International Journal of Electronic Commerce

ISSN: 1086-4415 (Print) 1557-9301 (Online) Journal homepage: http://www.tandfonline.com/loi/mjec20

Introduction to the Special Section: Business-to-

Business Electronic Commerce

Judith Gebauer, Michael J. Shaw

To cite this article: Judith Gebauer, Michael J. Shaw (2002) Introduction to the Special Section:
Business-to-Business Electronic Commerce, International Journal of Electronic Commerce, 6:4,
7-17, DOI: 10.1080/10864415.2002.11044250

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Introduction to the Special Section:
Business-to-Business Electronic Commerce
Judith Gebauer and Michael J. Shaw, Guest Editors
ABSTRACT: Innovative technologies are changing the landscape of interorganizational
relationships. Following proprietary interorganizational information systems (IOS), the
advent of Internet-based electronic commerce provided new opportunities and challenges
to connect businesses, facilitate transactions, and enable collaborations among business
partners, sellers and buyers, and businesses and public institutions. Recent advances in
wireless and peer-to-peer technologies can be applied in interorganizational environ-
ments. After initially focusing on the use of Internet technologies to facilitate and automate
business transactions, researchers and practitioners have begun to include more complex,
collaborative business processes in their analyses.
The Special Section of the International Journal of Electronic Commerce highlights
some ongoing developments in business-to-business (B2B) electronic commerce research.
As an introduction to the Special Section, this article provides an overview of the topic
area, reviews earlier research, and points out several research issues.

KEY WORDS AND PHRASES: Interorganizational systems, research frameworks.

Electronic commerce is the “sharing of business information, maintaining

business relationships, and conducting business transactions by means of tele-
communication networks” [41]. It includes the “sell-buy relationships and
transactions between companies, as well as the corporate processes that sup-
port the commerce within individual firms” [41]. Depending on whether the
area of interest includes the relationships between businesses and end-user
consumers, or focuses more on the relationships between businesses and public
organizations, a common distinction is made between business-to-consumer
(B2C) e-commerce and business-to-business (B2B) e-commerce.
As can be seen in Figure 1, B2B e-commerce is associated with systems and
processes that support the flow of information between organizations as it
occurs in procurement; manufacturing; research and development; and sales;
and distribution of goods, information, and services.
As a research area, B2B e-commerce is closely related to other information
systems research topics, most notably the study of electronic data interchange
(EDI), interorganizational information systems (IOS), and electronic markets
[17, 27, 37]. The distinction between these topics is based largely on the type
of technology utilized to support interorganizational relationships. While B2B
e-commerce systems typically incorporate the Internet and open communica-
tion standards [30], their predecessors were often based on proprietary tech-
nology or applied more rigid standards to exchange data in well-defined,
structured formats (EDI). In this regard, both in practical terms and from a
research perspective, B2B e-commerce can be seen as a current embodiment
of IOS. Another closely related area of research is the field of information tech-
nology (IT ) to support internal processes and data flows as they are addressed
in business process reengineering and workflow design and management,

International Journal of Electronic Commerce / Summer 2002, Vol. 6, No. 4, pp. 7–17.
Copyright © 2002 M.E. Sharpe, Inc. All rights reserved.
1086-4415/2002 $9.50 + 0.00.
8 JUDITH GEBAUER AND MICHAEL J. SHAW

Web-based Procurement System

Procurement Management
Buyer Decision Supplier
Authorization & Product
support
Security catalogs
Web-based
management management
collaboration
Buyer Supplier
Procurement Transaction Support

Buyer Communication & Supplier

Enterprise Coordination Order Supplier
Information Search & management Information
Systems Ordering Systems
Gateway Gateway
Receiving & Order
Accounting Fulfillment

Shipping &
Logistics

Buyer Supplier

Market Making

CFQ & CFP Forming Auction, Bidding,

Reverse auction, Negotiation, &
Buyers Or Exchanges Contracting
Sellers

Demand Inter- Supply

side organizational side

Figure 1. A Typical Web-Based B2B E-Commerce System Integrates the

Information and Process Flows Between Trading Partners’ Enterprise
Systems {36}.

both within and beyond corporate boundaries. As Zwass points out, it is

“often both pragmatically and analytically unfruitful to separate interor-
ganizational and intraorganizational business processes” [41].
Compared to earlier developments, the use of open standards related to
the Internet and the World Wide Web (e.g., Extensible Markup Language, or
XML) in the context of B2B e-commerce greatly facilitates the setting up of
electronic links and, as a result, may lead to the widespread diffusion of
interorganizational data interchange and information system integration that
has so long been anticipated [39]. Although the volume of Internet-based trans-
actions between businesses is still but a fraction of “traditional” EDI-based
data exchanges [41], it has been increasing steadily in recent years.
As a term and a topic, B2B e-commerce was first addressed in the business
world rather than in academia. Parallel to the emergence of consumer-
oriented electronic commerce applications and related businesses in the sec-
ond half of the 1990s, user firms, software providers, systems integrators,
and consultants became aware that Internet-based technologies offered great
potential for improving communication and interaction between organiza-
tions. Numerous startups were founded to provide software and services
that would automate procurement functions, establish on-line markets and
trading platforms, and enable new forms of collaboration [1, 30]. Industry
analysts predicted growth rates for Internet-enabled electronic business that
far exceeded any of the historic expectations for EDI diffusion [31], and stock
market valuations of newly founded B2B-related companies in the arena went
 INTERNATIONAL JOURNAL OF ELECTRONIC COMMERCE 9

sky high. 1 Only a few years later, however, it became obvious that many of
these expectations would not materialize as fast as had been predicted. Elec-
tronic procurement projects found it difficult to establish aggregated on-line
catalogs and obtain sufficient participation from suppliers; system integra-
tion proved more difficult than expected; and implementation costs exceeded
early estimates. On-line markets could not reach the critical number of trans-
actions, and many startups were forced to refocus their business models or
even to close. From the beginning, developments in B2B e-commerce were
monitored closely and covered extensively by industry analysts,2 trade jour-
nals,3 and practitioner-oriented conferences. After some delay, B2B-related is-
sues are now being addressed in academic outlets as well. Many questions
remain open, and B2B e-commerce is likely to provide a fruitful field for re-
search for some time to come [11].

Overview of B2B E-Commerce Research

In order to obtain an overview of the current state of research related to B2B e-
commerce, a number of IS journals were surveyed for publications between
1995, roughly the beginning of the commercial use of the Internet, and early
2002 [12] (Ngai and Wat did a similar survey of publications related to e-
commerce [29]). More than 100 articles were identified in Communications of
the ACM, Decision Support Systems, Electronic Commerce Research, Electronic
Markets, European Journal of Information Systems, Information & Management,
Information Systems Research, Information Technology and Management, Interna-
tional Journal of Electronic Commerce, Journal of Information Technology, Journal of
Management Information Systems, Journal of Strategic Information Systems, Man-
agement Science, and MIS Quarterly. Publications on Internet and Web-based
B2B applications (for the most part exchanges and electronic procurement
systems) were included in the survey, as were recent articles on interorgani-
zational systems, electronic markets, and EDI, since many of the issues dis-
cussed are valid independently of the underlying technology.

Applications and Research Perspectives

In the IOS literature, the organizational entity has traditionally been at the
center of research on B2B e-commerce, and research is typically undertaken at
the firm level or at the group level within a firm. Thus it is not the individual
that is the focus, as in research addressing the interface between humans and
computers, nor is research typically done at the level of the economy [20]. The
industry (often referred to as the market) also comes into play, because it con-
stitutes the environment within which organizational entities interact with
one another.
Reflecting the focus on the organizational unit, research addresses the im-
pact on business models and strategy; organizational factors such as system de-
sign and project management; results in the form of adoption, evaluation of
benefits, and bottom-line impacts; and technical issues. In addition, questions
regarding the impact of interorganizational applications on business relationships
10 JUDITH GEBAUER AND MICHAEL J. SHAW

Organi- Business: Results: Interorgani-

zational: Impact Bottom- tional: Impact
System design, on line im- on market
Technical: implemen- business pacts on structures
Technical tation, models, benefits, and inter-
infras truc- project processes , value as- organiza-
ture and manage- inte- sessment, tional rela-
standards ment gration adoption tionships

EDI {28} {26} {38} {7} {18}

Electronic markets {19} {6} {2} {14} {3}
Interorganizational
systems, supply-chain
management {25} {34} {16} {33} {10}
Electronic procurement {22} {13} {23}
Internet-based markets
and trading platforms {5} {15} {24} {4}

Table 1. B2B-Related Research: Applications and Research

Perspectives.

and market structures continue to receive attention (Chwelos, Benbasat, and

Dexter similarly categorized the impact of EDI systems [9]). In contrast, pub-
lic policy issues and the effect of emerging technologies on the economy as a
whole are not typically subsumed under B2B e-commerce research.
Table 1 lists representative examples of publications addressing different
research perspectives as applied to B2B e-commerce applications.
Since it lists only one example for each area, the table conceals the fact that
some areas have been covered quite extensively (e.g., interorganizational per-
spectives of electronic markets). But it does show that some issues have hardly
been covered at all. For example, the implications of electronic procurement
and Internet-based markets and trading platforms for business strategies and
processes have not been addressed.4 Similarly, the issue of whether, and how,
e-procurement applications affect market structures and interorganizational
relationships are yet to be explored. Some researchers have addressed specific
aspects, such as the consequences of e-commerce for small and medium-sized
businesses, or have taken an international perspective [21, 32].

Research Methods
B2B e-commerce provides a rich field to which to apply established, as well as
new, methods of research. According to the survey, the most prominent re-
search methods include case studies of single firms [15], multiple firms [18],
and industry studies [38]; descriptive forms of research using minicases and
anecdotes [19]; and conceptual frameworks, typically based on theoretical con-
cepts developed in other research disciplines [8]. In addition, empirical work
has been done [26], as well as exploratory studies combining data from a num-
ber of different sources [3] and analytical modeling [40]; prototyping [5]; and
simulation [35].
 INTERNATIONAL JOURNAL OF ELECTRONIC COMMERCE 11

The survey did not reveal a clear trend toward certain research methods
over time. As more real-life data become available, however, quantitative re-
search could become more feasible and consequently more prominent, though.
Given the complexity of the area, the combination of different approaches
into interdisciplinary research efforts appears particularly promising.

Research Issues
As is evident from the brief summary of the survey of IS journals, B2B e-
commerce research has its roots in interorganizational systems and technolo-
gies preceding Internet-based electronic commerce. Future research can be
expected to focus more specifically on the idiosyncrasies of the emerging tech-
nologies, as many questions will need to be answered in order to develop a
full understanding of the opportunities, challenges, and impacts of B2B e-
commerce.
Listed below are a series of research issues that merit the attention of B2B e-
commerce researchers:

• The impacts of B2B e-commerce on business processes, organiza-

tions, and markets
• The use and implications of dynamic pricing mechanisms, such as
negotiations and auctions, in B2B e-commerce
• Internet-based payment in B2B e-commerce settings
• Business system design and analysis for B2B e-commerce
• Alignment of B2B e-commerce strategies with overall business
strategies
• Economic analysis of B2B e-commerce business models
• Technical requirements and architectures to enable B2B e-commerce
• Beyond “traditional” B2B e-commerce: The application of new
technologies (e.g., mobile, peer-to-peer )
• Reconsidering make-or-buy decisions in the context of emerging
technologies
• Impact of new technologies on business network design and
strategic alliances
• Economic and legal issues in B2B e-commerce systems
• Impact of emerging standards (XML, OBI, etc.) on B2B transactions
and collaborative processes

Overview of the Special Section

The contributions included in the Special Section fit well into the framework
used above to categorize the research on B2B e-commerce. The papers con-
12 JUDITH GEBAUER AND MICHAEL J. SHAW

Organi- Business: Results: Interorgani-

zational: Impact Bottom- tional: Impact
System design, on line im- on market
Technical: implemen- business pacts on structures
Technical tation, models, benefits, and inter-
infras truc- project processes , value as- organiza-
ture and manage- inte- sessment, tional rela-
standards ment gration adoption tionships

EDI

Electronic Padovan et al.

markets (simulation)
Interorgani- den Hengst and
zational systems, Sol (industry
supply-chain case study)
management
Electronic Subramaniam
procurement and Shaw
(conceptual
Internet-based Dai and framework)
markets and Kauffman
trading plat forms (exploratory
study)

Table 2. Applications, Perspectives , and Research Methods as

Addressed and Utilized by the Contributions in the Special Section.

tribute to a broader understanding of the research, for they span a number of

different applications, include a variety of research perspectives, and apply
different research methods (see Table 2).
The first paper, by Subramaniam and Shaw, is titled “A Study of the Value
and Impact of B2B E-Commerce: The Case of Web-Based Procurement.” From
the beginning, the application of Internet technologies in organizations has
fueled great hopes of achieving cost savings, cycle-time reductions, and in-
creases in productivity or quality that would far outweigh the required up-
front investments. In practice, however, many organizations find it difficult to
realize the expected benefits. This is so because the structure of the systems is
oftentimes more complicated than anticipated (especially in large organiza-
tions), the integration of the applications into a heterogeneous IT infrastruc-
ture is more difficult than expected, and there are many organizational hurdles.
Simple models to assess the expected results are typically unable to obtain a
realistic picture. A good understanding of the factors that determine and af-
fect the value of an e-commerce application (or any IT system for that matter)
is important, however, to ensure effective allocation of IT investments, as well
as to promote projects internally (to end-users and business leaders) and ex-
ternally (to suppliers and business partners). Adoption of B2B electronic com-
merce systems by users as well as external partners has turned out to be one
of the most crucial factors determining success. In their paper, Subramaniam
and Shaw introduce a framework of factors that affect the value of Web-based
 INTERNATIONAL JOURNAL OF ELECTRONIC COMMERCE 13

procurement on different levels. Their framework is complex, but rightly so,

given the complexity underlying the systems in question. The authors dem-
onstrate this complexity and the applicability of their framework with a rep-
resentative case study. Based on the framework and on the results of the
interaction with their case study partner, Subramaniam and Shaw derive a
number of interesting results. For example, they quantify some of the benefits
of the electronic procurement solution, but they also draw several more qualita-
tive conclusions and provide concrete suggestions for implementation. Uti-
lizing the differentiated information of how an electronic procurement
application creates value, they present a valuable roadmap that goes far be-
yond a simple yes-or-no decision about adopting an e-procurement system,
but could become a success factor of its own.
In “Business Models for Internet-Based B2B Electronic Markets: An Explor-
atory Assessment,” Dai and Kauffman review a number of business models
of B2B markets. In recent years, the opportunity to connect businesses via
Internet-based many-to-many platforms has spurred tremendous interest in
the business world, resulting in a large number of initiatives and many mil-
lions of dollars in capital investments. During the sharp downturn that fol-
lowed, a number of initiatives failed, and significant parts of the investments
were lost. These developments raised many questions about the characteris-
tics of viable B2B market models and the factors contributing to their success.
The paper by Dai and Kauffman is a valuable contribution to an understand-
ing of these oftentimes chaotic developments, for two reasons. First, the pro-
posed framework for categorizing B2B markets goes beyond many others in
wide use that are, for example, based on the distinction between horizontal
(business function) and vertical (industry) orientation. Dai and Kauffman’s
framework allows for a broader application and, thus, provides a solid basis
for discussion of B2B market models, while, at the same time, it ensures prac-
tical relevance (given that it has been derived from a number of real-life ex-
amples). Second, the authors have based their insights on a thorough review of
the academic literature in the field of interorganizational systems as it can be
applied to recent developments in B2B. Their paper makes clear how much
there is to learn from prior research in IS that is not always considered in rela-
tion to the latest trends. By doing so, they elevate the discussion to a new
level.
In “The Impact of Electronic Commerce on Interorganizational Coordina-
tion: A Framework from Theory Applied to the Container-Transport Indus-
try,” den Hengst and Sol focus their attention on coordination between market
players, one of the mechanisms that underlie the functioning of markets. In
their effort to assess the implications of information technology for the ways
that market participants interact with one other, the authors develop a con-
ceptual framework that is based on a review of the literature on interorgani-
zational information systems, in particular as it applies transaction cost
economics. The framework consists of a number of interrelated elements that
are grouped into three parts (characteristics of goods, use of IT, and coordina-
tion structures). Several assumptions are derived regarding the impact of IT
on the different elements of the coordination structures. These assumptions
are subsequently tested for the container industry; this provides interesting
14 JUDITH GEBAUER AND MICHAEL J. SHAW

results, as the findings are not all in sync with expectations. The paper points
to the need to assess very carefully the (often implicit) assumptions that un-
derline a body of research. Overall, it is a valuable contribution that helps to
advance knowledge about how coordination structures “evolve over time.”
The paper by Padovan, Sackmann, Eymann, and Pippow, “A Prototype
for an Agent-Based Secure Electronic Marketplace Including Reputation-
Tracking Mechanisms,” extends the authors’ earlier research on software
agents to enable electronic marketplaces. The objective of modeling market-
places where the software agents resemble agents in the real world with re-
spect to their ability to make independent decisions, but also with respect to
variations in honesty, leads the authors to include a mechanism that can track
the reputations of the agents. Utilizing simulation techniques, Padovan et al.
demonstrate the effect of a single fraudulent participant on the market. With-
out reputation tracking, the market essentially breaks down, whereas the in-
troduction of a mechanism to track the reputation of the participants allows
for the exclusion of the fraudulent participant over time, while the honest
participants are able to keep their profits. The speed with which the fraudu-
lent participant is driven out of the market depends, to a large extent, on the
availability of reputation information in the market. This result demonstrates
the value that can be derived by making reputation data available market-
wide—for example, by establishing a central reputation service. It also allows
the application of the research of Padovan et al. to the design of both agent-
based and “real” marketplaces where reputation plays a role.
Three of the four papers included in the Special Section were presented at
HICSS-34 in early 2001, and one of them (Padovan et al.) was awarded Best
Paper of the “Internet and the Digital Economy” Track. We are grateful to the
authors for allowing us to include their work in this Special Section, and for
their collaboration and patience during several rounds of revisions. We also
thank the anonymous reviewers for their hard work behind the scenes, as
well as the editors for giving us the opportunity to present our selection of
research in the area of B2B electronic commerce. We hope readers will find the
contributions insightful and stimulating for their own research.

NOTES

1. See B2B Analyst, a periodical from US Bancorp Piper Jaffray (http://

www.line56.com/research/contributor.asp?ID=12).
2. See www.line56.com/research for a collection of analyst reports.
3. Examples include Business2.0, The Industry Standard (meanwhile itself a
victim of the downturn), InformationWeek, InternetWeek, Computerworld, Line56, Red
Herring, and Electronic Commerce World.
4. The contribution by Dai and Kauffman falls into this category.

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JUDITH GEBAUER (gebauer@uiuc.edu) is an assistant professor at the University of

Illinois at Urbana-Champaign. Her research interests include the management of
emerging technologies and their impact on organizations, innovative forms of orga-
nizations, the changing role of intermediaries, and electronic markets. She has a Ph.D.
(1996) and a master ’s degree in economics (1991) from the University of Freiburg,
Germany.

MICHAEL J. SHAW (m-shaw2@uiuc.edu) is Hoeft Professor of Information Technol-

ogy Management and director of the Center for Information Systems and e-Business
Management at the University of Illinois at Urbana-Champaign. He is also affiliated
with the Beckman Institute for Advanced Science and Technology. He has published
extensively on information systems and electronic commerce.