EBBSC: A Balanced Scorecard-Based Framework for Strategic E-Business Management

EBBSC: A Balanced Scorecard-Based Framework for Strategic E-Business Management

Fen Wang (University of Maryland, Baltimore County, USA) and Guisseppi Forgionne (University of Maryland, Baltimore County, USA)
Copyright: © 2009 |Pages: 23
DOI: 10.4018/978-1-60566-090-5.ch014

Abstract

E-business is far more about strategy than technology, and the strategy of e-business is very important in today’s dynamic and competitive environment. In this article, we describe a balanced scorecard-based framework in detail and discuss its potential e-business uses. This framework enables e-business managers to plan and allocate resources more effectively and align strategic objectives with performance results. It also provides a stable point of reference for e-businesses to understand and manage the fundamental changes introduced by e-business initiatives.
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Introduction

E-business has rapidly developed from being a vision of the future world of business to being “the” way of doing business (Whelan & Maxelon, 2001). This business opened new channels for communication and selling, a new source of data on customers and competitors, and changed the face of competition tremendously (Koutsoukis, Dominguez-Ballesteros, Lucas, & Mitra, 2000; Porter, 2001). Clearly, business processes of the 21st century must be more efficient and dynamic to build and sustain value across the organization, though having a dot-com presence does not necessarily point to success. As Raisinghani and Schkade (2001) pointed out “perhaps, one of the best ways to succeed in the world of e-business is to start off with a dynamic and new e-business strategy” (p. 601).

E-business is far more about strategy than technology. An effective e-business strategy is an elaborate and systematic plan of action that incorporates different organizational levels, different parties, different elements, and growth pattern features (Bakry & Bakry, 2001). Unlike traditional business strategy, e-business strategy considers a company’s business management architecture and how it can be improved, integrated and automated by instant and global Internet communication. Indeed, the Internet has spawned new e-business strategy and radically transformed existing models (Basu & Muylle, 2002; Pant & Ravichandran, 2001). These new models incorporate Internet technology, universal connectivity, and Web browser capabilities to integrate business processes within and beyond an enterprise. As a result, old business models should be adapted to the new conditions, and companies worldwide should develop an effective e-business strategy to fit the new conditions (Whelan et al., 2001).

What distinguishes many of the dot-coms from traditional organizations is not their new technical power, but their innovative and imaginative new business models (Hamel, 2000). This study proposes a balanced scorecard based e-business framework for the development and assessment of e-business strategy in this new age. Aided by this innovative and comprehensive e-business framework, managers can identify the major decision factors involved in their e-business strategies, specify the direct and indirect relationships among the factors, and generate strategies that would improve overall business performance.

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