Organizational Readiness for e-Business

With the growing importance of the Internet, companies across several industries, including construction, are increasingly leveraging the Internet to achieve competitive advantage.Internet-based tools such as project extra nets are being used to manage construction projects.
Such tools can be used to monitor control, manipulate and store project information and to make it available to all participants of the construction supply chain. Examples of Internet-based tools include a computer-mediated tendering system for services or contracts, purchasing of materials via the Internet by a contractor, project extra nets
for project management and specifying products online by a manufacturer. All these tools can be categorized under
the broader umbrella of e-business for construction as they support and/or facilitate business functions such as trading, exchange of data and information, and automation of the business processes and workflows.
Research studies and recent industry and research publications have documented the possible benefits
and business opportunities for companies using e-business tools such as project extra-nets. In spite of these documented benefits, the UK construction industry has been relatively slow in the uptake of these tools
in their day-to-day workings. A survey of the UK construction industry, undertaken by the Construction Products Association (CPA, 2000), predicted that by 2005,50% of the industry’s business activities would be
undertaken using e-business. However, another survey carried out a year later by the same organization indicated a considerable reduction in these projected figures to 22’/, (which is less than half of what was initially predicted),
indicative of a much slower uptake than anticipated. The construction industry stepping back from the initial’dot-com fever’ was seen as the main reason of this change (CPA, 2001).

Additionally some other factors that have also contributed to this slow uptake are:

  • Since e-business technology is relatively new there is limited availability of information or feedback on the technology’s performance on previous construction projects.
  • As with most technologies, it can be difficult to gauge the quantitative return on investment (ROI) from using new technologies such as e-business.
  • The teething problems and changes in working culture and practices which are required initially, with the adoption of any new technology, very often deters new users.

Although the uptake of e-business in the UK construction industry has been relatively slow, it can be seen that the construction industry has now realized the enormous potential for its use in the construction sector. The
UK construction sector is trying to maximize the use of e-business through several industry and government-backed initiatives [e.g. M4I (Movement for Innovation), CBPP (Construction Best Practice Programme), CPA (Construction Products Association), Construct-Il etc.l that promote research into the use of emerging technologies, such as e-business, in construction. Ii is now the industry’s view that, e-business is here for the long run and it will not be long before it becomes an industry standard.

Implementation of any new technology such as e-business for achieving business targets requires major changes in an organization, its current practices, systems, processes and workflows (ITCBP Intelligence, 2003).
The correct strategies and implementation plans have to be developed, communicated and implemented at all levels. Since this is not easy, issues such as ‘buy-in’, defining a strategy, selecting a system, developing a training programme, defining operating procedures, modifying organizational structures, reviewing use and extending use need to be thoroughly researched (ITCBP Intelligence, 2003). Taking this into account, construction companies who are currently using and those who have yet to use, e-business tools need to take measures to successfully adopt, use and
benefit from e-business.

It is important for companies that seek to adopt e-business to analyse their businesses to ensure a productive and beneficial implementation of these tools that is:

  • They need to evaluate the impact of using e-business tools on their day-to-day business processes
  • Assess their ‘e-readiness‘ for adopting e-business.

This page focuses on the development of an e-readiness assessment tool (VERDICT) for construction organizations. The next section defines e-readiness and describes the adopted methodology. This is followed by a review of readiness assessment models and detailed description of the development and implementation of the VERDICT tool. An example is used to illustrate the operation and features of the system and aspects of system evaluation are also presented.

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