Section 1: Introduction

1.1 Background

The spread of the Internet has led to several changes in business organisation and company strategy. By providing a wide range of opportunities linked to digital platforms, companies can now de-construct traditional vertical value chains and convert them into more flexible and synchronic value aggregations. Electronic commerce is the main driving force behind this transformation (Ordanini & Pol, 2001, 276).

... We want to transform the way your organisations operate by overthrowing your existing paper based paradigm and replacing it with an online based one ... e-commerce doesn't work unless you have a complete transformation (Interview, 2001).

What we are witnessing in contemporary organisational life is the opportunities wrought by technological changes, most recently through web-based technology and the Internet that shake traditional foundations of organizing and the very nature of organisations. New challenges are, therefore, confronting management across a diverse array of industries and government, and offer the likelihood, through economically viable new options, of new paradigms for organisational life, practices and processes, models, and relationships (Feeny, 2001).

Organisational relationship is a crucial issue from the list of transformative practices. While we have seen a more than steady growth in alliance 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 collaboration. However, there remains unevenness amongst organisations. As Hoffman and Schlosser (2001, 358) point out from recent research, we find "that SMEs' propensity to co-operate is significantly less than that of large companies. These empirical findings show that SMEs do not fully utilise alliances to improve their competitive position." This was an issue tackled in the current research, where the promotion of collaborative alliances among SMEs was a key objective of the ITOL program investigated.

1.2 Study objectives

A substantial body of literature exists on alliance formation, and increasing emphasis has been given to alliance termination ... but intermediate phases of alliance management have gone relatively unexplored (Reuer & Zollo, 2000, 165).

The overall objective of the research herein 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 five funding rounds of the Information Technology Online (ITOL) program run by the National Office for the Information Economy (NOIE). Conducted as a collaborative project between NOIE and Macquarie University, this research aims to record and examine such ITOL funded projects, looking especially at the range of approaches to e-commerce and relating these to communities of interests.

In particular, this research 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?

1.3 Study approach

Although there is an extensive amount of literature dealing with alliances, a comprehensive theory of interfirm co-operation has not yet emerged. The research on alliances is characterised by considerable diversity in conceptual frameworks, applied methods, empirical data and findings. ... Nothing is gained by arguing which theory is superior. Instead, one should strive to find a productive synthesis of the most important proven theories (Hoffmann & Schlosser, 2001, 358-9, 373).

Alliance research, despite having a relatively long history, remains a growth industry ... the dynamics of alliances is an important phenomenon of inter-firm collaboration (Reuer, 2000, 144).

Current alliance theories range from the economic and strategic to the sociological, and often focus on the following explanations for interorganisational collaboration (Hoffmann & Schlosser, 2001):

• Transaction-cost theory sees alliances as the most efficient organisational form for minimizing the totality of fixed and continual transaction costs.
• A resource-based view sees alliances as required to meet additional resources not available from market transaction or cost-effective or timely internal strategies.
• A knowledge-based approach suggests alliances as providing the optimum context for adding organisational value through knowledge exchange or combination for learning.
• General management and organisation studies emphasize factors such as leadership, communication and the like.
• Sociological approaches encompass a diversity that includes institutionalisation theory to develop legitimacy, notions of trust, and key executive positioning for alliance formation and success.

Recently, Das and Teng (2000, 37) have argued that the resource based view offers more to assist our understanding of strategic alliances: "In sum, it is about creating the most value out of one's existing resources by combining these with others' resources, provided, of course, that this combination results in optimal returns."

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 review of similar grant programs in other countries;
• Analysis of ITOL project files;
• Participation in ITOL Peer Workshop;
• Interviews with key NOIE/ITOL personnel;
• Content analysis of publications such as government reports, company profiles, and relevant web sites;
• A survey sent to all 67 ITOL grant recipients with a response rate of 52%. The survey incorporated questions around the background of projects funded, the nature of collaboration, achievements, obstacles and outcomes, and comments on NOIE support;
• In depth interviews, both face-to-face on sites and teleconferenced, each of approximately two hours duration with a representative group of 27 projects across each of the five funding rounds, involving both successful and unsuccessful projects, completed and ongoing ones. These were taped with permission and transcribed for analysis. The selection criteria related to innovation, e-commerce readiness, collaboration experience, measurable community benefits, and scale and diversity;
• Quantitative data analysis of survey responses and qualitative data analysis of interview data.

In this research, success was defined in terms allied to that emphasised by Douma et al. (2000, 581): "as the degree to which ... partners achieve their alliance objectives." Failure was defined in terms of not meeting objectives, although in some cases objectives had been modified or changed with experience and, in others, objectives had not been completely met because time and/or funding had run out. It is important to note, however, that, in a wider sense, a lack of success did not necessarily imply total failure, in that the ITOL program was structured such that all participants could benefit from the experiences of others through knowledge sharing processes.

Among some problems encountered during the research were the following:

• Some difficulty in getting up-to-date contact addresses for old ITOL projects, given that several of those in-charge of completed projects had moved on to other jobs and could no longer be located. In addition, many of the consortiums for the different projects had disbanded or the partners were no longer in contact with each other.
• Some of those involved in the different projects claimed heavy workloads prevented them from participating in the research, particularly some groups caught up with activities during the election at the end of 2001.