Executive Summary

Government policy to assist business adoption is off to a good start. NOIE has taken some excellent steps, and the government is rated highly in its 'light touch' approach to regulation. ... The ... ITOL program to assist private sector in exchange development ... is a welcome step. ... Government's role in e-business adoption is twofold: to facilitate, where possible, the private sector's rapid adoption of e-business; and to ensure that government itself comes online quickly and efficiently. In both of these areas, Australia has enjoyed strong early leadership (Boston Consulting Group, 2001, 10).

Background

What we are witnessing in contemporary organisational life is the transformative opportunities wrought by technological changes, most recently through web-based technology and the Internet, shaking traditional foundations of organizing and the very nature of organisations. Within such a context, organisational relationship, especially collaboration, is a crucial issue. While we have seen a more than steady growth in collaborative activity around the globe over the past decade or so, developments in technology, and, particularly, in e-business seem to have escalated that growth. Moreover, there is renewed emphasis on the learning potential of organisational collaboration and the notion of online learning communities encompassing both individual and community knowledge sharing, development, creation, and management.

The overall objective of this research is to evaluate current understanding of e-commerce practice through an in depth analysis of a wide and diverse range of cases from the 67 collaborative b2b e-commerce projects involved in the first five funding rounds of the Information Technology Online (ITOL) program run by the National Office for the Information Economy (NOIE).

Undertaken as a collaborative research between NOIE and Macquarie University, this study aims to address the following questions:

• Are any categories of ITOL projects more successful than others?
• What do the ITOL projects reveal about critical success factors for e-commerce projects?
• To what extent do the ITOL projects support current views related to e-commerce and new organisational forms enabled by the same?

In the present study, we used key concepts from knowledge, organisation studies and resource based perspectives, and employed both quantitative and qualitative methods, including:

• a literature review covering areas such as e-commerce, collaboration, strategic alliances, new organisational forms, diffusion of technology, organisational knowledge and learning, and critical success factors
• a survey of ITOL projects funded under Rounds 1 to 5, with a 52% return rate
• in depth interviews with project managers of 27 projects across each of the five funding rounds, involving both successful and unsuccessful projects, completed and ongoing ones.

Report Outline

This document summarises a larger report that contains the following sections:

• Study objectives and approach
• E-commerce in Australia - private sector and government
• Understanding organisational collaboration - review of current theory on key variables affecting organisational collaboration, the notion of communities, and critical success/failure factors
• The ITOL program - overview of Rounds 1 to 5
• Research results - summary of survey findings
• Organisational collaboration in ITOL projects - analysis of ITOL projects in relation to key variables
• ITOL's critical success / failure factors
• The role of ITOL and NOIE - success and challenges
• Conclusion

The ITOL program

The ITOL Program aims to accelerate Australian adoption of B2B e-commerce solutions by providing seed funding for diverse activities that encourage collaborative industry based projects. In particular, this Federal grant program seeks to enhance the adoption of b2b practices across a wide range of industry sectors, especially by clusters of SMEs; and foster awareness and strategic take up of innovative e-commerce solutions within and across industry sectors in order to deliver sustainable economy wide returns and contribute to increased competitiveness. Since the program began in 1996, ITOL has already allocated (in seven funding rounds) almost $7.5 million to 81 eBusiness projects across a range of industry sectors and geographic regions.

A unique feature of the ITOL program is its emphasis on collaboration between and among industry groups since these industry groups are seen as having a strategic role in diffusing e-commerce technologies and in encouraging e-commerce uptake among SMEs. Grant applications must clearly provide indicators of broad-based industry support such as the involvement of key organisations or stakeholders in the industry for which the B2B e-commerce solution is being proposed.

Organisational collaboration and learning in ITOL projects

In the first five funding rounds, ITOL grants were provided to different consortia made up of a wide variety of organisations, involving partners from two or more industries. In most (80%) of the projects surveyed, collaboration for the project was initiated by the principal grant recipient, commonly an industry association or an IT or management consultant. In a number of cases (20%), the consortium partners had worked together before. Consortium partners were generally (54%) based in both metropolitan and non-metropolitan areas (sometimes in multiple States). Co-opetition was involved in 30% of the projects surveyed where members of the consortium were collaborating with their competitors.

The following were cited as the most important motives for establishing the consortium: to develop new products or services (71%); to increase credibility (57%); to enrich organisational ability and learning (49%); to facilitate regional or international expansion (43%); and to implement industry standards (37%). Respondents advised taking the following pragmatic steps to strengthen their partnership: communicated with project partners on a regular basis (86%); identified partners who were truly committed (80%); and conducted regular face-to-face meetings (66%). Unfortunately, despite recent evidence (e.g. Mitchell, 2000) identifying clearly performance expectations, goals, responsibilities and rights as the most established critical success factor in strategic alliances, 63% of respondents said they did not establish clear written agreements delineating each partner's roles and responsibilities. [ITOL now requires each major consortium partner to sign a declaration of his or her commitment to the project.]

Clearly one of the strengths of the ITOL program comes from its insistence on projects being implemented by multi-partner alliances or consortia. As the survey results showed, the majority (69%) believed project outcomes were better achieved because of collaboration and sharing of resources and there is ample evidence from the research that real collaboration is occurring across the different ITOL projects.

The research showed that the majority of all analysed ITOL collaborative projects could be regarded as successful. In detail this can be translated as follows:

• 63% of the projects surveyed said their consortium satisfactorily achieved desired outcomes with a further 12% saying they exceeded their original objectives.
• Of the 12 projects that had already been completed at the time the survey was conducted, most said their consortium members kept on working together on the same or other projects even though the official grant period had already ended.
• 69% said project outcomes were better achieved due to the combined efforts and contributions of the different consortium members. Only 17% said the project could have easily been implemented with or without a consortium. On the other hand, 6% said project implementation was made more difficult because of problems with partners, or it would have been easier to implement the project as a single organisation rather than as a consortium.

Although most survey respondents identified 'operational problems' alongside 'technology' problems as having most influenced the outcome of their ITOL project, the in depth interviews revealed 'change management' and 'relationship' issues as more crucial determinants to the success of e-commerce collaboration. Although still posing some concerns, those relating to 'standards development' were regarded as not as crucial as the other problem categories.

Across a broad range of projects, many project participants have come to realise that managing people, relationships, and business processes is harder than managing technology. And so the choice of project manager is crucial to the project's success. Certainly, for many of the projects, collaboration was the key to survival, renewal, and growth. In the majority valuable lessons were learnt throughout the project tenure, although some lessons may well have been learnt earlier from previous projects had information flows been better expedited in some cases. Some of the projects clearly demonstrated the novel although others who could have done so were hampered by the difficulties of change management, especially in changing mindsets, behaviour, and traditional business or government practices.

The research also revealed the importance of linking alliances with business strategy, the need to devote time for alliance preparation; and to have a precise outline of performance expectations, goals, and responsibilities. Vital also were: the need for industry association support; the importance of trust among project partners and beneficiaries; the need for projects to be driven hard, and the need for personal representation and effective communication.

NOIE's success and challenges

Respondents were generally very positive about NOIE's role especially as broker and facilitator. The majority felt the money involved was important but what was crucial was the credibility attained through ITOL by association with NOIE. A key feature of the ITOL program's success has been in raising awareness and understanding of e-commerce. Learning from the ITOL projects was also regarded as especially crucial to SMEs in numerous ways, including affording showcases for Australian technology and know-how. Several ITOL-funded projects have also successfully pilot-tested innovative e-commerce solutions that may very well represent Australian best-practice models or even world-firsts. There was also a real feeling that successes in the projects could translate as models across to other communities and other industries. In some cases, there were real efforts at mentoring occurring.

Therefore, it is clear from the majority of the interviews that ITOL projects have, in a real sense, raised e-business knowledge in diverse regions, in businesses and in the broader community. Constructive collaboration had indeed enabled the growth of e-commerce capabilities.

While there were certainly successes among the different ITOL projects, there were also a number of challenges to achieving optimum online collaboration. These included concerns expressed by research interviewees about:

• Level of project funding
• Access to capital
• Issue of change management and training for organisations
• Issue of equity and access
• Timeframes for projects
• Facilitating networking and learning amongst projects
• Promotion of project results and learnings
• Quality review processes

With a mindset that "We are all in the same mess so let's all fix it up. ...We are all in a process together and no one knows all the answers" (Interview, 2001), then clearly collaborative learning is at the heart of the ITOL projects. And while traditionally, success in such alliance ventures is measured by achieving project objectives, in our research, in many instances where these objectives were altered or not met, there was a real sense of success in learning and knowledge gained from the experience.

It was not evident in this exploratory research that one particular category was more successful than the other. As such future research can build on the present empirical findings to develop and test hypotheses regarding critical success factors in e-business collaboration.

Acknowledgments

This study was undertaken as a collaborative project between NOIE and Macquarie University. The research team would like to thank all those involved in the ITOL program specially Ian Brown, Deborah Chen and Ashley Cross, as well as the different ITOL project participants for contributing both time and knowledge to the study. Special thanks also go to our research assistant, Maria Hollero for her valuable contribution to the research.