Understanding the Electronic Commerce Cycles of Change

Internet and electronic commerce (EC) technologies continue to create unprecedented capabilities. However, many organizations struggle with how to apply them appropriately. In this article, we describe a model of the effects of rapidly evolving EC capabilities on organizations. The model proposes that Internet and EC Technologies influence Competitive Environments and lead to new EC-based Business Strategies. The information demands of new Business and Organization Models designed to implement these strategies necessitate changes to Information Systems in firms. The model also proposes that two cycles of EC change exist. First is an internal cycle in which Business Strategies drive new Business and Organization Models, which in turn require new Information Systems capabilities. These capabilities enable the implementation of more new Business Strategies. Externally, new Information Systems requirements prompt new Internet and EC Technologies, which further influence the Competitive Environment; hence, second is the external cycle. Some researchers think that these cycles will not only continue, but also accelerate. This research provides a model and suggests avenues for further study of EC-invoked change. It also furnishes organizations with an understanding so that they can better position themselves to compete as EC capabilities are applied in their individual industries.

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