2009 International Conference on Electrical Engineering and Informatics

5-7 August 2009, Selangor, Malaysia

B2B E-commerce Readiness Assessment

Indicators based on the Critical Success Factors
Norjansalika Janom1, Mohd Shanudin Zakaria2,
Faculty of Computer Sciences and Mathematics
University Technology MARA (UiTM) Shah Alam, Malaysia
Faculty of Technology and Information Sciences,
Universiti Kebangsaan Malaysia, Bangi, Malaysia
1

norjan@tmsk.uitm.edu.my

Faculty of Technology and Information Sciences

University Kebangsaan Malaysia, Bangi, Malaysia
2

msz@ftsm.ukm.my
AbstractThe main aim of this paper is to generate
understanding of the range of internal and external factors
which impact the Business-to-business electronic commerce (B2B
EC) development of the smaller firms in agro- based industry.
Drawing on existing research on e- readiness models of
information, communications and technology (ICT) specifically
B2B EC technologies, this paper formulates a conceptual model
of B2B EC assessment constructs together with the specific
research approach towards the development of a more robust
electronic readiness (e- readiness) model. The research presents
a conceptual model that highlights the key indicators of the B2B
EC implementation based on individual, organizational and
environmental dimensions.
Keywords: Business-to-business electronic commerce (B2B EC),
Critical Success Factors, and Small Medium Enterprise (SME).

I. INTRODUCTION
There have been a lot of debates and discussions by
academicians, researchers, government agencies and other
related organizations regarding the critical factors that effect
the widely usage of B2B EC among organizations. The
implementation of inter-organizational systems like B2B EC
is being categorized as a system with high degree of difficulty
since it involves complexity of the multiple relationships and
interactions between trading partners. Thus, the
implementation requires careful planning and strategies at all
levels in the organizations. However, it appears that B2B EC
is one of the controversial issues that have attracted ecommerce researchers. The problem is compounded because
the term critical factors is a multidimensional concept that
can be accessed at different levels based on technical,
individual, group and organizational perspectives and using a
number of not necessarily complementary criteria such as
economic, financial, behavioral and perceptual (Molla, 2005).

The assessment of literature indicates that existing research

on B2B EC can provide only limited support to practitioners
(Engstrom & Sangari, 2007). There is, for instance, still a
dearth of research aimed at developing critical factors of B2B
EC model that would make it easier for practitioners to
understand and create necessary business strategies.
Unfortunately since these study have specific perspectives, the
existing theories or model can only provide fragmented
answers (Bruun, Jensen, & Skovgaard, 2002; Engstrom et al.,
2007). Similarly, Turban et al (2002) emphasized the need for
further research that focuses on the identification of ecommerce business models and where to use them, and how
to analyse the success or failure of the e-commerce
applications. Thus, companies able to identify their readiness
level for implementing e-business and every aspect needed to
improve itself before implementing the systems. Companies
need to consider their own strengths and weaknesses before
making decisions to explore new online channel without
weakening the existing traditional marketing channels.
Furthermore, the assessment of readiness for an innovation
in B2B EC can reduce the risk of its failure after introduction.
Although there are a few critical factors related to interorganizational assessment models used in practice for
example employees knowledge and skills as well as top
management support, relatively little is published in academic
research journals on the issue. Further, the current practical
B2B EC assessment models are largely based on the
experience of developed countries which rather different from
that in developing countries (Huang, Huang, Zhao, & Huang,
2004).
Understanding B2B EC implementation also is an
enormous task due to the complexity of the process, thus, the
simplified version on what are required and what are the
possible challenges exist may fill up the knowledge gap. The
research reported here describes one part of a larger study
designed to develop B2B EC readiness tools for SME in
developing countries. In light of this, this current study is

978-1-4244-4913-2/09/$25.00 2009 IEEE

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405

proposing a B2B EC assessment indicators framework

specifically for SME in agro- based industry in Malaysia.
II. RELATED WORKS
This section attempts to evaluate the effectiveness of the
existing B2B EC critical factor model. Particularly, in terms
of success factors of B2B EC, Fairchild A.M. (2004) has
defined success factors for electronic markets and divided
these into context- related and process- related success factors.
The findings showed that success factors related to
stakeholders motives, product complexity, government roles,
relationships with trading partners, security, cost, location and
entry barriers are all considered as significance factors of B2B
EC success.
Similarly, Eid, Trueman & Ahmed (2002) identified critical
success factors of business-to-business international internet
marketing (B2B IIM) which then been grouped into five
related factors as marketing strategy related factors, web site
related factors, global related factors, internal related factors
and external related factors.
Marketing strategy related
factors consider all the factors with relate to marketing of the
products that include the top management support and
commitment, setting clearly strategic goals for the
organization to integrate the marketing with marketing
strategy and the collaboration strategic partnerships. On the
other hand, Chaffey (2004) argued that since internet
technology been heavily used to support business-marketing
strategies, it should be treated as a separate plan which the
focus is on the web site itself. The focus on the web site
design suggest on the importance of well designed, accurate
content and information with easily access and relevant to
users (Chaffey, 2004). However, the appealing design would
not be significance to the products' marketing without high
accessibility of visitors, thus web sites promotion is needed.
As B2B EC involve international global markets trade, a
comprehensive understanding of foreign marketing
environment including trade regulations and package delivery
systems as well as the revising own organisation's operations,
strategies and business models are needed to successfully
exploit the opportunities of internet (Quayle M., 2002).
Company might need to allocate appropriate resources in
terms of technology capability to take 24 hour order taking,
customer service response capability, regulatory and customhandling experience (Molla & Licker, 2005). In a similar vein,
Bruun et al (2002) in their research, have found five factors
that are essentials for B2B e-market place success which are
focus, governance, functionality, technology and partnership.
These five elements are critical that constitute the foundation
for e-market place success. In addition, the other B2B ecommerce model developed by Engstrom & Sangari (2007),
emphasized on mission, value proposition, resources, key
activities and cost revenue model, the critical factors
components and challenges. Through interview with six emarket place companies from different industries, the research
intended to look at the similarities and significance factors
raised by the respondents.

As shown, research on critical factors of B2B EC have been

widely cited, but research specific on critical factors of B2B
EC for SME in agro based industry is rare and fragmented.
The unique aspects of the SMEs in agro- food industry in
Malaysia with regards to the adoption of B2B EC have not
been widely examined, particularly with respect to demand
and supply and agricultural development. In addition, the use
of B2B EC is not common within agro- based industry and the
uptake of the technology has been relatively slow (Baourakis
and Kourgiantakis, 2002). B2B EC in agricultural industry in
Malaysia also is undergoing a rapid transformation in
response to changes in economic, industrialization,
globalization and organizational business patterns (Arshad et
al 2006). Thus, considering the importance of EC as a
business tools to enhance business efficiency and
effectiveness through widening market potential and better
meeting customer needs, ignoring the technology might lost a
lot of opportunities.
Due to this, it is important for this research to identify the
B2B EC requirements indicators in order to assess SME ereadiness in adopting the technology.
This research is an
effort to identify the critical factors specific for SMEs
considering the
individual, industrial and national
perspectives. What we illustrate in this paper is that existing
metrics or indicators are incomplete for assessing B2B ecommerce readiness for SMEs.
Thus, hopefully our
framework may offer guidance for organizations, and explain
how this differs from relevant theoretical perspectives in
conjunction with existing literature.
III. METHODOLOGY
Through an extensive literature review, critical success
factors for B2B EC implementation success are identified.
The articles were identified through a computer search of
database of published works and conference proceedings in
the e-commerce area. Adopted from articles searching
method used by Nah & Lau (2001), the articles were searched
by the title based on the criteria such as it must contains either
the keyword success or critical factors or barriers and it
must contain the term e-commerce or e-business or more
specific B2B e-commerce or its equivalent, for instances
inter- organizational system (IOS). From the review, analysis
and classification of related factors, eight dimensions
emerged as critical to the B2B e-commerce implementation.
There are personal traits, organizational features, competency,
technology, business process, supporting industries, market
forces and government. Even though some of the dimensions
already been identified and used in the past related ecommerce research (Parasuraman, A. 2000; Molla and Licker
2005; Fillis 2004; Tan et al 2007) this study is trying to redefine the conceptual definition of each dimension within the
context of this research and re-identify the indicators based on
the definitions stated.
In addition, for the sake of completeness and to ensure the
validity of the B2B integration scale, B2B EC expert
evaluations are used. One of the key principles of e- readiness
approach is that whatever possible variables are chosen as

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indicators need to be validated by representatives of the

beneficiaries or stakeholders (Menou, 2001). Focus group
methodology has been used to guide the process of getting
information from the experts. The data collection process
involves face-to-face approach which
provides an
opportunity to gather complex data that involve deep
explanation and simultaneous feedback from respondents.
The selection of the experts are based on two criteria such as:
(1) knowledgeable and experience in e- commerce related
areas thus able to provide an overview and insight of B2B ecommerce from different perspectives (2) have experience
and background in agro- based industries. Based on these
criteria, we managed to get six experts from various agro
based industry backgrounds. According to Nielsen 1997 and
Zikmund 2003, group ranging of 6-9 users are appropriate if
the group are homogeneous. Through interviews, experts are
given the list of all the critical success factors of B2B ecommerce which already been identified earlier from
literature review.
Experts are asked to identify the
significance critical success factors of B2B EC based on agrobased industry perspectives as well as the weight and the
degree of criticality of the factors. Through the techniques of
personal constructs elicitation of each expert, the indicators
were then combined and the full list of the indicators was
shown in the next section.
IV. B2B E-COMMERCE CRITICAL FACTORS MODEL
This section discusses the specific indicators that are
critical to B2B EC readiness success based on the responses
from the experts. The experts noted if there were omitted
indicators or items that should be included for the coverage
and representative of conceptual definition of the categories.
With respect to their experiences in agro- based industry and
B2B EC, all the experts expressed strong agreement with the
suitability of most of the indicators. Below are the lists of the
indicators which experts believe as significance indicators for
B2B EC e- readiness assessment. Due to the space limitation,
discussions on the result from statistical perspectives are not
included.
4.1 Individual Dimension
This is based on individual demographics and individual
behaviourism of optimism and innovativeness, and other
entrepreneurial attitudes. Based on this definition, experts
agreed on four indicators that can be used to determine the
success of B2B EC adoption.
Optimist that products and services use the latest
technologies are much convenient to use
Innovative to be the earliest to acquire new technology
when it appears
Willing to spent time, money and work hard in gaining
knowledge on B2B EC technology implementation
Able to lead and influence people in achieving success
regarding to technology adoption
4.2 Enterprise Readiness Dimension

This is based on organization ability to provide technology,

policies and procedures, innovation culture, strategies and
visions, governance as well top management commitment.
Based on this definition, experts identified the total of sixteen
indicators that might effect the successful adoption of B2B EC.
4.2.1 Goals and Strategies (six indicators)
Enterprise has a clear vision and goals on B2B EC
The vision and goals of B2B e-commerce activities is
widely communicated and understood throughout company
Enterprise
establishes well- defined internal cross
departmental cooperative strategies plan
Enterprise establishes well- defined B2B EC strategies
aligned with
goals, missions and external integration
requirements
Enterprises current strength, weakness, opportunities and
treats are continuously revised
to exploit B2B EC
opportunity
Corporate data (e.g.: sales, inventory, manufacturing,
finance etc.) are used to drive short, mid and long term
strategies
4.2.2 B2B EC Governance (three indicators)
Enterprise thoroughly analyse the possible changes to be
caused in enterprise, suppliers, partners and customers due to
B2B EC implementation
Enterprise follows a systematic process for managing
change issues due to B2B EC implementation
Enterprise has clearly defined metrics for assessing the
impact of B2B EC initiatives
4.2.3 Policy and Procedures (two indicators)
Enterprise has adequate policy and procedures pertaining
contractual arrangement and signing of non-disclosure
documents
Enterprise implements privacy policies and online security
procedures on the usage of sensitive data of customers and
other companies
4.2.4 Top Management Support (three indicators)
Management considers multidimensional views of B2B
EC in increasing organization profits and efficiency
Management has allocated short and long term investment
for B2B EC development (training , ICT equipment &
maintenance, customer relationships management etc)
The analysis tools such as cost-benefits analysis and
portfolio analysis are available to evaluate and analyse B2B
EC investment
4.2.5 Innovation Culture (two indicators)
Enterprise considers innovation as part of organization
culture
Enterprise continuously
initiates and encourage
innovation in products, service and business activities
4.3 Human Resource Dimension
This dimension considers the social and cultural aspects
of competencies, relationships, exposure and skills of
employees. Based on this definition, experts identified a total
of eleven critical success indicators to determine the success
of B2B EC adoption. The success factors are further classified

407

into specific three elements which each element has their own
assessment indicators.
4.3.1 People Capability (five indicators)
Computer literacy of employees
Unrestricted access to computers by employees
Employees ability to implement change and move
quickly to adopt and use any new technology
Managers ability to govern and coordinate IT projects and
resources related to B2B EC
Sufficient knowledge of top management regarding
supplier relationships, industry structure, business process,
industry players, government and policies
4.3.2 Job Specification and B2B EC Champions (four
indicators)
All enterprise's B2B EC initiatives should have champions
Roles, responsibilities and accountability are clearly
defined within each B2B EC initiative
Availability of liaison personnel to coordinate different
departments that involve in specific B2B EC project
Employees have sufficient knowledge on B2B EC tasks
and have their own measurement to this task
4.3.3 Training and Reward Motivation (two indicators)
Employees are given continuous training on mix aspects of
B2B EC management and technical areas.
Enterprise has restructured reward system to encourage
B2B EC adoption and usage.
4.4 Technology
This dimension considers the variables consist of the
availability of technology infrastructure and the flexibility and
the capability of existing system. Based on this definition, we
identified a total of nine critical success indicators that can be
used to determine the success of B2B EC adoption. The
success factors are further classified into specific three
elements which each element has their own assessment
indicators.
4.4.1 Technology Availability and Accessibility (three
indicators)
Enterprise has reliable internet access connectivity and
speed to allow the exchange of large volumes of information
Enterprise has an extranet/internet applications for backend and front- end process
Enterprise have adequate IT support (in house or external)
to assist on system downtime, power outages, cyber attack etc
4.4.2 Technology Security (three indicators)
Enterprise comply with ICT national or international
quality standards
Enterprise has security system to protect networks and
sensitive information transmission from unauthorized access
and damages (eg separate virtual networks /LAN, SSL or
SET)
Enterprise uses proven technology to verify each party
that involve in the agreement
4.4.3 B2B System Flexibility (three indicators)
Enterprise B2B system should be flexible to any changes
(economy, policy or enterprise changes of business

environment) with limited impact to other connected internal

and external systems.
Enterprise B2B system can be monitored by external
partners to
facilitate and supervise system execution,
performance, transaction status and availability
Enterprise B2B system able to grow in one or more
dimensions based on the growth of data, transactions and
additional new suppliers over time
4.5 Business process
This dimension cover the practices, actions, business
process, the flexibility, working rules, collaborations and
communications, procedures
that compliment and
accommodate the EC technology activities within and
between organizations. Based on this definition, we identified
a total of five critical success indicators that can be used to
determine the success of B2B EC adoption. The success
factors are further classified into specific three elements which
each element has their own assessment indicators.
4.5.1 Compatibility of Internal Current Process (two
indicators)
Enterprises products or services are continuously review
to meet the suitability of online trade transactions for local and
overseas markets
Enterprise continuously reviews and makes changes to
current process (where necessary) to facilitate the adoption of
B2B EC (for example develop new procedures, modify layout
and equipment etc.)
4.5.2 Compatibility of Suppliers Business Process (three
indicators)
Enterprise continuously upgrade and enhance business
process through building strategic relationship with key
suppliers
Enterprise continuously upgrades and enhances business
process through reducing number of suppliers for closer and
focus relationships.
Companies that involve in the transactions accurately
execute its parts of related business in order for the process to
work well.
4.6 Market Forces
This dimension considers different perspectives consist of
the e- readiness assessment on related customers, suppliers
and competitors with regards to B2B EC. The constructs
include the integration, collaboration and cooperative norms
among trading partners. Based on this definition, we
identified a total of eleven critical success indicators that can
be used to determine the success of B2B EC adoption.
4.6.1 Enterprise Trading Partners Integration (seven
indicators)
Enterprise initiates buyers/ suppliers involvement in B2B
online transactions
Enterprise establishes common B2B EC goals with key
suppliers and buyers
Enterprise identifies specific projects/tasks required from
each partner according to their capabilities and functions in

408

the supply chain

Enterprise views differences in opinion with partners as
an opportunity to improve relationships effectiveness
Systematic systems, policy and procedures in place to
resolve disputes with supply chain partners (eg: standard
purchasing procedures, well- defined suppliers selection
criteria and well- defined treaty for monitoring supplier
quality etc)
Enterprise establishes connection between legal expertise
to draw up contracts, businesses and customers group to
develop B2B EC community
Both sides, enterprise and buyers/ sellers share expertise
and involve in the employee B2B relationships and other
supporting programs.
4.6.2 Trading Partners Capability and Intention (two
indicators)
Trading partners are generally very knowledgeable
regarding technical matters and have technical expertise.
The value chain partners have built or planned to build a
web-based system to do transaction and willing to share
information electronically.
4.6.3 Coercive and Non Coercive Strategies (two indicators)
In order to influence partners and other related parties to
implementation B2B EC, below are the influence strategies
that can be used.
Making a case based upon financial payoff/outcome from
adopting B2B EC
Providing a clear picture of the anticipated positive
impacts of B2B EC on the business
4.7 Supporting Industries
This dimension concerns on the support and involvement of
industries with relate to the availability
of
telecommunications, financial, trust enablers, IT industry and
consultant services. Based on this definition, we identified a
total of five critical success indicators that can be used to
determine the success of B2B EC adoption
4.7.1 Support and Service of Telecommunication and
Information Technology industries (three indicators)
Internet, telecommunication infrastructure and local
online medium (eg: B2B portals) is reliable and sufficient to
support B2B EC

Local IT industrys services are efficient, reliable and

affordable to support enterprise to move to B2B EC
Supporting services such as courier, logistic services
well integrated to the B2B EC solutions enabling effective
B2B EC environment
4.7.2 Financial related Infrastructure and Service (two
indicators)
Financial institutions support and offer financial
assistance for B2B EC initiatives or projects
The technology infrastructure of commercial and
financial institutions is affordable and capable of supporting
B2B EC transactions
4.8 Government Readiness
This dimension involves the conduciveness of the B2B EC
climate, economic, financial support, national infrastructure
conditions and e-government initiatives. Based on this
definition, experts identified a total of five critical success
indicators that are significance to determine the success of
B2B EC adoption.
4.8.1 National legal framework and initiatives (five
indicators)
Government provides uniformity, consistency and
effective legal frameworks to address & prosecute crimes and
other related issues
Government provides sufficient B2B EC interoperability
framework which include local and international trade issues
(eg: countrys law, currency, culture, language etc)
Government provides sufficient and appropriate financial
support and incentive for B2B EC development (eg: tax
concession)
Government has setting up research centre that combine
expertise from various disciplines for B2B EC development
Government has set up associated e-business incubators to
facilitate the transfer of innovation between research centres
to business organizations
Figure 1 illustrates the dimensions and significance indicators
based on the feedback from experts as discussed above. The
numbers represent the total indicators identified under each
indicator
classifications.

409

Figure 1.The Hierarchical B2B e-commerce readiness dimensions and indicators

V. CONCLUSIONS
Existing literature reviews with regards to B2B EC
critical factors in developing countries showed the positive
and negative aspects of such measures. This study
strengthens the existing theoretical foundation through
providing a comprehensive view of internal and external
critical factors in B2B EC. This research also tends to
clarify the major issues surrounding critical factor
measurements of B2B EC from individual, organization
and environment perspectives, considering best practices in
B2B EC. Through this, general recommendations on
successful implementation of e-commerce system
specifically from agro based industry perspectives are
provided. .
While our conceptual framework and survey instrument
provides a high-level design for implementing the ereadiness model, many questions remain to be unanswered
as: what are the weights of criticality of the motivational
factors towards building B2B EC readiness model? How
the indexes score of critical factors being constructed?
What are the specific B2B EC indicators for each ereadiness stage? How the model assessment sessions will
be conducted? These and many other questions must be
addressed as our future work will develop the
comprehensive set of determinants that can be used to
measure the e- readiness level of SME in developing
countries. Hopefully, with a better understanding of the
holistic perspective of critical factors involved in B2B EC,
organizations will be able to make decisions on critical
elements based on the level of importance of each indicator.
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