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  • 1. ARTICLE IN PRESS International Journal of Information Management 26 (2006) 290–301 www.elsevier.com/locate/ijinfomgt A strategic case for e-adoption in healthcare supply chains Jurong Zhenga,Ã, Elmer Bakkera, Louise Knighta, Heather Gilhespyb, Christine Harlanda, Helen Walkera a Centre for Research in Strategic Purchasing and Supply, School of Management, University of Bath, Claverton Down, Bath BA2 7AY, UK b Bristol Business School, Frenchay Campus, Coldharbour Lane, Bristol BS16 1QY, UK Abstract A growing body of literature suggests that greater benefits of e-business will be obtained when e-business is integrated throughout a supply chain. However, organizations are still cautious in adopting e-business technologies. This paper examines whether a strategic case for e-commerce can be recognised and the factors that influence e-adoption, using e-business development models, a contingency approach and a stakeholder approach. The paper explores the link of e-commerce with strategy and the potential strategic benefits, risks and problems. This paper analysed e-adoption in four diverse healthcare supply chains in the context of the English National Health Service (NHS). The fieldwork showed there is of limited use of e- in supply chains; there are key problems associated with perceived benefits and costs by different actors both within organisations and within the chain. The paper proposes a framework to link the case for e-commerce with the achievement of strategic objectives across three inter-related domains—health, supply and business. r 2006 Elsevier Ltd. All rights reserved. Keywords: E-business; Supply chain; Healthcare; E-commerce 1. Introduction Many firms in both the private and public sector are still cautious about the adoption of electronic technologies (Cox, Chicksand, Ireland, & Day, 2000; Zheng et al., 2004). The recent media attention on Sainsburys shows how e-commerce can have a strategic impact on the reputation and financial status of a commercial company.1 Furthermore, where there have been e-business initiatives, there still seem to be many cases of failure to derive the predicted benefits. To get a better understanding of the adoption of e-business this paper aims to show whether a strategic case for e-business can be recognised and the factors that can influence this. We take a supply chain perspective, as it is suggested that the greatest benefits of e-business, both operational and strategic, occur when its application is fully integrated throughout the supply chain (Currie, 2000). ÃCorresponding author. Tel.: +44 01225 386512; fax: +44 01225 323223. E-mail addresses: mnsjz@management.bath.ac.uk (J. Zheng), eb226@management.bath.ac.uk (E. Bakker), mnslak@management.bath.ac.uk (L. Knight), Heather.Gilhespy@uwe.ac.uk (H. Gilhespy), mnscmh@management.bath.ac.uk (C. Harland), mnshlw@management.bath.ac.uk (H. Walker). 1 ‘‘Digital Disaster’’, Supply Management, 2 December 2004, pp. 22–26. Also see: www.supplymanagement.com 0268-4012/$ - see front matter r 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.ijinfomgt.2006.03.010
  • 2. ARTICLE IN PRESS J. Zheng et al. / International Journal of Information Management 26 (2006) 290–301 291 Table 1 Research themes Themes Explanation E-adoption and influencing factors and actors: the current use and This gives insight into the current state of e-adoption, differences future plans for e-, decision process in the adoption process and the recognition of a strategic case between and within chains E-business strategy This gives insight into the link between a strategic case for e- and e-business strategy (such as, strategic plans for e-) and overall organisational strategy Perceived benefits, costs, risks and problems This gives insight into whether a strategic case can be recognised by a link between e- and strategic consequences both within the organisation and within chains This paper addresses the issue of whether there is a strategic case for e-commerce in the context of healthcare supply chains. Though e-adoption could offer major strategic benefits such as an effective and efficient delivery of healthcare, the uptake of e-commerce in healthcare sector is limited. Also, there is limited research into e-adoption in healthcare from a supply chain perspective. The healthcare sector therefore is believed to provide an opportunity for relevant and fresh insights in ‘‘the strategic case for e-’’ and enabling or constraining factors. E-business can be described as ‘‘doing business electronically’’, including internal processes (Timmers, 1999). This paper focusses on e-commerce, seeing this as a subset of e-business that confines itself to ‘‘any form of exchange between actual and potential organisational suppliers and customers via an electronic medium’’. The exploratory nature of the study led us to consider the adoption of any forms of e-technology used within the organisation and between organisations to gain a broad understanding of the adoption decision and the (possible) strategic impact of using different technologies in supply chains. To recognise whether there is a strategic case for e-commerce in healthcare supply chains and to gain insight in influencing factors, we concentrated the research around various themes, as listed and explained in Table 1. The paper shows an exploratory investigation of e-adoption in four healthcare supply chains in the context of the English NHS. All of these cases are related to the secondary healthcare sector, which accounts for the majority of external spending with the commercial sector (Harland, Rudd, Knight, & Forrest, 2003). This paper reports the empirical findings based on data from 45 interviews with NHS Trusts and suppliers. This paper aims to provide a good insight in (a) whether a strategic case for e-business can be recognised; (b) the factors that play a role and (c) key strategic issues relating to e-adoption in supply chain and public sector environment. The paper is organised in six sections. Section 2 presents a literature review of factors influencing e- adoption, e-business development model, contingency and stakeholder approaches, and e-adoption in healthcare. Section 3 describes the methodology and Section 4 presents the empirical findings. Section 5 discusses the empirical findings in the context of existing literature theory. Finally, the Conclusions present a framework for linking the case for e-adoption with their wider impact and the implications for future research. 2. Literature review 2.1. E-business development model Venkatraman (1991) presents a framework for IT-induced business reconfiguration. Five levels of IT- induced reconfiguration are shown along two dimensions—degree of business transformation and potential benefits from IT (see Fig. 1). The five levels include: Localised Exploitation; Internal Integration; Business Process Redesign; Business Network Redesign and Business Scope Redefinition. It is suggested that a higher level of IT-induced configuration is likely to have a greater impact on changing the business. Similarly,
  • 3. ARTICLE IN PRESS J. Zheng et al. / International Journal of Information Management 26 (2006) 290–301 292 High Five: Business Scope Redefinition Four: Business Network Degree of Business Transformation Three: Business Process Redesign Revolutionary Levels Evolutionary Levels Two: Internal Integration One: Localised Exploitation Low Low High Range of Potential Benefits Fig. 1. Five levels of IT-induced business reconfiguration (Source: Venkatraman, 1991). Willcocks, Sauer, and Associates (2000) argued that implementation is thought to progress through several stages and evolve as businesses in the supply chain recognise the benefits. Both the models examine the central issue of how firms develop information system capabilities to support organisational changes or to develop e-business to maximise business value. There are greater benefits when there is a higher level of integration of e-business. However, these models are inappropriate for SME e-adoption (Levy & Powell, 2003; Zheng et al., 2004) and do not provide sufficient information on developing an e-business strategy. 2.2. Factors influencing e-adoption—organisational contingencies Mehrtens, Cragg, and Mills (2001) suggested three main factors that influence SMEs’ decisions of internet adoption—perceived benefits, organisational readiness and external pressures. SMEs did not perceive benefits from e-adoption, given the low volume of transaction and importance of personal communication (Zheng et al., 2004). However, Wagner, Fillis, and Johansson (2003) found that SMEs in hi-technology industries were more likely to participate in e-business than those firms with a ‘‘lower’’ technology base. Similarly, Joo and Kim (2004) found organisational size and the presence of external pressure have positive relationships with corporate adoption of e-marketplaces. Grewal, Comer, and Mehta (2001) found that both motivation and ability are important in determining the adoption of e-marketplaces. Tsikriktisis, Lanzolla, and Frohlich (2004) found that expected performance benefits, access to new markets and external pressures drive the adoption of e-processes by service firms. 2.3. E-adoption in supply chain—a stakeholder approach In line with the acknowledged influence of external pressures, a stakeholder approach has proved to be useful for research into e-business in supply chains in the automotive sector (Howard, Vidgen, & Powell, 2003), in the pharmaceutical sector (More & McGrath, 2002) and for analysing information systems project abandonment (Pan, 2005). Different stakeholders may have different motivation for and interests in e-adoption. Howard et al. (2003) examined barriers to IS-related change with cross references to the key parties involved in transforming the motor industry. They argued that the issue of who gains and who loses as a result of industry transformation is important. 2.4. E-business strategy—a contingency approach Many studies show the need for a contingent approach to e-adoption within firms and within supply chains. Garcia-Dastugue and Lambert (2003) suggest that managers need to choose the appropriate level of integration for a particular relationship in the supply chain and an appropriate degree of information sharing. They identified situational dimensions including asset specificity, complexity of product description,
  • 4. ARTICLE IN PRESS J. Zheng et al. / International Journal of Information Management 26 (2006) 290–301 293 transaction risk, operational performance risk, frequency and item value. These dimensions are important for the effect of IT on co-ordination costs. Similarly, van Weele (2002) argued that different electronic solutions may be appropriate for different purchasing strategies based on Kraljic’s (1983) purchasing portfolio model. This model suggests that purchasing strategies differ according to the impact of strategic importance/value to the business, as well as supply risks and supplier relationships. Cagliano, Caniato, and Spina (2003) found that the degree of adoption throughout the supply chain is related to the level of integration with customers and suppliers. Furthermore, it was found that the adoption of the internet is related to industry factor but it is not related to size and position in the supply chain. 2.5. A strategic case—benefits and costs of e-commerce There are different types of benefits in terms of financial benefits and non-financial benefits, strategic, tactical and operation benefits. Cox et al’s study (2000) showed that the benefits of e-adoption were related mainly to operational efficiencies. The operational efficiencies may come from lower purchasing prices, reduced transaction and process costs and increased transaction speed (Croom & Brandon-Jones, 2004; de Boer, Harink, & Heijboer, 2002; McManus, 2002). Strategic benefits from e-adoption are related to more strategic procurement, such as supply base reduction and outsourcing (Croom, 2000), improvements in buyer–supplier relationships, gains in terms of the alteration of the power structure between buyers and sellers (Cox et al., 2000) or disintermediation (Timmers, 1999). However, there is limited empirical evidence in strategic benefits from e-adoption. 2.6. Issues in e-business in the public sector and healthcare Harland, Gibbs, and Sutton (2000) suggest that the macro-environment, the sector context (supply market factors, recipient factors, regulation, accountability, shareholder influence and competition), the nature of public sector and supply network factors all influence decision making in public sector supply. More and McGrath (2002) for instance highlighted the importance of stakeholder management in implementing an online trading case in the healthcare system in Australia. Different stakeholders may have different needs, expectations and fears. Also, there are issues relating to equitable reaping of rewards, communication issues, managing changes, securing funding, and the political dimension of moving forward, cultural differences and human resource issues. Overall, current e-business models tend to be derived from, and most suitable to, a large firm perspective. The relevance of these models in other contexts (such as SMEs and the public sector) is not well understood. Furthermore, most existing empirical research in e-business tends to be predominantly in the context of private sectors and there is limited research into e-business in the public sector (Vaidya, Sajeev, & Callender, 2004). There also seems to be limited empirical research in examining the link between contextual factors and e-adoption in the public sector and there is a need for better understanding of the influence of organisational structural, social/historical, power/political, cultural and behavioural factors on e-adoption (Wainwright & Waring, 2004). 3. Methodology The UK healthcare sector can be seen as a vast supply network of healthcare product/service suppliers and NHS Trusts,2 and organisations that influence supply policy and practice such as professional bodies, trade associations, the NHS Purchasing and Supply Agency (NHS PASA). Within this, there are product/service supply networks—the set of organisations that are associated with particular families of healthcare products/ services. For the purposes of this study, four different product/service-bound supply chains were studied, based around the following products: orthopaedic footwear, cardiac stents, intravenous fluids and blood 2 An NHS (hospital) Trust is one or more hospitals managed by a single board of directors.
  • 5. ARTICLE IN PRESS J. Zheng et al. / International Journal of Information Management 26 (2006) 290–301 294 NHS Trust Supplier Contracting agent NHS Trust Supplier NHS Trust Supplier Distributor NHS Trust Fig. 2. Representation of a supply chain case. Table 2 Research design choices Research design choice Rationale and implications Clinical products only Particular to health services and significant to the delivery of healthcare. Relatively high levels of inter-dependence between the NHS and its supply markets Unit of analysis ¼ product supply chain As a representation of a product/service supply network. By reducing the coverage within a network to a limited number of actors, it was possible to investigate several chains Products within four services (pathology, cardiology, orthotics Through other projects, the research team had previously been and pharmacy) involved with these four areas, and thus already had some knowledge of its context Products: blood collection tubes, cardiac stents, orthopaedic To provide considerable variety on various supply and clinical footwear, IV fluids dimensions, such as; product value and volume, type of supply market, patterns of demand, attention to service and product from clinicians and managers, etc To investigate the same five NHS Trusts for each of the four To allow comparison across supply chains chains tubes. A healthcare supply chain is defined as a small group of NHS Trusts, suppliers and relevant contracting and distribution intermediaries, notably NHS PASA and NHS Logistics, NHS PASA’s warehousing and distribution subsidiary (Fig. 2). Different types of product supply chain are studied as they are distributed and traded differently. Also, they vary in their cost, criticality to delivery of patient care and potential impact on service improvement. Consequently, they differ in operational demands and considerable differences in type and scale of benefits could be generated by improving supply performance through e-adoption. To deliver this study’s objectives it was essential to look beyond organisational boundaries or specific technologies and take a more integrative and contextualised view (Pettigrew, 1985) of the adoption of e-technologies. In the inevitable trade-off between breadth and depth in the empirical phase of the study, we made certain key choices which are summarised with brief notes on their rationale and implications in Table 2. Various methods and sources were used to collect data for each supply chain case: semi-structured interviews (face-to-face and telephone), documentation and secondary sources as well as academic and practitioner expert-oriented workshops. In order to gain insight from a corporate and a supply chain perspective, we interviewed the heads of procurement and a procurement expert for the focal product in each Trust (clinician or buyer), senior sales operations or marketing managers at supplier companies, and relevant personnel from NHS PASA and NHS Logistics.
  • 6. ARTICLE IN PRESS J. Zheng et al. / International Journal of Information Management 26 (2006) 290–301 295 Table 3 Interview sample of the four supply chains Trust heads of procurement Five interviews, with nine senior personnel NHS Logistics One interview with former senior supply chain expert Blood tubes 7 NHS people +1 at NHS PASA One interview with one of three suppliers Cardiac stents 5 NHS people +1 at NHS PASA Four interviews with three of four suppliers Orthopaedic footwear 6 NHS people +2 at NHS PASA Two interviews with two of many suppliers IV fluids 6 NHS people +1 at NHS PASA Three interviews with three of four suppliers Data were collected on each supply chain, in total 45 interviews were conducted (see Table 3). Based on a literature review, our prior research with the NHS over the last 10 years and published work, interview guides and a coding scheme were developed to enable the collection and analysis of data; the guides and the scheme closely reflected the themes listed in Table 1 and factors identified through the literature review. Most interviews were tape-recorded, and full transcripts of the interviews were prepared, and then coded in NVivo (software for analysis of qualitative data). Also, after each interview, the interviewer completed a ‘‘contact summary sheet’’ (Miles & Huberman, 1994) to note the main themes and insights from the discussion. These were particularly helpful for communicating key points between members of the research team. 4. Findings In this section of the paper we present the findings of our empirical research based around the themes identified earlier. 4.1. E-adoption and influencing factors 4.1.1. Current use of e-commerce and future plans In field research we found a clear difference in the levels of use of e- between trusts, between suppliers and between the four supply chains. Throughout the chains emailing orders and sending orders using auto-fax was mentioned frequently by interviewees, but telephone ordering seems a more dominant practice for communication between trusts and suppliers. Nonetheless, some use of other forms of e- could also be recognised, such as Electronic Data Interchange (EDI), e-tendering, e-catalogues and e-marketplace (e.g. Global Healthcare Exchange, GHX). The most notable difference in the use of e-commerce between chains was between stents and footwear. Advanced e-technologies such as for instance (GHX) are used in stents while footwear departments in the trusts appear to be using e-less. EDI is used in the pharmacy supply chain. There are a number of factors that may explain the different pattern of e-adoption between these supply chains. Firstly, stents as a product are seen as a major area of interest within the NHS because of the rapid innovations, the high spend and the increased demands stretching the budgets. In contrast, footwear is not seen as a major spend area within Trusts. Secondly, among the four chains studied, only stent suppliers appeared to be able to organise joint e-initiatives. There are a limited number of stent suppliers and they are global companies, with multiple manufacturing sites and worldwide sales operations that produce high-value products and for which innovation is essential for long-term survival. The stent suppliers were also involved in the development of GHX and hence can be seen as stakeholders in pushing the use of GHX. Furthermore, there are strong links between the stents suppliers, who have a history of working together on collective issues, such as lobbying about regulation. In contrast, in footwear there are many suppliers, and they are relatively small in size restraining them in their resources. There did not seem to be a clear driving force for e-adoption in the supply chains except in the stents supply chain. Most suppliers in the other chains tended to adopt a ‘‘wait and see’’ approach. However, Trusts also mentioned that they are waiting for suppliers to be e-capable.
  • 7. ARTICLE IN PRESS J. Zheng et al. / International Journal of Information Management 26 (2006) 290–301 296 Within the NHS, different Trusts were found to be at very different stages of development in their e- adoption. For example, two of the Trusts interviewed used electronic requisitions as well as electronic exchanges, whereas others used paper-based systems. It seems that the adoption of e- depended on the stage of e-development of the organisation. Other factors influencing this different use of e- were related to the lack of a common platform within the NHS and degree to which there are differences between suppliers in a sector. Although NHS PASA has certain Trust-wide plans such as to use e-auctioning and e-tendering in IV fluids, most future plans appear to be ‘‘Trust-wide’’ or ‘‘supplier-wide’’—rather than supply chain-related plans. Further findings related to the e-adoption decision process are presented in the next section. 4.1.2. E-adoption decision process and the influencing actors For Trusts, the uptake of e-commerce systems depended more often on either the Finance Department or the Board rather than the Procurement Department. The former tended to have other priorities and did not see the potential benefits of e-business in achieving their objectives. Clinical preference has a strong impact on product and supplier choice and the use of e-; strong relationships exist between clinicians and suppliers, which lead to fragmentation and constrains the development of a common e-platform. The research also shows that some individuals are highly influential in the adoption of e-business. Some Trust Directors are personally interested in improving supply management, and therefore willing to support and fund e-initiatives. Building on the finding that suppliers seem to be willing but waiting for e-adoption, and the existing diversity within the NHS, it could be hypothesised that direction and coordination from a central agency could benefit e-adoption between Trusts and throughout supply chains. However, NHS PASA’s role within the NHS appears to be mainly supportive and not directive. Although NHS Logistics increasingly appears to be becoming a hub in the NHS for the use and spread of e-technologies, there is uncertainty about its future existence. Furthermore, Trusts’ e-adoption decisions appeared also to be affected by major changes in supply strategy and structure of the NHS. 4.2. A strategic case for e-commerce? 4.2.1. E-business strategy Throughout the supply chains, there are not many strategic plans that incorporate e-commerce. There are only two Trusts in which the use of e- has become part of the overall strategy. In those two Trusts, e-commerce is perceived to contribute to delivering better patient care, whereas for the other Trusts the use of e-commerce is not seen as a priority and the link with the overall organisational strategy is absent. Only two suppliers, in two different chains, refer to a strategy for e-commerce, but both focus on organising their internal information systems and processes. Among the four chains, only stent suppliers appeared to be able to organise joint initiatives. In other chains, most suppliers tend to adopt a ‘‘wait and see’’ approach. Some suppliers perceive the major problem to be with the lack of a common, clear direction from NHS Trusts. Similarly, some Trusts referred to the lack of direction within the NHS regarding e-commerce. Trusts and procurement departments within Trusts reveal diversity in identities; some see themselves as part of a bigger whole (the NHS or a consortium) while others act as independent Trusts. This influences the strategy to be followed; their own or that of the bigger whole. 4.2.2. E-commerce—costs and benefits The research shows that perceived benefits of using e-commerce are mainly related to operational improvements like reduced transaction costs, reduced inventory, better traceability and reducing errors. The strategic impact of e-technologies on supply network effectiveness in patient safety, clinical outcomes and health service capacity, efficiency and effectiveness was hard to quantify if recognised. There are supply chain-related benefits in terms of traceability, distribution and better stock level management. However, both Trust and supplier interviews show that they are more concerned with ‘‘bigger’’ issues, such as suppliers remaining in the IV-fluid market, recognition of the importance of orthopaedics in health, budgets and patient care.
  • 8. ARTICLE IN PRESS J. Zheng et al. / International Journal of Information Management 26 (2006) 290–301 297 4.2.3. E-commerce—risks and problems There are many different types of reasons for Trusts and/or suppliers’ non-adoption of e- in the supply chain. This ranges from lack of motivation, threat to existing business models, equitable allocation of cost and benefit to fear of IT failure/lack of confidence. There are some specific issues faced by suppliers, for example, a fear of reverse e-auctions in terms of commoditising their product/service, reducing their margins and long- term profitability. Often initiatives that suppliers, Trust purchasing people and budget holders recognised to have a net benefit were not implemented, because the parties could not agree an equitable allocation of the costs and benefits. Other suppliers’ concerns were related to possible loss of inter-personal contact, a general fear about electronic messages ‘‘getting through’’, as well as the costs of adding their products to e-exchanges. Most suppliers adopted their ‘‘wait and see’’ approach in adopting e-business technologies in their supply chains to the NHS for various reasons. They were concerned that early adopters could be penalised if the NHS attempts to impose particular systems in the future. Other problems suppliers mentioned as constraining e- adoption included: the lack of direction and strategy in the NHS and from Trusts, Trusts having internal problems, internal departmental competition, compatibility of systems, and the lack of commitment and motivation. The main Trusts’ concerns were related to lack of data and fear of job losses. Also, highly publicised NHS IT-failures were associated with a cautious attitude to major e-investments. 5. Discussion This paper has shown that making a strategic case for e-adoption in healthcare supply chains is a very complex process, depending on a mix of different types of factors, such as perceived benefits and risks, stakeholders’ motivation, equitable allocation of costs and benefits, influential functions and individuals. 5.1. Relevant existing theories The findings showed that differences in e-adoption between the four supply chains can partly be explained using a development model, contingency factors and a stakeholder approach. A development model is found to be useful in explaining differences between suppliers and trusts within a chain. However, this can only partly explain the differences, as differences are also related to the lack of a common platform, which in its turn is influenced by the organisational structure. Other contingency factors affecting adoption are the importance of the purchase (spend, innovativeness, pressure on budgets), degree of organisation of the supply market, size of suppliers (resources), and number of suppliers. Differences in external pressure give insight into suppliers’ readiness and willingness, which fits with a stakeholders’ perspective. Suppliers tend to have different motivations to use e-technologies as they have different stakeholders’ positions in their supply chains. These may vary in terms of supplier relationship dependency and interest in a technology such as GHX. 5.2. E-adoption—a social process Although the above-mentioned theories and perspectives can explain the state of e-adoption and recognition of strategic impact to some extent, the fieldwork also shows that the adoption of e-commerce and the perceived benefits are a result of an underlying social process. E-adoption and the strategic recognition partly depended on who made the e-adoption decision; their interest in e- and belief to which it could benefit their priorities. Purchasing’s influence on the investment decision depended on the degree to which the purchasing function was integrated within Trusts and recognised to have a strategic impact. This together with the presence of certain so-called ‘‘project champions’’, can further explain e-adoption. This suggests that e- adoption is the result of a process of negotiation in which someone’s or a department’s influence depends on the position in the social order of the organisation; the social status (Eden, 1992).
  • 9. ARTICLE IN PRESS J. Zheng et al. / International Journal of Information Management 26 (2006) 290–301 298 5.3. Issues of benefits and risks in supply chains This paper confirms the importance of risk and benefit sharing for making a strategic case for e-adoption in supply chains as suggested in other research. Our study revealed there are some potential negative consequences for business of e-commerce, which may explain the unwillingness to take up e-business supply chain initiatives. Two issues relating to the impact of e-adoption in supply chain were identified in this paper. First, improved data held by buyers on what they purchase can change buyers’ negotiation positions and can fundamentally affect the power dynamics in the supply network and the business sector. The second direct and significant threat with strategic implications in the business is the concept of ‘‘reverse e-auctions’’. This technology specifically promotes competition on price and can drive suppliers out of business The cost savings accruing in the health domain are potentially achieved at significant risk to companies in the commercial sector whose business logic and practices may be fundamentally challenged. This suggests there is a need for consistent and mutual risk analysis and benefit sharing between Trusts and suppliers. 6. Conclusions and implications for future research This paper has shown that e-adoption can be explained using a development model of e-adoption, a contingency approach and a stakeholders approach. However, there seems to be a ‘‘chicken-and-egg’’ problem with e-adoption and the degree to which a strategic case is recognised. Adoption implies there has been more support from management and it is more likely that the strategic benefits have been focused on and recognised. However to get it adopted, more strategic benefits often have to be shown to convince the Board or Finance Department. The recognition of the strategic benefits of e-commerce therefore becomes intertwined with the adoption itself. Our research showed that the adoption and integration of e- in strategic plans within organisations depend on influential functions and individuals’ priorities and perceived benefits. Furthermore, strategic qualitative benefits are found to be hard to ‘‘sell’’ internally when quantitative (financial) benefits are wanted by, typically, the financial manager. Also, within supply chains, there does not appear to be a systematic way of linking analysis of e-enablement and strategic objectives across health management, business management and supply management. Based on our research findings, we propose a framework to link the case for e-commerce with achieving strategic objectives across three inter-related domains. E-commerce in supply chains can be related to the achievement of strategic objectives in a number of ways. Firstly, benefits (operational and strategic) in the context of healthcare supply chains need to be related across three inter-related domains. These are: health— the care for patients; business—commercial firms and their role in the UK economy health; and supply—a subordinate to health and business that relates to exchange of goods and services within and between the commercial and public sector organisations. Secondly, within each domain, a change might be aimed at delivering operational improvements or strategic benefits or both. Thirdly, e-technologies can have a direct impact on strategic objectives or indirect impact through operational benefits. The domains, effects, and the relations between them are mapped in Fig. 3. The proposed framework could be used in many different public sector contexts and across organisational boundaries for examining costs and benefits of potential e-commerce technologies to enable negotiations between interested parties and encourage innovation and learning. Our research suggests that key players in the healthcare supply chain need to consider benefits and costs in terms of: (1) three domains; health, business and supply (2) operational and strategic effects; and (3) direct and indirect effects. In future research there is a need to identify the influence of the different constructs on e-adoption and the strategic case of e-commerce and how these constructs are interrelated. Further attention needs to be paid to operational and strategic benefits to be able to map issues using the above framework. In doing this, a better understanding of different forms of e-, their use and benefits in the different stages of the purchasing process is necessary. As investment decisions however seem to relate to companies’ entire purchasing portfolios, there is also a need for a better understanding of the complex interaction of corporate and supply chain centred influences on e-adoption decisions. A learning and diffusion perspective could be useful for examining the adoption process within and between organisations.
  • 10. ARTICLE IN PRESS J. Zheng et al. / International Journal of Information Management 26 (2006) 290–301 299 HEALTH BUSINESS Strategic impact SUPPLY Strategic impact. healthcare business Strategic impact supply management Operational impact Operational impact healthcare business Operational impact supply mgt predicted predicted benefits and costs benefits and costs predicted benefits and costs other e-technologies other e-technologies for health services for commercial firms e-supply technologies Fig. 3. Linking the case for e-supply technologies with their wider impact. Acknowledgements We would like to express our gratitude to the Association for Standards and Practices in Electronic Trade (operating as e.centre), the EPSRC Innovative Manufacturing Research Centres (IMRC) and the NHS Purchasing and Supply Agency (NHS PASA) for sponsoring this research project. Our thanks also go to all the organisations and individuals which took part in the research. References Cagliano, R., Caniato, F., & Spina, G. (2003). E-business strategy—How companies are shaping their supply chain through the internet. International Journal of Operation & Production Management, 23(10), 1142–1162. Cox, A., Chicksand, L., Ireland, P., & Day, M. (2000). Rhetoric or reality: Evidence on the ‘‘revolution’’ in e-procurement. Proceedings of the ninth international annual IPSERA conference, Canada. Croom, S. (2000). The impact of web-based procurement on the management of operating resources supply. Journal of Supply Chain Management, Winter, 4–13. Croom, S., & Brandon-Jones, A. (2004). e-Procurement: Key issues in e-procurement implementation and operation in the public sector. Proceedings of the 13th annual IPSERA conference, Catania, Italy. Currie, W. (2000). The global information society. Chicester: Wiley. de Boer, L., Harink, J., & Heijboer, G. (2002). A conceptual model for assessing the impact of electronic procurement. European Journal of Purchasing & Supply Management, 8, 25–33. Eden, C. (1992). Strategy development as a social process. Journal of Management Studies, 29, 799–811. Garcia-Dastugue, S. J., & Lambert, D. M. (2003). Internet-enabled coordination in the supply chain. Industrial Marketing Management, 32(3), 251–263. Grewal, R., Comer, J. M., & Mehta, R. (2001). An investigation into the antecedents of organisational participation in business-to- business electronic markets. Journal of Marketing, 65(2), 17–33. Harland, C. M., Gibbs, J., & Sutton, R. Y. (2000). Supply strategy for the public sector: Framing the issues. In Proceedings of the ninth annual IPSERA conference and third annual North American research symposium of purchasing and supply chain management (pp. 342–352). Toronto, Canada. Harland, C. M., Rudd, A., Knight, L. S., & Forrest (2003). Procurement in the English National Health Service. Paper presented at the International research study in public procurement conference, Budapest.
  • 11. ARTICLE IN PRESS J. Zheng et al. / International Journal of Information Management 26 (2006) 290–301 300 Howard, M., Vidgen, R., & Powell, P. (2003). Overcoming stakeholder barriers in the automotive industry: Building to order with extra- organizational systems. Journal of Information Technology, 18, 27–43. Joo, Y.-B., & Kim, Y.-G. (2004). Determinants of corporate adoption of e-Marketplace: An Innovation theory perspective. Journal of Purchasing Supply Management, 10, 89–101. Kraljic, P. (1983). Purchasing must become supply management. Harvard Business Review, September– October, 109–117. Levy, M., & Powell, P. (2003). Exploring SME internet adoption: Towards a contingent model. Electronic Markets, 13(2), 173–181. McManus, S. A. (2002). Understanding the incremental nature of e-procurement implementation at the state and local levels. Journal of Public procurement, 2(1), 5–28. Mehrtens, J., Cragg, P., & Mills, A. (2001). A model of internet adoption by SMEs. 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Production and Operations Management, 13(3), 216–229. Vaidya, K., Sajeev, A. S. M., & Callender, G. (2004). e-Procurement initiatives in the public sector: An investigation into the critical success factor. Proceedings of the 13th IPSERA conference, Catania. van Weele, A. J. (2002). Purchasing and supply chain management—Analysis, planning and practice. London: Thomson Learning. Venkatraman, N. (1991). IT-induced business reconfiguration. In S. Morton (Ed.), The corporation of the 1990s. New York: Oxford University Press. Wagner, B. A., Fillis, I., & Johansson, U. (2003). E-business and e-supply strategy in small and medium sized businesses (SMEs). Supply Chain Management: An International Journal, 8(4), 343–354. Wainwright, D., & Waring, T. (2004). Three domains for implementing integrated information systems: Redressing the balance between technology, strategic and organisational analysis. International Journal of Information Management, 24, 329–346. Willcocks, L., Sauer, C., & Associates (2000). Moving to e-Business. Random House Business Book. Zheng, J., Caldwell, N. D., Harland, C. M., Powell, P., Woerndl, M., & Xu, S. (2004). Small firms and e-business: Cautiousness, contingency and cost benefits. Journal of Purchasing and Supply Management, Special Issue IPSERA 2003, 10(1), 27–39. Jurong Zheng joined CRiSPS in September 1996 as a research officer. Her research focuses on inter-organisational network management, supply networks, e-business and SME internationalisation. She has been involved in a number of research projects including ones looking at: e-business supply chain models using open global standards; inter-organisational networking; the use of information systems in small and medium size enterprises; and a review of strategic supply relationship management in the public sector. Jurong gained her Ph.D. degree in international business from the University of Reading, on Western joint ventures in China with reference to ownership control, location and partner selection. Elmer Bakker joined CRiSPS as a research officer in November 2004. Elmer studied management and organisation at the University of Groningen in the Netherlands. He subsequently studied for his Ph.D. at the University of Groningen. His Ph.D. dealt with the role of perception in the influence of the external environment on the management of supplier relations. Elmer is currently working on the NHS PASA Research Partnership and the e-business in supply chain models project. Louise Knight is a Senior Research Fellow in the Centre for Research in Strategic Purchasing and Supply (CRiSPS) at the University of Bath School of Management. She has led and contributed to a wide range of projects relating to supply management, public procurement, learning, and interorganisational networks. She is currently working with Professor Andrew Pettigrew on an ESRC-EPSRC Advanced Institute of Management (AIM) funded project on collaborative research in management and the social sciences. She is the Associate Editor of the Journal of Purchasing and Supply Management, and is currently editing a book based on an international, comparative study of public procurement. Heather Gilhespy completed her first degree in Psychology at Exeter University. She later undertook a Master’s Degree in Applied Psychology at Cranfield University. Her Master’s dissertation investigated the role of psychology in executive coaching. She has been part of three research projects in management at Curtin University Graduate School of Business in Western Australia. Heather has also spent four years working for an e-procurement software company. Heather is currently a Research Teaching Associate in the Department of Organisation Studies at the Bristol Business School.
  • 12. ARTICLE IN PRESS J. Zheng et al. / International Journal of Information Management 26 (2006) 290–301 301 Christine Harland is Professor of Supply Strategy and Director of the Centre for Research in Strategic Purchasing & Supply (CRiSPS) at the University of Bath School of Management. Her specialist field of research is strategic supply management with particular interests in the development of the concept of supply strategy, an holistic approach to supply networks, complex confederal public sector supply networks and e-procurement. She is a Co-Director of the research partnership with the NHS Purchasing and Supply Agency on supply strategy in the health sector helping to innovate service packages and redesign the supply network to serve end customers better, and to deliver government objectives. Helen Walker completed her first degree in Psychology at Goldsmith’s College, University of London. She later undertook a Master’s Degree in Occupational Psychology at the University of Wales, College of Cardiff. Her Ph.D., from the University of Bath School of Management, investigated the virtual organisation and issues associated with its development and management. Helen joined CRiSPS in March 2000, working on the collaborative research programme with the NHS Purchasing and Supply Agency to investigate supply strategy and implementation, focusing on strategic outsourcing and evaluating appropriate system levels for supply. Her current research activities include investigating sustainability and supply in the public sector.