2014 Ghobakhloo - JOCEC - Business To Business Electronic Commerce Success A Supply Network Perspective PDF

Journal of Organizational Computing and Electronic Commerce, 24: 312341, 2014
Copyright Taylor & Francis Group, LLC

ISSN: 1091-9392 print / 1532-7744 online
DOI: 10.1080/10919392.2014.956608
BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE

SUCCESS: A SUPPLY NETWORK PERSPECTIVE
Morteza Ghobakhloo,1 Tang Sai Hong,1 and Craig Standing2
Downloaded by [Laurentian University] at 01:22 07 December 2014
Department of Mechanical and Manufacturing Engineering, Universiti Putra

Malaysia, Selangor, Malaysia
2
Centre for Innovative Practice, Edith Cowan University, Joondalup, Australia
DeLone and McLean (2004) have advanced an electronic commerce (EC) success model and
suggest that it can be extended to investigating EC success in different contexts. However, the
EC success model has not been empirically validated in the context of business-to-business
(B2B) EC. The purpose of this study is to gain a better understanding of EC value and
success within the B2B environment. Accordingly, we introduce an extended version of
DeLone and McLeans (2004) EC success model, and test hypotheses regarding the associations between various success dimensions using the data collected from 122 supply chain
units. In addition to providing support for most of the hypotheses suggested by DeLone and
McLeans (2004) EC success model, our results indicate that other success dimensions, such
as EC readiness, must be considered for successful EC in B2B environments. The research
findings provide practitioners with clarity on the levers of B2B e-commerce success within
the supply chain unit level of analysis. Overall, the studys results contribute to theoretical
development in the area of business value creation and EC success, and present a basis for
further research in these fields.
Keywords: EC success; net benefits; business performance; supply network; e-commerce;
satisfaction
1. INTRODUCTION
Prior information systems (IS) literature suggests that a number of legitimate measures have been defined to evaluate the value of implemented IS. Looking at IS as resources
available to businesses, and using economic-rationalistic models, IS value has been evaluated as IS-enabled performance improvement (Melville Kraemer, and Gurbaxani 2004;
Tang and Ghobakhloo 2013). Alternatively, IS usage and its business value have been
examined by another stream of IS research, which follows the taxonomy of IS success
established by DeLone and McLean (1992). In the research stream that follows DeLone
and McLeans IS success taxonomy, system quality, information, and service quality are
determinants of IS use and satisfaction and, consequently, business value. Understanding
of the success concept and IS benefits has been improved considerably through multiple
studies testing, confirming, and developing the original and updated DeLone and McLean
Address correspondence to Morteza Ghobakhloo, Department of Mechanical and Manufacturing
Engineering, Universiti Putra Malaysia, 43400 UPM, Selangor, Malaysia. E-mail: morteza_ghobakhloo@
yahoo.com
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BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE SUCCESS
313
(D&M) IS success model (e.g., Gable, Sedera, and Chan 2008; Rai, Lang, and Welker
2002; Seddon 1997), as well as by several reviews and analyses of prior IS success studies
(e.g., Au, Ngai, and Cheng 2002; Bokhari 2005; Petter, DeLone, and McLean 2008, 2013;
Sabherwal, Jeyaraj, and Chowa 2006).
Although IS benefits/business value is a well-established IS research topic, there is
still strong pressure to answer the question of whether and how investment on electronic
commerce/e-commerce (EC) creates business value (Standing and Lin 2007). We also do
not clearly know how to evaluate the success of EC systems, particularly in a business-tobusiness (B2B) environment.
1.2. B2B EC Success

EC has become a powerful and ubiquitous communication mechanism to facilitate
the processing of B2B transactions (Wu, Zhong, and Mei 2011). EC, in general, refers to
the execution of information-laden transactions between two or more parties using interconnected networks (Kim 1999). For the purposes of this article, B2B EC is defined as
transactions conducted electronically between organizations that involve the electronic
transmission of data and the execution of transactions between business entities, or parts
of business entities, using the Internet or privately owned computer networks (Belanger,
Hiller, and Smith 2002). B2B EC, therefore, enables a business to electronically interact
with other businesses, including suppliers and customers, in particular via the Internet,
computer, and communication technologies (Senn 2000). The benefits of the B2B EC are
many, some of which include better productivity, reduced potential staff overhead, and
reduced transaction costs (Lin, Huang, and Burn 2007). Although EC technologies have
advanced dramatically within the last decade, there has been no change in the fundamental
role of EC in facilitating business transactions and communicating relevant information to
decision makers in businesses (Wu et al. 2011). Yet, the long-term success or failure of
companies is determined, to some extent, by their ability to generate positive net revenues
from their EC activities.
Marketing literature proposes that consumers/users overall satisfaction or dissatisfaction with a product/service is the key determinant in forming their postuse intention
(Oliver 1997). For example, Expectation Confirmation Theory (ECT), which is a wellestablished theory within the marketing and consumer behavior literature, holds that reuse
intention is directly determined by satisfaction, which, in turn, is the function of confirmation and expectations (Oliver 1980). Drawing on ECT, many IS scholars have proposed
that the continued usage of IS applications by individuals is primarily determined by their
satisfaction with the IS. Previous IS studies propose that when an individual user of an IS
observes that his or her experienced benefits of the information are better than his or her
perceived usefulness (before use), he or she will be satisfied with the IS and will continue
using it (Urbach and Mller, 2012).
It may be assumed that satisfaction with B2B EC can result in the continued usage
of B2B EC. Yet, we cannot simply draw this conclusion because of the lack of research on
the success of B2B EC. B2B EC success is unique, as compared to the success of other EC
and IS types (Kuechler, Vaishnavi, and Kuechler 2001). The B2B context not only contains
some elements of B2C, but also is based on more complex economic principles. A B2B
network reflects the economics of many to many transactional systems, which means
each time a participant is added to a particular B2B EC network, every other participant
can contact it (Zeng, Wen, and Yen 2003). Therefore, all participants receive value from
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each new addition, and the successful use of B2B EC by each participant benefits all members of a B2B EC network (Wang, Mao, and Archer 2012). Consistently, the critical mass
principle rules in B2B context, which indicates that when members of a B2B EC network
are more successful in conducting B2B EC, this B2B EC hub is more valuable to all members. More importantly, many B2B networks are now offering complimentary and complex
EC services to B2B EC members, including systems integration (e.g., physical flow integration), integrative financial services such as instant payment processing, and logistics
services such as inspection service (Wu et al. 2011; Zeng et al. 2003).
Due to the complexity of B2B EC, many B2B EC members have invested heavily
in complex IS infrastructure and IS/EC human resources. Many B2B EC members have
domain experts who have a deep understanding of the unique processes in B2B EC environment (Ghobakhloo, Arias-Aranda, and Benitez-Amado 2011). Compared to other EC
contexts, participants of B2B EC are more sophisticated buyers and sellers with very specific requirements and demands; therefore, their decision to continue with a particular B2B
EC relationship does not rely on individual perceptions of EC. Instead, the decision to continue with B2B EC generally requires the approval of a chain of command from EC experts
of different B2B EC members, and relies on actual net benefits in terms of financial and
operational efficiency (Ghobakhloo et al. 2011; Wang et al. 2012; Wu et al. 2011). In sum, it
can be argued that all members of a B2B network should be satisfied, at the organizational
level, with the outcomes of B2B EC to decide to continue using it.
We also know that in IS success studies, personal uses of IS, or individuals inside
organizations who interact with computer and communication technologies are subjects of
interest. In a B2B EC environment, however, both internal users in an adopting firm (which
has implemented any form of EC) and external users (e.g., business partners and suppliers)
interact with EC applications. Thus, the concept of EC usage, satisfaction with EC, and EC
value (net benefits), as well as their determinants, might be dissimilar with corresponding
concepts in IS success studies. DeLone and McLean (2004) developed an EC success model
that incorporates the EC-related success measures, and is competent to assess the success
of EC at the organizational level. Surprisingly, and to the best of our knowledge, there is
no empirical research that draws on the DeLone and McLean (2004) EC success model to
explore and study the decrements of B2B EC success.
To address this significant lack of research on the success of EC in B2B environments,
the main purpose of this study is to introduce a B2B EC success model by re-specifying
and validating DeLone and McLeans (2004) EC success model in a B2B EC setting based
on the IS success and marketing literature. DeLone and McLean (2004) have recommended
that
selection of e-commerce success dimensions and measures should be contingent on
the objectives and the context of the empirical investigation. The multidimensional and
interdependent nature of e-commerce success, as reflected in the DeLone and McLeans
IS Success Model, requires careful attention to the definition and measurement of every
aspect of this dependent variable. (pp. 4344)
Consistently, we believe that in B2B environments, a hub firm that has adopted EC is indeed
considered as the EC service provider to supply partners, and its employees are considered
as internal users of EC. Alternatively, its supply partners and their employees are considered
as external users of EC.
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Accordingly, we make the following first-time assertion: internal users satisfaction

with EC (IUSE) and external users satisfaction with EC (EUSE) are dissimilar concepts
and should be individualized in the B2B EC context. In this study, we define IUSE as
the extent to which EC applications implemented in a hub (focal) firm meet the expectations and needs of employees who interact with those applications. Alternatively, EUSE is
defined as the extent to which an EC system implemented by a hub firm meets the expectation of its supply partners. Further, the study proposes that both IUSE and EUSE should be
simultaneously considered as determinants of EC use and EC net benefits when it comes
to evaluating the success of B2B EC. More importantly, we propose that the antecedents
of EC success offered by DeLone and McLeans (2004) EC success model should be conceptualized and operationalized with respect to the difference between IUSE and EUSE, as
well as the particularities of B2B EC.
2. BACKGROUND
Research assessing IS success has been ongoing for more than 20 years (Gable et al.
2008). Several definitions and measures of IS success were provided by prior IS literature
(Urbach, Smolnik, and Riempp 2010). Owing to the complex and multidimensional nature
of IS success, early attempts to define it were ill-defined (Petter et al. 2008). In relation
to this problem, a taxonomy of IS success, known as D&M IS success taxonomy, was
developed by DeLone and McLean (1992) through a comprehensive review of the research
published during the period 1981 to 1987. Right after publication of the D&M IS success
taxonomy, many IS scholars attempted to extend or re-specify the original model. Some
scholars claimed that the D&M IS success taxonomy is incomplete and thus suggested
that more dimensions should be included in the model, or presented alternative success
models. For example, Seddon and Kiew (1996) argued that the original D&M model lacks
comprehensiveness. Seddon (1997) further re-specified original D&M IS success model
by differentiating actual impacts and expected impacts, as well as by incorporating the
additional construct of perceived usefulness presented in the technology acceptance model
(TAM) (Davis 1989). Alternatively, many other IS scholars focused on the application
and validation of the D&M IS success taxonomy. Rai and colleagues (2002), for example, have shown that both original D&M IS success model and Seddons (1997) are valid
and adequately explain IS success.
Ten years after the publication of their first model, DeLone and McLean (2003) further reviewed debates on the original D&M model and its extensions, and decided to add
service quality in their updated IS success model. As expected, many IS scholars tried
to empirically validate or re-specify the updated D&M IS success model. Gable and colleagues (2008) for example re-conceptualized the D&M IS success model and validated
their suggested IS success model. To develop a better understanding of success and to
examine whether the relationships presumed by the original and updated D&M success
models are supported by results of empirical studies, several reviews and analyses of literature were conducted (e.g., Au et al. 2002; Bokhari 2005; Sabherwal et al. 2006). Sabherwal
and colleagues conducted an exhaustive meta-analysis to examine the D&M model and
highlighted the importance of user-related and contextual attributes in IS success. However,
Sabherwal and colleagues study has been instrumental in synthesizing the quantitative IS
success research. Thus, it was extended through comprehensive review and analysis of
both qualitative and quantitative prior studies for the period 1992 to 2007 by Petter and
associates (2008).
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GHOBAKHLOO ET AL.
The review of IS success literature shows that although the D&M IS success taxonomy attempts to provide an integrated view on IS success that enables comparisons
between different studies, the operationalization of the taxonomys success dimensions
varies greatly between the several studies which have been published in the past (Urbach
and Mller 2012). This diversity of construct operationalization is particularly due to the
diversity of different types of IS (Petter and McLean, 2009). No matter what the type of
information system, previous IS success studies can be categorized as IS success studies at
(1) the individual level of analysis, and at (2) the organizational level of analysis. Although
the IS success at the individual level of analysis is well-studied and the majority of interactions within constructs of IS success are well supported at this level, at the organizational
level of analysis, much work remains to be done to investigate the IS success models
propositions. In effect, the interactions within different dimensions of IS/EC success at the
organizational level of analysis are, as of yet, largely uninvestigated (Table 1).
Similar to an IS context, the original D&M IS success model (DeLone and McLean
1992) has provided a promising research stream to explain EC success at the individual
level of analysis. Molla and Licker (2001) adapted the original D&M IS success model to
measure EC success through assuming customer EC satisfaction as an indicator of EC
success. Wang (2008) validated DeLone and McLeans (2004) EC success model and
assessed business-to-customer (B2C) environment systems success through re-specifying
their model by replacing the use construct with intention to reuse, as well as adding the perceived value construct as a determinant of customer EC reuse and satisfaction. The D&M
IS success taxonomy has also frequently been used as the basis for the study of mobile
commerce (M-commerce). Chung and Kwon (2009), for example, used D&M success taxonomy to study the M-banking satisfaction phenomenon and found that system quality
and information quality are key determinants of satisfaction with M-banking. Zhou (2011)
extended the updated D&M EC success model to the context of mobile website adoption
success and found that information quality, system quality, and service quality are indirectly
related to the satisfaction with mobile website. It is clear that the scope of previous studies using the D&M success taxonomy within the EC background has been limited to the
Table 1 Construct interrelations in IS success literature (Petter et al. 2008; Urbach and Mller 2012).
Antecedent
Explained Construct
System quality
Information quality
Service quality
User satisfaction
Net benefits
System quality
Information quality
Service quality
System use
Net benefits
System quality
Information quality
Service quality
System use
User satisfaction
System use
System use
System use
System use
System use
User satisfaction
User satisfaction
User satisfaction
User satisfaction
User satisfaction
Net benefits
Net benefits
Net benefits
Net benefits
Net benefits
Individual Level
Organizational Level
N/A
+
+
++
++
+
+
+
+
+
+
+
++
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
+
N/A
N/A
+
N/A
++, strong support; +, moderate support; , mixed support; N/A, insufficient data.
317
individual level of analysis. We still face a lack of conclusive findings on the antecedents
of user satisfaction with EC, EC use, and EC net benefits at the organizational level of
analysis.
With some similarities to the IS context, several definitions and measures of EC success are provided by prior research. Besides using the D&M IS/EC success model, prior
studies have also attempted to measure EC success by using metrics to describe success in
EC in net-enabled or net-enhanced organizations (Straub et al. 2002), exploring theoretical foundations of value creation in EC by reviews of theories within the entrepreneurship
and strategic management literature (Amit and Zott 2001), using bottom-up approaches to
develop an understanding of EC success (Torkzadeh and Dhillon 2003), and assessing relationships between EC competency dimensions and EC value (Eikebrokk and Olsen 2007).
For example, Cullen and Taylor (2009) studied the success of ongoing use of EC systems in
B2B buying and selling transactions within the U.K. National Health Service pharmaceutical supply chain. They found that system quality, information quality, management and use,
assurance and empathy, and trust are key determinants of EC success in this particular case.
A few other studies have drawn on the so-called IS-enabled organizational capability
perspective to assess the success of B2B EC (e.g., Ghobakhloo et al. 2011; Wu et al. 2011).
Within this stream of studies, EC success is considered as effectively leveraging IS and EC
resources controlled by members of a B2B network to support the development of higherorder e-business capabilities. In some other cases, EC scholars did not follow any particular
theory for the assessment of EC success. Rather, they merely relied on IS/EC literature and
performed exploratory studies to better understand the EC success phenomenon (Kaefer
and Bendoly 2004). Table 2 reviews important previous EC success studies within the EC
background. This table indicates that there are very few studies on the success of B2B EC,
and due to their innate limitations, none of them offers a comprehensive and one-size-fit-all
understanding of B2B EC success phenomenon.
3. MODEL AND HYPOTHESES DEVELOPMENT
Even though B2B EC is widespread, there is no well-known, comprehensive,
integrated theoretical framework for measuring its success. To address this situation, we
develop a new theoretical model, based on the D&M EC success model (DeLone and
McLean 2004), for assessing success of EC in B2B environments. We believe that the
D&M EC success model is the most robust theoretical basis for application in the B2B
EC success area because: (a) it is a comprehensive evaluation framework, whose associations have been validated by a large number of empirical studies (Urbach et al. 2010);
(b) there are many validated measures that can be reused to assess the proposed success
dimensions (Petter et al. 2008); and (c) the D&M IS success model, as the origin of the
D&M EC success model, is currently the dominant evaluation framework in IS research
(Petter and McLean 2009). Accordingly, our theoretical model for assessing B2B EC success is depicted in Figure 1, where each of the arrows represents one of the hypotheses to
be tested.
3.1. Hypotheses Development
3.1.1. Net benefits. It is evident that EC can provide a variety of benefits for its
users. However, the net benefits construct in a B2B environment immediately raises two
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B2B EC success
B2C EC context
Wang (2008)
Lee and Chung (2009)
B2B EC success
Jennex, Amoroso, and

Adelakun (2004)
B2C EC success
B2B EC success
Kaefer and Bendoly (2004).
Lee and Kozar (2006)
B2C EC success
EC Context
Molla and Licker (2001)
Study
Table 2 Review of previous studies on EC success.
D&M IS success taxonomy and

trust background

EC/IS background

EC/IS background
IS and EC background
IS and EC adoption literature

EC/IS background
Theoretical Background
Cross-sectional study of Korean

M-banking users
A questionnaire based
cross-sectional survey of
Taiwanese B2C EC users
Interviews, field survey, and

analytic hierarchy process
approach
Case study of two small

companies active in B2B EC
and a cross-sectional survey
of small businesses
Cross-sectional study
Multitheoretic perspective
Research Method
System quality, content quality, trust,

support and service and use are
potential determinants of customer EC
satisfaction. Customer EC satisfaction
can result in B2C EC success.
Keeping in mind the moderating effect of
interorganizational context,
technological compatibility, and
operational capacity influence the
success of B2B EC within the
consumer electronics industry.
Workers skills, client interface, and
technical infrastructure are the most
important factors to the success of a
B2B EC relationship among small
businesses.
Information quality, system quality,
service quality, and vendor-specific
quality are important criteria in
selecting the most preferred website by
customers. Security is also another
important determinant of B2C EC
success.
System quality, information quality,
service quality, and perceived value are
key determinants of satisfaction with
B2C EC. Satisfaction with EC and
perceived value significantly determine
the intention to reuse B2B EC.
System quality, information quality, and
trust are key antecedents of customer
satisfaction with M-banking.
Findings/Suggestions
319
B2B EC success
B2C EC success
Zhou (2011).
B2C EC context
Chung and Kwon (2009)
Wu et al. (2011)
B2B EC success
Cullen and Taylor (2009)
D&M IS success taxonomy,

technology acceptance
model, and trust theory
IT-enabled organizational
capability perspective and
RBV

trust literature
Literature from the fields of

operations and supply chain
management and IS
Cross-sectional study of Chines

M-banking users
Cross-sectional study of Chines

manufacturing firms
cross-sectional survey of
Korean M-banking users
cross-sectional survey from
the U.K. NHS pharmaceutical
supply chain
Information quality, system quality, and

trust are the most important
determinants of B2B EC success in this
particular case. Management and use
and world wide webassurance and
empathy are two other important
determinants.
System quality and information quality
significantly and positively determine
the user satisfaction with M-banking,
and trust significantly moderates these
two relationships.
EC systems development and EC systems
usage have significant and positive
impacts on e-business service
capability, which, in turn, leads to
greater IT-enabled collaborative
advantage.
Perceived ease of use, perceived
usefulness, and trust are key direct
determinants of satisfaction with
M-commerce. M-commerce quality
dimensions are indirectly related to the
satisfaction with M-commerce.
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GHOBAKHLOO ET AL.
Supply partners
EC readiness
H8b
H4c
H8a
Information
quality
H4b
H4a
EUSE
H5c
H5b
System
quality
H5a
H6b
H6c
Service
quality
H6a
H2a
H2b
EC use
H1
H3a
H3b
Net benefits
H7a
Implementing
firms EC readiness
H7b
IUSE
Figure 1 Proposed research model of B2B EC success.
questions that must be answered: for whom and at what level of analysis? and what qualifies
as a benefit? We previously explained that the successful use of B2B EC by each participant benefits all the members of a B2B EC network. Thus, EC net benefits in this study
would be analyzed at the firm level and for all the members of a B2B EC network (supply
chain unit members in this study). Regarding the second issue, the literature suggests that
the nature of EC technology in B2B environments is technically complicated because this
type of EC investment is physically distributed between the implementing firm and its
supply partners (Standing and Lin 2007); thus, net benefits cannot be limited to financial
metrics and it should involve nonfinancial metrics, such as better supplier relationships.
Therefore, net benefits in this study includes both financial and operational metrics.
3.1.2. EC use. DeLone and McLeans (2003) IS success model suggests that net
benefit is directly affected by IS usage. There are an abundance of prior studies providing
support for significant positive effect of IS usage over net benefits/organizational impacts
of IS at both individual and organizational levels of analysis (e.g., Rai et al. 2002; Seddon
1997; Urbach et al. 2010). Examining this relationship from the organizational level of
analysis, prior scholars have found strong support for the relationship between use and net
benefits (Petter et al. 2008). Teng and Calhoun (1996) empirically found that the intensity of IS usage had a significant impact on job complexity, decision routinization, and
decision-making effectiveness. Similarly, EC literature shows that B2B EC use has led to
improved firm performance in sale, internal processes and customer/supplier relationships
improvement, improved information sharing efficiency, and enhanced transactional efficiency (Ghobakhloo et al. 2011; Wang et al. 2012, Wu et al. 2011). It is therefore assumed
that EC use is related to net benefits for organizations. We note that in B2B environments,
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EC usage by supply partners is as equally important (if not more so) as EC usage by an
implementing hub firm, from the standpoint of providing members of a B2B EC network
with benefits. Therefore, measuring EC usage by customers is also necessary. To account
for this need, our instrument of EC use measures mutual EC usage by the implementing
hub firm and its supply partners.
H1. There is a positive relationship between EC use and net benefits.
3.1.3. Users satisfaction with EC. As we explained previously, and contrary

to the generic IS context in which users of IS are internal employees of an implementing
organization (managers, management information system department, and/or staffs), EC
involves both internal and external users. Thus, we distinguished between IUSE and EUSE.
D&M EC success model (DeLone and McLean 2004) suggests that customer EC satisfaction (which is EUSE in this study) is a significant determinant of EC use and EC-enabled
net benefits. It can be logically expected that when customers have a good opinion of an EC
system, and when EC effectively covers the entire customer experience cycle from information retrieval through purchase/trade, payment, receipt, and service, customers would
be satisfied with EC. Following prior EC success studies in the B2C environment (e.g.,
Molla and Licker 2001; Wang 2008), we propose that external users satisfaction with an
EC system and related applications will influence EC usage and net benefits in B2B environments. It seems evident that the use of an EC system by a hub firm in a supply chain is
completely interlocked with its use by supply partners. When external users of an EC system (implemented by a hub firm) are satisfied with it, they will intensively use the system,
and assuming an intense usage of EC in an organization as a value adding activity, external
user satisfaction will provide the adopting organization with enhanced EC usage and, thus,
increased net benefits. Hence, it is hypothesized that
H2a. There is a positive relationship between EUSE and EC use.
H2b. There is a positive relationship between EUSE and net benefits.
To the best of our knowledge, little has been done to understand the direct relationship
between internal users satisfaction with EC (IUSE in this study) and EC usage and business value gain in B2B environments. Prior EC research has mostly addressed customers
satisfaction with EC (e.g., Chang and Chen 2009; Choi et al. 2008). In the D&M IS success
model, internal user satisfaction as a dimension of IS success is posited to have positive
effects on IS-created benefits. This positive relationship at the organizational level of analysis is empirically confirmed by some prior IS studies (e.g., Petter et al. 2008; Urbach
and Mller 2012). IS literature shows that at the organizational level of analysis, satisfaction (for users of an implementing firm) has resulted in improved performance, enhanced
job satisfaction, improved decision making, and increased productivity (Gelderman 1998;
Law and Ngai 2007). Alternatively, the D&M IS success model also assumes that IS usage
and user satisfaction are closely interrelated so that increased user satisfaction will lead to
increased intention to use and, thus, increased IS usage. This would have positive effect
on IS-created business value.
The relationship between user satisfaction and IS usage has been moderately supported by previous research at the organizational level of analysis. Hsieh and Wang (2007),
for example, observed a significant, positive relationship between satisfaction and extent
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of enterprise resource planning systems usage. Collopy (1996) found that although actual
usage of an IS is significantly related to satisfaction, self-reported usage is not significantly
related to satisfaction. Moreover, even though several scholars have found a significant correlation between self-reported system usage and user satisfaction (e.g., Khalil and Elkordy
1999; Torkzadeh and Doll 1999), other scholars have not found such a (correlational)
relationship (e.g., Ang and Soh 1997; Vlahos, Ferratt, and Knoepfle 2004).
We contend that, in a B2B environment, EC plays the role of a generic IS for
internal users. Thus, we suggest that internal users satisfaction with an EC system and
related applications influences EC usage in the implementing firm, because the more satisfied the users (managers and employee) are with the system, the more the organization
is be inclined to use it. Likewise, when EC applications meet the users needs, satisfaction with the EC should increase, which should lead to greater use of the EC. We also
believe that if the information needs of top and middle managers are met satisfactorily
by the EC applications, then their decision-making performance will improveleading to
increased positive business value. Similarly, impact and value of the EC are likely to be
achieved through staff productivity, operations efficiency, and improvement in decisionmaking, where these are significantly mediated by internal users satisfaction (Thong
2001). We therefore hypothesize:
H3a. There is a positive relationship between IUSE and EC use.
H3b. There is a positive relationship between IUSE and net benefits.
3.1.4. Information quality. Prior studies report that information quality is a direct
antecedent of IS usage and, in particular, satisfaction with IS at both individual and
organizational levels of analysis (Coombs, Doherty, and Loan-Clarke 2001; Iivari 2005;
Sabherwal et al., 2006; Urbach et al. 2010). Information quality is defined as the quality of
the information provided to the organization by its IS, in terms of timeliness, accuracy, reliability, relevance, and completeness of information (Byrd et al., 2006). Although support
exists for the effect of information quality on user satisfaction at the organizational level
of analysis, there have been insufficient studies examining this relationship to reach a very
strong conclusion (Petter et al. 2008). Previous studies by Coombs and colleagues (2001),
Scheepers, Scheepers, and Ngwenyama (2006), and Teo and Wong (1998) are among the
few that have found a significant and positive relationship between information quality
(i.e., content, accuracy, timeliness, and format) and satisfaction with IS. Although many
studies have examined the relationship between information quality and system use at the
individual level of analysis, very few studies assessed this particular relationship at the
organizational level of analysis. Fitzgerald and Russo (2005), for example, in their study of
the London Ambulance Dispatch System, show that there is a positive relationship between
information quality and system use.
To the best of our knowledge, and despite existing support for relationships between
IS quality and satisfaction with IS and IS usage, little has been done to understand the
relationships between information quality of EC applications and EUSE, IUSE, and EC
use in a B2B environment. Wang (2008) found that information quality has a significant
and positive effect on customer satisfaction with EC and EC use in a B2C setting. Given
the significant support provided by IS and B2C literature for the significant and positive
effect of information quality on both internal users and customers satisfaction with EC,
and EC use, we hypothesize that
323
H4a. There is a positive relationship between EC information quality and EC use.

H4b. There is a positive relationship between EC information quality and EUSE.
H4c. There is a positive relationship between EC information quality and IUSE.
3.1.5. System quality. IS literature suggests that system quality, as a technological characteristic of information systems, is a significant determinant of IS use and
satisfaction (Petter and McLean 2009; Urbach and Mller 2012). Owing to the large amount
of research relating to the TAM (Davis 1989), perceived ease of use (PEOU) is the most
common measure of system quality (Petter et al. 2008, Wang 2008). To determine the
relationship between system quality, user satisfaction, and EC usage, we draw on prior organizational research showing that system quality defined as PEOU (e.g., Hsieh and Wang
2007) or other measures such as overall quality (e.g., Caldeira and Ward 2002; Fitzgerald
and Russo 2005) is a significant determinant of IS usage. Similarly, we follow the literature
suggesting that PEOU (Hsieh and Wang 2007) or system quality based on such criteria as
accuracy and reliability (Benard and Satir
1993; Scheepers et al., 2006) is also positively

related to user satisfaction at the organizational level of analysis. We argue that in a B2B
environment, higher quality of EC applications will make EC more user-friendly and compatible with the requirements of internal and external users, decrease resistance and anxiety
toward implemented EC applications across the supply chain, and bring about more effective decision-making processes. These facilitating conditions directly or indirectly enhance
effective use of EC and, subsequently, increase EUSE and IUSE and EC use.
H5a. There is a positive relationship between EC system quality and EC use.
H5b. There is a positive relationship between EC system quality and EUSE.
H 5c. There is a positive relationship between EC system quality and IUSE.
3.1.6. Service quality. Service quality is the third technological characteristic of

an EC system, which is suggested to have significant impact over EC success (DeLone and
McLean 2004). Justifying the significance of this determinant is theoretically problematic.
In a B2C EC success context, Wang (2008) found positive relationships between service
quality and customers EC satisfaction and EC use. However, in other IS contexts, findings of studies suggest mixed support for this relationship. There is a little literature that
examines the relationship between service quality and system use, and most studies did
not provide support for this relationship (Petter et al. 2008). Likewise, some prior studies, such as those of Halawi, McCarthy, and Aronson (2008), Marble (2003), and Urbach
and colleagues (2010), find no significant relationship between service quality and satisfaction with the system. Nevertheless, a few organizational studies empirically find that
service quality (e.g., defined as IS consultant effectiveness or competency of the IS support
staff) significantly and positively affects satisfaction with IS and/or IS use (Caldeira and
Ward 2002; Fitzgerald and Russo 2005; Thong, Yap, and Raman 1996). This inconsistency,
however, cannot diminish the importance of assessing service quality, because these prior
studies did not specifically address the B2B EC context.
Here, EC service quality refers to overall support provided by an EC system implemented in a hub firm with support provided by EC personal (e.g., information system
department in implementing firm) delivered to both internal and external EC users. This
covers such aspects as responsiveness, empathy, reliability, assurance, and trust. Owing to
this definition, and support provided by prior literature, (e.g., DeLone and McLean 2004;
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GHOBAKHLOO ET AL.
Petter and McLean 2009; Wang 2008), we posit that higher EC service quality will result
in enhanced EUSE, IUSE, and EC usage.
H6a. There is a positive relationship between EC service quality and EC use.

H6b. There is a positive relationship between EC service quality and EUSE.
H6c. There is a positive relationship between EC service quality and IUSE.
3.1.7. Organizational EC readiness. Several researchers claim that the D&M IS

success taxonomy is incomplete and suggest that more dimensions should be included in
the model as the potential determinants of IS use and satisfaction (e.g., Sabherwal et al.
2006). Literature on EC use in a B2B setting suggests that EC use in this specific context
is significantly affected by organizational EC readiness, which is defined as availability of
financial and technological resources, employee EC readiness and EC commitment, and
awareness (e.g., Lai and Ong 2010; Molla and Licker 2005; Tan et al. 2007). Prior B2B EC
studies demonstrate that when businesses lack necessary trust to conduct e-business, information sharing between firms is considerably limited (Pavlou 2002; Ratnasingam and Phan
2003). At the individual level, Lai and Ong (2010) showed that employees with higher levels of education and/or lower resistance to EC-enabled changes will have a higher level of
readiness for e-business. They will also have a better understanding of e-business benefits
and a greater willingness to embrace B2B EC. Consistently, we hold that besides technical
aspects of EC, organizational readiness in each of the partners in a B2B trading community is crucial to pursuing higher levels of EC use. Therefore, lack of organizational EC
readiness by either side in e-businessthe implementing hub firm offering EC services or
supply partners using serviceswill lower the intensity of EC use. Thus, it is hypothesized
that
H7a. There is a positive relationship between implementing firms EC readiness and
EC use.
H8a. There is a positive relationship between supply partners EC readiness and EC
use.
It is arguable that higher EC readiness among each of the members of a B2B EC network can improve satisfaction with that particular B2B EC. One of the key aspects of
EC readiness is the level of organization-wide EC/IS literacy (Lin et al. 2007; Molla and
Licker 2005). The literature widely acknowledges that employees with higher level of IS
and computer expertise are more able to seize advantages from information systems and
communication technologies, and are therefore likely to be more satisfied (Egbu, Hari, and
Renukappa 2005; Thong 1999). Furthermore, skilled, knowledgeable employees at organizations tend to reinforce their self-efficacy and self-esteem through the use of an IS, as
being proficient with the IS provides them with a preponderant position, recognition, and
status in the companyand this increase their level of satisfaction with IS (Hasan 2003;
Potosky 2002). We believe that in a B2B environment, EC plays the role of a generic IS for
internal users in each of the business partners in a B2B network. Similarly, in an IS context
where internal users of an EC system have high levels of EC/IS skill, we expect them to
have higher usage tendencies and be more able to seize the potential of ECtherefore,
being more satisfied.
Information systems literature provides evidence that top management support and
commitment for an information system is key to its success in an organizations (Sabherwal
325
et al. 2006). Top management support of IS may result in improved quality and progressive
utilization of IS, radical IS innovation, assimilation of IS in firms, IS effectiveness, and,
subsequently, IS-enabled business value (Byrd and Davidson 2003; Thong et al. 1996).
EC systems, particularly advanced EC tools such as electronic supply chain management
(ESCM) applications, emphasize the overall and long-term benefits of all members in a
supply chain network through cooperation and information sharing (Ghobakhloo et al.
2011; Wu et al. 2011). To achieve EC-enabled collaborative networks, businesses need
to allocate substantial financial resources, and accept the associated risks for redesigning
intraorganizational and technical processes, changing traditional and fundamental product
distribution channels and customer service procedures, and staff training (Motwani, Madan,
and Gunasekaran 2000; Naesens, Gelders, and Pintelon 2009). In such circumstances, top
managers can effectively support the use of EC, provided they are aware of opportunities
and threats of EC, trust EC, and are open to accepting EC-created changes. This support
is, in effect, essential in order to provide moral support as well as the financial and technical support for the implementation for achieving an electronic collaborative network and
joint value-adding efforts in B2B EC (Byrd and Davidson 2003; Fink and Neumann 2009).
Therefore, it is logical to expect that top management support and commitment toward EC
positively influences the levels of organization-wide satisfaction with EC among each of
the members of a B2B EC network.
Another key dimension of organizational EC readiness is the organization-wide
awareness of EC outcomes. We also know that a user who perceives an IS as providing value, is more likely to be satisfied with the IS than one who does not (Mahmood et al.
2000, p. 754). For example, Calisir and Calisir (2004) have demonstrated that perceived
usefulness is the most important determinant of end-user satisfactions with enterprise
resource planning. This perspective is not limited to the IS context, as Wang (2008) has
introduced perceived usefulness to the D&M EC success model as a crucial intervening
success measure that mediates the effects of information quality, system quality, and service quality on user satisfaction in a B2C EC environment. Therefore, when there is high
organization-wide understanding of benefits of B2B EC among each of the members in a
supply chain network, users of that B2B EC would be more satisfied with it.
H7b. There is a positive relationship between the implementing firms EC readiness
and IUSE.
H8b. There is a positive relationship between supply partners EC readiness and EUSE.
3.1.8. Control variable. In the present study, we control for business size by computing the natural logarithm of the total number of the firms employees. Prior research has
considered this measure to be a good proxy of firm size (Benitez-Amado and Walczuch
2012; Tanriverdi 2005).
4. RESEARCH METHODOLOGY
4.1. The Sampling Frame
This study examines B2B EC success at the supply chain unit (SCU) level of analysis,
incorporating views of a hub firm implementing EC and two of its main supply partners.
This means that each of the members of a SCU (a hub firm implementing EC and two of
its main supply partners) independently answered the questionnaire. The items in hub firm
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GHOBAKHLOO ET AL.
questionnaire and supply partners questionnaire are conceptually identical, and there are
only slight differences in the structure of some items between the two versions of the questionnaire. The sampling frame of this study consists of all manufacturing and distribution
firms located in Iran and peninsular Malaysia. The data were collected by means of an electronic survey administered in mid-2012 and through a multiple informant technique, which
is consistent with prior studies on IS created business value.
A sample of 622 potentially qualified Iranian and Malaysian SCUs was identified
from various sources and through cooperation with provincial Administrations of Industries
and Mines and the Enterprises of industrial cities in various provinces in Iran, and through
assistances of Federation of Malaysian Manufacturers and organizations from Malaysia
Ministry of Industry and International Trade. During data collection, we first requested
the hub firms to introduce us to two of their key business partners. Further, a preliminary
request with an URL link to the web-survey was emailed to contact persons identified
among members of each SCU. The contact persons were requested to ensure that different parts of the questionnaire would be responded to or answered by a suitable informant
having adequate knowledge. Finally, and after conducting follow up activities, 122 valid
sets of questionnaires (each set includes three questionnaires, one from the hub firm of two
from supply partners), 65 from Iranian and 57 from Malaysian SBUs, were received for a
response rate of 19.61%.
Nonresponse bias was assessed by comparing early respondents with late respondents. The rationale for this test is that late respondents are likely to have similar
characteristics to nonrespondents. To compare early with late responses, we defined the
first 2% of the received questionnaires as early responses and the last 25% were regarded
as late responses. The t-test results revealed no significant difference in sample characteristics for the two groups. Regarding the industry-wide distribution, we observed that 43.45%
of respondents belong to the distribution industry and 56.55 % belong to the manufacturing
industry. The median firm size in term of the number of full-time employees was 182 for
the entire sample.
4.2. Instrument Development
We developed the measurement items primarily by adaptations from validated existing scales in the literature (Tables 3 and 4). We further followed existing guidelines (e.g.,
DeLone and McLean 1992, 2003, 2004) and exemplars in the literature (e.g., Straub 1989;
Sethi and King 1991) for developing new measures. After developing the initial survey
instrument, we formed a focus group and a pretest was conducted through interviews with
the focus group. This focus group included three distinguished IS scholars who are considered to be pioneers of IS and EC success studies within the IS community. Based on the
pretest, the few additional items that were not captured through the literature review were
added, and items that were not clear, not representative of the domain, or that were severely
open to misinterpretation were eliminated.
Following this stage, four well-established IS scholars having substantial experience
in survey research and expertise in the subject domain were asked to assess the instrument. Next, and after applying improvements suggested from IS scholars, the questionnaire
and all scales were translated to Persian through the assistance of two native professional
English translators.1 Some Iranian IS scholars further helped us with the process of
1 An English version of the questionnaire was distributed in Malaysia due to the adequate English
proficiency of Malay respondents.
327
Table 3 Properties of variables.
Variable
Respondents
Construct
Type
Net benefits
Hub firm and supply partners
Reflective
EC use
Reflective
EUSE
Supply partners
Reflective
IUSE
Information quality
Hub firm
Reflective
Reflective
System quality
Service quality
Implementing firms EC
readiness

Hub firm
Reflective
Reflective
Reflective
Supply partners EC readiness
Supply partners
Reflective
Source
Wang (2008), Zhu, Kraemer, Xu
and Dedrick (2004)
DeLone and McLean (2004),
Guimaraes and Igbaria (1997)
Wang, Tang, and Tang (2001),
Wixom and Todd (2005)
Gorla, Somers, and Wong
(2010) Molla and Licker
(2001), Wang et al. (2001),
Wixom and Todd (2005)
Lai and Ong (2010), Molla and

Licker (2005), Tan, Tyler, and
Manica (2007)
back-translation of items into English to ensure the validity of the questionnaire. For
testing and assuring face validity of the questionnaire, we piloted the questionnaire with
21 SCUs (three businesses from each SCU which means a total of 63 businesses) in both
Iran and Malaysia and within different industries. Based on feedback from the pilot study,
some questions were rephrased to improve their clarity. As a result, some minor revisions
were applied to the questionnaire before final data collection.
5. DATA ANALYSIS
The Covariance-based Structural Equation Modeling (CB-SEM) is used to analyze
the data and the hypothesized relationships (Hair et al. 2006). In so doing, we follow
Anderson and Gerbings (1988) recommended two-step approach to test our hypotheses.
As the first step, the measurement model was tested to establish validity and reliability
of the scales used in our analysis. For the second step, the test of structural relationships
was performed. Compared to other SEM techniques, such as PLS-SEM, CB-SEM is more
suitable for our study because the justification for the specification of the dependence relationships in our model is entirely theory-driven, and CB-SEM is most suited when the
objective is to test or extend a profoundly theory-driven path model (Hair et al. 2006,
2013). We used IBM AMOS (v. 20.0.0, 2011) to perform the desired CB-SEM analysis
in this study.
5.1. Measurement Model
Researchers spend major effort theoretically justifying structural relationships. The
same effort should be spent on the theoretically justifying measurement relationships
(Petter, Straub, Rai 2007). Therefore, both structural and measurement relationships should
be regarded as hypotheses to be conceptually justified and tested (Jarvis, MacKenzie, and
328
Net benefits (improvement in % within last three years)

Overall profitability
Return on Investment (ROI)
Sale growth
Total procurement costs
Product delivery cycle time
Transaction costs
EC use (between implementing firm and
2 selected supply partners during a month)
Actual usage frequency of email, extranet/VPN,
web sites, EDI, ESCM and EFT
Frequency of online sale, supplies ordering,
information exchange, and fund transfer
EUSE/IUSEsatisfaction with
Sufficiency of information provided
Accuracy of information provided
Timeliness of information provided
Reliability of information provided
Sufficiency of information provided
Accuracy of information provided
Overall interaction with is EC
Information quality
Providing information needed
Providing accurate information
Providing information in a good appearance and
format
Providing information in a timely fashion
Making information easily accessible to users
System quality
Easy to learn
Item
Table 4 Measurement properties of constructs.
0.807
0.781
0.892
0.866
0.758
0.905
0.773/0.817
0.723/0.848
0.774/0.827
0.778/0.761
0.801/0.735
0.735/0.629
0.768/0.764
0.852
0.794
0.793
0.854
0.810
0.670
0.797
0.692
Factor Loading
0.923
0.885
0.922/0.927
0.695
0.865
Cronbachs Alpha
0.898
0.924
0.911/0.908
0.808
0.898
Composite
Reliability
0.597
0.710
0.596/0.585
0.678
0.596
Average Variance
Extracted
329
0.797/0.852
0.879/0.842
0.852/0.839
0.841/0.829
0.844/0.762
0.781/0.820
0.852
0.869
0.849
0.873
0.777
0.734
0.755
0.770
0.700
0.858
0.935/0.905
0.925
Inventory holding costs removed from the construct of net benefits due to very low factor loading ( < 0.5).
Ease of use
Clarity and understandability of interaction
Appropriates of functionality
Shortness of response time
Comfortable access to different business
applications
Service quality
Showing a sincere interest in solving problems
Readiness to help users
Willingness to help users
Having sufficient knowledge to answer questions
and inquiries
Providing personal attention when users
experience problems
Implementing firms and/or supply partners EC
readiness
Awareness of opportunities and threats of EC
Organization-wide EC literacy
Resources sufficiency for EC
Clear vision on EC
EC-created change management
EC openness and trust
0.931/0.927
0.933
0.694/0.679
0.714
330
GHOBAKHLOO ET AL.
Podsakoff 2003). In doing so, it is imperative to correctly distinguish between formative

and reflective indicator measurement models to avoid measurement model misspecification
(Petter et al. 2007). Jarvis and colleagues (2003) noted that the decision to define a construct
as formative or reflective must be based on four key criteria: (1) direction of causality
from the construct to the indicators, (2) interchangeability of indicators, (3) covariation
among indicators, and (4) nomological net of construct indicators. In light of these decision
rules, it is appropriate for all indicators associated with each construct to be modeled as
reflective.
First, the collected data are tested for reliability and validity using exploratory factor
analysis (EFA) via SPSS v. 20.0.0, 2011. PLS cannot directly measure unidimensionality,
but it can be assessed using an EFA. Using EFA, we can ascertain whether the measurement items converge in the corresponding constructs, that each item loads with a high
coefficient on only one factor, and that this factor is the same for all items that are supposed
to measure it (Urbach et al. 2010). We, therefore, conduct a factorial analysis using the
principal axis factoring extracting method. As a result of performing this analysis, seven
factors (EUSE, IUSE, information quality, system quality, service quality, implementing a
firms EC readiness, and supply partners EC readiness) with eigenvalues of 1.00 or higher
are extracted, which provides support for perceptions under which we formed the measurement instrument.2 Kaisers overall measure of sampling adequacy of 0.782 indicates
that these data were appropriate for factor analysis (Ghobakhloo et al. 2011). Moreover,
the results explained 70.552% of the all independent variables, showing an acceptable and
satisfactory level of construct validity.
We assessed the overall fit of the first-order measurement model. Following recommendations by Hair and colleagues (2006) and Hu and Bentler (1998), we controlled
for multiple goodness-of-fit indices namely Chi-square (CMIN or 2 ) statistic/DF, Root
Mean Square Error of Approximation (RMSEA), Root Mean Square Residuals (RMR),
and standardized RMR (SRMR), Comparative Fit Index (CFI), Goodness-of-Fit Index
(GFI), Incremental Fit Index (IFI), Normed Fit Index (NFI), Relative Fit Index (RFI), and
Tucker-Lewis Index (TLI). Because RMSEA = 0.033, CMIN/DF = 1.342, RMR = 0.026,
SRMR = 0.046, CFI = 0.972, IFI = 0.966, TLI = 0.958, GFI = 0.917, NFI = 0.912 and
RFI = 0.904, we conclude that the measurement model has a good fit with the data (Hair
et al. 2006; Hu and Bentler 1998).
The measurement model validity was further evaluated using four validity measures:
content validity, internal consistency, convergent validity, and discriminant validity (Petter
et al. 2007). The content validity was ensured as (a) we employed measurement items
adapted from existing and validated scales; (b) we acted based on standard procedure
previously established in the literature for new and significantly changed measurements
(e.g., pretest); and (c) we refined the measurement instrument with four well-established IS
experts and performed the pilot study on 21 SCUs.
The result of confirmatory factor analysis, and the measurement properties of items
and their internal consistency reliabilities are listed in Table 4. This table shows that all of
the factor loadings are 0.6 or higher, which is above the threshold of 0.5 suggested by Hair
and colleagues (2006). Moreover, all of the Cronbachs alpha and composite reliability
2 In this EFA we incorporate only perceptual variables and exclude the direct measures of EC use and net
benefits. We performed another EFA in which all of the studys variables were included. In this EFA, almost all
of the measurement items load highly on a single factor; however, the items intended to measure EC usage load
moderately on both the EC usage factor and on the factor that represents net benefits.
331
Table 5 Correlation matrix.
INFQ
SYSQ
SERQ
IFECR
SPECR
EUSE
IUSE
EC use
NetB
BS
INFQ
SYSQ
SERQ
IFECR
SPECR
0.843
0.242
0.011
0.531
0.308
0.426
0.239
0.498
0.358
0.140
0.773
0.054
0.352
0.058
0.383
0.470
0.552
0.430
0.145
0.845
0.003
0.168
0.064
0.058
0.028
0.039
0.130
0.833
0.317
0.343
0.430
0.599
0.433
0.123
0.824
0.419
0.128
0.467
0.316
0.062
EUSE
IUSE
EC Use
NetB
BS
0.772
0.247
0.606
0.519
0.008
0.765
0.551
0.533
0.060
0.823
0.688
0.102
0.772
0.055
1.00
Notes: INFQ, information quality; SYSQ, system quality; SERQ, service quality; IFECR, implementing firms
EC readiness; SPECR, supply partners EC readiness; NetB, net benefits; BS, business size.
The italic items on the diagonal represent the square roots of the AVE; The values of 1.00 on diagonal are
indicative of correlations between the similar items which have no AVE.
values for existing measures are 0.7 or higher, all above the recommended level of 0.70,
indicating adequate internal consistency (Fornell 1982).
Fornell and Larcker (1981) suggested that convergent validity is adequate when constructs have an average variance extracted (AVE) of at least 0.5. This provides further
evidence of convergent validity, as AVE for every variable in this study is significantly
higher than 0.5 (Table 4).
Although few variable intercorrelations are relatively high, the items demonstrate
satisfactory discriminant validity. For satisfactory discriminant validity, the AVE from the
construct should be greater than the variance shared between the construct and other constructs in the model (Chin 1998). This means that a construct is considered to be distinct
from other constructs if the square root of the AVE for it is greater than its correlations
with other latent constructs (Barclay, Higgins, and Thompson 1995). As in all cases, the
square root of AVE for each construct is larger than the correlation of that construct with
all other constructs in the model, the results exhibit discriminant validity. Table 5 shows the
correlation matrix, with correlations among constructs and the square root of AVE on the
diagonal.
The correlations matrix does not indicate any exceptionally correlated variables,
because the highest correlation among principal constructs is r = 0.688. Evidence of common method bias usually results in very high correlations (r > 0.90) (Tang and Ghobakhloo
2013). Finally, the test of multicollinearity aimed at identification of all potential collinearity problems (having more than one predictor construct) reveals that the variance inaction
factor values for all of the variables does not exceed the threshold generally accepted in the
literature with values of 3.3 (e.g., Petter et al. 2007). As a result, these findings strongly
support content validity, convergent validity, and discriminant validity of the operational
measures and response scales.
5.2. Structural Model
The test of the structural model includes estimates of the path coefficients, which indicate strengths of the relationships between dependent and independent variables, and the R2
values, which represent the amount of variance explained by the independent variables (Rai,
332
GHOBAKHLOO ET AL.
Supply partners
EC readiness
.319**
.226*
-.013
Information
quality
.254*
R2 = .361
EUSE
BS
.100
.252*
.195*
.002
.305**
.369***
System
quality
R2 = .531
.232*
EC use
.030
.078
Service
quality
.435***
Net benefits
R2 = .689
-.026
.241*
.245*
.202*
Implementing
firms EC
readiness
.307*
IUSE
R2 = .307
RMSEA = 0.037, CMIN/DF = 1.408, RMR = 0.028, SRMR = 0.049, CFI = 0.952, IFI = 0.943, TLI = 0.940, GFI = 0.907, NFI = 0.904, and
RFI = 0.893.
* p < .05; ** p < .01; *** p < .001
Figure 2 Structural pass model with standardized path coefficient.
Patnayakuni, and Seth 2006). Together, the R2 and the path coefficients (loadings and significance) indicate how well the data support the hypothesized model. Figure 2 explains the
results of the test of the hypothesized structural model. All hypotheses are supported, with
the exceptions of H4a, H4c, H6a, H6b, and H6c. Table 6 reports results of the hypotheses
tests. Findings show that EUSE, IUSE, EC use, and the control variable of business size,
collectively, account for 53.1% of the variance in net benefits. 36.1% of the variance in
EUSE, 30.7% of the variance in IUSE, and 68.9% of variance in EC use are explained by
the antecedent factors studied. The results further show that business size is not a significant
control variable.
As the CB-SEM approach aims at predicting the value of exogenous variables in a
model, prediction accuracy is another important aspect of CB-structural equation models
(Gtz et al. 2010). Therefore, we test the models predictive relevance using the nonparametric Stone-Geisser test (Geisser 1975; Stone 1974). Prediction accuracy for each of the
latent constructs can be assessed by the non-parametric Stone-Geisser test criterion (Q2 ).
Because any value above zero confirms prediction accuracy, the Stone-Geisser test reveals
successful prediction and predictive relevance in our structural model, as all Q2 values in
our study are larger than zero.
5.3. Validating DeLone and McLean (2004) EC Success

Shortly after publication of the D&M IS success taxonomy, IS researchers (e.g.,
Ballantine et al. 1996; Seddon and Kiew 1996; Seddon 1997) began proposing modifications to this model and presenting alternative success models. Some EC success studies
333
Table 6 Results of hypotheses tests.
Hypotheses
H1
H2a
H2b
H3a
H3b
H4a
H4b
H4c
H5a
H5b
H5c
H6a
H6b
H6c
H7a
H7b
H8a
H8b
Relationship
Support
0.435
EC use Net benefits

EUSE EC use
EUSE Net benefits
IUSE EC use
IUSE Net benefits
Information quality EC use
Information quality EUSE
Information quality IUSE
System quality EC use
System quality EUSE
System quality IUSE
Service quality EC use
Service quality EUSE
Service quality IUSE
Implementing firms EC readiness EC use
Implementing firms EC readiness IUSE
Supply partners EC readiness EC use
Supply partners EC readiness EUSE
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
Yes
Yes
No
No
No
Yes
Yes
Yes
Yes
0.252
0.195
0.241
0.245
0.010
0.254
0.013
0.232
0.305
0.369
0.026
0.030
0.078
0.202
0.307
0.226
0.319
p < 0.05; p < 0.01; p < 0.001.
have proposed modifications to the D&M IS success taxonomy (e.g., Chung and Kwon
2009; Zhou 2011). After the validation of the measurement model and proposed structural
model, we are interested in knowing how well DeLone and McLeans (2004) original EC
success model can interpret EC success in this study.
DeLone and McLeans (2004) EC success model has the same set of constructs and
relationships as DeLone and McLeans (2003) IS success model. However, the construct
concepts are customer-related. For example, user satisfaction refers to customer satisfaction
within an EC system. Accordingly, we use only the customer (external user) parts of the
data from supply partners using EC services provided by a hub (implementing) firm in a
supply chain. The structural model is presented in Figure 3, which indicates validity of
System
quality
.344**
BS
R2 = .227
.388***
EUSE
Information
quality
.072
.292**
.263*
.359***
Net benefits
.196
.388**
.078
Service
quality
.014
EC use
R 2 = .376
R2 = .449
RMSEA = 0.029, CMIN/DF = 1.016, RMR = 0.023, SRMR = 0.038, CFI = 0.988, IFI = 0.982,
TLI = 0.972, GFI = 0.928, NFI = 0.924, and RFI = 0.919.
* p < .05; ** p < .01; *** p < .001
Figure 3 DeLone and McLean (2004) structural model with standardized path coefficient.
334
GHOBAKHLOO ET AL.
the DeLone and McLean (2004) EC success model in its original form. This figure shows
that original DeLone and McLean EC success model (without any extension) can provide
adequate predictive power for EC use and, particularly, net benefits.
6. DISCUSSION
This research develops an extension of DeLone and McLeans (2004) EC success
model, which sought to assess success of EC in the B2B environment and at the SCU level.
Most of the hypotheses derived from the D&M EC success model are supported by our
study, excluding the paths from information and service quality to EC use.
Our results support the hypotheses involving the two newly added determinants of
EC use and EC satisfaction. We observe that IUSE and EUSE, respectively, are the two
most important determinants of EC use at the SCU level. First, the significant relationship
between IUSE and EC use supports the predicted association with the D&M IS success
models, suggesting that the more satisfied a user is with the system, the more inclined he
or she is to use it. Second, the significant relationship between EUSE and EC use supports
the D&M EC success model (when customers as external users are satisfied with an offered
EC service they will be more likely to use it). Taken together, these two findings support
our idea of distinguishing between EUSE and IUSE, while simultaneously incorporating
both as dimensions of EC success in B2B environments.
The results do not find evidence that information quality has a significant effect on
EC use. Our study challenges Fitzgerald and Russos (2005) findings, which conclude that,
at the organizational level of analysis, information quality is significantly and positively
related to IS use. We also find that service quality is not significantly related to EC use
and EC satisfaction, which challenges several other comparable studies in the IS context
and at the organizational level of analysis (e.g., Coombs et al. 2001; Thong et al. 1996).
These challenging findings may be explained by assuming that, in the quasi-mandatory
environment of B2B EC, the effects of output quality of EC applications and of services
provided by EC personnel are not significant on mandatory EC usage, due to the significant
effect of organizational and supply chain policies and strategies on EC usage behavior.
Interestingly, we find that even though information quality has no significant effect
on IUSE, it is significantly and positively related to EUSE. This finding suggests that hub
firms providing EC service, need to focus on improving output quality of EC applications
in order to keep their B2B partners satisfied with EC and foster their willingness to continue with B2B EC. Findings also show that system quality is significantly and positively
related to EC use, IUSE, and EUSE. These findings support IS studies that also find these
associations to be significant at the organizational level of analysis (e.g., Caldeira and Ward
2002; Fitzgerald and Russo 2005; Scheepers et al. 2006).
The results demonstrate that the two newly added variables for assessing the level
of EC readiness across supply networks, which complement the ones adopted from the
DeLone and McLean (2004) EC success model, are important determinants of EC use and
EC satisfaction in the B2B environment. We find that implementing a firms EC readiness
is the second-most important determinant of IUSE and supply partners EC readiness is
indeed the most important determinant of EUSE. B2B EC at the SCU level emphasizes
the overall and long-term benefit for all members of a SCU via electronic transmission of
data, information, and knowledge. Supply chain-wide application of EC therefore requires
all of the supply chain members to (a) provide required financial resources for redesigning and aligning internal and technical processes, thereby ensuring organization-wide EC
335
literacy; and (b) have compatible organizational culture, skills, values, and work practices
with EC and with each other. Thus, all members of a SCU should have a suitable level of
EC readiness in order to be satisfied with the B2B EC and to sustain a desired level of B2B
EC usage. This finding provides empirical support for our contention that the DeLone and
McLean (2004) EC success models success dimensions do not fully capture the characteristics of B2B EC. The prominence of newly added variables from a practical perspective can
give practitioners a basis for prioritizing their activities, while trying to achieve enhanced
EC value across supply networks.
Consistent with the proposed associations with the D&M EC and IS success models
(2003, 2004), we find that EC use, IUSE, and EUSE are positively related to the net benefits
for all members of a SCU as assessed in this study. These findings suggest that EC use in
B2B environments and at the SCU level can create net benefits in terms of financial and
operational performance for all supply chain members.
6.1. Theoretical and Practical Implications
This article provides a starting point for a new direction of research on an enduring
topic. It makes key contributions to research and practice by developing a model of B2B EC
implementation success for future research. It does so by combining empirical findings and
theoretical explanations from the EC and IS literature in the interest of furnishing a clearer
understanding of the determinants of EC success in B2B environments and at the SCU
level. This study, for the first time, contends that B2B EC at the SCU level is different from
any other EC and IS contexts. In effect, internal users in the hub firm and external users
as supply partners concurrently interact with implemented EC applications in the supply
chain. We, therefore, distinguish between internal and external users satisfaction. We further demonstrate that both EUSE and IUSE are significant determinants of EC use and net
benefits among members of a supply chain. The study also demonstrates that the D&M
model of EC success, with no modification, provides acceptable predictive power in the
context of B2B e-commerce success. However, we demonstrate that the quality dimensions
of the D&M EC success model are insufficient to fully capture the factors influencing success of B2B e-commerce. We demonstrate that incorporating EC readiness of all members
of a B2B network is crucial to the investigation of EC usage behavior and EC satisfaction
in a B2B setting.
This research also provides some partial implications. First and foremost, managers
and EC practitioners need to consider that EC in a B2B environment can be successful
only if it satisfies all users that belong to a B2B trade network. Business partners in a
B2B environment also need to make sure that all business partners have adequate levels of
readiness to conduct EC. This issue is more critical to businesses in developing countries
because they are generally more limited in terms of the trust necessary to conduct e-business
and the quality, availability, and cost of access for necessary EC infrastructure. Finally, the
study demonstrates that by ensuring satisfaction of all users in a business network from EC,
and by intense EC usage across a supply chain, all supply members can achieve net benefits
in terms of financial and operational metrics.
6.2. Limitations and Future Directions
Although this study uses a standard research design, it has some limitations that readers should take into account while interpreting the results. First and foremost, the context
336
GHOBAKHLOO ET AL.
of this study is limited to the perspective of Iranian and Malaysian firms, which limits the
generalizability of our fidings to the Asian-developing countries context. Although we do
not believe that the major implications of this study are limited to its research context, we
cannot ignore that the business environment for businesses in developing and developed
countries are largely different. Thus, future research that examines any extension of our
model in other developed and developing countries or business contexts may improve the
generalizability of our findings. Second, and to avoid model complexity, we assessed some
constructs of this research by using parsimonious measures, because we had anticipated the
relatively small number of participants. Larger multi-item measures can be used to capture
aspects of these constructs conceivably not assessed here.
ACKNOWLEDGMENTS
The authors thank Assistant Professor Stacie Petter for her guidance and feedback
throughout the development of the paper. The authors also thank Professor Sebastin
Bruque Cmara for his support and encouragement for this paper.
FUNDING
This research was funded and supported by an International Graduate Research
Fellowship (IGRF) from the University Putra Malaysia (Ref No: UPM/SPS/GS30834).
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BIOGRAPHIES
Morteza Ghobakhloo, PhD, is affiliated with the Department of Mechanical and
Manufacturing Engineering, Universiti Putra Malaysia. He has served as an IS/IT consultant in various industries. Dr. Ghobakhloos research interests include IT adoption and
acceptance, IT business value, electronic supply chain management, and electronic commerce evaluation. His research has been published in such journals as International Journal
of Production Research, Industrial Management & Data Systems, International Journal of
Information Technology & Decision Making, Journal of Small Business and Enterprise
Development, and Information Technology for Development.
Tang Sai Hong is an associate professor in the Department of Mechanical and
Manufacturing Engineering, Universiti Putra Malaysia. His academic experience is in
the field of Mechanical, Manufacturing and Systems Engineering. His industrial experience is in the field of construction, M&E, automobile, semiconductor, and design. His
current research is related to information technology, operations research, and robotics.
Professor Hong has published numerous articles in a variety of well-known journals,
including Expert Systems with Applications, Fuzzy Sets and Systems, Applied Artificial
Intelligence, Journal of Manufacturing Systems, International Journal of Production
Research, Industrial Management & Data Systems, and Journal of Industrial Engineering
and Management.
Craig Standing is a foundation professor of Strategic Information Management in the
School of Business at Edith Cowan University in Western Australia, where he is the
recipient of the Deans Award for Research Excellence. His research interests include
electronic marketplace adoption and use, ICT and innovation, and electronic commerce
evaluation. Professor Standing has published in many prominent journals, including
Decision Support Systems, Information & Management, International Journal of Electronic
Commerce, European Journal of Information Systems, Journal of Knowledge Management,
Technovation, Information Systems Frontiers, Information and Organization, Journal of
Enterprise Information Management, and Electronic Markets.

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Journal of Organizational Computing and Electronic Commerce, 24: 312341, 2014

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BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE

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Department of Mechanical and Manufacturing Engineering, Universiti Putra

BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE SUCCESS

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1.2. B2B EC Success

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BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE SUCCESS

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Accordingly, we make the following first-time assertion: internal users satisfaction

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BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE SUCCESS

Lee and Chung (2009)

Jennex, Amoroso, and

Kaefer and Bendoly (2004).

Lee and Kozar (2006)

Molla and Licker (2001)

Table 2 Review of previous studies on EC success.

D&M IS success taxonomy and

D&M IS success taxonomy and

D&M IS success taxonomy and

IS and EC adoption literature

D&M IS success taxonomy and

Cross-sectional study of Korean

Interviews, field survey, and

Case study of two small

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System quality, content quality, trust,

Chung and Kwon (2009)

Cullen and Taylor (2009)

D&M IS success taxonomy,

D&M IS success taxonomy and

Literature from the fields of

Cross-sectional study of Chines

Cross-sectional study of Chines

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Information quality, system quality, and

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Figure 1 Proposed research model of B2B EC success.

BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE SUCCESS

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H1. There is a positive relationship between EC use and net benefits.

3.1.3. Users satisfaction with EC. As we explained previously, and contrary

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BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE SUCCESS

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H4a. There is a positive relationship between EC information quality and EC use.

1993; Scheepers et al., 2006) is also positively

3.1.6. Service quality. Service quality is the third technological characteristic of

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H6a. There is a positive relationship between EC service quality and EC use.

3.1.7. Organizational EC readiness. Several researchers claim that the D&M IS

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BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE SUCCESS

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BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE SUCCESS

Table 3 Properties of variables.

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Hub firm and supply partners

Hub firm and supply partners