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E-Commerce Metrics for online Organizations:

Assessing the value of ecommerce metrics for effectively manage work system method
of net-enhanced businesses.
Azeem Ismail Cheema
University of New England, Australia
acheema@une.edu.au

Abstract: The paper describes research aimed at evaluating e-Commerce metrics with prospect of
effectively manage and enhanced work system method in online organizations. The case study
methodology was used to evaluate performance measurement of e-Commerce capability metrics.
Qualitative data was collected from various sources included interviews with organizational personnel,
customers, company websites and documents. Different metrics were used in research like; Speed and
designs of web services, causes of abandoned shopping baskets, Return visitors profile, purchasing
session length and path, Impact of advertisements and publicity, Sources of referrals, and comparison
with competitors.. The research reveals that by properly considering these metrics and building
information system on the findings could increase revenue of a company to a considerable level. Paper
puts light on importance of building effective information system for online businesses on the basis of
these metrics.
Keywords: e-business, e-Commerce, e-commerce Metrics, Information system, Net-enhanced
businesses, Work system method,
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Introduction
Concept of doing business is changing rapidly with advancement in information system and
technology. There is hardly an organization which is not net enhanced or any business doing online
sales. Many organizations are being failed due to non-effective work system methods and lack of
deployment of valuable information obtained by ecommerce metrics. In this study, definition of e-
commerce is taken as business activities conducted over the Internet. Net-enhanced organizations
are traditional, “brick and mortar” firms that are using the Internet to invigorating their existing
businesses (Straub et al. 2002).
Big companies are conducting business online and integrating with other departments ant outer
world .according to the recent survey connecting to customers and suppliers by the mean of internet
is one of the top-ranked information technology management issues (Computer Sciences Corp.
2001).
As reasonable investment is being used for online businesses, analysts and researchers are trying to
find the ways where these investments could bring maximum out put. This is the reason that this
study is being under taken.
Case studies on companies such as Hewlett Packard and Dell provided insights into business use
and benefits of ecommerce, but we have to see whether these findings are specific to a few big
organizations,
Or are the findings more widely applicable to other medium or small sized companies?
There are many organizations which are going in loss in online business. We have to see the impact
of e-commerce in those and other companies.
For these issues we need to conduct analysis and quantities basis. We can not do this without
finding some metrics; which could be compared for different organizations.
Main questions in my study are what are the reverent metrics for anal sing e-businesses?
What is the impact of these metrics on e-commerce? Do these metrics play different role in different
organizations? For this reason I chose some metrics already in use by many researchers and
analysts.
The metrics which were used in this research are Speed in locating known items in a catalogue,
designs of web services, causes of abandoned shopping baskets, Return visitors profile, purchasing
session length and path, Impact of advertisements and publicity, Sources of referrals, and
comparison with competitors.
Some hypotheses were developed to test the presence or absence of the effects in terms of e-
commerce capabilities with respect to performance measures such as profit margin, cost reduction,
and supply chain efficiency etc.
.
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2. Literature review
Revolution in performance measurement with the development of balanced or multi-dimensional
performance measurement frameworks have been seen in recent years. The metrics mentioned
above are in wide use. Of these new frameworks, the Balanced Scorecard (BSC) has become pre-
eminent (Kaplan and Norton, 1992).
According to Marr and Schiuma (2003: 680) these metrics and balanced scorecards are the most
influential and dominant concept in the field.
Metrics are very important because they provide comparability and intensive research procedure.
Metrics enable research to accumulate in a subject area as direct comparisons become possible
between different persons, cultures, time periods, industries, or different geographic regions
(Straubet al. 2002).Reviewing the wider e-business literature and websites; it was possible to
identify a number of factors that an e-business metrics and performance measurement system
should deal with. These include: The performance of the website (Zeithaml et al. 2000),
The performance of customers (Hinton et al., 2003), Linking e-business performance to business
strategy (Chang et al. 2003),
Information Systems Research
(Zhu et al., 2002)

3. Research Method
The aim of the research was to investigate the effect of metrics and their performance in an e-
business when properly measured and system made on the findings. A case study method was
deemed the most suitable approach, as it is well suited to investigating contemporary practices
within organizations (Yin, 1994).
Measurement characteristics and metrics were tested for 10 manufacturing companies using
primary and secondary data from public databases and Web sites. Several small business owners
were contacted and different persons from e-business background and customers were interviewed.
Data were collected and analyzed for a 3 week study period.
A further three companies agreed to participate from this author. The principal method of
data collection in the research was via face-to-face, semi-structured interviews with a key
informant in each organization. A framework based on a standard set of question topics
was used by the interviewers in order to focus and bound the discussions (Miles and
Huberman, 1994). Additional data came from company investigating different companies’
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web sites. The author had not much time as required for this research, however it was
strived to consult as many resources as possible for better results.

4. Results
The findings from the metrics used for the research are briefly described below. Where some
organizations or person concerned Pseudonyms have been used and some case data disguised to
protect confidentiality and privacy.

4.1 Speed in locating known items

This metric played a vital role in success of an online business. 10 websites were conducted to find
common electronic equipment. It was found that for a lay man it was difficult to locate the item in
some websites. 2 top websites in relation to speed in locating known items were chosen. These 2
organizations were renowned web based giants making considerable profit each year.

4.2 Designs of web services


Design of the web service was the second metric used in the research. Organizations were selected
randomly and then were analyzed by the author and a professional analyst. Then it was decided to
give numbers related to the quality of the design. 6 people were conducted for the 12 web based
businesses and were asked to give number from 1-10, compare to the design of a website and home
page. Top 3 companies were short listed. Again these were well known organizations.
4.3 Impact of advertisements and publicity
This factor is a traditional way of boosting any business. It used so widely that its importance is not
beyond the truth. As much a business is advertised as would be it familiar to the public. That will
contribute to it annual revenue. In this study 20 names were given to the people and asked them to
grade these. The top 3 organizations were indeed the top one. The result showed that these 3
companies obtained more than 70% of the total marks. It means there is no point to leave e-business
unknown. It would never be familiar fast if you don’t advertise it. It is wrong in this fast moving
world that gold is gold and nobody need to tell buyer difference between gold and amalgams of
other metals.

4.4 Purchasing session and length & Sources of referrals


Purchasing session and length and source of referrals were also found very important. This is
electronic era with lot of competitor around if purchasing session and length or source of referral is
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not considered the business may go down. By measuring these metrics and managing they properly
could bring intangible benefits for an organization. I noted this point many times while conducting
interviews with key information giver for the organizations during my research.
4.5 Return visitors profile

It was found during the study that almost all organizations keep record of visitors and customers.
Return visitors are called prospect customer and should dealt with courtesy and respect. Customers
are the asset of any organization. Priorities must be given to return visitors or likely customers
because they are more critical and would be comparing different organizations. It is found that
successful e-businesses are caring for return visitors and customers. The organization more friendly
and courteous reaps more benefits from e-commerce than the other way round
4.7 Comparison with competitors

This was the last metric evaluated during the study. Human being is swayed by the influence of
other we do are act in the shade of others doings. The same applied in the business but not all the
time. In this study it was found the organization that rapidly change, with the need of people and
advancement of technology deemed to be more successful. When people were asked to chose a
company to be their customer. They selected with the feature of modernization and competitive to
other organizations. It was noted that all well established organizations are spending budgets in
succeeding their competitors.

6. Discussion
It was expected that from the literature review, and interviews it the effective e-business
performance measurement system would encompass a range of different measures, including
financial as well as non-financial measures.
To some extent this was born out by the case findings. In that all some of them were measuring
more than one aspect of e-business performance. Examples of the metrics used included those
associated with customers, e-business processes and website performance. However, the case
organizations generally appear to have adopted an ad hoc approach to e-business performance
measurement and metrics. It was found that not any organization had a true portfolio of e-business
performance metrics; which we can take as example or template. Moreover there tended to be a
discernable focus for their e-business performance measures through the use of proper metrics.
Such as customer metrics, financial metrics, process metric, environment metrics, or other metrics
specifically used for the study. There was never any sense of balance between the measures used.
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Any mention of the BSC was notably absent in any of the interviews except in a one case.
The literature also suggested that an effective e-business performance measurement system would
link e-business performance to strategy. However, only some of the case organizations had
performance metrics that were considered appropriate to their aims for e-business.
High level measure was not possible because some of the case organizations had e-business metrics
that linked to the features limited for the stud. In some cases it was noted that these metrics were not
directly linked to the strategy of an organization. Incremental and numbering techniques were
adapted to amending organizations existing performance measurement systems for e-commerce.
Only few changes have been made for assessing metrics in any organization and tried to keep them
as low as possible. In the few instances where completely new e-business metrics were introduced
they were simply added to the existing set of performance measures or modified for obtaining equal
results. The environment of the research was not controlled and there were many instances where
chance of making mistakes was higher.
It is also note able that none of the organization selected for the case study, undertook any kind of
review of their existing performance measurement systems to determine what changes might be
needed for e-business according to the knowledge of the author.
It was found that organizations are reluctant to use all of the metric as used in the case; instead they
are using their own metrics and assessing procedures on case by case basis. The reason derived after
deep study is that companies don’t want to make investment in new untested systems and prefer
their own home made system.
One obvious reason is that organizations may be concerned about the difficulties and costs of
adapting existing performance measurement systems for e-business, and are not convinced about
the benefits that may ensue.

7. Conclusion
This case study reveals the effects of metrics of e-commerce on different organizations. The only
a few metrics were chosen for the study and these were tested relatively on a very small portion of
net-enhanced businesses. The outcomes and result of the study shows that to be a better and strong
e-business, the traditional organizations have to use all of these metrics and measurement system. It
is clear by the study that, those organizations are progressing rapidly which have intensive
evaluating system for measuring their electronic commerce system. The bigger companies were
found with having most of the factors of success while studying the case.
It is also a fact that not a single factor can improve the economy of an organization but these all
metric play an important role in advancement.
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