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    International Journal of Operations & Production ManagementCritical success factors for B2B e commerce use within the UK NHS pharmaceutical

    supply chainAndrea J. Cullen Margaret Taylor

    Article in format ion:To cite this document:Andrea J. Cullen Margaret Taylor, (2009),"Critical success factors for B2B e#commerce use within the UKNHS pharmaceutical supply chain", International Journal of Operations & Production Management, Vol. 29Iss 11 pp. 1156 - 1185Permanent link to this document:http://dx.doi.org/10.1108/01443570911000177

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    Critical success factors for B2Be-commerce use within the UK

    NHS pharmaceutical supply chainAndrea J. Cullen

    School of Computing, Informatics and Media,University of Bradford, Bradford, UK, and

    Margaret TaylorSchool of Management, Bradford University, Bradford, UK

    AbstractPurpose The purpose of this paper is to determine those factors perceived by users to inuence thesuccessful on-going use of e-commerce systems in business-to-business (B2B) buying and sellingtransactions throughexamination of theviews of individuals acting in both purchasing andselling roleswithin the UK National Health Service (NHS) pharmaceutical supply chain.Design/methodology/approach Literature from the elds of operations and supply chainmanagement (SCM) and information systems (IS) is used to determine candidate factors that mightinuence the success of the use of e-commerce. A questionnaire based on these is used for primary datacollection in the UK NHS pharmaceutical supply chain. Factor analysis is used to analyse the data.Findings Thepaper yields ve composite factors that are perceived by users to inuence successfule-commerce use. System quality, information quality, management and use, world wideweb assurance and empathy, and trust are proposed as potential critical success factors. Of these,all respondents ranked information quality, system quality, and trust as being of most importance, butdifferences in the rankings between purchasing and selling respondents are evident.

    Research limitations/implications The empirical study is limited to a single supply network,and although the ndings seem intuitively to be of relevance to other sectors and supply contexts, thereremains an opportunity to test this through further research. There is also an opportunity to extend thesurvey research, particularly into the wholesaler organisations that operate in the sector of study.Practical implications The managerial implications that result from this research providepractical guidance to organisations in this sector on how to ensure that e-commerce systems for B2Bbuying and selling are used successfully.Originality/value This paper furthers knowledge and understanding in the elds of operationsmanagement, IS, and SCM, by suggesting potential determinants of successful e-commerce use in bothbuying and selling organisations within supply networks.

    Keywords Critical success factors, Electronic commerce, National Health Service,Supply chain management, Pharmaceuticals industry, United Kingdom

    Paper type Research paper

    The current issue and full text archive of this journal is available atwww.emeraldinsight.com/0144-3577.htm

    The authors are grateful to the Editor and the three anonymous reviewers for their constructivefeedback and advice in the preparation of this paper. They acknowledge the input of ProfessorAlan Muhlemann who co-supervised the doctoral project which led to the eldwork element of the research reported in this paper. Finally, they thank Bradford University School of Management for providing the studentship funding which supported those same PhD studies.



    Received 13 June 2008Revised 19 May 2009,17 July 2009Accepted 21 July 2009

    International Journal of Operations &Production ManagementVol. 29 No. 11, 2009pp. 1156-1185q Emerald Group Publishing Limited0144-3577DOI 10.1108/01443570911000177

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    IntroductionThere is little doubt that interest (both academic and in the world of practice) in supplychain management (SCM) initiatives generally, and in e-commerce more specically,continues to grow(Angeles andNath, 2007). As e-commercediffuses in practice, theneedfor supporting research in this area is indisputable, as is the requirement for deploymentguidance for practitioners (Angeles and Nath, 2007). However, despite the great impactof e-commerce in business management and the economy, research on e-commerce fromthe operations management (OM) perspective is so far scant (da Silveira, 2003, p. 211).By taking an OM perspective, this work addresses the identied dearth and increasesthe OM communitys understanding of the e-commerce phenomenon. In particular, theobjective of the research is to establish the factors that are perceived as inuencing thesuccessful on-going use of e-commerce by users working in both selling and buyingfunctions within the business-to-business (B2B) supply chain for pharmaceuticals in theUK National Health Service (NHS). These factors are suggested as potential criticalsuccess factors (CSFs) in this context.

    Easton and Araujo (2003) make a compelling argument for adopting a contingentapproach to the use of e-commerce in practice, arguing that particular circumstancesrelating to market and product characteristics must be taken into account whenmaking decisions about the adoption and use of e-commerce. This argues forindividual sector studies (such as ours) whereby these characteristics will not confoundthe development of knowledge nor create confusion for those implementing and usinge-commerce in practice. Although studies have investigated e-commerce within thepharmaceutical industry, these are still relatively few in number and have tended todeal with the design stage of systems (Joyce et al., 2006), sales and/or marketing(Lerer, 2002; Mukherjee and Nath, 2007; Rupert, 2002), and consumer online purchasing(Spain et al., 2001); they have also tended to be based outside the UK (More andMcGrath, 2002) or to concentrate on the strategic level (Kanungo, 2004). By contrast,

    this research focuses on the on-going use of e-commerce by buyers and sellers, in amajor UK supply chain.The paper begins by drawing on the results of a review of literature from the elds

    of OM, SCM and information systems (IS). This is used to provide an overview of thedenition and meaning of e-commerce. The review highlights gaps in existingknowledge which inform the research objectives for this study. The literature reviewalso leads to the generation of candidate factors thought to inuence the success of e-commerce and related systems. The extent to which these factors are perceived byusers to inuence the on-going use of e-commerce in the UK NHS pharmaceuticalsupply chain is examined by our empirical research, presentation of which follows. Weprovide an account of the methodology incorporating the development of the datacollection instrument, the choice of target sector, and the sampling procedures adopted.The results of the data collection process are analysed using factor analysis, and wegive details of the ndings. The results are discussed by reference to the DeLone andMcLean (2003) model of IS success and in relation to previous work in the elds of OMand SCM. The managerial insights which derive from our work are also highlightedwithin the discussion. We conclude by articulating our contribution to academicknowledge, summarising the practical and managerial implications of the researchand in recognition of the limitations of the research we make suggestions forfuture work.

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    Literature review E-commerce dened In this section the concept of e-commerceis discussedin order that its meaning, as used inthis research, may be understood. Such clarication is required because terminology isnot yet universal, and in the literature, terms such as e-business and e-commerce aresometimes used interchangeably. In general, however, e-business is regarded as anoverarching concept which encompasses the conduct of all business (both within andbetween organisations) using electronic means, e.g. the use of internet-based ICTs toconduct business [ . . .] within and between organisations (Hinton and Barnes, 2009,p. 331). By contrast, e-commerce refers only to activities (both internal and external) thatsupport business between organisations: electronic commerce [ . . .] [is] the use of electronic systems in the exchange of goods/services/information (Baron et al., 2000,p. 93); and can be categorised as either consumer-oriented or B2B oriented (Baron et al.,2000, p. 93). Using this classication, e-commerce is regarded as a sub-set of e-business,conned to activity which relates to exchanges between actual and potentialpartners both suppliers and customers (Easton and Araujo, 2003; Baron et al., 2000;Quaddus and Achjari, 2005).

    E-commerce involves all activities which support the trading process and not justthe actual buying and selling of products (Quaddus and Achjari, 2005). This denitionpoints the way to the disaggregation of e-commerce into a number of more specicactivities. First, whilst e-commerce refers to all electronic means of doing business[. . .] e-procurement, a sub-set of this, refers to all technology-based purchasingsolutions to simplify transactions within and between organisations (Bakker et al.,2008, p. 314). E-procurement can itself be broken down into more precise activitiesincluding e-ordering/e-maintenance-repair-operate (MRO), web-based enterpriseresource planning (ERP), e-sourcing, e-tendering, e-reverse auctioning/e-auctioning,and e-informing (Walker and Harland, 2008; Bakker et al., 2008). Furthermore,

    e-commerce includes not only e-procurement, but also other technologies and activitiessuch as e-marketplaces, electronic data interchange (EDI), and ERP/e-collaboration(Bakker et al., 2008).

    The concept of e-commerce is not new. In many ways, it represents a re-badging of anearlier notion that of inter-organisational information systems (IOISs). Such systems,which span the boundaries of actors within supply chains (Craighead et al., 2006) haveexisted since at least the 1970s (McIvor and Humphreys, 2004). So-called supply chainmanagement systems (SCMS) represent a sub-set of IOISs (Craighead et al., 2006), andare dened as instances of information technologies employed in interorganizationalcontexts to mediate buyer-supplier transactions (Subramani, 2004, p. 46). Thedenitions given for IOIS and for SCMS bear resemblance to those for e-commerce ande-procurement, respectively, suggesting that the distinction between general commerceand activities associated with buying and selling has long been recognised.

    Whilst there is a degree of consensus (and historical support) for the activitiesassociated with e-commerce, there remains confusion over whether it refers to allelectronic means of communication (Bakker et al., 2008) or to internet-based systemsonly (Hinton and Barnes, 2009; Schoder and Madeja, 2004). As noted above, IOIS havebeen used to link organisations to their customers and/or suppliers since the 1970s(McIvor and Humphreys, 2004). In the early days, these tended to take the form of dedicated private networks such as EDI. More recently however, the extended reach



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    and accessibility of the internet has led to the development and use of more exible andless expensive approaches the Internet represents a powerful technology forcommerce and communication at the buyer-supplier interface (McIvor andHumphreys, 2004, p. 241). Perhaps, as time moves on, it will be easier to delineatethe electronic technologies associated with e-commerce, but for now the debate seemsunresolved. Therefore, for the purposes of this work, we have adopted the most generaland inclusive denitions from the preceding discussion in order not to unnecessarilyrestrict the scope. The term e-commerce is used hereafter to include all forms of transaction between organisations and to cover all electronic means by which suchinteraction is facilitated.

    There are many potential sources of confusion associated with investigatinge-commerce use; unless acknowledged, addressed and (where possible) eliminated theseissues will reduce the impact of research that is undertaken. These sources of confusionderive particularly from the different stages that occur when adopting andimplementing technology, and from the denition of success that is used. Thefollowing sections consider these issues in the context of this research and demonstratehow knowledge gaps, which our work then address, derive from them.

    Stages in the adoption and use of e-commerceThe life cycle of integrated-enterprise system implementation has been separated into thephases of design, test, realize,and improve (Ho andLin, 2004). This breakdown is relevanthere because it separates the on-going use of the system from the earlier moreproject-oriented design, buy and install phases. During the nal improve phase, whichruns the system from the going-live point and is thus indeterminate in duration, systemperformance is monitored and ne-tuned, and the associated businesses processes areadjusted as necessary. Taking a similar perspective, Loh and Koh (2004) break down theimplementationprocess for an ERPsysteminto fourphases,beginning witha chartering

    phase which deals with the decisions prior to the selection of a system and with planningand scheduling. The project phase consists of system conguration and rollout, and isfollowed by the shakedown phase during which the implementation moves fromgoing-live to normaloperation. Finally, andof most relevance to this work, is the onwardand upward phase which lasts until system replacement or upgrade and incorporatesongoing maintenance, enhancement of the system and of related business processes.These two studies are technically oriented and do not adopt a wider use perspective.However, and despite their differences in the precise denitions of life cycle phases, theyare useful in delineating the stages of implementation of (e-commerce) systems. Mostimportantly, they acknowledge the existence and importance of the phase(s) of systemimplementation that occur post going-live, to which this research relates.

    Most previous research on e-commerce (or related system) adoption has tended tofocus on the earlier project-like phases of implementation, which are of determinateduration, rather than on the later phase once the system has been installed and is inregular use. They generally fail to deal with the post installation infusion stage of Internet-enabled commerce (Rosenzweig and Roth, 2007, p. 1313). Examples of suchOM-based studies include investigation of the contextual factors that inuence thedecision to adopt or not, and the extent of adoption of particular technologies in the UKhealthcare sector (Bakker et al., 2008); the factors that inuence the decision to adoptinternet-based processes for e-transactions by service rms (Tsikriktsis et al., 2004) and

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    the differences between early, late and non-adopters of online reverse auctions(Schoenherr, 2008). That is not to say that the on-going use phase has been neglectedcompletely: in work that considers not only the initial implementation of a newtechnology (ERP in this case), but also the on-going effects of its use, Bendoly andSchoenherr (2005) suggest that ERP is notsimply a tool that providesa single output butrather an infrastructure that supports other information-related capabilities of a rm.

    Issues around the denition of e-commerce successIt is important tobeclear onwhatwe meanbysuccess as it relates to e-commerce research,for without such clarity it is not feasible to identify factors that impact on it or to inuenceits achievement in practice. However, the preponderance of studies that focus on thestart-up phases of system implementation as opposed to its on-going use is an issue thatspillsover intotheproblemof deningsuccess.Wheree-commerce implementationis seenas a project then relatively standard success metrics may be applied, such as on-time,within-budget completion; the meeting of system requirements; and system quality(Espinosa et al., 2006). Nevertheless, even in this case, it is not straightforward: Loh andKoh (2004), for example, fail to dene successful implementation, instead seemingimplicitly to regard success as lack of failure.

    Once we extend our consideration to on-going system use the process becomes morecomplex, and there is a need to more clearly delineate technical achievements from thebusiness benets that presumably motivated the decision to adopt in the rst place. It isapposite then, once we have considered success from a technical IS perspective, to takea top-down approach which considers performance and success as these relate to SCM,before looking at the business benets of e-commerce in more detail. We develop thesepoints in successive paragraphs below.

    From the IS and general management literature and specically in the context of e-commerce, user satisfaction has been proposed as a measure of success (Zhang et al.,2003); whilst metrics such as numbers of customers, web site visitors, and page viewsare dismissed as mere trafc statistics and hence meaningless as indicators of potential protability (Porter, 2001; Reichheld and Schefter, 2000). In the IS literaturethere is a considerable body of work that considers how IS may be evaluated. Withoutdelving too extensively into this literature, which is essentially technical in perspective,it behoves us to acknowledge the importance accorded to the DeLone and McLean ISsuccess model. This was originally developed in 1992, but was later revised to take intoaccount the growth in e-commerce (DeLone and McLean, 2003). Widely cited and used,it evaluates IS success using six constructs:

    (1) System quality (adaptability, availability, reliability, response time, andusability).

    (2) Information quality (completeness, ease of understanding, personalisation,relevance, and security).

    (3) Service quality (assurance, empathy, and responsiveness).(4) Use (nature of use, navigation patterns, number of site visits, and number of

    transactions executed).(5) User satisfaction (repeat purchase, repeat visit, and user surveys).(6) Net benets (cost savings, expanded markets, incremental additional sales,

    reduced search costs, and time savings).



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    The rst three constructs represent dimensions which reect characteristics of theIS itself, whilst the latter three represent dimensions which reect (successful) use of the IS. Thereby these measureable constructs span the implementation of a systemfrom its development, through to its use and nally to the resultant impact of its use onthe individual and the organisation. The latter impacts represent:

    [. . .] the most important success measures, as they capture the balance of positive andnegative impacts of e-commerce on our customers, suppliers, employees, organizations,markets, industries, economies and even our societies (DeLone and McLean, 2003, p. 25).

    Moving from the IS perspective to the supply chain context there a number of approaches for the measurement of supply chain performance which take aprocess-based view of individual supply chain stages (Gunasekaran et al., 2001, 2004;Theeranuphattana and Tang, 2008; Beamon, 1999). Reduced costs of operations,lowered inventory, reduced lead times, increased customer satisfaction, increasedexibility, improved cross-functional communication, and remaining competitive areidentied as key motivators (and hence success measures) within SCM (Tummala et al.,2006). Arguably these are primarily inter-rm targets, whereas the achievement of supply chain integration which applies across functions and companies is an aspirationof both managers and researchers (Godsell and van Hoek, 2009), thereby implicitlyacknowledging suchintegration as a metricof successfulSCM. In this vein, Harland et al.(1999) extend the scope of supply chain performance through four levels beginningwithin therm boundary, througha dyadic relationship, to an inter-organisationalchainand nally to an inter-organisational network. Other studies have similarly consideredthe notion that integration across organisational boundaries may be a mark of successful SCM (Croom, 2005; Harland et al., 2006). Nevertheless, there is little evidenceof measured benets of such integration (Harland et al., 2006, p. 746). Indeed, in workwhich derives strongly from study of practice, it is interesting to note the apparent

    paradox that exists between the widespread use of certain sales and nancial practicesin order to meet short-term functional targets at the expense of supply chain integration(Godsell and van Hoek, 2009). This again serves to demonstrate the complexity of thenotion of success in this domain, the competing pressures on members of the supplychain and the consequent need for new approaches to facilitate the achievement of goodperformance, however this is dened.

    We now consider the benets of e-commerce to the individual business. McIvor andHumphreys (2004), for instance, identify benets of e-commerce which include reducedcosts (of purchased products and of procurement processes), reduced acquisition andorder fullment times, and improved inventory management. These same factors areidentied as having the potential for improvement as a result of the use of web-basedB2B procurement/purchasing systems (WBPS) (Baron et al., 2000) who also identify thepotential to reduce the number of errors associated with procurement. Power (2005)providesa compelling account of the process efciency gains to be obtained from the useof B2B information technology (IT) over manual systems, however, in seeking to explorethe links betweentheextent of implementation of (traditional) e-systems (such as EDI) inthe supply chain and performance, he discovered a stark lack of attention paid toperformance measurement in this context. Thus, whilst the benets of e-systemimplementation are widely espoused, it transpires that this is one area of the literaturethat appears strong on rhetoric, but weak on weight of real evidence (Power, 2005, p. 99).

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    So, when we discuss success and performance in the context of implementinge-commerce are we to assume that organisations are seeking purely technical success,are they aiming for wider business and organisational benets or are they pursuing theseemingly more altruistic holy grail of supply chain integration benets as suggestedabove? Taking Powers (2005) study of Australian e-system users as an example of recent empirical work, then performance is measured by changes in operationaloutcomes relating to such issues as costs, inventory, productivity, quality, cycle times,etc. and in bottom-line outcomes relating to customer satisfaction, service quality,sales and net prot. There is little emphasis on integration in these outcome measures.

    Turning to another recent study, we nd further evidence that measures todetermine the impact of e-commerce are inconclusive and in this case varybetween technical measures (such as page hit rates, page view duration, or theconversion rate from viewings to orders) and strategic assessments relating tothe rms goals and competitive position which reect an organisational perspective(Quaddus and Achjari, 2005). A variety of approaches to e-business performancemeasurement have also been found in practice but they point towards a common aim tolink the performance of e-business to organisational objectives (Hinton and Barnes,2009). This suggests that e-business is not regarded in practice as something thatoperates in isolation and that its adoption and on-going use must be linked to moregeneral organisational and supply chain performance objectives.

    Summarising this debate is difcult because consensus is yet to emerge. It is clearthat success can be measured from a number of perspectives including technical,organisational and supply chain. Of these, and hardly surprising, evidence suggeststhat organisational benets are the primary driver for e-commerce implementation.It follows that the most pertinent success measures in practice will relate to the bottomline. It is this perspective that is used primarily in our research where we seek usersviews of the factors thought to inuence the successful on-going use of e-commerce. It is

    also pertinent at this point to stress that in the UK NHS, which forms the focus of ourstudy, the use of e-commerce by the pharmaceutical departments is not optional(Purchase and Supply Agency (PASA), 2004). Given this lack of discretion overwhether to use a system or not, a number of success measures are not relevant. Thus, inour case, the perceived usability of the system may be more indicative of success thanits use per se. Hence, the preceding discussion on aspects of e-commerce success bringsus back to the DeLone and McLean (2003) model for IS success which incorporates bothtechnical and organisational benets. It is for this reason that we also return to it laterin the discussion of our results.

    Devloping ideas on the meaning of success is a rst step in managing e-commerceuse but there is a subsequent requirement to develop means by which performancemay be managed. Appropriate performance measures need to be developed in orderthat managers in practice may monitor the performance/success of their use of suchsystems (Hinton and Barnes, 2009). Furthermore, companies need to know the CSFs inimplementing e-procurement strategies, processes and systems (Puschmann and Alt,2005, p. 123) and from an academic perspective there is a call for more comprehensivemeasures [ . . .] [for e-commerce] [. . .] that can accommodate multiple criteria forsuccess (Quaddus and Achjari, 2005, p. 128). The development of potential CSFsproposed as part of this research will contribute to meeting these identied shortfalls inexisting knowledge and practice.



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    Having noted the difculties associated with dening and measuring success in thiseld we now turn to discussion of previous studies that have sought to investigatethose factors that are thought to inuence its achievement and that provide motivationfor the particular objectives and approach of our research. This section leads to thesubsequently more detailed process by which a list of candidate success factors isgenerated for empirical testing.

    Motivation for research into e-commerce success factorsBaron et al. (2000) identify a number of factors that they argue impact on theimplementation of WBPS. These include issuesassociatedwith security, technologyandoperations and the need to integrate with existing business processes. Further factorsthat are more managerially oriented and which they argue require attention are theneeds to make apparent the benets to all parties; for supplier co-operation; and to takeaccount of the differing levels of technological expertise amongst employees. The mostcritical success factor was cited as the need to measure and reect the value for the user

    in order to foster the correct internal perception of such systems. This emphasis on theuser begins the justication of our approach, which is further explored below.In work investigating the use of the internet as a purchasing medium in the parallel

    world of business-to-consumer transactions, Olsen and Boyer (2003) explicitlyacknowledge the importance of the views and preferences of the user. Indeed, theymotivate their own research on the premise that end-users views and beliefs shouldimpact how technology is adopted and implemented (Olsen and Boyer, 2003, p. 226).Their empirical research leads them to nd three categories of online purchasing users(very positive, indifferent, and uncomfortable) and they conclude that companieswishing to sell successfully using the internet must address the differing needs of eachgroup. Furthermore, Olsen and Boyer argue that in the context of use of the internet forpurchasing, (as opposed to more traditional IT systems), the issue is not whether or not

    to use the system, but more a matter of degree. This suggests therefore that there ispotential to affect the level of use, arguably a measure of success, by the appropriatedesign and management of such systems based on understanding of the views of theusers. Our work contributes to the development of such understanding.

    Angeles and Naths (2007) study of B2B purchasing rms found CSFs fore-procurement clustered around three key areas, namely supplier and contractmanagement; end-user behaviour and e-procurement business processes; andinformation and e-procurement infrastructure. They also found barriers which couldarguably be dened as CSFs but framed in the inverse, including factors relating tolack of system integration and standardization, immaturity of e-procurement-basedmarket services and end-user resistance.

    In common with Olsen and Boyer (2003) and Angeles and Nath (2007) consideredthe implementation and use of e-procurement based on the perceptions of only buyingagents, albeit with different units of analysis (i.e. individuals vs rms, respectively).Angeles and Nath specically argue for research which investigates the perspectives of the supplying rm. Trading is a process involving both buying and selling agents, butis further complicated because these dyadic relationships occur at different stages inthe supply chain and represent different business functions (e.g. manufacturers,wholesalers, and end-users). Therefore, our study, which considers the views from bothbuyers and sellers at different stages in the supply chain breaks new ground. A further

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    area of novelty is that in contrast with much of the preceding work on e-commercewhich has tended to focus on the supply of indirect and commodity items (Angeles andNath, 2007; Baron et al., 2000; Olsen and Boyer, 2003) our research considers a chain forthe supply of a direct and strategic commodity, i.e. for the pharmaceutical productswhich enable the delivery of the UK NHS. The need for this type of work is stressed byAngeles and Nath (2007, p. 114) who argue that the implementation issues may differsignicantly once they start procuring strategic or direct goods.

    Baron et al. (2000) argue that the costs of processing the smaller order sizes that aretypical of the purchase of indirect items/MROs make this a fertile area for the use of supposedly more efcient e-commerce approaches. Puschmann and Alt (2005)identied CSFs for the use of e-procurement for indirect material supplies including theneed for an overall procurement strategy and organisation, alignment of e-procurementstrategies with the procurement process and with other relevant systems, and the needto work with suppliers from an early stage. Most crucially, Puschmann and Altacknowledge that many important success factors are non-technical in nature.Emerging from a qualitative research design, which they say is typical of other earlywork on the factors that inuence the success of e-commerce implementation, theirndings are limited. They argue strongly for the need to extend work in this area, andin particular, for studies which move away from a qualitative research approach andhave the validity and reliability of empirical success factor research. This call is echoedby Bendoly and Schoenherr (2005) who acknowledge that the informal nature of theirown empirical work restricts the validity of their ndings, and argue for rigorous,extensive and formal research by which factors that inuence the success of e-commerce use may be determined.

    The notion of CSFs is helpful in this endeavour. Thus, CSFs are the indispensablebusiness, technology, and human factors that help to achieve the desired level of organizational goals (Turban et al., 2000, p. 310) or the limited number of areas in

    which results, if they are satisfactory, will ensure successful competitive performancefor the organization (Rockart, 1979, p. 85). CSFs represent the areas that shouldreceive constant attention in an organisation as they are key for it to ourish (Rockart,1979) and once identied take the guesswork out of identifying successful andunsuccessful organisations (Chen, 1999).

    The CSF approach has previously been used to investigate OM topics such asquality (Antony et al., 2002; Badri et al., 1995; Saraph et al., 1989) and supply chainagility (Power et al., 2001). Further, the foci of previous studies have ranged fromnational (Antony et al., 2002), industry (Chen, 1999), organisational (Rockart, 1979;Daniel, 1961; Shah and Siddiqui, 2006), business unit (Badri et al., 1995) to anindividual sub-section within an organisation (Turban et al., 2001). The varietyevident in previous work suggests that a CSF approach is applicable in many

    situations including ours, which investigates a specic supply chain in a singleindustry sector.

    Research objectiveThe objective of this research is to establish the factors that are perceived asinuencing the successful on-going use of e-commerce by users working in both sellingand buying functions within the B2B supply chain for pharmaceuticals in the UK NHSsupply chain. These factors are posited as potential CSFs.



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    MethodologyPrevious work for determining success factors has followed a two-stage processwhereby candidate factors are derived from the literature and these are subsequentlyeld tested using either a postal questionnaire (Antony et al., 2002; Soliman and Janz,2004), multiple case studies (Fairchild et al., 2004), or a single case study (Phan andStata, 2002). In order to address the research objective of this study a similar, butextended, two-stage process was undertaken, as summarised in Table I and describedas follows.

    Stage 1a: methodology for the generation of candidate success factorsIn the rst stage, following other similar research endeavours (Loh and Koh, 2004) a listof potential success factors was generated from the literature. Computer-basedbibliographic search engines were used to seek out previous research from the elds of OM, SCM, and IS. Within those elds, the search was guided by a keyword structurewhich sought papers that related to information system and e-commerce adoption,implementation, use, andsuccess. Thesearch spannedsectors,countries and technologytypes in order to have the widest possible coverage and to generate a comprehensive listof candidate factors. The keywords, titles and abstracts of potential papers formed therst lter and, where these suggested that a paper would be of relevance anduse, the fullpaper was accessed. The ndings of the literature search and review are summarised inTable II.

    Stage 1b: questionnaire development The questionnaire was developed iteratively, generated initially from theliterature-derived candidate factors. In order to increase the practical relevance of the work and to ensure that issues perceived by practitioners were considered we then

    Stage Source of data Form of analysis Purpose of analysis

    1a Literature Literature search (including IT, OM, ande-commerce strategy)

    Denition of research objective/questionsIdentify benets for supply chainsales and purchaseIdentify success factors for thesupply chain, technology use

    1b Three focusgroups

    NudistCross-group analysisWithin-group analysis

    Generate propositionDevelop hypothesesDevelop questionnaireIdentify and build theory

    2 Questionnaire K/S testDescriptive statisticsCorrelationsMann-Whitney testKruskal-Wallis testFactor analysis

    Test hypothesesDiscover dimensions of supplychain benetsDiscover dimensions of supplychain successDevelop perceptions of CSFs forB2B e-commerce sales andpurchasesGain insight into the supply chainof the NHS

    Table I.Summary of research


    UK NHSpharmaceutical

    supply chain


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    Candidate success factor Source

    Security of the system and information DeLone and McLean (2003), Fairchild et al. (2004),Harland et al. (2007), Jun and Cai (2003), Phan andStata (2002), Soliman and Janz (2004) andTurban et al. (2000)

    Condence in accuracy of information givenabout delivery details

    Al-Mashari (2002) and Jones and Beatty (2001)and Vijayasarathy and Tyler (1997)

    Ease of use of the system Al-Mashari (2002), DeLone and McLean (2003), Jones and Beatty (2001) and Turban et al. (2000)

    Condence and faith (trust) between transactingorganisations

    Fairchild et al. (2004), Harland et al. (2007),Reichheld and Schefter (2000), Soliman and Janz(2004) and Turban et al. (2000)

    Quality information ow accuracy of deliverytimes, stock levels, out of stock items

    DeLone and McLean (2003), Fairchild et al. (2004),Gunasekaran et al. (2004) and Jones and Beatty(2001)

    Seamless integration, i.e. not having to print and


    Jones and Beatty (2001), McIvor et al. (2000),

    Murphy and Daley (1999) and Turban et al.(2000)More efcient than alternatives Baker et al. (2001), DeLone and McLean (2003),Hawkins and Prencipe (2000), and Kaefer andBendoly (2004)

    Sustainable without having to replace andupgrade regularly

    Soliman and Janz (2004)

    Standardised system Messerschmitt (2000)Timely and efcient information ow reliabilityin real time

    Kaefer and Bendoly (2004), and Kehoe andBoughton (2001b)

    Cheaper interaction and transaction processingthan alternatives

    DeLone and McLean (2003), Jones and Beatty(2001), Kaefer and Bendoly (2004), Motwani et al.(2000), Pisanias and Willcocks (1999) andVijayasarathy and Tyler (1997)

    Supplier or customer acceptance of electronicprocedures

    Al-Mashari (2002), DeLone and McLean 2003,Evans and Wurster (1999), Murphy and Daley(1999), Phan and Stata (2002) and Turban et al.(2000)

    Access to a large number of suppliers orcustomers

    Evans and Wurster (1999)

    Existence of a trustworthy intermediary Emiliani (2000) and Ranchhod and Gurau (1999)Existing relationship with supplier or customer Al-Mashari (2002), McNealy (2001), Min and Galle

    (1999) and Phan and Stata (2002)Solid agreement between organisations (e.g.written contract)

    Al-Mashari (2002) and Evans and Wurster (1999)

    When using a web site, display of information toconvey trust and knowledge

    Evans and Wurster (1999), Phan and Stata (2002)

    Management support Al-Mashari (2002), Jun and Cai (2003),

    Motwani et al. (2000), Soliman and Janz (2004) andTurban et al. (2000)Knowledge of perceived benets DeLone and McLean (2003) and Murphy and

    Daley (1999)When using a web site, display of importantlegislation

    Rothstein (2001)

    Large purchasing or sales volume Beamon (1999) and DeLone and McLean (2003)Relevant to company strategy Al-Mashari (2002) and Cagliano et al. (2003)

    ( continued )

    Table II.Factors and issuesassociated withe-commerce use



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    sought the views of purchasing and sales professionals. This was achieved through a

    series of three focus groups in which 14 participants from a variety of sectors,including NHS pharmacy, were asked to give their views on how electronic B2B salesand purchases could be undertaken successfully and to suggest what they regardedas the most important success factors (Cullen and Webster, 2007). The ndings fromthe focus groups conrmed the original literature-derived factors but suggested thatthe numbers of page views, registered users and web site hits were applicable only toselling transactions. They further identied three new items for all transactions,namely display of current contract price, IT technical support, and largesales/purchase value, and two new ones for purchasing transactions only, namelyinitial referral to supplier and ability to reduce inventory. These items wereincorporated into the questionnaire.

    As it was intended to gather data from both purchasers and sellers, two different, but

    mirrored, versions were required type 1 was intended for people involved in a salesfunction, i.e. manufacturers and wholesaler sales; type 2 was intended for peopleinvolved in a purchasing function, i.e. NHS and wholesaler purchases. The academicresearch team worked together to produce nal drafts for each type, which wassubsequently piloted with members of the target population, before being prepared innal form, taking into account feedback from the pilot study. The items in thequestionnaire, as summarised in Table III, sought to gather data on respondentsopinions of factors that contribute to successful e-commerce use. The factors listed onthe two questionnaire types varied slightly to reect the different target audience.However, of the 31 and 32 factors,29 were common. These common factorswere used forfurther analysis in this study. A ve point Likert scale was used to record therespondents views of the importance of each item, anchored by 1, not at all importantto 5, very important.

    Stage 2: empirical methodologyOur investigation concerned the NHS in the UK, which is a national organisationconsisting of four semi-autonomous regions covering, in order of decreasing size,England, Scotland, Wales, and Northern Ireland (NHS, 2009). For practical reasons, andbecause the NHS in Northern Ireland is the smallest of the four regions, it was notincluded in the study. Taken as a whole, the NHS has many suppliers of diverse

    Candidate success factor Source

    The ability to purchase or sell products at acheaper price

    Baker et al.(2001), Emiliani (2000), Emiliani andStec (2002), McNealy (2001), Porter (2001),Reichheld and Schefter (2000)

    Ability to convey (on-line) a deep understandingof your business

    Evans and Wurster (1999), Phan and Stata (2002)

    Buying or selling products of known brands Davis et al. (1999), Kung et al. (2002) and Rowlatt(2001)

    When using a web site, display of association recognisable bodies

    Kanter (2001)

    When using a web site, number of page views DeLone and McLean (2003) and Siegel (1999)When using a web site, number of registered users DeLone and McLean (2003)When using a web site, number of hits DeLone and McLean (2003) and Siegel (1999) Table II.

    UK NHSpharmaceutical

    supply chain


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    Type 1 questionnaire for sales respondents Type 2 questionnaire for purchasing respondents

    If receiving orders for pharmaceuticalselectronically, how would you evaluate thefollowing factors in contributing to successfule-commerce use

    If placing orders for pharmaceuticalselectronically, how would you evaluate thefollowing factors in contributing to successfule-commerce use

    1 Security of the system and information Security of the system and information2 Condence in accuracy of information given

    about delivery detailsCondence in accuracy of information givenabout delivery details

    3 Ease of use of the system Ease of use of the system4 Condence and faith (trust) between transacting

    organisationsCondence and faith (trust) between transactingorganisations

    5 Display of current contract price correct price ischarged

    Display of current contract price correct price ischarged

    6 Quality information ow accuracy of deliverytimes, stock levels, out of stock items

    Quality information ow accuracy of deliverytimes, stock levels, out of stock items

    7 Seamless integration, i.e. not having to print andre-input

    Seamless integration, i.e. not having to print andre-input

    8 More efcient than alternatives More efcient than alternatives9 Sustainable without having to replace and

    upgrade regularlySustainable without having to replace andupgrade regularly

    10 IT technical support IT technical support11 Timely and efcient information ow

    reliability in real timeTimely and efcient information ow reliability in real time

    12 Cheaper interaction and transaction processingthan alternatives

    Cheaper interaction and transaction processingthan alternatives

    13 Customer (or supplier) acceptance of electronicprocedures

    Supplier (or customer) acceptance of electronicprocedures

    14 Standardised system Standardised system15 Access to a large number of customers Access to a large number of suppliers16 Existence of a trustworthy intermediary Existence of a trustworthy intermediary17 Existing relationship with customer Existing relationship with supplier

    18 Solid agreement between organisations (e.g.written contract)

    Solid agreement between organisations (e.g.written contract)

    19 When using a web site, display of information toconvey trust and knowledge

    When using a web site, display of information toconvey trust and knowledge

    20 Management support Management support21 Knowledge of perceived benets Knowledge of perceived benets22 When using a web site, display of important

    legislationWhen using a web site, display of importantlegislation

    23 Large sales volume Large purchasing volume24 Relevant to company strategy Relevant to company strategy25 The ability to sell products at a cheaper price The ability to purchase products at a cheaper

    price26 Ability to convey (on-line) a deep understanding

    of your businessAbility to convey (on-line) a deep understandingof your business

    27 Selling products of known brands Buying products of known brands28 When using a web site, display of association recognisable bodies

    When using a web site, display of association recognisable bodies

    29 Large sales value Large purchase value30 When using a web site the number of page views Initial referral to supplier (e.g. personal

    recommendation)31 When using a web site the number of registered

    usersAbility to reduce inventory use information asa substitute

    32 When using a web site the number of hits

    Table III.Summary of items in thequestionnaires



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    products located principally within, and throughout, the UK. It spends more than17 billion annually on goods and services (PASA, 2008a), of which NHS hospitals inEngland spend around 2.2 billion on pharmaceuticals, including around 1.7 billionon branded pharmaceuticals (PASA, 2008b). As it represents a major element of annualpurchasing spend, the supply of pharmaceutical products within the NHS was chosenfor investigation.

    As shown in Figure 1, the NHS pharmaceutical supply chain consists of organisationsacting in different buying and selling capacities, i.e. NHS hospitals (buyers),pharmaceutical wholesalers (buyers and sellers) and pharmaceutical manufacturers(sellers). Using this supply chain as the unit of study facilitated investigation of the viewsof people acting inboth buyingandsellingroles, withina linked chainof supply consistingof enterprises acting in different capacities. This avoids a limitation of previous researchwhereby: most research studies in SCM have not genuinely explored connected chainsof dyadic relationships, and have actually, in the main, been surveys of focal rms(Harland et al., 2007, p. 1,250).

    The empirical research involved primary data collection using the questionnaire,mailed to individuals working in sales and purchasing functions in organisationswithin the UK NHS pharmaceutical supply chain.

    Population, sample design and sampling procedure NHS participants . At the timeof this study (2003), the NHS was structured intoa numberof regional trusts, with 270 hospital trusts in England, 14 in Wales and 16 in Scotland(NHS, 2003). The three regions of the UK NHS that we investigated all use similarpurchasing procedures for pharmaceutical products, and according to the NHS PASA

    Figure 1.General pharmaceutical

    supply network showingthis studys supply chain

    (in italic font)

    Basic chemicalmanufacture

    Distribution andre-packaging


    Distribution andre-packaging inc.Pharmaceutical


    Health care, chemists/ retailers inc. NHS

    health care services

    UK NHSpharmaceutical

    supply chain


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    pharmaceutical e-commerce project manager at that time, hospital trusts in NHS Walesand NHS Scotland were similar enough in respect of the context of this research to berepresentative of trusts in NHS England. Therefore, a decision was made to include allpharmaceutical purchasing departments within NHS England in the main study, and touse all those in the other two regions for the pilot.

    The NHS pharmaceutical purchasing process is complex and evolving. IndividualNHS hospitals belong to a specic trust, and there can be any number of hospitalsoperating within a particular trust. In some cases, individual hospital pharmacies insidetrusts are responsible for purchasing pharmaceuticals directly from eithermanufacturers or wholesalers. In other trusts one, or a group of, pharmaceuticalpurchasing department(s) act for all hospitals. For the purposes of this research accesswas needed to the people within the NHS who carry out a direct purchasingfunction whether within individual hospitals (of which there were 1,066 listed inEngland at that time), hospital pharmacies or trust purchasing departments. Noup-to-date list of individual purchasing hospitals/departments within each trust existed

    at that time, and a decision was made to invest time in creating an accurate database toreect the target population. This was achieved through a painstaking process usingNHS web sites, the chemists and druggists directory listings (Dotpharmacy, 2002) andtelephone calls to each NHS trust. The resulting database contained details of 209purchasing units in NHS England and a total of 28 units for NHS Wales and NHSScotland combined.

    Manufacturing and wholesale participants . We used the SIC coding system, whichclassies businesses by their main type of economic activity. The classication provides aframework for the collection, presentation and analysis of data about industry (ONS,2002). The sample frame used to select manufacturers and wholesalers of pharmaceuticalproducts used the standard framework afforded by SIC classication, selectingpharmaceutical wholesalers (SIC 51.46) and pharmaceutical manufacturers (SIC 24.4); all

    registered as trading within the UK. Wholesaler and manufacturer addresses were takenfrom the nancial analysis made easy database (van Dijk, 2003) and checked againstentries in the Chemist and Druggists Directory 2003 (Dotpharmacy, 2002). This processyielded a total of 677 pharmaceuticalwholesalers and379 pharmaceutical manufacturers.Of these, a number were selected at random to pilot the questionnaires 35 wholesalesellers, 35 wholesale purchasers and 30 manufacturers.

    A complete database of the 1960 cases was compiled including the NHSparticipants, and the manufacturers and wholesalers of pharmaceuticals, togetherrepresenting the population for the study. Thereafter, the sampling procedure wasconsidered. The arguments for sample versus census suggest that a census isfeasible when the population is small, and necessary when the population is highlyvariable (Cooper and Schindler, 2003). In this case, it was decided to adopt the censusapproach and to survey all the organisations within the database. This decision wasreached after consideration of the following factors:

    . The size of the NHS population suggests that a census is feasible.

    . Manufacturers and wholesalers of pharmaceutical products exhibit a diverserange of activities.

    . The pharmaceutical sector is highly fragmented with many small, and only afew, larger organisations.



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    . Potential non-response means that a larger-than-required sample should beselected.

    . The type of between-groups statistical analysis that would be needed to analysethe results would require that the number of cases be separated into severalsmaller samples.

    . The total number of organisations in the database was not considered to beprohibitive in termsof theresourcesneededandfacilities available fora postalsurvey.

    In the nal stage of preparation for the main survey phase, eight NHS England trustswho declined to participate in the study were removed, as were the 100 manufacturerand wholesaler organisations and the 28 NHS Wales and Scotland trusts used in thepilot. The nal database for the main study had a total of 1,824 cases.

    Response ratesThe pilot study comprised 128 questionnaires (28 NHS, 35 wholesaler sales, 35

    purchasing wholesaler and 30 manufacturing). From this, ten completedquestionnaires were returned, representing a response rate of 7.8 percent. Theseresponses, together with accompanying feedback from the respondents informed thepreparation of the nal versions of the questionnaire to be used for the main study.Subsequently, a total of 153 usable questionnaires were received, representing anoverall response rate of 8.34 percent. Breaking this down by unit of analysis, the NHSaccounted for approximately 50 percent of the total responses received with a responserate for this sector of 38.31 percent. As shown in Table IV, response rates in the othersectors ranged from 2.80 to 8.34 percent.

    Our overall response rate for NHS buying respondents was 38.3 percent(77 respondents) and for all buying respondents was 11.27 percent (95 responses).This compares favourablywith other surveys that haveconsidered only thebuyingside,e.g. Angeles and Nath (2007) (185 respondents, 2.64 percent responserate) andOlsenandBoyer (2003) (416 respondents 39.8 percent response rate). Given that our survey wasunusual in polling the views of both buying and selling respondents, we consider oursample size and response rate to be satisfactory, albeit lower than we would have hoped.Without articulating the challenges to which they refer, Angeles and Nath (2007, p. 106)argue that their response (2.64 percent) represents what they consider to be aconvenience sample considering the challenges of data gathering for a study of thisnature. Where individual group sample sizes are low (e.g. wholesaler buyers with


    of responsesFinal sample

    sizePercentage of


    of total

    NHS England purchasers 77 201 38.31 50.33Wholesaler purchasers 18 642 2.80 11.76Total purchasers 95 843 11.27 62.09Wholesaler sales 31 642 4.83 20.26Pharmaceuticalmanufacturer sales 27 349 7.74 17.65Total sales 58 991 5.85 37.91Total 153 1,834 8.34 100

    Table IV.Numbers and ratesof response for the

    main survey

    UK NHSpharmaceutical

    supply chain


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    18 responses representing a 2.8 percent response rate), we acknowledge the need for carein interpreting the results of our study and in generalising from the ndings.

    The sample was tested for non-response bias using the Mann-Whitney statisticaltest across a number of variables to establish whether signicant differences existedbetween early and late responses. The assumption behind conducting this test is thatlate respondents will be more like non-respondents than early ones (Weber andKantamneni, 2002) and that therefore comparisons between late and early responsesmay be used to establish the presence or otherwise of non-response bias. No signicantdifferences were found.

    Data analysis and discussionAs discussed earlier, a systematic two-stage approach has been used in this researchfor the identication of factors perceived to inuence successful on-going use of e-commerce for B2B buying and selling transactions. Using a similar approach, afterproducing an underlying structure of success using factor analysis, Chen (1999) then

    investigated this between different respondent groups to determine differences inperceptions held by each group. The same approach to data analysis is adopted here.Initially, factor analysis is used to discover the key underlying factors which areperceived by respondents, and these are then discussed in relation to the DeLone andMcLean (2003) model of information system success. Thereafter, analysis of theresponses from the four different groups within the sample is undertaken to establishwhether differences exist in perceptions between them. Throughout the discussionmanagerial implications are highlighted as appropriate.

    Factor analysisFactor analysis is a technique that can be used to simplify data, by reducing the numberof items to demonstrate the presence or otherwise of underlying constructs. This techniquecan therefore be used to uncover any interdependencies between items of interest (WeberandKantamneni, 2002), andwasconsideredsuitable for examining perceptionsof successwithin this study. Inorder to conduct factoranalysis, items should benormallydistributed(Field, 2000),and to test the normality of the data, theKolomogorov-Smirnov (K/S)statisticwas calculated for each of the respondent groups over all variables. For all groups acrossthese tests, the signicance level (two tailed) for the majority of the variables was smallenough to reject the assumption of normality (i.e. p , 0.01). Elsewhere it has been arguedthat factor analysis is robust to assumptions of normality. However, if variables arenormally distributed, then the solution is enhanced (Coakes and Steed, 1999, p. 156).Following this viewpoint, the nding that the sample data is not normally distributed formost itemssuggests that factor analysis remains an appropriate method foranalysing ourdata, but that it may not produce the best solution possible. Mindful of this potentiallimitation, a number of other tests that could be used to conrm whether factor analysis isan appropriate technique to be used on a data set were applied. These are summarised inTable V. Their applicability to this research is discussed, as appropriate, in the followingdiscussion of the results of the data analysis.

    When the assumptions listed in Table V were initially applied to the analysis of the29 common items in the dataset, not all were met. The R-matrix determinant wasbelow the recommended level and therefore the absence of multi-collinearity could notbe assured. Field (2000) suggests deleting items when this occurs, but goes on to stress



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    that selecting the items to eliminate can be fairly arbitrary. Weber and Kantamneni(2002) suggest deleting complex variables or items at this stage, i.e. those that load ontomore than one factor. The items that were therefore chosen for deletion consisted of ve that were complex, one that did not have a communality greater than 0.5 and 1 thatdid not correlate with any others (i.e. its singularity suggested an item that does notcorrelate with any others (Field, 2000)). The items deleted were:

    . knowledge of perceived benets (complex);

    . supplier/customer acceptance of the system (complex);

    . buying or selling products of known brands (complex);

    . existence of a trustworthy intermediary (complex);


    ability to convey (on-line) a deep understanding of your business (complex);. large number of customers (communality: 0.439); and. the ability to purchase or sell products at a cheaper price (singular).

    Factor analysis was conducted a second time on the remaining 22 variables. AllCronbach alpha values were above the recommended minimum of 0.7. The nal resultsof the application of the assumptions, listed in Table V, are presented in Table VI, andthese verify that the application of factor analysis on the revised dataset is appropriate.

    Assumption/issue How tested

    1. Is the sample size adequate for factor analysisto take place?

    Obtain the values of the communalities. If allcommunalities are above 0.6 then samples of lessthan 100 are adequate, if they are in the region of 0.5, samples between 100 and 200 are required

    2. Sampling adequacy Kaiser-Meyer-Olkin (KMO) value has to be $ 0.5for the sample and for each item

    3. Retaining factors Eigenvalues . 14. Interpretation of factors Varimax rotation5. Test for multi-collinearity R-matrix determinant is . 0.000016. Importance of given factor Retained if correlation coefcient is . 0.47. Matrix is an identity matrix, i.e. factor analysis

    is an appropriate methodBartletts test needs to be signicant (at the 0.05level)

    Sources: Chen (1999); Field (2000); Weber and Kantamneni (2002)

    Table V.Tests for the appropriate

    use of factor analysis

    Assumption/issue Result

    1. Adequate sample size All communalities are in the region of 0.5, justifying a sample of 100-2002. KMO value has to be $ 0.5 KMO 0.8193. Criterion for retaining factors All factors retained with eigenvalues . 14. Interpretation of factors Varimax rotation applied5. Test for multi-collinearity: R -matrix

    determinant must be . 0.00001R-matrix determinant 0.00003205

    6. Factor retained if correlation coefcient . 0.4 Conrmed7 Bartletts test should be signicant Signicance , 0.0005

    Table VI.Assumptions following

    deletion of variables

    UK NHSpharmaceutical

    supply chain


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    The results of applying factor analysis to the revised data set are shown in Table VII,and reveal the existence of ve underlying factors that were perceived by respondentsto inuence the successful on-going use of e-commerce for B2B buying and sellingtransactions in the UK NHS pharmaceutical supply chain.

    The composite factors generated through our research are perceived by users toinuence success, and in exploring the managerial implications that derive from themit is interesting to compare these ve factors with the six dimensions by which DeLoneand McLean (2003) evaluate IS success. Our results point to the importance of systemand information quality, both of which are constructs regarded by DeLone and McLeanas indicators of success. In large part, these two factors relate to the technical aspects of the system that can be managed and inuenced through good system design. For bothbuying and selling organisations then, there is a need to ensure that e-commercesystems are easy to use, standardised and sustainable and that they contain andprovide for accurate, up-to-date and timely information on stock levels/availability andprices. Further they should be supported by effective technical backup and be seen asmore efcient than alternative transaction mechanisms. In this last regard, we again

    FactorFactors and associated items 1 2 3 4 5

    Factor 1: system qualityStandardised system 0.765Ease of system use 0.751Cheaper interaction and transaction processing 0.724Seamless integration 0.706More efcient than alternatives 0.660Sustainable without having to replace and upgrade 0.647 Factor 2: information quality

    Quality information ow accuracy of delivery times etc 0.798Display of current contract price 0.731Condence in accuracy of delivery information 0.721IT technical support 0.637Timely and efcient information ow 0.585 Factor 3: management and useLarge sales volume 0.861Large sales value 0.843Relevant to organisations strategy 0.588Management support 0.571 Factor 4: world wide web assurance and empathyWeb site association with recognisable bodies 0.890Web site displaying important legislation 0.860Web site display of information to convey knowledge 0.697 Factor 5: trust Existing relationship with customer 0.735Security of the system and information 0.657Solid agreement between organisations (written contract) 0.627Trust condence and faith between transacting orgs 0.604

    Notes: Extraction method: principal components analysis; rotation method: varimax rotation withKaiser normalisation; rotation converged in six iterations; KMO measure of samplingadequacy 0.819

    Table VII.Success factorsfor e-commerce



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    highlight the importance of meeting user expectations for ensuring success. The needto measure and reect the value for the user in order to foster the correct internalperception of the system was cited as the most critical success factor by Baron et al.(2000). It is clear that this issue is also important in the sector of our study.

    Exploring the three remaining composite factors that derive from our analysis, it isevident that many of the items within them relate to DeLone and McLeans other moreuser-related measures, albeit less explicitly. (In this regard, we discounted use fromour discussion because the NHS purchasing respondents do not have discretion overwhether to use the system or not and hence measures related to frequency of use arenot relevant for many within our sample.) The desire for assurance and empathy whenusing a web site points to the need for selling organisations to display information thatactively encourages buyers to trust them. Examples of how this may be achievedinclude acknowledging associations with recognised bodies and demonstratingknowledge of relevant legislation on web sites. Our fourth factor is trust, whichencompasses issues relating to the security of the system and information, as well asitems such as having an existing relationship with transaction partners and theexistence of tangible agreements between partners. Our respondents identied theimportance of having faith and condence in partners. From a managerial perspective,it is vital that not only are e-commerce systems safe and secure but also that usersperceive them to be so. In order to foster trust in e-commerce systems, they need to beimplemented on the back of established trading relationships and to be supported byfamiliar tangible agreements such as written contracts. Finally, our management anduse factor incorporates the ubiquitous requirement for management support. The factthat this item is frequently cited, serves only to emphasise its importance from a userperspective. Our ndings support the premise that without clear and positivemanagerial support the system is less likely to be used successfully.

    Cross-group analysisFollowing the approach of Chen (1999), the factors deriving from our data are nowcompared across the four organisational groups within the sample. Table VIII showsthe results. For each group, the mean value of the importance placed on each factor isgiven. This was calculated from the responses to all of the sub-items within the factor,and is shown together with the ranking within the group that this represents (in italic).Thus, for example, for the NHS purchasing group, the mean values ranged frommanagement and use at 3.31 (ranked ve least important) to information qualityat 4.67 (ranked 1 most important). Figures in parentheses in Table VIII show thestandardised mean (calculated as the ratio of the group mean for the factor to theaverage group mean for all ve factors). A standardised mean value of greater than one

    shows a higher than average importance rating within the group, and a value belowone indicates a lower than average importance rating. This gure gives furtherindication of the relative importance of each factor within each group and asdiscussed later can also be used to compare ratings between groups.

    From Table VIII, it is clear that there is variation between groups as to which factoris perceived as being most important, i.e:

    . NHS factor 2 (information quality).

    . Manufacturers factor 5 (trust).

    UK NHSpharmaceutical

    supply chain


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    . Wholesaler sales factor 1 (system quality).

    . Wholesaler purchasing equal ranking between factor 2 (information quality)and factor 5 (trust).

    Interestingly, however, despite the different emphases in perceived importancebetween groups, all groups placed factors 1, 2, and 5 in the rst three positions, with 3and 4 either fourth or fth. It is further evident that both of the purchasing groupsperceive the quality of information (factor 2) to be the most important. Many of the

    items within this construct relate to issues that are outside the control of thepurchasing organisation (such as correct and up-to-date information on prices andstock availability), but they are within the control of selling organisations. Theimplications of this nding suggest that selling organisations should give priority toensuring that their e-commerce systems provide their customers with a high level of information quality.

    The standardised mean scores can be used to provide further evidence of differencesin perceptions between groups (Chen, 1999). Thus, looking at the gures across therows in Table VIII it is evident that factor 1 (system quality) is rated as relatively moreimportant by NHS purchasers than by two of the other three groups and equal to thewholesaler sales group, and that factor 2 (information quality) is rated as relativelymore important by the NHS than by the other groups. So for e-commerce use within thepharmaceutical supply chain, NHS users regard information quality and systemquality to be of key importance. However, to deliver items within these factors (e.g.display of current prices or seamless integration) would require co-operation betweentransacting organisations, meaning that collaborative relationships between supplychain actors are necessary.

    By the same arguments, factor 3 (management and use) has a relatively highstandardised score in the manufacturing (sales) and wholesaler sales sectors ascompared to the other two groups. Sales organisations are more likely to realise greater

    Composite factors NHSWholesaler(purchasers) Manufacturer


    2 3 3 1F1 system quality 4.44 (1.09) 3.86 (1.04) 4.19 (1.05) 4.32 (1.09)

    1 1 2 3F2 informationquality

    4.67 (1.15) 4.13 (1.11) 4.22 (1.06) 4.14

    5 5 4 4F3 management anduse

    3.31 (0.81) 3.07 (0.83) 3.75 (0.94) 3.75 (0.95)

    4 4 5 5 F4 WWW assuranceand empathy

    3.66 (0.90) 3.41 (0.92) 3.57 (0.89) 3.35 (0.85)

    3 1 1 2 F5 Trust 4.28 (1.05) 4.13 (1.11) 4.28 (1.07) 4.24 (1.07)Average mean value 4.07 3.72 4.00 3.96

    Notes: Figures in parentheses are the standardised means within groups; gures in italics are thewithin-group rankings of each factor

    Table VIII.Mean values for the vecomposite factors



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    benet from some of the items associated with this factor (e.g. large sales value andvolume) than purchasing organisations. Therefore, it is not surprising that selling userswould perceive this to be important, and from a practical perspective it argues forsales organisations to concentrate on optimising these items.

    For factor 5 (trust) the wholesaler purchasing sector exhibits the highest relativestandardised mean between groups. This factor contains items such as existingrelationship with supplier or customer, security of the system and information andsolid agreement between organisations (e.g. written contract). These issues arewithin the control of the purchaser, at least to some extent, and therefore the wholesalerpurchaser may seek to develop these characteristics.

    In order to probe more deeply into the differences in perceptions of success factorsbetween groups, further cross-group analysis was undertaken using the Kruskal-Wallisstatistic. Similar to an analysis of variance this test is used where normality assumptionsmay not apply (Foster, 1998), as is the case here. It can be used to compare the scores on afactorof more than two independent groups (Foster, 1998).Table IXshowsthemean ranks

    of the ve factors by group, with the highest value for each factor highlighted in italicindicating the group which regards it as the most important.

    Organisation n Mean rank

    Factor 1 system qualityNHS 77 83.88 Manufacturer 27 67.63Wholesaler (S) 31 79.19Wholesaler (P) 18 57.83Total 153 Factor 2 information qualityNHS 77 96.01Manufacturer 27 59.11Wholesaler (S) 31 50.23Wholesaler (P) 18 68.61Total 153 Factor 3 management and useNHS 77 63.69Manufacturer 27 95.48Wholesaler (S) 31 101.42 Wholesaler (P) 18 64.17Total 153 Factor 4 WWW assurance and empathyNHS 77 78.17Manufacturer 27 80.70

    Wholesaler (S) 31 71.42Wholesaler (P) 18 76.06Total 153 Factor 5 trust NHS 77 71.71Manufacturer 27 85.89Wholesaler (S) 31 81.65Wholesaler (P) 18 78.28Total 153

    Table IX.Kruskal-Wallis test for the

    ve composite factorsof success

    UK NHSpharmaceutical

    supply chain


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    Examining the Kruskal-Wallis test results in more detail, Table X shows thatthe differences recorded between groups for factor 2 (information quality) and factor3 (management anduse) arehighly signicant ( p , 0.0005 in both cases). Managementand use, perceived to be more important by suppliers of pharmaceuticals (i.e. thewholesaler sales group) than to purchasers, relates to internal aspects of e-commerceimplementation. This may imply that, for selling organisations as opposed to buyingones, there is a need to focus on issues such as providing management support andensuring that e-commerce use is relevant to company strategy and applied to largepurchasing or sales volumes. In comparison, information quality is a factor whichrelates more to communication between transacting organisations. The importanceattached to this factor by the NHS (purchasers) relative to other groups suggests that fororganisations supplying the NHS it is necessary to provide correct and timelyinformation via the e-commerce system.


    This paper has presented the ndings of an empirical study of the factors perceived toinuence the on-going successful use of e-commerce by buying and selling users in theUK NHS pharmaceutical supply chain.

    Contribution to knowledge and managerial implicationsThis research has extended understanding of the growing e-commerce phenomenon,by determining the perceptions of success held by users within a specied supplychain. As it is frequently suggested that user satisfaction is key to the success of e-commerce (DeLone and McLean, 2003; Zhang et al., 2003) on the basis thatdissatised users will not use such systems (Jones and Beatty, 2001), it is vital thatusers are consulted and considered. In line with this, we have followed the approachtaken by Olsen and Boyer (2003) and based our study rmly on the views of the system

    end-users. The literature review with which we framed our study has highlighted anumber of specic research gaps, and the way in which our work contributes toaddressing these follows.

    First, by breaking down the stages of implementation and use of e-commerce wewere able to distinguish our work, which considers on-going system use, from previouswork which has tended to concentrate on the earlier adoption and implementationstages (Bakker et al., 2008; Tsikriktsis et al., 2004; Schoenherr, 2008). The lack of workat the post-installation infusion stage has been highlighted by Rosenzweig and Roth(2007).

    Second, we earlier highlighted the confusion over dening and measuring successfor e-commerce, noting the varying technical, organisational and supply chain widebenets that can be achieved. Despite the wide espousal of the benets of e-systemimplementation however, the weight of real evidence is lacking (Power, 2005).

    Factor1. System

    quality2. Information

    quality3. Management

    and use4. WWW assurance and

    empathy 5.Trust

    x 2 6.509 30.540 22.570 0.742 2.538

    Asymp.sig. 0.089 , 0.0005 , 0.0005 0.863 0.469

    Table X.Test results forKruskal-Wallis test onthe ve factors of success



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    The empirical survey undertaken within this research has provided concrete evidenceof the views of e-commerce users relating to the benets of its use and the factorsthought to inuence this. It contributes to the identied need for more comprehensivemeasures of e-commerce success which incorporate multiple criteria (Quaddus andAchjari, 2005).

    Third, much previous work has focussed only on one trading function (buying orselling) (Olsen and Boyer, 2003; Angeles and Nath, 2007) and a need has beenarticulated for more comprehensive research which explores connected chains of dyadic relationships as opposed to those that consider only a focal rm (Harland et al.,2007). Our study of the UK NHS pharmaceutical chain addresses this need.

    Fourth,previous work in thee-commerceeld has tended to consider its usefor indirectitems (Angeles and Nath, 2007; Baron et al., 2000; Olsen and Boyer, 2003). By contrast wehave followed the suggestion of Angeles and Nath (2007) and studied the supply of directand strategic items, hence making a further contribution to knowledge.

    Finally, returning to Powers (2005) point above, concerning the lack of realevidence, we note the preponderance of qualitative approaches and through thisstudy have responded to the corresponding calls for quantitative research that hasvalidity and reliability (Puschmann and Alt, 2005; Bendoly and Schoenherr, 2005).

    From a practical viewpoint, our research makes a contribution that responds to callsfor e-business use performance measures to be used by managers in practice (Hintonand Barnes, 2009) and for companies to know the CSFs in implementing e-procurementsystems (Puschmann and Alt, 2005). In addition to the development of potential CSFsin the UK NHS pharmaceutical supply chain, we have found differences between theperceptions of buying and selling agents which point towards the need for differentmanagement approaches for these groups.

    The detailed managerial implications deriving from our analysis have been spelledout in the preceding discussion section. Here, we summarise and reect on the key

    points. At a general level, the importance of user perceptions is widely acknowledgedand cannot be under-estimated (Baron et al., 2000). Therefore, whether thoseperceptions are well-conceived or ill-founded matters little management must worktowards either meeting or changing them. Even in situations such as the UK NHS,where use of e-commerce is non-voluntary, the users needs should be considered. Here,constrained by working under the remit of a centralised purchasing agency (PASA)and despite having little discretion over system use, the users have made clear theirwish for many of the same system features as emerge from prior research in othertrading contexts. Thus, issues relating to security, technology, trading relationships,process familiarity and integration remain relevant and are vital in developing thecondence and trust necessary to ensure system success. Whatever the context inwhich trading occurs, it seems necessary to focus on the needs of individual users inorder to understand the issues and fears associated with e-commerce. Clear andpositive management support in determining and then addressing these is essential.

    At a more detailed level, our research points towards specic steps that can be takenwhich will help to ensure e-commerce success in the context studied. Importance isascribed by users (and particularly users in the buying groups) to the technical aspects of the system. These can be managed and inuenced relatively straightforwardly throughgood system design and implementation. It is necessary, for example, to ensure thate-commerce systems are easy to use, standardised and sustainable and that they contain

    UK NHSpharmaceutical

    supply chain


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    and provide for accurate, up-to-date, and timely information. Further they should besupported by effective technical backup and be seen as more efcient than alternativetransaction mechanisms. Other less tangible issues that have emerged from the studyrelate to the need for trust and condence. These can be increased by implementinge-commerce on the back of existing trading relationships and using processes that arefamiliar to the user. Familiarity with at least some aspects of the buying and sellingprocesses would seem to be important in helping users to accept new ways of working.Further, top management support is not simply rhetoric here, but is necessary forengaging users and for encouraging acceptance such that e-commerce systems will beused successfully from both organisational and individual perspectives.

    Limitations and suggestions for further workThe limited sample size and response rate of our study erodes the robustness of thendings for some groups (e.g. the wholesaler respondents.). Any extension of this workshould aim to increase the representation of these groups in order to further explore thedifferences between purchasing and selling agents within the supply chain.

    Where the use of e-commerce is not voluntary (as in the UK NHS), measures of success which are based on use or degree of use intuitively lack relevance.Therefore, whilst our work has explored the notion of success in a non-voluntarycontext, there remains an opportunity for further detailed investigation, perhapsby in-depth case study methods, in order to develop more relevant and discriminatorymeasures of success in such circumstances. Similarly there is scope to examinewhether differences in perceptions exist between users in those contexts where use iscompulsory and those where it is not.

    In accordance with the argument for the adoption of a contingent approach todecisions relating to the use of e-commerce (Easton and Arajuo, 2003), this work hasbeen undertaken within a single supply network. Whilst, intuitively its ndings would

    seem to be of relevance in other supply situations, this remains as an opportunity to beexplored by further research.

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