Executive Judgment in E-Business Strategy

Abstract

One of the main strategic challenges for organizations today is to effectively manage change and stay competitive in the future. Change appears to be the only constant in contemporary business and is present in every industry and in every country (Brown & Eisenhardt, 1998). Moreover, the key area of importance, current within many organizations, is how to effectively leverage technology within such a complex and dynamic business environment (Sauer & Willcocks, 2003). The alignment or fit approach, which has its roots in contingency theory, has long been promoted as the way to get high returns from technology investment. However, the realization of advantage from the Internet and related e-business technology investment has long been a source of frustration for corporate executives. Impressive performance returns by companies such as Dell Computers, Cisco Systems and General Electric illustrate that returns can be achieved by linking the Internet and related e-business technologies to firm strategy. These companies have shown that successful management of their IT investments can generate returns as much as 40% higher than those of their competitors (Ross & Weill, 2002). Yet, many executives view the Internet and related e-business technologies with intense frustration. They recollect investment in the great speculative bubble of the 1990s and excessive expenditure on year 2000 (Y2K) compliant systems (Keen, 2002). They recall high profile examples of botched enterprise resource planning (ERP) systems that have consistently run over time and budget and report that customer-relationship management (CRM) initiatives were largely a flop (Reinartz & Chugh, 2002). Unfortunately, it is not yet clear how firms should go about capturing the potential that exists in e-business, as few normative frameworks exist to guide practitioner investment.