Gortmaker & Janssen
The Role of Government n E-Busness Adopton
Chapter.IV
The.Role.of.Government.in.
E-Business.Adoption
Barbara Roberts, The Unversty of Southern Queensland, Australa Mark Toleman, The Unversty of Southern Queensland, Australa
Abstract
An analysis of the role of government in e-business adoption is provided in this chapter, with empirical evidence from Australia included. It is shown that government influence is multifaceted. Governments champion e-business adoption for national economic gain; they provide the physical network on which much of e-business depends and increasingly provide e-government services to improve regulation and compliance effectiveness. E-government in particular can act as a strong driver of organisational adoption for some types of e-business processes. Implications for theory from a DOI perspective are included. The authors hope that further research by IS professionals will guide future e-business project directions by improving the understanding of government’s role in e-business adoption in practice, which in turn will improve theoretical understanding of how the benefits can best be maximized.
Introduction
Governments and big businesses are powerful stakeholders in driving and shaping econo- mies and the communities in which those economies operate. In particular, governments are able to maintain a dominant position at the top of the stakeholder pecking order due to their regulatory and fiscal power. This powerful position allows governments to exert influence
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on e-business adoption patterns in a variety of ways. The discussion ranges from indirect pressures resulting from governments’ strong championship of e-business benefits through to direct influences arising from the legislative controls introduced for the digital economy, the provision of the physical network infrastructure as a critical enabling adoption factor, and the effects of e-government activity on e-business adoption in general. Both theoretical explanations and empirical evidence, based largely on an Australian perspective, are provided to support the discussion on the role governments play in e-business adoption.
Background
E-business is used for a wide range of purposes and types as the following definition illus- trates: “the use of Internet technologies to link customers, suppliers, business partners, and employees using at least one of the following: (a) e-commerce Web sites that offer sales transactions, (b) customer-service Web sites, (c) intranets and enterprise information portals, (d) extranets and supply chains, and (e) IP electronic data interchange” (Wu, Mahajan, &
Balasubramanian, 2003, p. 425). Also, it is often assumed that an explicit and close connec- tion between e-business and competitive advantage exists, as the next definition illustrates:
“As a way of doing business, e-business refers to the use of business processes that leverage technology — and especially the Internet and World Wide Web (the Web) — to maintain or create competitive advantage” (McKie, 2001, p. xvi). This automatic coupling of e-business with the delivery of some level of guaranteed benefit is one which appears regularly in the literature (Porter, 2001; Sawhney & Zabin, 2001). However the relationship between e-busi- ness and delivered benefit is unlikely to be consistent for all types of e-business processes, and does not necessarily exist for all stakeholders involved in its adoption and use. Despite this note of caution, many governments around the world are committed to providing e-gov- ernment for their nation’s citizens and organisations in the form of government information and services on the Web because of the expected benefits such as improved effectiveness and greater convenience of access (Gefen, Pavlou, Warkentin, & Rose, 2002; NOIE, 2003b;
Turban, King, Lee, Warkentin, & Chung, 2002).
Internet-enabled e-business is credited with delivering a new type of Internet-based economy in which information flows are improved while associated costs are reduced (Dunt & Harper, 2002). Michael Porter’s (2001) claim that “Internet technology provides better opportunities for companies to establish distinctive strategic positioning than did previous generations of information technology” (p. 65) supports the high confidence shown in e-business by government bodies and many business analysts (D. Anderson, 2000; NOIE, 2000; OIE, 2004a). Two major benefits of e-business adoption commonly identified are reduced costs and increased demand through increased services and new markets (Allen Consulting Group, 2002; OECD, 2002). These benefits directly flow from the Internet’s intrinsic characteristics of providing low-cost and high-speed global communication, effectively reducing the limit- ing impact of geographic position and extending presence in the marketplace to 24 hours a day, 7 days a week.
Related benefits of e-business adoption promoted or marketed by Australia’s National Office for the Information Economy (NOIE) include increased competitive advantage; provision of
The Role of Government n E-Busness Adopton new ways of generating revenue; improved relationships with suppliers; improved services to clients; increased collaboration in the supply-chain; and improved business practices through the development of new business models built around the capability of network- ing (NOIE, 2002b). Thus e-business is closely associated with economic growth at both a national and organisational level in the minds of many, including economic and government analysts (Bakry & Bakry, 2001; Brown, 2002; Dunt & Harper, 2002; Porter, 2001). As a consequence, governments are not only keen to increase adoption rates by organisations, but are also keen to realize direct benefits by adopting e-business for the purpose of delivering government services more effectively, thus resulting in e-government.
Much of the empirical evidence and discussion included in this chapter are based on examples taken from Australia, and hence a brief background of the Australian government’s efforts to promote and increase adoption within the Australian business community is examined next.
Government.as.Champion.and.Catalyst...
of.E-Business.Adoption:.Australian.Example
The Australian Government actively champions e-business adoption by Australian organisa- tions in order to accelerate uptake and consequently improve the Australian economy. The Australian government’s National Office for the Information Economy was restructured and renamed in April 2004, with the functions split between the new Australian Government Information Management Office (AGIMO), and the Office for the Information Economy (OIE). The research and strategic role setting function of NOIE has been taken on by OIE, with the government belief in e-business benefits clearly articulated: “Strengthening Australia’s participation in the information economy will benefit all Australians by im- proving the efficiency of Australian firms, boosting the Australian economy and enhancing national wealth” (OIE, 2004a). The following statements of major objectives of OIE make their advocacy role clear: “identifying and promoting the business case for the adoption of e-business at the firm level, within supply chains and throughout industry sectors” and “to accelerate the uptake of electronic-business tools and practices that will lift the productivity and productive capacity of the Australian economy” (OIE, 2004a).
Thus, the Australian government explicitly promotes the adoption of e-business, particu- larly by small and medium sized enterprises (SMEs), because of the perceived benefit that e-business is expected to contribute to the future of the Australian economy (Brown, 2002).
The case study methodology is frequently employed by government analysts, and case study reports are provided on government Web sites as examples of how organisations can derive benefit from adopting e-business practices (NOIE, 2001, 2002a, 2003a).
E-Government.Adoption:.Australian.Example
The adoption of e-business technologies by governments for the purpose of providing better government services is a logical progression from simply acting as a champion for the technology. In 2003 NOIE produced a report, entitled “E-government Benefits Study”
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which detailed the Australian Government’s aim to transform “traditional over-the-counter services to fully interactive online services” and that this transformation was driven by a
“need to improve business processes, to engage citizens, and to provide services to yield better outcomes for government and citizens” (NOIE, 2003b). The report also claimed that increasingly it was Australians who were driving the demand for e-government in order to get easier access and save time (NOIE, 2003b). The push for increased e-government in Australia is mirrored in many other countries such as the U.S. (Cottrill, 2001; Gefen et al., 2002) and Singapore (Ke & Wei, 2004). Analysis of the successful e-government adoption in Singapore confirmed the finding that strong championship by government and clear articulation of the benefits to all stakeholders was an important factor in e-government success (Ke & Wei, 2004).
E-Business.Adoption.Factors:...
Government.Factor.in.Context
A review of literature examining adoption of e-business identifies government-related behaviour as just one of the many influential factors that have been identified from a wide range of sources. In order to better appreciate the level of impact coming from government related activity, it is worth quickly reviewing the range of other influential factors so that the role of government with regard to e-business adoption can be placed in context.
Diffusion.of.Innovation.Theory
A major theory, first published in 1962, on the adoption of innovations and the rate at which subsequent usage diffuses through the population of potential users — the diffusion of innovations (DOI) theory by Rogers (1995) — has general application to e-business and is now briefly examined. DOI theory posits that the factors influencing adoption rates by organisations are drawn from two major sources: (1) characteristics of the innovation itself and (2) characteristics of the adopting organisation (see Figure 1).
Five innovation characteristics are singled out in DOI as independent variables influencing adoption rates, and these relate to perceptions of (1) relative advantage over alternatives, involving a range of social, technical, and economic benefits; (2) compatibility with exist- ing values, experiences, and needs; (3) complexity; (4) trialability; and (5) observability of the innovation. As might be expected, the degree of perceived relative advantage, encom- passing the full range of possible benefits, is found to be one of the best predictors of an innovation’s rate of adoption by diffusion scholars (Rogers, 1995, p. 216). Interestingly, with regard to the characteristics of the adopting organisation, while many characteristics of the adopting organisation have been identified and studied (shown in Figure 1), Rogers claims that the results from several hundred studies show only low correlations between the identified factors and organisation innovativeness, with size/resource capacity the most significant (Rogers, 1995, p. 381).
The Role of Government n E-Busness Adopton
In general, the degree of relative advantage an innovation delivers and the resource capac- ity/size of the adopting organisation emerge as the two most important of the identified factors (Rogers, 1995). The DOI theory also recognises that influence from managerial championship and opinion leaders acting as agents of change act as an accelerating force by affecting the potential adopters. Research by Fichman (2001) into the adoption of IT innovations specifically supports the DOI findings that the degree of perceived benefit and the size/resource capacity of the adopting organisation have significant explanatory power in understanding adoption and usage patterns.