Evaluating the value of e-business in small and medium-sized enterprises: a model and analysis in Southern Africa

Master Thesis


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The implementation of electronic business (e-business) in organisations has led to a major improvement in business performance in both developed and developing countries. This improvement as well as market forces have put pressure on Small and Medium-sized Enterprises (SMEs) to adopt e-business. However, the e-business models adopted by SMEs are often abstruse and poorly represented, which leads to time consumption and miscommunication between the stakeholders involved, the business operations and Information Technology (IT) functions. These unclear e-business models make it difficult to evaluate its value. This research examines the elements necessary for this e-business value creation and draws from different disciplines and theories to create a comprehensive model for e-business evaluation in Southern African SMEs. Most studies done on e-business in Southern Africa have been found to be on challenges of technology, a lack of resources such as financial and user capabilities and challenges in business processes. Some gaps in the e-business literature have been found to exist on issues of alignment of business mission and strategy, entrepreneurial drive and management capabilities. The study adopted Gerbner’s theory of communication exchange for the data collection strategy and process, which posits that by studying the events of the communication exchange, one can infer about the state of the systems engaged in the exchange and their relationships. Consequently quantitative website content analysis of 100 Southern African SMEs was conducted to determine their e-business value. The results revealed that an SME that comprises of a properly aligned business mission and strategy, business processes that are enabled by e-business, an entrepreneurship orientation, management capabilities and employees as well as technology integration will achieve ebusiness value. This was seen by a positive influence of 68% on e-business value from these elements. Conversely 32% of this influence is from external elements, and future studies could explore more elements that influence e-business value. Also, a small employee size was found to not be a hindrance of e-business value. Lastly, overall infrastructural e-readiness is the same in Botswana and South Africa, which refutes claims that e-readiness is higher in South Africa than the rest of the Southern African countries. However, SMEs in Botswana lag behind when it comes to technological aspects such as technology equipment, successfully integrating their systems within the businesses; and their IT in their entire businesses and networks, forming technology interdependencies of processes with external businesses, and using online means to transfer information to clients/customers. The developed model (EBVE model) could help (1) stakeholders investigate, communicate and make appropriate decisions and (2) aid SMEs to successfully integrate e-business in their business processes and practices.