The impact of e‐business on capital productivity

Abstract

PurposeThe purpose of this paper is to provide evidence of the influence of different e‐business technologies on capital productivity (CP). Productivity measurement is a useful tool to gauge business performance. However, currently there is little empirical evidence to support the impact of e‐business technologies on productivity.Design/methodology/approachIn this paper, an empirical investigation of 132 small and medium enterprises (SMEs) in the UK telecommunication sector was carried out, using a hierarchical regression. In doing so, three different types of technologies that may be associated with e‐business (i.e. internet‐based applications, groupware applications, and collective systems) were considered.FindingsThe main findings are that any improvement in CP is significantly influenced by groupware applications and collective systems. Therefore, the UK SMEs and other large companies might be over‐investing in the development of web sites to support their internet presence, while under‐investing in promoting awareness and the use of these services to customers (i.e. groupware applications and collective systems).Research limitations/implicationsMeasuring the payoff is more difficult in e‐business environments because applications cut across boundaries thereby affecting multiple parties. Hence, alternative metrics to measure payoff from multiple perspectives could be necessary. Productivity measurements were conducted in the SME UK telecommunications sector, and hence findings are valid within this specific context.Originality/valueThe results of this paper provide interesting insights on the performance drivers of companies using e‐business technologies. The findings can guide managers in focusing their energies on e‐business technologies and represent an approach to determine which e‐business technologies are more likely to lead to a boost in productivity.

Measuring the impact of information and communication technology investment on the profitability of Indian manufacturing MSME

“…The study findings are based on the argument that top management should adopt ICT by first recognising its value and significance in the performance context. Martínez-Caro and Cegarra-Navarro (2010) found that firms are investing sometime over and, on the other hand, under the required level. These results suggest that the top management can no longer consider the investment in ICT a cost centre, as it is now reaping the benefits of this investment and has become a revenue centre.…”

“…Beynon et al (2021) survey-based findings support and validate these findings. ICT capabilities need to be established (Martínez-Caro and Cegarra-Navarro, 2010), and these ICT capabilities require firm investment and priority concern for the organisation (Saffu et al , 2008), which require sophisticated tools that are not usually available with SME (Molinillo and Japutra, 2017). This challenge is SMEs’ inability to predict technological advancement (Eze et al , 2019, 2018).…”

“…MSMEs use smaller information technology (IT) teams or contract IT staff for their IT needs (Oliveira et al , 2014). Productivity measurement helps assess business performance (Martínez-Caro and Cegarra-Navarro, 2010). Small businesses need credit to finance ICT (Apulu et al , 2011).…”

E-business capabilities in developed and developing countries: Different or the same?

“…E-business adoption has moved from a 'nice to have' to a necessity due to the vital role it plays in global businesses [1,2], with many suggesting that the question is not whether or not e-business tools should be adopted but how this adoption should be conducted [3,4]. E-business tools offer a large array of benefits to those that implement them; examples include increased competitive advantage, improved communication, improved agility, increases in efficiency and access to new markets [5,6]. Similar benefits of adoption include reduced costs and increased process improvements [7,8] as well as improvements in inventory management, distribution and production planning [9,10].…”