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E-business: revolution, evolution or hype?

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In this paper the authors seek to move beyond the hyperbole in the popular press by questioning wether "e-business" truly represents a revolution in the way firms operate or whether it is a more normal evolution in the operations of certain firms. It is important to answer this question because if the change is revolutionary then many mangers will be required to rethink their firm strategies and managerial responses in a profound way. On the other hand, if the change is simply evolutionary it will apply more to some firms than to others and pre-Internet strategies and managerial responses will still be appropriate in many circumstances. In order to answer this question the authors examine where this revolution (or evolution) is concentrated, and why this revolution (evolution) is occuring as it is. In contrast to views in the popular press, they find that e-business is growing most rapidly in business-to-business markets and for the purchasing of routine items. Moreover, in these markets it is occurring as an evolutionary development of previous technologies (telex, fax, EDI, etc.) in established relationships between purchasers and suppliers. The authors then examine the claims that "e-business" is different to previous forms of business. For each of these claims they find that there are countervailing arguments and, despite the claims of technological "visionaries", e-business has not suspended the laws of economics. Finally, they evaluate whether e-business meets the criteria of pervasiveness and process orientation that hacve characterized previous industrial revolutions. They conclude that it is premature to categorize e-business as revolutionary. Overall, the authors argue that e-business is no silver bullet; rather it will be a useful tool for somme firms and some kasks. Rather than listen to the popular press or consultants, managers should put in place sensible approaches that question its appropriateness to their firm and its circumstances.

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/inseadwp2000/2000-08.pdf

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Copyright INSEAD. All rights reserved