Lin, 2012; Melville, Kraemer, & Gurbaxani, 2004; Zhuang, 2005). Organizations need to adopt appropriate evaluation methodologies and approaches to evaluate the new type of organizational capabilities in order to improve productivity of the e-commerce/IT outsourcing investments (Lin, Pervan, Lin, & Tsao, 2008).