A Study of Sourcing Channels for Electronic Business Transactions
BYUNGJOON YOO, VIDYANAND CHOUDHARY, AND TRIDAS MUKHOPADHYA
Theory
This paper sought to study the firm’s choice of B2B sourcing and determine the uncertainty on the future success of B2B marketplaces. The author examined different factors that are important in the selection of B2B sourcing channels. They carried out an empirical examination on electronic procurement and established that the size of a firm is important in determining the applicability of specific e-business technologies. Another significant issue that was considered in this research was the capability of a firm to use information technology. They examined data on electronic procurement to establish the technological capacity of firms.
Research Design
The research presented three possible alternatives for adopting B2B. These alternatives included the use of private channels only, the use of public channels only, and the use of private and public channels. It is assumed that in the private alternative, savings can be expressed as the cumulative benefits from customization and general IT. The negative impacts of the specificity of a product are marginal when compared to a public market place. Assuming a public marketplace only means a firm will not build its private marketplace. This is preferred by most small and medium-sized firms. In this case, the research established that savings from procurement are calculated when the benefits reduce when the specificity of the product (θ) increases, and the benefit increases when the size of the public market increases. Customization of IT and the parameter of information security of the private channel are only included in the benefit level of the public channel to establish a comparison between the levels of benefits between private and public channels. Lastly, assuming both channels will only take place if a firm chooses a public marketplace at the second stage if it earns more profits than the private marketplace. Having both channels initially offers managerial flexibility that gives the firm a chance to select the best option in the next stage. The design considered many factors in three stages. First, it was considered at the product level, firm-level, and then at the industry level. At the firm level, firm size (n), IT expertise (λ), and customization and information security (e) were considered. The research used the noncooperative game model to examine if the company chooses either public or private B2B channels.
Analysis
The research found that in the first alternative, the effects of an increase in IT (λ) level on the selection of either private or public channels were based on the costs of execution and levels of technology customization. Higher levels of IT expertise only favors the public channel only when there is a small, fixed cost differential between private and public channels and a sufficiently high degree of customization in the private channel. It was also established that the value of creating both public and private channels is lower when the difference in the expected profit from the two channels is high. Lastly, in the case of creating both channels, the research established that when the uncertainty level is high, the benefits accrued by the firm for implementing the two channels is higher. Therefore, the likeliness of executing the two channels initially is higher.
Conclusion
Through this research, the authors examined the managerial impacts by using a model that looks into the main forces that administrations should consider when finding solutions to the B2B puzzle. Initially, they considered the direct benefits and cost of implementing a private channel. They also considered the viability of implementing a public channel by looking into the IT capabilities, the specificity of the procurement needs, and the level of influence on the future success of the marketplace. The model also examined other factors such as the size of the firm and the level of IT capability on the selection of the best B2B channel. The novelty of this research design I that it incorporated the choice of B2B and the uncertainties surrounding the success of the public marketplace. The research opens the way for more research on the effects of reversible investments, the option value of small pilot projects, and the likelihood of deferring investments.
System Design Features and Repeated Use of Electronic Data Exchanges
ANDREAS I. Nikolaou AND D. HARRISON McKnight
Theory
The research employs a two-theory strategy in their attempt to explain how data exchanges work overtime. Social exchange theory (SET) is used initially to explain the concept of data exchange. This theory is fit for data exchange research since it pays attention to the exchanges and explains views concerning commerce. The research supplements the social exchange theory with social cognition principles. Social cognition principles are important in understanding how features of data exchange are evaluated in a user’s mind over some time. Social cognition is important for this research because the research examines how the exchange user evaluates the exchange provider cognitively across different periods.
Research Design
The research was designed to evaluate the impacts of the exchange system design manipulations on PIQ and the need to continue applying the exchange. Two time periods, T1 and T2 were used to denote the two initial times a data exchange is used. The research examined the features of exchange in cases where users are required to meet important deadlines. The examination of T1 and T2 was based on two important reasons. The first reason is the impact of the initial time frame since it usually sets a pattern for beliefs between different groups. Secondly, the research considered the first two periods since they represent a time difference in which beliefs are mostly unstable and subject to alterations as new information is established. Therefore, T1 and T2 provide a better way of comparing beliefs than the two later periods would have done. The research employed a web-based exchange that created a real-world situation. Factors of interest in the design were also manipulated. The experiment was administered at two time periods and later formation of perceptions was captured in a dual-period setting. 158 participants provided data in T1 and 145 in T2.
Analysis
The research aimed to test how the exchange outcome feedback and control aspects impact PIQ and the intention of the user to apply the exchange system in their first two transactions. The test result for the indirect impacts of control transparency on the application of intent is important at both T1 and T2. The result did not have any impacts on PIQ at T1 but affected it in T2.the transparency control also affected PIQ at the two time periods. At T2, intent to use was affected by control transparency than at T1 under negative feedback conditions. PIQ also mediated the impacts of control transparency fully on the need to use at T1 and T2. The T1/T2 impacts on the result view were partially affected by PIQ.
Conclusion
The research resulted in two important conclusions, first, it showed clearly that outcome feedback has impacts on PIQ and intent to use the exchange differently between T1 and T2. Secondly, it established that negative outcome feedback reduces the impacts of control transparency on the need to use the exchange from T1 to T2. Additionally, the research found out that PIQ was even more predictive of the intent of the user to continue using the exchange for the second transaction. Nevertheless, the research warns systems designers on the dangers of relying mainly on offering transparent signals on the data being exchanged. This is proved both at T1 and T2. Generally, the research showed that the two system design interventions of control transparency and outcome feedback can affect the intent to use electronic data exchanges.
BYUNGJOON YOO, VIDYANAND CHOUDHARY, AND TRIDAS MUKHOPADHYA
Theory
This paper sought to study the firm’s choice of B2B sourcing and determine the uncertainty on the future success of B2B marketplaces. The author examined different factors that are important in the selection of B2B sourcing channels. They carried out an empirical examination on electronic procurement and established that the size of a firm is important in determining the applicability of specific e-business technologies. Another significant issue that was considered in this research was the capability of a firm to use information technology. They examined data on electronic procurement to establish the technological capacity of firms.
Research Design
The research presented three possible alternatives for adopting B2B. These alternatives included the use of private channels only, the use of public channels only, and the use of private and public channels. It is assumed that in the private alternative, savings can be expressed as the cumulative benefits from customization and general IT. The negative impacts of the specificity of a product are marginal when compared to a public market place. Assuming a public marketplace only means a firm will not build its private marketplace. This is preferred by most small and medium-sized firms. In this case, the research established that savings from procurement are calculated when the benefits reduce when the specificity of the product (θ) increases, and the benefit increases when the size of the public market increases. Customization of IT and the parameter of information security of the private channel are only included in the benefit level of the public channel to establish a comparison between the levels of benefits between private and public channels. Lastly, assuming both channels will only take place if a firm chooses a public marketplace at the second stage if it earns more profits than the private marketplace. Having both channels initially offers managerial flexibility that gives the firm a chance to select the best option in the next stage. The design considered many factors in three stages. First, it was considered at the product level, firm-level, and then at the industry level. At the firm level, firm size (n), IT expertise (λ), and customization and information security (e) were considered. The research used the noncooperative game model to examine if the company chooses either public or private B2B channels.
Analysis
The research found that in the first alternative, the effects of an increase in IT (λ) level on the selection of either private or public channels were based on the costs of execution and levels of technology customization. Higher levels of IT expertise only favors the public channel only when there is a small, fixed cost differential between private and public channels and a sufficiently high degree of customization in the private channel. It was also established that the value of creating both public and private channels is lower when the difference in the expected profit from the two channels is high. Lastly, in the case of creating both channels, the research established that when the uncertainty level is high, the benefits accrued by the firm for implementing the two channels is higher. Therefore, the likeliness of executing the two channels initially is higher.
Conclusion
Through this research, the authors examined the managerial impacts by using a model that looks into the main forces that administrations should consider when finding solutions to the B2B puzzle. Initially, they considered the direct benefits and cost of implementing a private channel. They also considered the viability of implementing a public channel by looking into the IT capabilities, the specificity of the procurement needs, and the level of influence on the future success of the marketplace. The model also examined other factors such as the size of the firm and the level of IT capability on the selection of the best B2B channel. The novelty of this research design I that it incorporated the choice of B2B and the uncertainties surrounding the success of the public marketplace. The research opens the way for more research on the effects of reversible investments, the option value of small pilot projects, and the likelihood of deferring investments.
System Design Features and Repeated Use of Electronic Data Exchanges
ANDREAS I. Nikolaou AND D. HARRISON McKnight
Theory
The research employs a two-theory strategy in their attempt to explain how data exchanges work overtime. Social exchange theory (SET) is used initially to explain the concept of data exchange. This theory is fit for data exchange research since it pays attention to the exchanges and explains views concerning commerce. The research supplements the social exchange theory with social cognition principles. Social cognition principles are important in understanding how features of data exchange are evaluated in a user’s mind over some time. Social cognition is important for this research because the research examines how the exchange user evaluates the exchange provider cognitively across different periods.
Research Design
The research was designed to evaluate the impacts of the exchange system design manipulations on PIQ and the need to continue applying the exchange. Two time periods, T1 and T2 were used to denote the two initial times a data exchange is used. The research examined the features of exchange in cases where users are required to meet important deadlines. The examination of T1 and T2 was based on two important reasons. The first reason is the impact of the initial time frame since it usually sets a pattern for beliefs between different groups. Secondly, the research considered the first two periods since they represent a time difference in which beliefs are mostly unstable and subject to alterations as new information is established. Therefore, T1 and T2 provide a better way of comparing beliefs than the two later periods would have done. The research employed a web-based exchange that created a real-world situation. Factors of interest in the design were also manipulated. The experiment was administered at two time periods and later formation of perceptions was captured in a dual-period setting. 158 participants provided data in T1 and 145 in T2.
Analysis
The research aimed to test how the exchange outcome feedback and control aspects impact PIQ and the intention of the user to apply the exchange system in their first two transactions. The test result for the indirect impacts of control transparency on the application of intent is important at both T1 and T2. The result did not have any impacts on PIQ at T1 but affected it in T2.the transparency control also affected PIQ at the two time periods. At T2, intent to use was affected by control transparency than at T1 under negative feedback conditions. PIQ also mediated the impacts of control transparency fully on the need to use at T1 and T2. The T1/T2 impacts on the result view were partially affected by PIQ.
Conclusion
The research resulted in two important conclusions, first, it showed clearly that outcome feedback has impacts on PIQ and intent to use the exchange differently between T1 and T2. Secondly, it established that negative outcome feedback reduces the impacts of control transparency on the need to use the exchange from T1 to T2. Additionally, the research found out that PIQ was even more predictive of the intent of the user to continue using the exchange for the second transaction. Nevertheless, the research warns systems designers on the dangers of relying mainly on offering transparent signals on the data being exchanged. This is proved both at T1 and T2. Generally, the research showed that the two system design interventions of control transparency and outcome feedback can affect the intent to use electronic data exchanges.