84 The Role of Government in E-Business Adoption … We came out of that with the instruction from &XVWRPVWRDSSO\IRUDGLJLWDOFHUWL¿FDWHVRZH need to get these processes in place. Phase 2: Survey Methodology A survey of all Australian wineries, excluding the microsize wineries processing less than 20 tons of grapes per year, was conducted in the latter part of 2004 using a self-administered questionnaire. The survey was designed to collect detailed information about the nature and extent of the wineries’ e-business adoption, and among other things, to statistically test the proposition that some elements of e-business behaviour oc- cur in response to government related activity on the Internet. Responses were received from 198 of the 1,065 wineries, giving an overall response rate of 18.6%. The response rate varied by winery VL]HLQFUHDVLQJVLJQL¿FDQWO\DFURVVWKHIRXUVL]H categories used in the analysis (F 2 (3) = 32.28, p < .001). See Table 1 for winery size categories, population and response numbers. The survey collected basic background information on each winery, and included separate sections for each of the following types of e-business processes: e-mail; use of external Web sites; and three pos- sible types of winery Web sites — public for B2C, extranet for B2B, and intranet for winery staff only. Feedback on the winery’s overall use of e- EXVLQHVVDORQJZLWKLGHQWL¿FDWLRQRIEDUULHUVWR further (or any) adoption and general comments were also sought. The survey included statements designed to test the proposition that government e-business DFWLYLW\ZDVDIDFWRURILQÀXHQFHUHVSRQGHQWV were provided with a 5-point Li ker t scale to show WKHLU OHYHO RI DJUHHPHQW 7KH ³'R QRW NQRZ´ responses were treated as missing responses for the statistical calculations. The Likert scale, while strictly an ordinal scale, has been shown to have VXI¿FLHQWLQWHUYDOFKDUDFWHULVWLFVIRUWKHFRPSXWD- WLRQRIPHDQVQRWWREHLQYDOLG³DULWKPHWLFPHDQV V H H P W R FO R V HO \ U H ÀH F W J U R XS D W W L W X G H V W RZD UG V W K H stimuli” (Hofacker, 1984). Therefore the response means illustrated differences in responses by winery size when the nonparametric tests for or- GLQDOGDWDVKRZHGDVLJQL¿FDQWGLIIHUHQFHE\VL]H existed. Response differences by winery size for the factor statements were investigated using the Kruskal-Wallis K Independent Sample test. This test is appropriate for an ordinal scale and makes no assumptions about the underlying distribution of the data, which in this case was not normally GLVWULEXWHG6XPPDU \¿QGLQJVUHODWHGWRWKHUROH RIJRYHUQPHQWLQÀXHQFHDUHQRZUHSRUWHG Survey Finding 1: Government ,QÀXHQFHV(0DLODQG8VHRI Government Web Sites The survey data analysis revealed that e-govern- PHQWDFWLYLW\LQÀXHQFHGHPDLODQGH[WHUQDO:HE site use but had negligible direct impact on the operation or content of Web sites operated by the wineries. This is not particularly surprising when the purposes of the different e-business process W\SHVDUHFRQVLGHUHGDQGLVSDUWRIWKHZLGHU¿QG- LQJWKDWIDFWRUVLQÀXHQFLQJHEXVLQHVVDGRSWLRQ do not impact in the same way across the various HEXVLQHVVSURFHVVGRPDLQV6RPHVSHFL¿FJRY- ernment related results are detailed next. With regard to e-mail use, three quarters of the wineries use e-mail to communicate with government agencies and departments, but small wineries, when compared with the larger ZLQHULHV ¿QG OHVV FRQYHQLHQFH IURP XVLQJ H mail with government organisations. Turning to use of external Web sites, the most common W\SHDFFHVVHGE\ZLQHULHVDUHWKHVSHFL¿FZLQH industry Web sites, some of which are operated by Australian Government authorities (e.g., the Australian Wine and Brandy Corporation is the Australian government authority responsible for the promotion and regulation of Australian wine and brandy). Almost 90% of wineries, regardless of their size, use the Internet to access these sites. 85 The Role of Government in E-Business Adoption The next most common type of Web sites accessed by wineries is government sites connected with legislation and regulation compliance. In this case KRZHYHUXVDJHGLIIHUVVLJQL¿FDQWO\E\ZLQHU\ size: for example, 72% of small wineries compared with 100% of very large wineries (F 2 (3) = 11.88, p < .01, N = 155). For exporting wineries, usage of RQOLQHFRPSOLDQFHSURFHVVHVGLIIHUHGVLJQL¿FDQWO\ by winery size. For example, approximately 45% of the small and medium wineries used the online compliance process for wine export approvals compared with approximately 75% of the large DQGYHU\ODUJHZLQHULHVDVLJQL¿FDQWGLIIHUHQFH in usage level (F 2 (3) = 15.92, p < .01, N = 76). The same type of pattern was observed for wineries using the Web to process customs clearances, with only about 15% of small and medium win- eries using this option, except that in this case the usage levels of very large wineries, at 64%, was markedly higher than that of the large win- eries at 30%. The difference by winery size for RQOLQHFXVWRPFRPSOLDQFHLVVLJQL¿FDQWF 2 (3) = 15.79, p < .01, N = 31). Note: the uptake of online compliance for export customs declarations has changed considerably since the export component of Australia’s Integrated Cargo System went live in late 2004. Online transaction processing for export declarations is now close to 100%; see Table 2 for details. Analysis of survey responses indicated B2G related e-business is increasing, with clear evi- GHQFHWKDWPRVWUHVSRQGHQWVDUH¿QGLQJFRPSOL- ance with government regulations easier due to the functionality and utility of e-government Web sites. Respondents also anticipated that their e-business activities in the next 12 to 18 months will be dominated by increasing use in the areas of B2B and B2G rather than the area of B2C. Overall there was a perception that the role of e- government on e-business adoption by wineries LQJHQHUDOLVVLJQL¿FDQWDQGLVLQIDFWDVWURQJHU DQGPRUHLQÀXHQWLDOIDFWRUWKDQWKDWRIWKHGLUHFW relative advantage delivered by e-business to the wineries themselves. Survey Finding 2: Network Infrastructure Limitations Acts as Major Barrier Empirical evidence from the census survey re- vealed that the limitations of available network speeds and network connection costs are two common barriers to further e-business adoption by Australian wineries, with close to 50% of respondents citing these two issues as barriers. These barriers apply to wineries regardless of organisation size. Telstra is the only network carrier with physical lines into all regional and remote sites. The quality of the lines away from major cities and regional centres provides only limited support for e-business activity. For ex - ample, ADSL broadband connections are only available within approximately three and a half kilometres of an ADSL enabled exchange (Telstra, 2004), and many wineries are located outside this range. As one interview respondent made clear, inferior Internet access in regional areas is also accompanied by higher costs: regional businesses pay more to get less. The following example illustrates the problem in terms of e-commerce costs. A very large, pri- Y D W H O \ R Z Q H G Z L Q H U \Z L W K RI ¿F H VL QD O O $ X V W U D O L D Q states uses online processes for compliance where possible. However, the main production centre is located near a major regional town situated further than three kilometres from the nearest Telstra exchange, with broadband access not available. The standard Internet connection at their regional production site has an annual cost of $11,000 and is 130 times slower than the speed of a similar ,QWHUQHWFRQQHFWLRQDWWKHLUFLW\RI¿FHZKLFKKDV an annual cost of $2,000. The winery spends an additional $90,000 a year to upgrade their Internet connection speed at the regional winery location to acceptable speeds, and Telstra has required up-front contributions of approximately $100,000 for infrastructure upgrades. The winery has little choice other than to make these investments in 86 The Role of Government in E-Business Adoption RUGHUWRJHWVXI¿FLHQWVSHHGIRUWUDQVDFWLRQSUR- cessing across the Web. 7KHZLQHU\UHVHDUFKFRQ¿UPHGWKDWLPSURYH- ments in network infrastructure quality and low- ering associated e-commerce costs are needed in order to reduce the most common barriers facing Australian organisations in the adoption of e-busi- ness processes. The current limited penetration of broadband access in Australia acts as a serious inhibitor for growth of e-business adoption, par- ticularly for SMEs and many regional organisa- WLRQVZKR¿QGWKHFRVWEXUGHQRIXSJUDGLQJWKHLU own telecommunication infrastructure to ensure an acceptable Internet access speed is too high for WKHUHVXOWLQJOHYHORIEHQH¿W7KHYDULRXVOHYHOV of government recognise their responsibility for improvements in network infrastructure. For example, the Australian Federal Government has developed a national strategy for improving broadband access across the country in partner- ship with state and territory governments. Objec- tives include the development of a coordinated approach to future network development in order to reduce price and location barriers, and in par- ticular to provide affordable broadband services in regional Australia (OIE, 2004b). The Victorian State Government has gone further, by agreeing to combine with Telstra to establish a high-speed ¿EUHRSWLFQHWZRUNDFURVV9LFWRULDWRFRQQHFWDOO VFKRROVSROLFHRI¿FHVDQGJRYHUQPHQWRI¿FHVDW a total cost of over $120 million (Barker, 2005). Once implemented, this high speed Internet access will advantage e-business operations in Victoria in comparison with the other states. MANDATING ADOPTION ENSURES E-GOVERNMENT SUCCESS An interesting point to note from the interview comments provided previously is the awareness of the lack of choice with regard to compliance with the changes stemming from the government’s power to regulate and to control the means by which compliance with regulation occurs. The wineries were not choosing to adopt online transactions for export clearance compliance — they simply had no choice in the matter. Nor were the respondents anticipating much in the ZD\RIGLUHFWEHQH¿WIRUWKHPVHOYHV²LQVWHDG they were acting in response to a directive they could not ignore because the directive came from a stakeholder with a much higher degree of power than themselves. It is reasonable to assume that all Australian exporting organisations, not just wineries, will have been conscious of their lack of choice in deciding whether or not to adopt the online process for ICS. So how successful has the Australian Gov- ernment been in forcing Australian exporters to process their export declarations via online transaction processing using digital signatures as evidence of identity? The answer is they have been extremely successful. In a correspondence from the Federal Minister for Justice and Customs (C. Ellison, personal communication, August 1, 2005), less than 1% of all export declarations have been lodged since ICS went live in Sep- tember 2004 using the alternative manual paper system. The manual system is designed with disincentives: extra costs are attached and it is only available at a limited number of locations. The monthly breakdown of export declarations processed between September 2004 and July 2005 between the electronic and manual alternatives is shown in Table 1. The Australian government has gone to great lengths to support exporting clients during the rollout of ICS by conducting training sessions in capital cities and large regional centres; provid- ing online guides; and by providing an electronic simulation of ICS for new clients in order to build familiarity with the system. Broadband access is not required for the Web-based system to oper- ate with full functionality, and clients in remote regions of Australia have successfully adopted the online system. 87 The Role of Government in E-Business Adoption The example of successful ICS adoption by Australian organisations illustrates the point that organisations sometimes adopt e-business processes because of stakeholder pressure. It is not relative advantage or ease of use driving the adoption decision. The decision to adopt is forced because a more powerful member of the VWDNHKROGHUJURXSRQHZLWKVXI¿FLHQWSRZHUWR mandate change, dictates how the process will be managed. The role of relationship management between stakeholders in the context of e-govern- ment projects and uneven stakeholder power is examined further in work by Chan, Pan, and Tan (2003). The development and adoption of the ICS by the Australian government is an example of HJRYHUQPHQWGHVLJQHGIRUWKHEHQH¿WRIJRYHUQ- ment and the nations’ citizens as a whole, with a particular focus on increasing security levels. The Australian government has chosen to introduce online compliance with online evidence of iden- WLW\(2,YLDGLJLWDOFHUWL¿FDWHVDQGSURYLVLRQ of online security via public key infrastructure 3.,LQRUGHUWRUHDSEHQH¿WVRIEHWWHUJRYHUQ- PHQWUDWKHUWKDQIRUEHQH¿WWRWKHH[SRUWHUVDQG importers. The need for online EOI has forced all participating users of the online system to pur- FKDVHGLJLWDOFHUWL¿FDWHV,QWXUQPDQ\RUJDQLVD- WLRQVZLOOIRUWKHYHU\¿UVWWLPHKDYHRYHUFRPH any hurdle which the lack of online evidence of identity had previously presented. It is possible that the introduction of the ICS within Australia may pave the way for increased adoption of other online transaction processes which require digital FHUWL¿FDWHV IRU (2, SXUSRVHV DOWKRXJK DW WKLV stage, this is merely speculation. FUTURE RESEARCH There is much scope for future research in the role o f g ov e r n m e n t s w i t h r e g a r d t o e - b u s i n e s s a d o p t i o n and stakeholder relationships. The observations made in this chapter on the role of government in e-business adoption suggest that the theoreti- cal framework from the DOI perspective needs P R G L ¿F D W L R Q Z K H Q D S S O L H G W RH E X V L QH V V D G R S W LR Q Figure 2 illustrates some suggested changes to the DOI theory by adding in an extra innovation characteristic related to the network externality HIIHFWZKHQEHQH¿WGHSHQGVRQDGRSWHUQXPEHUV while the stakeholder pressures from the external HQYLURQPHQWKDYHDOVREHHQLQFOXGHGZLWKLQÀX- ence from e-government singled out because of its pivotal role in determining many e-business conditions and compliance processes within national boundaries. E-government is still emerging and developing as a mechanism for reliable, secure, and effective government. As more e-government projects come online and experience grows, then analysis of the successes and failures will be vital to improving our understanding of how governments can best le- YHUDJHEHQH¿WIURPHEXVLQHVVSURFHVVHVIRUWKHLU nation and citizens. Research by IS professionals will aid this analysis process and potentially guide future directions of both e-government projects and the provision of government controlled struc- WXULQJFRQGLWLRQVWRDOORZHEXVLQHVVWRÀRXULVK within the marketplace. CONCLUSION T h e r o l e of g ov e r n m e n t i n e - b u s i n e s s a d o p t io n h a s been shown to be multifaceted. First, governments play an important role as an e-business champion. The Australian government is committed to this role because of the strong belief that e-business will strengthen and improve the Australian economy. Second, governments are responsible for provid- ing the physical network infrastructure that most of the nation’s citizenry and organisations rely on for the conduct of their e-business practices. The quality, speed, and cost of this access are crucial elements in determining the effectiveness, depth, and extent of e-business adoption for many organi- sations. The example from Australia discussed 88 The Role of Government in E-Business Adoption earlier served to illustrate this point. Third, the development of e-government for the purpose of LPSURYLQJFRPPXQLFDWLRQÀRZRILQIRUPDWLRQ and online transaction processing to aid regula- tion awareness and compliance acts as a strong driver of e-business adoption in some, but not all, e-business process domains. There is evidence that governments can use their powerful stakeholder position to effectively force online adoption for compliance purposes when necessary, in order to maximise adopter numbers and thus increase WKHEHQH¿WVIRUJRYHUQPHQWDQGWKHQDWLRQWRWKH level desired. A theoretical implication follows: all RUJDQLVDWLRQVZLWKVXI¿FLHQWVWDNHKROGHUSRZHU whether private (big businesses) or government, have the potential to effectively mandate adoption of their own e-business processes which strongly depend on the number of adopters to achieve suf- ¿FLHQWUHODWLYHDGYDQWDJH REFERENCES ACIL. (2002). 3DWKZD\V WR SUR¿WDELOLW\ IRU small and medium wineries. ACIL Consulting. Retrieved from http://www.aciltasman.com. au/images/pdf/wine_report_v2.pdf Allen Consulting Group. (2002). Australia’s in- formation economy: The big picture. Melbourne: NOIE. Anderson, D. (2000). Creating and nurturing a premier e-business. Journal of Interactive Mar- keting, 14(3), 67-73. Anderson, K. (2000). Export-led growth. 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Orlando: The Dryden Press. This work was previously published in Global E-Government: Theory, Applications and Benchmarking, edited by L. Hakim, pp. 65-84, copyright 2007 by IGI Publishing (an imprint of IGI Global). 91 Copyright © 2009, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited. Chapter 1.7 Business Networking: The Technological Infrastructure Support Claudia-Melania Chituc INESC Porto, Portugal Américo Lopes Azevedo INESC Porto, Portugal ABSTRACT The rapid evolution of information and com- munication technologies, the changing client’s demands, and market conditions impelled enter- prises to adapt their way of undertaking business, from traditional practices to e-business, and to participate in new forms of collaboration, such as networked organizations. In this context, standards, frameworks, technologies, and infra- structures supporting collaborative business, in a networked environment, become key factors in achieving environments with a desired high level of collaboration and inter- and intra-organization business processes alignment. The aim of this chapter is to underline the main issues, trends, and opportunities related to business integration from a technological perspective, analyzing and discussing the most relevant (existing and still under development) business integration reference models, frameworks, standards, technologies, DQG VXSSRUWLQJ LQIUDVWUXFWXUHV DQG WR EULHÀ\ present relevant research projects in the area of business networking. A special emphasis is made on frameworks such as ebXML and RosettaNet, and the importance of papiNet, BPLE4WS, and freebXML is underlined. Challenges regarding self-forming networked organizations are also advanced. INTRODUCTION Current business trends and information and communication technology (ICT) developments determined enterprises to change their way of undertaking business, from vertically-integrated FRPSDQLHV WRZDUGV ÀH[LEOH FROODERUDWLYH QHW- worked organizations (CNOs). In this context, enterprise integration and interoperability emerge as key elements supporting real-time information ÀRZDQGH[FKDQJHDQGLQWUDDQGLQWHURUJDQL]D- 92 Business Networking tion business processes integration and alignment. CNOs represent a valuable and effective approach to achieve strategic objectives in a time-response and cost-effective manner, with a high level of quality of delivery and customer’s satisfaction, while generating value to stakeholders. CNOs represent a collection of heterogeneous organizations with different competences, but V\PELRWLFLQWHUHVWVWKDWMRLQHI¿FLHQWO\FRPELQLQJ the most suitable set of skills and resources (e.g., knowledge, capital, assets) for a period of time in order to achieve a common objective, and make use of ICT to coordinate, develop, and support their activities. The term CNO is used in this chapter, in a broad sense, for other emerging business collaborative forms with similar proprieties, such as virtual enterprises (VE), virtual organizations (VO), or extended enterprises. The aim of this chapter is to underline the main issues, trends and opportunities related to business integration, from a technological perspective, analyzing and discussing the most relevant (existing and still under development) business integration reference models, frame- works, standards, technologies, and supporting LQIUDVWUXFWXUHVDQGWREULHÀ\SUHVHQWUHOHYDQW research projects in the area of business network- ing in Europe and the USA. A special emphasis is made on frameworks such as ebXML and Rosetta Net, and the importance of papiNet, BPLE4WS, and freebXML is underlined. The main research questions which motivated the present work are: • Question 1::KLFKDUHWKHPDLQEHQH¿WV for technology integration, in a business collaborative environment formed by hetero- geneous organizations with different goals, strategies, and technologies, but symbiotic interests? • Question 2: Which are the main (exist- ing or still under development) standards, technologies, and frameworks supporting business integration and interoperability? • Question 3: Which are the most relevant developments/research projects in the area of business networking? The remains of this chapter are organized as follows. The following section presents the main LVVXHV HJ EHQH¿WV RSSRUWXQLWLHV DQG WUHQGV related to business integration and interoperabil- ity, from a technological perspective. The most relevant reference models, standards, frameworks, technologies, and supporting infrastructures for enterprise integration will be then analyzed, ex- emplifying with research projects developed in EU and the USA. A special emphasis will be made on ebXML, BPLE4WS, papiNet, freebXML, and Rosetta Net. The last section addresses the needs for further research and concludes this chapter. NEEDS FOR ENTERPRISE INTEGRATION AND INTEROPERABILITY IN A COLLABORATIVE BUSINESS NETWORKED ENVIRONMENT CNOs represent a powerful mechanism to achieve competitiveness and agility in today’s turbulent market conditions by comprising various entities with complementary competences, but symbiotic interests. They include geographically-distributed organizations, having different cultures, working methods, or supporting technologies. Although CNO partners aim at achieving a common busi- ness goal and following a common business strategy, each member organization has its own goal and strategy, which makes CNO coordination and management assume a critical role. CNO have several advantages, the most rele- vant ones being summarized in Camarinha-Matos and Afsarmanesh (2003): agility, complementary roles, achieving dimension, competitiveness, resource optimization, and innovation. However, the formation, development, and operation of any CNO, and its success, depends 93 Business Networking on some base commonality among its members, such as common goals, common or interoperable ICT infrastructures and supporting services, UHDOWLPH LQIRUPDWLRQVKDULQJ DQG ÀRZDPRQJ CNO members, and common standards or com- mon views in a number of areas (e.g., describing DQGRUFKHVWUDWLQJEXVLQHVVSURFHVVÀRZVDFURVV m u l t i p le s y s t e m s , t r u s t , c o m m o n s y s t e m of v a l u e s and common way to perform business processes) (Camarinha-Matos & Afsarmanesh, 2003). Ad- equate reference models, supporting infrastruc- tures, and proper managerial and technological alignment of inter- and intra-organization business processes are required to achieve these common challenges. Enterprise integration and interoperability aim at developing computer-based tools that facilitate coordination of work and information ÀRZ DFURVV RUJDQL]DWLRQDO ERXQGDULHV :KLOH enterprise integration focuses on intra-enterprise distributed business processes (e.g., orchestration, FRPPXQLFDWLRQDQGÀRZVHQWHUSULVHLQWHURSHU- ability is focusing on inter-enterprise distributed EXVLQHVVSURFHVVHVDQGÀRZV$FFRUGLQJWR9HU- nadat (1996), enterprise integration (EI) refers to facilitating information, control, and material ÀRZVDFURVVRUJDQL]DWLRQDOERXQGDULHVE\FRQ- necting all the necessary functions and hetero- geneous functional entities. It aims at improving communication, cooperation, and coordination in an enterprise. As a consequence, the enterprise behaves as an integrated whole, enhancing its RYHUDOOSURGXFWLYLW\ÀH[LELOLW\DQGFDSDFLW\IRU the management of change. EI does not represent a new issue; evolving from physical integration to application and later business integration, EI has been a challenge for both information technology and manufacturing industries for several decades. ,(((SURYLGHVDGH¿QLWLRQIRULQWHURSHU- ability, focusing on information exchanged and its use. Major motivations for EI are mentioned in Vernadat (1996), and can be summarized as follows: • The need for real information sharing • The need for interoperability (e.g., the need to harmonize the operational networked environment) • The need to improve task coordination or inter-working between organization units, individuals, and systems in interaction within an enterprise In order to be competitive in a collaborative business networked environment, organizations should adopt a bipolar approach which allows them WR IXOO\ EHQH¿W IURP WKH VSHFL¿F FRPSHWHQFHV of each partner of a CNO (Chituc & Azevedo, 2005b): • To develop a compatible organizational infrastructure allowing CNO members to join their competences while supporting the operations and functions to be performed • To build up new management methodologies based on the most recent ICT developments, assuring high performance of the business activities with a minimum of human interac- tion ENTERPRISE NETWORKING: RELEVANT INITIATIVES IN EUROPE AND THE USA Several initiatives are currently being developed in the area of business networking in Europe and the USA, and also in Australia, Mexico, Canada, and more recently in Japan. As pointed out by Camarinha-Matos and Afsarmanesh (2003), the area of networked organizations/ enterprises is particularly active in Europe, and this can be somehow explained by the process of European integration. The European Union (EU), especially with the 6 th Framework, supports a large range of research projects in the area of enterprise net- ZRUNLQJ)LJXUHLOOXVWUDWHVWKHPDLQ³FOXVWHUV´ RUWDUJHWHGUHVHDUFKLQLWLDWLYHVLQWKLV¿HOGDV GH¿QHGLQ9()RUXP http://www.ve-forum.org): . (e.g., the Australian Wine and Brandy Corporation is the Australian government authority responsible for the promotion and regulation of Australian wine and brandy). Almost 90% of wineries,. attached and it is only available at a limited number of locations. The monthly breakdown of export declarations processed between September 2004 and July 2005 between the electronic and manual. capital cities and large regional centres; provid- ing online guides; and by providing an electronic simulation of ICS for new clients in order to build familiarity with the system. Broadband access