E-Business Initiatives in Indonesian Manufacturing SMEs
Keywords:E-business, business process, small and medium enterprise, cluster analysis, business focus, functional activity.
AbstractThe role of information technology (IT) in improving companies’ competitiveness, including small and medium enterprises (SMEs), has been widely accepted. But, the IT investment will be in vain, if SMEs do not align their business and IT. There is a need to develop a framework of business-IT alignment. The framework development requires an understanding of the patterns of IT implementation in supporting SMEs’ business (e-business initiatives). This paper presents an empirical study on e-business initiatives in Indonesian manufacturing SMEs. The study uses 41 business processes that are grouped into three business focuses: supplier side, internal side and customer side. Based on the complexity of IT support to business processes, supplier side score, internal side score, customer side score and global score can be calculated. These scores are used to develop e-business initiative groups by using cluster analysis. After validated using discriminant analysis, the cluster analysis gives five e-business initiatives. First initiative is e-business implementation in three sides of business focuses, although in the early stage. Second initiative is IT implementation with internal side focus. Third initiative is e-business with customer side focus. The fourth is initiative that focuses on internal and customer side. The last is e-business initiative that balances and extends IT implementation on the three sides of business focuses. Then, this paper explains the differences between e-business initiatives.
Indonesia, P. R., Undang-Undang Republik Indonesia Nomor 20 tahun 2008 tentang Usaha Mikro, Kecil dan Menengah. Jakarta, 2008.
Depkopukm. Perkembangan Data Usaha Mikro, Kecil, Menengah (UMKM) dan Usaha Besar (UB) Tahun 2008 s.d. 2009. Jakarta: Departemen Koperasi dan Usaha Kecil dan Menengah Republik Indonesia, 2010.
Lefebvre, L. A., Lefebvre, E., and Mohnen, P., Doing Business in the Knowledge-Based Economy: Facts and Policy Challenges. Kluwer, New York, 2001.
Hamad, H. S. Antecedents of business-to-business e-commerce adoption and its effect on competitive advantage in manufacturing small and medium-sized enterprises: A comparative study of United States of America and Egypt. Faculty of Business, Plymouth University. Doctor of Philosophy. 2014.
Alam, S. S., and Noor, M. K. M., IT Adoption in Small and Medium Enterprises: an Empirical Evidence of Service Sectors in Malaysia. International Journal of Business and Management, 4(2), 2009, pp. 112-125.[CrossRef]
Porter, M. E., Strategy and the Internet. Harvard Business Review, 2001.
Laudon, K. C., and Laudon, J. P., Esssentials of Management Information Systems: Organization and Technology in Networked Enterprise: Prentice-Hall, 2001.
Avlonitis, G. J., and Karayanni, D. A., The Impact of Internet Use on Business-to-Business Marketing: Examples from American and European Companies. Industrial Marketing Management, 29, 2000, pp. 441-459.[CrossRef]
Audrey Gilmore, Damian Gallagher, Scott Henry. E-marketing and SMEs: operational lessons for the future. European Business Review, 19 (3), 2007, pp.234–247[CrossRef]
Beach, R., Adopting Internet Technology in Manufacturing: A Strategic Perspective. Production Planning & Control, 15(1), 2004, pp. 80-89.[CrossRef]
Goode, S., and Stevens, K., An Analysis of the Business Characteristics of Adopters and Non-Adopters of World Wide Web technology. Information Technology and Management, 1, 2000, pp. 129–154.[CrossRef]
Moriones, A. B., & Lopez, F. L. A Firm-Level Analysis of Determinants of ICT Adoption in Spain. Technovation, 27(6-7), 2007, pp. 352-366.[CrossRef]
Saptadi, S., Govindaraju, R., Samadi, T. A., and Sudirman, I., Internet Adoption and Business-Information Technology Alignment in Indonesia SMEs: A Literature Review. Paper Presented at the International Seminar on Business and Management, Bandung, Indonesia, 2011.
Saptadi, S., Sudirman, I., Samadhi, T. A., and Govindaraju, R., Business–IT Alignment Success Framework for Manufacturing SMEs (A Conceptual Model). Paper Presented at the 6th IEEE International Conference on Management of Innovation and Technology, Bali, Indonesia, 2012.
Wahid, F., and Iswari, L., Adopsi Teknologi Informasi oleh Usaha Kecil Menengah di Indonesia. Paper Presented at the National Seminar on Application of Information Techno¬logy, Yogyakarta, 2007.
Roosdhani, M. R., Wibowo, P. A., and Widiastuti, A., Analisis Tingkat Penggunaan Teknologi Informasi dan Komunikasi pada Usaha Kecil Menengah di Kabupaten Jepara. Jurnal Dinamika Ekonomi & Bisnis, 9, 2012, pp. 89-104
Smecda, Strategi Peningkatan Kemampuan Adopsi Teknologi Informasi untuk Meningkatkan Daya Saing UKM. Retrieved 10 January, 2011, from http://www.smecda.com/Files/infos-mecda/misc/Strategi_Peningkatan_kemampuan.pdf.
Tallon, P. P., Kraemer, K. L., and Gurbaxani, V., Executives’ Perceptions of the Business Value of Information Technology. A Process-oriented Approach, Journal of Management Information Systems, 16(4), 2001, pp. 145-173.
Rivard, S., Raymond, L., & Verreault, D. Resource-based view and competitive strategy: An integrated model of the contribution of information technology to firm performance. Strategic Informations Systems, 15(1), 2006, pp. 29-50.[CrossRef]
Kohli, R., and Grover, V., Business Value of IT: An Essay on Expanding Research Directions to Keep Up with the Times, Journal of the Association for Information Systems, 9(2), 2008, pp. 23-39.
Zhu, K., and Kraemer, K. L., e-Commerce Metrics for Net-Enhanced Organizations: Assessing the Value of e-Commerce to Firm Performance in the Manufacturing Sector. Information Systems Research, 13(3), 2002, pp. 275-295.[CrossRef]
Brynjolfsson, E., and Yang, S., Information Technology and Productivity: A Review of the Literature. Advances in Computers, 43, 1996, pp. 179-214.[CrossRef]
Ramdani, B. Information Technology and Organisational Performance: Reviewing the Business Value of IT Literature. In Y. K. Dwivedi, M. R. Wade & S. L. Schneberger (Eds.), Information Systems Theory: Explaining and Predicting Our Digital Society, 1, 2012. New York: Springer.[CrossRef]
Kauffman, R. J., and Weill, P. An Evaluative Framework for Research on the Performance Effects of Information Technology Investment. Paper presented at the Tenth International Conference on Information Systems, Boston, Massachusetts, 1989.
Barua, A., Kriebel, C. H., and Mukhopadhyay, T. Information Technologies and Business Value: An Analytic and Empirical Investigation. Information Systems Research, 6(1), 1995, pp. 3-21.[CrossRef]
Zhu, K., and Kraemer, K. L., Post-Adoption Variations in Usage and Value of E-Business by Organizations: Cross-Country Evidence from the Retail Industry. Information Systems Research, 16(1), 2005, pp. 61-84. [CrossRef]
Dohmen, A., Leyer, M., and Patas, J., Towards a Methodology to Assess Changes in IT Business Value in Terms of Business Process Performance. Paper presented at the Americas Conference on Information Systems, 2010.
Earl, M., Evolving the E-Business. Business Strategy Review, 11(2), 2000,pp. 33-38.[CrossRef]
Magal, S. R., Feng, M., & Essex, P. A., An Exploratory Study of Web-Based Electronic Commerce Applications. The Journal of Information Technology Theory and Application, 3(5), 2001, pp. 1-24.
Levy, M., and Powell, P., Strategies for Growth in SMEs: The Role of Information and Information Systems. Elsevier, Amsterdam, 2005.
Sahin, I., Detailed Review of Roger’s Diffusion of Innovations: Theory and Educational Technology-Related Studies Based On Roger’s Theory. The Turkish Online Journal of Educational Tech¬nology, 5(2), 2006, pp. 14-23.
Elia, E., Lefebvre, L. A., and Lefebvre, É., Focus of B-to-B E-commerce Initiatives and Related Beneﬁts in Manufacturing Small-and Medium-Sized Enterprises. Information Systems and e-Business Management, 5(1), 2007, pp. 1-23.[CrossRef]
Saptadi, S., Sudirman, I., Samadhi, T. M. A. A., and Govindaraju, R., Studi Kualitatif Implementasi E-Business di UKM Manufaktur Indonesia. Paper presented at the Seminar Nasional 5th Indisco, Semarang, 2013.
BPS. Berita Resmi Statistik-Perkembangan Indi-kator Makro UKM Tahun 2009. Jakarta: Biro Pusat Statistik, 2009.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. Multivariate Data Analysis: Prentice Hall, 2009.
Dolnicar, S., A Review of Unquestioned Standards in Using Cluster Analysis for Data-Driven Market Segmentation. Paper presented at the Australian and New Zealand Marketing Academy Conference 2002 (ANZMAC 2002), Deakin University, Melbourne.
Mooi, E., and Sarstedt, M., A Concise Guide to Market Research. Berlin Heidelberg: Springer-Verlag., 2011.[CrossRef]
Tanjung, C., Ekonomi Kesejahteraan sebagai Penggerak Ekonomi Indonesia Menuju Pentas Dunia. Retrieved 11 December, 2013, from http://www.academia.edu/4234933/Kuliah_Umum_ Bp._CT
Kemenperin, Direktori Perusahaan. Retrieved 22 November, 2012, from http://www.Kemen perin.go.id/direktori-perusahaan.
Burns, R. B., and Burns, R. A. Business Research Methods and Statistics Using SPSS: Sage Publications Ltd, 2008.
Gutierrez, A., Orozco, A. N., Serrano, A., and Yazdouni, H., Comparing Alignment Factors in SMEs and Large Organizations: A Planning Integration Perspective. Paper presented at the Americas Conference of Information Systems, Keystone, Colorado, 2007.
Levy, M., and Powell, P., Exploring SME Internet Adoption: Towards a Contingent Model. Elec¬tronic Markets, 13(2), 2003, pp. 173-181.
Acar, E., Kocak, I., Sey, Y., and Arditi, D., Use of Information and Communication Technologies by Small and Medium-Sized Enterprises (SMEs) in Building Construction. Construction Management and Economics, 23, 2005, pp. 713–722.[CrossRef]
Wymer, S. and Regan, E. Factors Influencing ECommerce Adoption and Use by Small and Medium Businesses. Electronic Markets–The International Journal, 15(4), 2005, pp. 438–453.[CrossRef]
How to Cite
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).