Ejise Volume9 Issue1 e Commerce

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Evaluating e-Commerce Success A Case Study

Shaun Pather 1, Dan Remenyi 2 and Andre de la Harpe 11Cape Peninsul a University, South Africa2Cape Peninsula University, South Africa and Trinity College Dublin, Ireland

[email protected]@[email protected]

Abst ract: The business community in the past decade has been characterised by debate over the value or effectivenessof e-Commerce and how this type of technology needs to be implemented. During this period the business world haswitnessed many examples of failures of Internet based business. There is little doubt that the high failure rate inDot.Coms had much to do with misconceptions regarding the ease with which e-Commerce could be implemented.Unrealistic expectations caused tried and tested business rules to be abandoned as hyperbole over took sound businesssense. Although it is clear today that the Internet and the Web can facilitate business processes to add value toorganisations, this technology has to be managed with considerable care. This paper reports on a case study conductedin kalahari.net, a well known South African e-Tailing business.

This case study highlights several valuable lessons to do with the evaluation of an e-Commerce investment and how toensure its success. Specifically the case study closely examines aspects of kalahari.nets IS management policy, andidentifies a set of preliminary e-Commerce success dimensions.

Keywords: e-Business, e-Commerce, Internet business, web-facilitated business, Information Systems Management,business evaluation, IS success

In brick and mortar organizations, applications support the business, but in e-Businesses applicationsare the business (Kroll, 2001).

1. IntroductionIn the ten years, approximately, since e-Commerce became a major issue there havebeen many attempts to create and operate

successful businesses facilitated by thistechnology. The establishment of a very largenumber of Dot.Com businesses during the secondhalf of the 1990s reflects the high hopes whichwere placed in this technology. Most of theseattempts have failed and the reasons for suchfailures are well catalogued (See for example

Ames, 2001; Carton, 2001). The number ofsuccesses has been relatively small and thelessons, which can be learnt from theseorganisations, are not yet well known. What hasbecome clear though, is that basic businessprinciples still hold (Remenyi et. al. 2004).

Over the last decade, a multitude of studies havefocused on various aspects of the practice of e-Commerce. Several of these studies havefocused on measures and frameworks forevaluating the success of the IS function. DeLoneand McLeans review of the academic and trade

journals over a seven year period (1996-2002)found that most of the articles were conceptual innature (DeLone & McLean, 2004: 35). As acontribution towards operationalizing e-Commercesuccess metrics, this paper reports on an ongoinginvestigation into e-Commerce success factors.

The paper presents a single case study of a wellknown South African e-Commerce venture,

kalahari.net1, which is regarded as one of the

successes in the e-Commerce environment in thatregion (Financial Mail: 2004). In particular thecase study examines the complexities involved inmanaging kalahari.nets information systems, andhighlights a preliminary set of indicators ofsuccess of the IS function.

2. Background to e-Business inSouth Africa

South Africa was not immune to the e-Commercehype. According to the Department of Trade andIndustry, expectations that the Internet wouldboost SA's economy and revolutionise the marketby allowing small firms to compete equally withlarger rivals did not materialise. The generalmanager of information technology andcommunications is quoted as saying that Many ofthe initial hopes of the internet revolution havebeen disappointing (Stones, 2002). As well as thedisappointments of the SME sector, largerorganisations which participated in the e-Commerce gold rush also ran into problems.There are many examples of this. The followingare some of the well known examples in South

Africa. Broadcast Interactive Group, an

internet venture with the backing ofseveral radio stations, closed before itwas properly off the ground.

1 kalahari.net is a Trademark and this is recognised by theauthors.

ISSN: 1566-6379 15 Academic Conferences LimitedReference this paper as: Pather S, Remenyi D and de la Harpe A (2006) Evaluating e-Commerce Success A Case Study The Electronic Journal ofInformation Systems Evaluation , Vol. 9, Iss. 1, pp 15-26, available online at www.ejise.com
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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Electronic Journal of Information Systems Evaluation Volume 9 Issue 1 2006 (15-26 )

In July 2001, Woza, a successfulindependent online content companyclosed down after its main investor,Bytes Technology Group pulled out even though it claimed a pageimpression rate of 5.5 million a

month. The Shoppingmatrix.com, which set

out to mainly retail DVDs and musicCDs shut down after alleged cashflow problems.

The SPAR national supermarketchain closed down its online shoppingsite due to extremely poor sales viathe site.

The banking venture Blue Bean andTwenty20 were also South African e-Commerce ventures that did not last

very long (with the latter recentlybeing relaunched).The Department of Trade and Industry, claimsthat the biggest disappointment of the Internet hadbeen its failure to empower small businessesthrough its capacity of allowing them tocommunicate more easily with customers andtrading partners, and to close the gap between bigand small companies. They claim that among theproblems faced by start-up online companies inSouth Africa, businesses underestimated thenecessity of having a trusted brand name tosecure online sales (Stones, 2002).

A survey of online retail activity in South Africa(Goldstuck: 2002) reports that the failure rate of e-Commerce in South Africa was 35% (2000-2002)and this was predicted to grow to 40%. Thissurvey points out that online retail in South Africais at a very early stage of its market penetration,and remains deeply immature in itsimplementation.

Many factors contributed to the demise of theonline retail market during this period. In general itcan be stated that the business worldunderestimated the complexities and importanceof many aspects of business including marketing,finance, human resources as well as not properlyappreciating the challenges offered by thetechnology itself. Thus organisations likeBoo.Com failed as much from technological andIS management blunders as it did from generalbusiness incompetence.

In light of the foregoing, research into e-Businessin South Africa is timely in assisting practitionersto obtain an understanding of the complexities

surrounding this business paradigm. The authorshave chosen to conduct a detailed study of thewell-known South African business called

kalahari.net. The objective of this case study is toevaluate this organisations success and to identifysome of the key characteristics of its operationwhich have lead to this success. Although thiscase study is wide ranging in scope its main thrustis related to how kalahari.net manages and

evaluates its IS function.

3. Research methodo logyThe approach to this case study draws mainly oninterpretivist methods. Cognoscente of recentcriticisms of the value of management research(Starkey & Madan: 2001) and that of therelevance of certain types of empirical research inIS (Benbasat & Zmud: 1999), the authors adopteda case study approach (Yin: 1994).

The rationale of using a case study was to allow

an in-depth examination of a real world problembased on an existing company already engaged ine-Commerce. Case study research according toHarrison (2002: 177) is more aptly described as astrategy than a method. It sets out to address theunderstanding of a phenomenon within itsoperating context. Of necessity, case studyresearch is about making sense of thecomplexities of a real-world working environmentand this is the approach taken here.

The primary sources of data for the case studywere interviews with knowledgeable informants

from within kalahari.net, one of whom became aco-author of this paper. The interviews took placeduring June and August 2004 and during March2005. The interview transcripts were analysedusing qualitative content analysis (Henning, 2004:104-109) to reduce the data through a process ofcoding. Motivations for choosing a qualitativeapproach to this investigation are provided byBabbie & Mouton (1998:270).

The authors made several visits to the premisesof kalahari.net. In addition to this we alsoreviewed a number of public documents of theholding company, and carefully examined the website. This also included registering as a customer,and making a purchase. The authors alsogenerated a complaint to kalahari.nets customersupport section, to determine how this washandled by the system.

4. An overview of KALAHARI.NETkalahari.net is a South African based businessreferr ed to by its owners and managers as an e-Tailer 2 . It is a web and Internet facilitated

2 An e-Tailer is an online retailer and in the B2C sector, thebusiness model focuses on sales to the individual customer(Laudon & Traver, 2003: 71).

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Shaun Pather, Dan Remenyi and Andre de la Harpe

business which sells products such as books,CDs, DVDs, videos, software, hardware, wine,and health care goods. These products aresourced from South Africa, and elsewhere. Inaddition to these products kalahari.net has anumber of online partners through which products

such as ticketing solutions to theatres, cinemasand major events may be bought.

kalahari.net is operated as a business unit of Via Afrika which is a wholly owned subsidiary divisionof Naspers Limited. Naspers is listed on theJohnannesburg Stock Exchange and Nasdaq inNew York. Naspers Limited, is today a R10 billionturnover enterprise and has R8 billion assets(Naspers, 2004). Via Afrika controls a number ofdifferent businesses operating as independentbusiness units in book publishing and distribution,niche retail and entertainment, and in private

education. In 1998 Naspers decided to takeadvantage of the opportunities offered by the Weband the Internet and launched through itssubsidiary, Via Afrika, a number of internetbusinesses which included 24.com (nowmweb.co.za), kalahari.net, fin.24.com andnews24.com.

As mentioned above kalahari.net was firstenvisaged as a book selling business. The ideafor this came from the CEO of Naspers. John vanRelihan, who was responsible for Via Afrikasbook club division, grabbed this opportunity. At

this point they owned the largest book club in Africa. With so much publicity concerning theapparent success of Web based businesses suchas Amazon.com it was thought that this could beemulated in South Africa and Via Africa could doit.

Some venture capital money was allocated bythe holding company to fund the operation. Johnvan Relihan set up an independent team and theybegan working towards the creation of an e-Commerce operation.

This was the period of extraordinary hypeconcerning the Web and it was generally thoughtthat it was not difficult to set up an e-Commerceoperation and that it could be achieved in a shortperiod of time. The dictum emanating from

American business schools and consultants in thisperiod was that with as little as $50,000 and within60 days an e-Commerce website could be up andrunning. This type of thinking omitted the issue ofon-going costs and revenue and the breakevenperiod. As there was no-one in the Via Africagroup with e-Commerce experience this type ofexaggeration appears to have been believed.

As a result of this thinking there was virtually nopreparation for kalahari.net. There was nobusiness case prepared, although it was generallythought that a breakeven situation would bereached in two years. No rational for suggesting aperiod of two years to reach the breakeven point

has been offered and even today after six years,breakeven has not been achieved. Furthermorethere was no risk analysis performed. Thedevelopment of the website was rushed and alaunch took place in October 1998 approximatelyone month after the decision was taken to get intothis business.

Not surprisingly the Website attracted littlebusiness. The problems with the first attempt tomake kalahari.net an e-Business were typical ofthe many errors made by start up Dot.Com of thatperiod.

The marketing plan was ill conceived. Thetechnological issues and challenges, especiallyrelating to information systems architecture, werenot really understood. The web-site interface isdescribed as being horrendous, with longdownload times, and poor information on the site.The crucial internal data loading process tookweeks and resulted in unreliable product data.There was no fulfilment process in place. Thekalahari.net team was made up of three businessoriented people, and approximately ten newlygraduated IT students. The sourcing policy was

not well thought through. The funding was not wellconceived or planned Via Africa had what theyrefer to as an open book basis for fundingkalahari.net. In addition, there were inadequateinternal controls with which to management thebusinesses.

Failure was certainly staring them in the face. Thesum of the potential loss was not big in theNaspers world but the failure of an e-Commerceventure in the full light of the public media was amost unattractive prospect.

As a result of this predicament management atboth kalahari.net and Via Africa decided to re-launch the business. Via Afrika appointed Susanvan der Schijff who had a direct marketingbackground to take over the reigns at kalahari.netin March 1999. Susan had been the productdeveloper for the book club and she had a muchbetter understanding as to what an e-Businesswas about. The re-launch took place in October1999 and in so doing the kalahari.netmanagement ensured that:-

A more knowledge and experiencedteam was put in place. The largelyinexperienced IT staff weredismissed, and a new team of only

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four people were recruited. Thisincluded a seasoned IT manager aswell as a web-site designer.

The back office systems werereorganized to become moreresponsive to the needs of a web-facilitated business and the fulfilmentprocesses were redesigned.

The web-site itself was substantiallyoverhauled.

The relationships with suppliers werestrengthened to ensure that moreaccurate product data was provided.

The direct marketing experience ofthe new general manager, was usedto implement new strategies to attractand retain customers. This includeddiversifying the product base.

Thus, in 1999, kalahari.net was re-launched in amuch more thoughtful and professional way,keeping a close watch on all the importantbusiness variables. Since the re-structure and there-launch of Kalahari.net the business has grownfrom strength to strength, as indicated by itsincreasing turnover shown in Figure 1.

0

10

20

30

40

50

1999 2000 2001 2002 2003

YEAR

ZAR

(million)

Figure 1: kalhari.net turnoverOver the past 6 years kalahari.net has becomeknown as one of the best recognised e-Commerce brands in South Africa. It is not onlywell established but it has become a role model inSouth Africa. It was recently rated as the best site(Figure 2) from among of a possible 1000websites (including Amazon.com) in a FinancialMail survey (Financial Mail, 2004). It wasidentified as the subject of this study as it offersmany lessons for both well established Internetfacilitated business as well as for those who wishto enter this market for the first time.

Figure 2: Kalahari.net Home Page (Screenshot shows partial page only)

5. An evaluation of Kalahari.net As mentioned above kalahari.net is regarded as asuccessful e-Commerce or e-Business in South

Africa. According to members of staff the reasonswhy kalahari.net is considered as such are:-

Its year on year growth; Its the biggest B2C e-Commerce

website in SA; It has 200,000 registered customers; It has received accolades from the

South Africa press especially theprestigious Financial Mail;

It has no domestic competition; It was the first e-Business to be fully

compliant with the ElectronicCommunications and Transactions(ECT) Act;

It is close to breakeven and intends tostart making profits in the 2005-2006period.

The company is regarded as a success despitethe fact that it has not yet broken even. Breakevenis anticipated soon. However kalahari.net has thefinancial backing of a more substantive parentcompany which may probably be able to sustain itfor quite some time if that was to becomenecessary. It is therefore problematical to reallycall kalahari.net a commercial success. It certainlyis a public relations and awareness success and itis very beneficial to the Naspers Limited group tohave a business which is so highly recognised inSouth Africa and which is so well regarded. Butthe objective of business is ultimately profit or atleast not making losses - and this has not yetbeen achieved. Therefore care needs to be takenwith the use of the word success. If kalahari.netwas an independent operation where the ownermanagers had to go to the financial market for



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funding it is questionable as to whether it wouldhave survived the hiatus in the financial markets.

Our evaluation of kalahari.net is that the work ofthe past 5 years has positioned the business sothat if the current growth performance is sustained

and if costs are keep under control it will becomea profit generator in the near future. But referringto kalahari.net as a business success when it hasnot yet reached its breakeven point after six yearsis not a description we would readily wish to use.

6. Meeting the IS managementchallenge

As mentioned above one of the major objectivesof this research was to understand howkalahari.net managed the IS function (comprising4 major systems See Figure 3) which is

regarded as a core aspect of any e-Commercebusiness. The interviews reveals some veryinteresting IS management issues. Some of theseare recognised as tried and tested ISmanagement practices, however there are someinnovative ideas in use at kalahari.net as well.

Before discussing the detail of some of themanagement processes used by the IS function inkalahari.net it is useful to point out how criticalthey perceive their IS function to be for theirbusiness. Besides the fact that the website has tofunction without error 24/7 they also rely heavily

on a wide range of other information. In the wordsof management,Without a database there is no websiteand with no website there is no business.Data is needed to allow us to feed the site.Information such as how mnay items areavailable on the website, what the stockavailability is, our pricing, the number ofdays to deliver and the number of days forproducts to arrive are essential. We monitorthe supply chain closely. Where the stock iscoming from? How much is international orhow much is local? The weight, thevolumetric mass, delivery dates, when willthe customer receive an order, how manycustomers did receive on time, how manydid not, to mention only some of theissues.

Figure 3: There are 4 central InformationSystems at kalahari.net

In addition, the IS function is required to reportweekly on issues such as, cash flows, orderreceived per day, order deliveries per day, costper order income, postage cost per order,exception reports on suppliers costs.

There are also reports required on operationalissues such as website down time, downloadingof website time for customers etc. Themanagement of kalahari.net clearly believe thattheir business is fuelled by information.

The following sections provide an overview of keyareas of the organisations IS management andoperations. We view these as having a centralrole to play in achieving success with their IS.

6.1 Aligning the IT and businessstakeholders

When the kalahari.net website initiallycommenced operations in 1998 the relationshipbetween business managers and the embryonicInformation Technology (IT) department was at avery low ebb. Thus in the initial period ofkalahari.nets operations, the IS were plagued byserious problems such as bugs, and generallyinadequate performance. This is hardly surprisingwhen one considers the fact that the website wasdeveloped and was up and running within onemonth by what was in effect very young andinexperienced people.

Due to the rush to be in business the initialattitude of business managers was Getsomething going, get it on the web, withoutproper consideration as to the implications of theirrequests. This is clearly an unsatisfactoryapproach to IS. However the IS functionresponded as best it could by trying to implementthese requests without fully understanding whatwas really required. This led to unsatisfactorysystems which in turn resulted in distrust betweenthe two parties and an eventual a substantialbreakdown in communications.

After this rather messy start the seniormanagement made a strategic decision to bring



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together in a much more functional way thebusiness and IS stakeholders. In working towardsthis they firstly outsourced the IS department intotal the management of kalahari.net felt that theextra burden placed on managing IS personnelplaced a burden on their abilities to keep focused

on the business. In doing so, a very importantcondition was placed on outsourcing - theoutsourced partner was required to base itspersonnel at kalahari.nets headquarters in CapeTown. Secondly controls embodied in ISdevelopment and maintenance methodologieswere introduced for all aspects of IS work.

7. Maintaining the business and ITpartnership

The philosophy behind kalahari.net attitude tomaintaining a sense of partnership between thebusiness and the IS function was to ensure

continuous dialogue between these two groups.This was affected through regularly scheduledmeetings.

Figure 4: kalahari.net Business Task Team

The IS-Business partnership is maintainedusing a three-pronged strategy:

The first step in establishing this dialogue wasto establish a weekly business-prioritisingmeeting. A task team of business stakeholders(see Figure 4) meets weekly with IT managersto address immediate, short-term and mediumterm priorities. These team meetings had apositive effective in fostering greater co-operation between the Business and IS, aswell as between different managers of thebusiness.

Secondly, attention was focused on systemsdevelopment methodologies. IBM RationalUnified Process, or RUP, methodologieswere introduced. RUP, is a comprehensive,Web-enabled set of software engineering bestpractices that provide guidance forstreamlining the teams activities (Kroll, 2001).Business analysts at kalahari.net have givenRUP the thumbs up, and favour its ability toprovide sets of project documentation that ismeaningful to both IT and businessstakeholders. In this way all the role-players

can participate meaningfully systemsdevelopment phases. As a result of theimplementation of this new methodology,

business stakeholders became fully involved inall phases of the systems development lifecycle (see Figure 5).

Thirdly, key IT team members becameinvolved in decision making at all levels. Theyare involved in making IT project decisions aswell as in routine business meetings at whichissues such as gross profit, budgets, turnoveretc. are discussed.

Figure 5: RUP Systems Development CycleSource IBM [http://www-306.ibm.com/software/awdtools/rup/]



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7.1 Database management is central tooperations

Central to e-Tailing is the management of alarge database. kalahari.net is linked toapproximately 400 supplier databases all overthe word these range from 2 million productsdown to only 2 products. A primary kalahari.netdatabase houses all product information (SeeFigure 6). Extreme care is taken to ensure theaccuracy of the data. There is no room for

errors e.g. a DVD that should retail for R899should not be sold for R89.99.

Suppliers are totally responsible for providingthe data to the primary databases each day.Since it is not possible to manually check such

a huge stock database, exception reportingtakes place to identify errors e.g. selling priceis lower that the cost price.

Figure 6 : Ensuring suppliers update the database with accurate data is an all important businessprocess. Source [ kalahari.net]

In addition to exception reporting, a suppliers

report is maintained to determine how manysuppliers have actually sent through anupdated data file, at what time did the reportcome through, and how long did it take toupload.

7.2 Ordering and fulfi lment

The kalahari.net Management System (KMS)which is essentially a CRM system handles allordering and fulfilment processing. Central toensuring that these key processes functionsmoothly, is once again, the integrity of thedata being handled.

KMS is used to monitor the purchasing cycle.Orders to suppliers are compiled twice daily,and depending on the facilities available at thesupplier end, these are either electronic (EDI,FTP, email) or manual (via fax). Alltransactional data relating to orders in thepipeline are handled by KMS. This isprocessed and is available as a report whichgets prioritised each morning at the start of theday. Based on the data and supplier reports,customers are contacted regarding delivery ofproducts on time. kalahari.net also utilisesmanual methods such as telephone or fax toverify orders to suppliers.

7.3 Efficient delivery systemsSuppliers and couriers have deadlines andmust adhere to agreed SLAs e.g. overseassuppliers have an hour after receiving a FTPfile to report on fulfilment problems thereafterthey have up to 24 hours to have productstransported to a designated courier. Within 2days the products are shipped to kalahari.netsdistribution centre near Cape TownInternational airport. Thereafter the shippingagents at the airport have 1 day to clearcustoms and excise and to transport the goodsto distribution centre where streamlinedprocesses ensure minimum delays in deliveryto the customer.

7.4 Essential web-site features

There are several key features on the Web-sitethat are viewed by kalahari.nets managementas central to success.

The first of these is the sites search engine.The use of the search facility by a customerusually marks the commencement of apotential transaction. Consequently the searchfacility is continuously tested. In addition to thisall searches conducted are produced as



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reports in order for the Marketing departmentto monitor the interests of shoppers.

Secondly, downloading time of the web pagesis considered crucial. kalahari.net prides itselfon providing its customers with a download

time of 8 seconds or lower and considerableresources have been spent on design andtechnical infrastructure to make this a reality.Monitoring of the download time takes placethrough continuous testing of the loading time.

Thirdly, merchandising is viewed as beingimportant. Quick turn around on updating stockitems IT must be able to support updating ofproducts they to achieve updating within 10minutes.

Fourthly, with regards the payment gatewaykalahari.net ensures that within 2 seconds acustomer will receive feedback on verificationof card, as well as authorisation of payment.

7.5 Business intelligence formanagement decision making

At the core of both strategic and operationaldecision-making is a Business IntelligenceSystem (BIS) (Figure 7). Information from BISis used for both strategic as well as day-to-dayplanning. BIS is an IS responsibility with amanager assigned to the BI system reportingto the CIO.

Strategic Planning

Business IntelligenceSystem

Operational Planning

TurnoverMonitoringGross profit

Analysis

Per hoursalesreports

Marketing

campaignsuccessesMonitoringBuyingpatterns

Figure 7 : Business Intelligence System

As one of the core functionalities, the BISprovide hourly and daily sales reports, whichare either used operationally or presented asdetailed turnover analysis report to seniormanagement. Turnover is also monitored perproduct category which can be viewed at anytime of the day. This report assists inmonitoring feedback on marketing, doing

customer profiling, and in identifying areas inwhich the kalahari.net brand needs to bestrengthened. Gross profit is also monitoreddaily in order that managers make decisionsspeedily when profits fall below expectedmargins.

7.6 Trust and privacy

In South Africa, the ElectronicCommunications and Transaction (ECT) Actwas promulgated in 2002. The Act introducesa number of regulations to SA's e-commerce

community. Among other things, the Actprovides for the protection of consumers in

terms of privacy and the security of electronicpayments (South Africa, 2002).

In 2002 a B2C e-Commerce Readiness Surveywas conducted by South African based Buys

Attorneys and Trust Online, examining thewebsites and legal notices of 607 South

African websites. Buys and Trust Onlineexamined legal notices, privacy policies, termsand conditions of use, disclaimers and securitypolicies. kalahari.net was found to be the onlycompany that was 100% compliant with theECT Act. As a result, in August 2002, thecompany went public, with a claim that it wasthe first South African e-Tailer to be compliantwith the requirements of the ECT Act and wasalso fully in support of the efforts made toprotect the consumer (e-Strategy, 2002).



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The synergies between the fourmajor IS (and their associatedportfolio of applications) discussedin this paper, appears to supportthe attainment of the businessobjectives - the bottom line of

which is to get closer to break-even.Like the evaluation of the success of thekalahari.net business, in general it is too earlyto pronounce on the success of the IS function- but it is nonetheless easy to see a muchclearer understanding of the importance of ISin their business and a much more intensiveapproach to integrating IS and businessfunctions.

10. Future requirements

Current management of the IS infrastructureoccurs on a needs basis - with the impact onturnover being the most common indicator ofsuccess/failure. We would rather suggest thatthe business requires an integratedassessment procedure. Such a proceduremust provide a framework to evaluate thevarious components of the IS infrastructure, ina way that gives management the ability tomonitor the impact of the technology (and thustheir investment) on the attainment of specific

business objectives. Such an assessmentshould be conducted periodically, so as to aidmedium term and longer-term decision-making.

As a starting point towards an integrated

assessment procedure, a summary of criticale-Commerce functions that require IS supportare identified. These are presented in Figure 8.which highlights a preliminary set of IS relatedmetrics that were identified during theinvestigation. These metrics are mapped onto

Angehrns ICDT model (Angehrn, 1997). TheICDT model identifies four virtual spaces onthe internet (Information, Commuication,Transaction and Distribution spaces), and isone useful way of differentiating theapplicability of metrics. Furthermore these fourvirtual spaces lend themselves to the customer

buying cycle (van der Merwe & Bekker, 2003)viz. need recognition, gathering information,evaluating information, making a purchase.The organization of metrics in this way willallow kalahari.net management to monitorcritical areas of the business, in terms ofidentified needs e.g. an increase in page hits,but decrease in purchases may prompt acloser look at items associated with the VirtualTransaction Space.

Figure 8 : Preliminary metrics for evaluating e-commerce success

11. Lessons from the case studyFrom the discussions with the management ofkalahari.net it is apparent that they believe thatthere are several special issues on which theyhave to focus which are different to a traditionalbricks and mortar business. These issues as wellas other pertinent success criteria, highlighted in

the foregoing discussion, are presented in Figure9, as a set of critical success factors.

In particular the following areas of businessoperations are deemed to be critical to thesuccess of the e-Commerce business:-

At all costs the electronic shop-frontmust be kept open and active24/7/365 this includes ensuring theavailability of a hot-site. Site underconstruction notices and otherdistractions by which the shop-front isnot available are extremely counter



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productive to the business. Theelectronic shop-front needs to be asattractive as possible and have aswide an appeal as possible.

Agility and flexibility - the ISinfrastructure must allow for thebusiness to be agile in responding toproduct updates to the web-site,advertising of specials etc. Changeshave to be made immediately. Anysubstantial lead-time involvedrepresents lost revenues.

An effective, efficient, databaseinfrastructure is essential for asuccessful online retailing business.

An on-line shop lives by its twindatabases. These are the productdatabase which represents theinventory in the shop front and needsto be both up-to-date and error freeand the client database whichrepresents the main marketopportunities. The product databaseneeds to be seamlessly connected tothe procurement and deliverysystems to ensure that the correctitems are delivered on time.

IT and business stakeholders need tothink together, and engage in jointdecision making across all areas ofbusiness including non-IT issues.

There is just no room for a culture-gap.

Figure 9 : Critical success factors of the businessMake every effort to ensure the privacy ofcustomer data. In the e-Tailing environment, thevolume of successful transactions, is directlydependent on the trust the customers have in yoursystems ability to offer secure transactions.

The web-site requires: minimum download time,accurate and smooth searching facilities, minimalclick through rates, a quick payment facility, pre-

orders facilities for purchasing of products prior toproduct launch, and visible security features. Theelectronic shop-front needs to centre around thecustomer.

12. ConclusionIn this paper we have described a South Africane-Business operating in the B2C environment. Aset of preliminary metrics for evaluation, as wellas Critical Success factors, has been identified.The key aspects of the findings of the case studyindicate a few important lessons regarding boththe management of IS and that of the business. Inaddition to the lessons already outlined, thefollowing need to be highlighted:

One of the key issues relating to thecreation, deployment, andmaintenance of IS infrastructure in an

e-Business relates to the relationshipbetween business and ITstakeholders. The case studydemonstrates that e-Businessrequires the bringing together ofthese stakeholders in not only theday-to-day management of thebusiness, but also in key-decisionmaking structures. Furthermore, theutilisation of systems developmentmethodologies that are friendly to allstakeholders has been shown to be acontributory factor to this relationship.

The use of a modern IT managementtool is crucial to keeping the ISinfrastructure functioning. Systemsneed to be monitored vigilantly, andhave to be kept as lean as possible toensure reduced workloads on bothsystems and people.

Business is business, be it electronicor brick and mortar. However, thecommon element is the financialstatements. Money does count, andkalhari.net has demonstrated that alleyes are on problems that directlyaffect turnover and gross-profit.Indeed these are monitored andreported daily, and business reactswith agility, if either of these are notmeeting targets. The companysinformation system is always the firststop in reacting to a falling bottomline.

In the electronic on-line tradingenvironment, database technology isthe most central aspect of the ISinfrastructure. Extreme care, and

diligence is taken to ensure thatproduct data, and customer data, isaccurate. There is no room for errors,

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Electronic Journal of Information Systems Evaluation Volume 9 Issue 1 2006 (15-26)

and successful transactions dependsentirely on the way in which this ismanaged.

It is not our intention to offer these findings asgeneralizations for the e-Business sector in South

Africa, and elsewhere, but rather to offer thesefindings as an initial set of criteria that could beused to adapt business models, and improvemanagement practice. Many of the issues raisedare mostly pertinent to the B2C environment, but

issues around procurement of goods areimportant to the B2B sector as well.

Future work includes, further investigation andcollection of empirical evidence of e-Commercesuccess metrics in order to verify and extend

those identified; comparison of findings in thiscase study to others; and the development ofmore comprehensive framework for measuringthe performance of IS in e-Commerce businesses.

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