Factors affecting the implementation success of Internet-based information systems

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Abstract

The Internet has come to revolutionize the way in which business conducts commercial activities. In this paper, we report on the development of a model of Internet-based information systems (IIS) implementation in business-to-consumer electronic commerce based on IS implementation and technology innovation–implementation studies. Our research model suggests that eight factors, comprising the characteristics of IIS technology innovation, organizational factors, and IS related factors, affect the implementation success of IIS. IIS themselves are characterized by three dimensions: volume, sophistication, and information contents. The suggested model was empirically tested using survey results from Korean companies that have adopted IIS. The results of multivariate regression analysis reveal that compatibility and IS infrastructure are key determinants of the extent of IIS implementation (in terms of volume, sophistication, and information contents). IS expertise potentially affects the extent of IIS implementation.

Introduction

Electronic commerce (EC) is emerging as an increasingly important avenue for conducting business. One of the major types of EC activity is the use of Internet-based information systems to conduct transactions between a given firm and the consumers of its products or services. The adoption of Internet-based applications in organizations signals a major paradigm shift that changes the ground rules by which businesses compete in markets and interact with their customers. Internet-based information systems (hereafter IIS) (or Web-based information systems) in business-to-consumer EC are systems that offer direct sales through an electronic channel, i.e., the Internet, via an electronic catalog or other innovative formats (Spiller & Lohse, 1997–1998). Marketing initiatives – providing products and product information to potential customers – have accelerated much of the current expansion in Internet use (Quelch & Klein, 1996). An increasing number of organizations are utilizing the Internet as a medium by which to boost their business, in terms of buying, advertising, and selling (Nejmeh, 1994). Organizations that adopt such Internet-based systems stand a better chance of achieving a competitive advantage (Gonsalves, Lederer, Mahaney, & Newkirk, 1999) by realizing improved market reach, customization of products and services, more efficient payment systems, and shortened time to markets for new products and services (Berthon et al., 1996, Spar and Bussgang, 1996).

In sharp contrast, empirical academic studies on how to enhance the understanding of the adoption and implementation of Internet-based systems are lacking. There is a gap between the development in IS research and the observed changes in the fundamentals of organizational computing due to the adoption of Internet-based systems. This study intends to fill this gap.

Effective adoption and diffusion of IS in organizations has been an important concern among practitioners and researchers. The value of Internet-based systems is dependent upon their adoption and acceptance by the relevant parties. Given the strategic impact of IIS in business-to-consumer EC, it is quite meaningful to investigate the factors influencing the adoption decision for IIS. Further, investments in innovative information technology incur very high costs, with high uncertainty as to the benefits (Dos Santos, 1991); the decision to adopt such applications early or wait until they have proven successful is substantially important. It is also important to understand the context within which IIS are implemented in business-to-consumer EC. The understanding of the factors that affect IIS will help policy-makers and practitioners implement these systems and increase the speed of the development of EC.

Section snippets

IS adoption and implementation

Innovation can be defined as an idea, practice, or object that is perceived as new by an individual or other unit of adoption (Rogers, 1995). Innovation has been studied at the level of industry, organization, and the individual. This study focuses on the adoption of a technological innovation – IIS – at the organizational level. Technological innovation theories can provide a useful reference discipline for empirical studies of IS adoption (Thong, 1999). A substantial amount of research has

Research model

This study, unlike former studies on Internet implementation, examines the factors that affect the implementation success of the specific technology, i.e., IIS. The theories for IIS can be developed from the review of former literature on IS implementation, as IIS are also transaction-based systems and are used as competitive weapons in organizations. A review of the IS adoption and implementation literature shows that the framework developed by Tornatzky & Fleischer (1990) may be useful in

Research design

The data used in validating the research model were gathered as part of a research project on IIS implementation. A field survey was conducted to create a large, statistically testable sample with which to test the significance of relations among variables. A face-to-face interview using a structured questionnaire was the main method of data collection. The mail survey method was avoided, because of the difficulty in obtaining reliable responses from the questionnaire, which addressed such

Validity and reliability of measures

In this study, content and construct validity were tested. In this study, the measures were based on previous work and were pretested by both practitioners and four IS professors to enhance the content validity of the instrument. Reliability and construct validity of the measures for research variables were evaluated using Cronbach α and factor analysis (Table 5, Table 6). All scales exceeded 0.6 after low-to-total correlated items were deleted. The analysis of reliabilities indicated that the

Summary of the study

This study is based on innovation–implementation and technology innovation theories applied to IIS. Our research model suggests that eight factors, comprising characteristics of IIS technology innovation, organizational factors, and IS related factors, affect the implementation success of IIS. IIS themselves are characterized by three dimensions: volume, sophistication, and information contents. The results of multivariate regression analysis revealed that compatibility and IS infrastructure

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