Service Sector Productivity: B2B Electronic Commerce as a Strategic Driver

Abstract

Information technology, and especially the Internet, are exerting an increasingly large and broad influence on industrial structures and measurement and evaluation of such fundamental concepts as risk, the value and benefits of intangibles such as intellectual capital, brand-related goodwill, and service sector productivity. Identifying the key value-adding factors underpinning productivity in the service sector has always been a significant challenge but with the advent of the WWW and the broad diffusion of Internet-enabled technologies and transacting modalities such as electronic commerce, this challenge has become even harder. In this paper, we compile a number of empirical case studies from industry where the use of electronic commerce has served as a strategic differentiator in pushing the service productivity envelop and in maximizing customer value added. Specifically, we examine the impact of electronic commerce on the process and petroleum industries. We profile in detail the role of electronic commerce as a strategy-enabling, infrastructural, path-breaking and general-purpose technology that if properly leveraged, can lead to radical improvements in both quality and productivity in services, thus helping re-define and re-shape the core structure and relationships in the industries it impacts. We end by identifying best practices in deploying electronic commerce as a strategic agent of change within and across firms and industries in the pursuit of increasingly higher levels of service sector productivity and quality.