17-Dec-2000&

Electronic commerce (e-commerce) has become a major factor in determining the future
survival or success of organizations. The de®nitions of e-commerce are many and diverse. In
addition to these, there are varied notions of electronic business (e-business) and collaborative
commerce (c-commerce). Here, we structure the existing ®ve-fold e-commerce taxonomy to
accommodate various e-business and c-commerce perspectives as well. From this, we
synthesize an integrated over-arching de®nition of e-business. However, the result has a
limitation. To overcome it, we advance a knowledge-management view that explicitly
recognizes e-business as being based on e-knowledge: processes and technologies for
managing knowledge. We contend that the knowledge-oriented perspective of e-commerce/
c-commerce/e-business is bene®cial in furnishing a common, organized, and uni®ed
foundation for understanding and managing electronic organizations in the knowledge
e-conomy. Copyright # 2000 John Wiley & Sons, Ltd.
INTRODUCTION
Electronic commerce (e-commerce) has become a
major factor determining future survival or success of organizations. It is changing the shape of
competition, speed of action, and nature of leadership (Kalakota and Robinson, 1999). The advent of
the World Wide Web represents a turning point in
electronic commerce, allowing organizations to
achieve better economies of scale and scope. Ecommerce is an infrastructure for a new way of
doing business and gaining competitive advantage
in the customer age (Fingar, Kumar and Sharma,
2000).
Three distinct interrelated classes of electronic
commerce applications can be distinguished:
consumer-to-business, business-to-business, and
intraorganizational (Kalakota and Whinston,
1996). Nevertheless, electronic commerce means
different things to different people. These varied ecommerce perspectives coupled with notions of
electronic business (e-business) and collaborative
commerce (c-commerce) combine to present a
confusing picture. Gray Eichorn, President and
CEO of Open Market, says, `I don't have a clue; it
doesn't mean anything. To me, it's e-gads. We
refer to Internet commerce, meaning using the
Internet to do business' (High Latitude, 1999).
E-commerce is commonly de®ned as using
technology to enable buy-sell transactions
(Holsapple and Singh, 2000a). In everyday usage,
the terms Internet commerce and Web-commerce
are often interchanged with e-commerce (Fingar,
*Correspondence to: Clyde W. Holsapple, School of
Management, Gatton College of Business and Economic,
University of Kentucky, Lexington, KY 40506-0034, USA.
E-mail: cwhols@pop.uky.edu
Knowledge and Process Management Volume 7 Number 3 pp 151±164 (2000)
Copyright # 2000 John Wiley & Sons, Ltd.
Kumar and Sharma, 2000), even though ecommerce transactions are not limited to the
Internet or Web. This common view of ecommerce is quite narrow and precludes other
important non-commercial transactions, information exchanges, and intraorganizational activities
(Perry and Schneider, 2000). More recently, the
term e-business has become a central theme at the
heart of business strategy. It refers to transformation and streamlining an organization's value
chain activities through use of Internet technologies. However, many managers still view ebusiness as simply buying and selling goods on
the Internet (Kalakota and Robinson, 1999). GartnerGroup (1999a) has identi®ed a complex form of
e-business called c-commerce, referring to collaborative and ¯uid interaction of a community of
employees, business partners, and customers
designed to take advantage of new trading
opportunities made possible by the Internet. This
paper introduces a taxonomy for understanding
the nature and relationships among e-commerce,
c-commerce, and e-business.
As a ®eld of study and research, e-commerce
cuts across every functional business discipline. It
pervades practically every aspect of management.
To help make sense out of the many perspectives
on e-commerce, Holsapple and Singh (2000a)
developed a taxonomy of e-commerce de®nitions
for systematically considering what an organization needs to address in its quest for competitiveness in the ubiquitous e-commerce world. This
paper extends the taxonomy to accommodate ebusiness and c-commerce perspectives.
Perspectives are very important because they
in¯uence and guide the nature or focus of both
business practice and research effortsÐmore so for a
young dynamic ®eld such as this. Based on observed
relationships among the taxonomy's ®ve categories,
a single integrated perspective on e-commerce, ccommerce, and e-business in synthesized. We then
extend this perspective by adopting a knowledge
management orientation. The result is a uni®ed view
that clari®es relationships among the competing
conventional conceptualizations, offering a structure for guiding both research and practice.
Following a summary of the e-commerce taxonomy, we examine representative de®nitions of
c-commerce and e-business. Their relationships to
e-commerce taxonomy's categories are discussed.
Subsuming all the notions, we then advance an
e-knowledge perspective of e-business, explicitly
recognizing the ties to knowledge management
processes and technologies. We conclude by noting implications for practice, research, and study.
TAXONOMY OF ELECTRONIC
COMMERCE DEFINITIONS: A SUMMARY
To ®nd a best, most inclusive, comprehensive
characterization of electronic commerce, Holsapple
and Singh (2000a) collected representative ecommerce de®nitions from diverse print and
electronic sources. Examples appear in Table 1.
However, no single de®nition appeared to dominate or encompass all others. Nevertheless, an
interpretive analysis revealed that the de®nitions
clustered around ®ve distinct themes, resulting in
an e-commerce taxonomy.
Here we summarize the taxonomy's ®ve
categories of e-commerce: trading view, information exchange view, activity view, effects
view, and value chain view. Each perspective has
value as a lens for viewing the e-commerce
landscape.
Trading view
Insofar as the term `commerce' connotes marketbased activities, e-commerce tends to be associated
with computer-based means for performing commercial transactionsÐbuying and selling. For example, shopping services allow a consumer to seek and
purchase goods or services through electronic networks. This view of e-commerce is concerned with
what kind of buying-selling can be done electronically, what aspects of such transactions can be
electronic, identi®cation of enabling technologies,
and exploration of electronic trading behaviors.
This e-commerce view, illustrated in Figure 1, is
probably the one that springs to the popular mind
when the term `electronic commerce' is used.
Information exchange view
E-commerce not only enables exchange of money
for products and services, but does so via
exchanges of information. Information can be
considered as characterizing the substance of a
market transaction, and can itself be the commodity being bought and sold. Beyond this, information transfer can occur prior to a transaction (e.g.
to support underlying decisions) or following a
trade (e.g. to assess it). Figure 2 conveys the
information exchange emphasis found in many ecommerce de®nitions.
Activity view
A third class of e-commerce de®nitions is composed of those that recognize the use of technology
in accomplishing a variety of business activities
RESEARCH ARTICLE Knowledge and Process Management
152 C. W. Holsapple and M. Singh
including, but not limited to trading. As Figure 3
suggests, the notion of `commerce' is extended to
encompass not only the use of technologies for
transaction execution but also for presale and
postsale efforts, decision support, maintaining/
cultivating business relationships plus a host of
ancillary activities (e.g. satisfying legal/regulatory
requirements).
Table 1. Representative e-commerce de®nitions
De®nition Source Focus
$ Electronic commerce is the use of computer networks to conduct
business Ðbasically the buying and selling of goods and servicesÐ
electronically with one's suppliers, customers, and/or competitors.
Hayashi (1996) Trading View
$ Electronic commerce is the use of telecommunication networks for the
purpose of linking organizations and/or individuals that engage in
some form of computer-mediated commercial trading relationship. It
incorporates things like buying and selling over such platforms as the
Internet, EDI, Interorganizational Systems such as EFT, Point of Sales
Systems etc.
Steinfeld (1997) Trading View
$ Electronic commerce has been used to describe a wide variety of
businessÐrelated transactions, but is at its core the data used for
conducting day-to-day business operations with suppliers and
customers.
Coburn (1995) Information
Exchange View
$ Electronic commerce can be de®ned as commercial activities
conducted through an exchange of information generated, stored, or
communicated by electronic, optical, or analogous means, including
electronic data interchange (EDI), e-mail, and so forth.
UN Reference
Number A/50/17
(1995)
Information
Exchange View
$ Broadly speaking, electronic commerce includes any form of economic
activity conducted via electronic connections.
Wigand (1997) Activity View
$ Electronic commerce is an integrative concept, designed to draw
together a wide range of business support services, including
interÐorganizational e-mail; directories; trading support systems
for commodities; products, customized products and custom-built
goods and services; ordering and logistics support systems;
settlement support systems; and management and statistical reporting
systems.
Clarke (1997) Activity View
$ Broadly de®ned, electronic commerce is a modern business
methodology that addresses the needs of organizations, merchants,
and consumers to cut costs while improving the quality of goods and
services and increasing the speed of service delivery.
Kalakota and
Whinston
(1996)
Effects View
$ Electronic commerce refers to the conduct of business between two
or more companies, using an integrated set of electronic tools to
streamline business processes and reduce cycle time. These tools
include EDI, imaging, bar coding, e-mail, work¯ow management
systems, and any other tools that may be appropriate to streamline a
given business relationship.
Benesko (1994) Effects View
$ Electronic commerce is commerce which is enabled by WWW-era
technologies, to permit the seamless integration of information,
communication, and logistical technology along the entire value chain
of business processes from the suppliers of raw goods and services to
the ®nal customers.
Becker, Ferris, and
Osborn (1998)
Value Chain
View
$ Electronic commerce denotes the seamless application of information
and communication technology from its point of origin to its endpoint
along the entire value chain of business processes conducted
electronically and designed to enable the accomplishment of a
business goal. These processes may be partial or complete and may
encompass business-to-business as well as business-to-consumer and
consumer-to-business transactions.
Wigand (1997) Value Chain
View
Knowledge and Process Management RESEARCH ARTICLE
Electronic Commerce, Electronic Business, and Collaborative Commerce 153
Effects view
The foregoing categories are concerned with what
and how aspects of e-commerce. They focus on
what is done (trading, other activities) and how it
is done (technology-based information exchanges).
As Figure 4 indicates, a fourth category of de®nitions emphasizes the why aspect of e-commerce: its
goals, reasons and effects. Effects of e-commerce
appear in all areas of business, from customer
service to logistics to new product design. It
facilitates new types of business processes for
reaching and interacting with customers, suppliers, and partners. It can reduce overhead costs in
managing orders and interacting with trading
partners, maintain/increase market shares, lower
product cycle times, facilitate collaboration,
improve service quality, reduce response times
and so forth.
Value-chain view
A ®fth group of e-commerce de®nitions clusters
around the value-chain concept. The value chain
model identi®es technologically and economically
Figure 1 The taxonomy's trading view
Figure 2 The taxonomy's information exchange view
Figure 3 The taxonomy's activity view
Figure 4 The taxonomy's effects view
RESEARCH ARTICLE Knowledge and Process Management
154 C. W. Holsapple and M. Singh
distinct activities (called `value activities') that an
organization performs in the course of doing
business (Porter, 1985).
The class of de®nitions depicted by Figure 5 sees
e-commerce as the value-creating use of technology. It supports or performs value activities
(which overlay trading and other business activities) in an effort to enhance competitiveness. An
extended value chain incorporates value chains of
other entities such as suppliers and /or consumers
and is commonly called a supply chain. Even
though it is not explicitly recognized in de®nitions
underlying this category, use of technology in
implementing supply chains ®ts is as part of the
value chain view of e-commerce. Thus, when we
refer to value chains we mean both internal and
extended value chains.
OTHER PERSPECTIVES
Two notions generally advanced as distinct from
e-commerce are collaborative commerce and electronic
business. Here, we present a representative assortment of c-commerce and e-business de®nitions.
These are analyzed with respect to the e-commerce
taxonomy, showing that they are not only compatible with the taxonomy but help give additional
structure to it.
Collaborative commerce
According to GartnerGroup, the e-commerce
world of businesses shifting their operations to
the Internet is fast evolving into a virtual strategy
called c-commerce, in which companies deal with
multiple, ever-changing partners (McCarthy,
1999). Collaboration has emerged as a critical
business practice for improving performance of
the value chain. Collaboration seeks to synchronize business-to-business and business-toconsumer trading partners. This synchronization
is a strategic initiative to achieve ef®ciencies
previously targeted through such efforts as Justin-Time, Quick Response, Ef®cient Consumer
Response, Enterprise Resource Planning and
others (Dynamic Web Enterprises, 1999).
Most c-commerce de®nitions (see Table 2 for
examples) emphasize the importance of exchanging information. Consequently, they focus on its
distribution in the conduct of e-commerce (e.g.
messages passed electronically between trading
partners, electronic information transfer within a
business). On a broader scale, the de®nitions
recognize a new paradigm shift sweeping the
business world today: that information is not just
a supporting element of the value-adding process,
but a source of value itself; that organizations
apply useful information to make more timely,
better decisions. Judith Hurwitz, president and
CEO of Hurwitz Group, states that `A dynamic,
inter-enterprise business infrastructure that links
product and process information across organizations, divisions, and applications is how companies will succeed in the 21st century' (PTC.com,
1999).
Clearly, collaboration is not con®ned to trading
activity. Broadly, commerce involves negotiated
trading of valuable objects or services between
multiple parties and includes all activities that
each of the parties undertakes to complete the
transaction (Perry and Schneider, 2000). Unlike
e-commerce, trading activity does not receive
any particular emphasis in c-commerce. Using
collaborative tools, components, and integration
technologies, c-commerce is concerned with information exchanges that pervade all collaborative
activities in a community of participants (including, but not limited to, the activity of trading). This
coincides with the taxonomy's activity view of ecommerce. The activity view recognizes activities
both across and within organization boundaries,
ranging from tactical to strategic levels, entailing
both business and consumer contacts, and includFigure 5 The taxonomy's value chain view
Knowledge and Process Management RESEARCH ARTICLE
Electronic Commerce, Electronic Business, and Collaborative Commerce 155
ing both pre-transaction and post-transaction
activities (Holsapple and Singh, 2000a). Even
though c-commerce de®nitions do not mention
these business activities explicitly, they are
common and inherent in the very nature of
collaborative commerce.
Because of its main focus on technology for
information exchange in conducting activities
within collaborative community, c-commerce coalesces closely around the information exchange
and activity views of the e-commerce taxonomy.
This is not to say that c-commerce de®nitions
entirely ignore remaining views of the taxonomy.
For example, one de®nition refers to selling (Ward,
1999); organizations moving toward c-commerce
are replacing traditional business trading relationships with constantly shifting alliances and ¯uid
interactive collaboration designed to take advantage of new trading opportunities made possible
by the Internet and other technologies (GartnerGroup, 1999a). Similarly, their de®nition refers to
intended effects of c-commerce suggesting that it
can promote enterprise agility and dynamic integration (GartnerGroup, 1999a). Although no direct
mention of the value chain is made in the ccommerce de®nitions, collaboration is critical for
improving performance in value chains.
Figure 6 illustrates the relationship between
e-commerce and c-commerce in terms of the
taxonomy. While all taxonomy classes derive
from e-commerce de®nitions, the most commonly
emphasized view of e-commerce is electronic
support of trading. Conversely, for c-commerce
the clear emphasis is on electronically supporting
information exchange to foster collaborative business activities, with some relationship to the other
three classes.
Electronic business
Competitive issues driving businesses of all sizes
and across all industry sectors call for nothing less
than complete organizational metamorphosis. Ebusiness is the way companies are fundamentally
changing the way they do business using electronic technologies (Oracle Corp., 1999). E-business is
much more than technology; it also involves a
mind set (Electronic Business Inc., 1999). Sometimes e-business is equated with e-commerce, but
many contend that e-commerce is only part of a
much bigger picture (Dalton, 1999). E-business is
the overall strategy, and e-commerce is an extremely important facet of e-business (Kalakota and
Robinson, 1999).
E-business solutions are helping today's companies do everything better, faster, and more
ef®ciently. From forging strong customer relationships, to managing supply chains, to strengthening
value provided to customers, to electronic dissemination of information, e-business is changing
the way work is done (MySAP.com, 1999). The `e'
may come ®rst in e-business, but it is the `business'
that is important (Pickering, 1999). No matter how
powerful technology is it is only valuable to the
extent that it supports business; e-business is more
about business than technology (IBM Corp., 1999).
Table 2. Representative c-commerce de®nitions
De®nition Source
$ Collaborative commerce occurs when organizations employ real-time collaboration
tools to sell or support their products and services to other businesses, or directly
to consumers.
Ward (1999)
$ Collaborative commerce enables manufacturers to automate information ¯ows
within a multi-channel distribution network, including manufacturers,
distributors, dealers, service groups, and end consumers.
InSight (1999)
$ Collaborative commerce will provide a dynamic, Internet-based inter-enterprise
business infrastructure that links product and process information and
applications boundaries of internal organizations as well as suppliers, partners,
and customers
Maynard (1999)
$ Collaborative commerce describes the collaborative and ¯uid interaction of a
community of personnel, business partners, and customers that is joined together
by Internet, component and integration technologies, resulting in agile but highly
integrated `virtual' multicompany enterprises.
GartnerGroup (1999a)
$ A key goal of c-commerce is to harness all product information and application
assets into a Web-based framework and providing ubiquitous, personalized access
to all participants in a given commerce community.
Burdick (1999)
RESEARCH ARTICLE Knowledge and Process Management
156 C. W. Holsapple and M. Singh
Examining e-business de®nitions (see Table 3 for
examples) with respect to the e-commerce taxonomy leads to several observations. Taken together,
e-commerce and c-commerce are mainly concerned with what is done (trading and other
business activities) and how it is done (via
technology-based information exchanges). Many
of the e-business de®nitions, however, stress the
why aspect because they explicitly de®ne e-business
in terms of its various outcomes and bene®ts. If ebusiness is the cause of a revolution in rules of
business, its effect, in short, is structural transformation of an organization's internal foundations to
be more effective (Kalakota and Robinson, 1999).
Essentially, e-business is technology-enabled transformation that dramatically increases ef®ciencies
of traditional business processes (GartnerGroup,
1999b). These ef®ciencies are materialized in a
variety of forms: maximized customer value, lower
costs, improved quality of products and services,
increased innovation, lower product cycle times,
optimal trading opportunities, and so forth.
Beyond ef®ciencies of traditional processes, it
stimulates new processes as well. The e-business
emphasis on such outcomes and bene®ts clearly
aligns the notion of e-business with the taxonomy's effects view illustrated in Figure 4.
Another major point in e-business de®nitions is
recognition of the value chain and value adding
activities. Competitive advantage is obviously not
achieved by simply emulating competitors; it is
achieved by matching customer desires to value
chain competencies (GartnerGroup, 1999b). Both
sides of the equation can be modi®ed by valueenhancing processes through the use of e-business
technologies and techniques. An electronic business uses technology in an effort to continuously
optimize its value chain positions. To achieve this,
an enterprise must integrate its e-commerce,
customer relationship, enterprise, supply chain,
and logistics systems with its value chain
processes and its business partner's processes
(GartnerGroup, 1999b).
The value chain view takes the stand that the
unfolding world of e-business cuts across every
functional ®eld of business and pervades practically every aspect of management. E-business
represents a new means of value adding and
value creation for organizations and consumers. It
has both an internal orientation (facilitating value
activities) and an external orientation (linking
value activities with those of suppliers and
customers).
Because of its concentration on the bene®ts of
conducting business and achieving competitive
advantage via value chain management, the
notion of e-business relates closely to the effects
and value chain views of the ®ve-fold taxonomy.
This is illustrated in Figure 7, which shows
relationships among e-commerce, c-commerce,
and e-business giving structure to the taxonomy.
E-business emerges as the broadest of the three
concepts. It encompasses e-commerce in its popular (albeit narrow) sense of buying and selling.
Hence, it indirectly relates to the taxonomy's
trading perspective. For a given business transaction, the ¯ow of material is secondary to the ¯ow
of information that enables, facilitates, and guides
it (Cook, Chung and Holsapple, 1995). Some
e-business de®nitions explicitly or implicitly
recognize this, thus relating e-business to the
taxonomy's information-exchange view. Because
e-business allows customers, partners, and suppliers to seamlessly interact with organizations
Figure 6 Relationship between e-commerce and c-commerce
Knowledge and Process Management RESEARCH ARTICLE
Electronic Commerce, Electronic Business, and Collaborative Commerce 157
using collaborative technology, it naturally encompasses all business activities performed by
the collaborative commerce community. Some
e-business de®nitions directly allude to this
notion of collaboration, thereby relating e-business
to the taxonomy's activity view.
Figure 7 Relationship between e-commerce, c-commerce, and e-business
Table 3. Representative e-business de®nitions
De®nition Source
$ Electronic business allows customers, partners, and suppliers to seamlessly
interact with organizations providing their constituents with value-added
customized services and immediate access to relevant information.
Hurwitz Group (1999)
$ E-business encompasses e-commerce and includes both front- and
back-of®ce application that form the engine for modern business to
maximize customer value.
Kalakota and Robinson (1999)
$ E-business is the powerful business environment that is created when
you connect critical business systems directly to customers, employees,
vendors, and business partners, using intranets, extranets, e-commerce
technologies, collaborative applications, and the Web.
E-commerce, E-business-Income
Opportunities (1999)
$ E-business encompasses electronic commerce and includes the
reengineering of business processes and the use of the World Wide Web
to disseminate information electronically.
Dalton (1999)
$ E-business uses technologies such as the growth of the Web, component
architectures, acceptance of emerging standards like XML, agents, and
collaborative technologies that enable multiple trading partners to work
interactively producing lower costs, improved quality of products and
services, increased innovation, and optimal trading opportunities.
GartnerGroup (1999a)
$ E-business is the transformation of key business processes through the
use of Internet technologies.
IBM Corp. (1999)
$ E-business deals with the continuous optimization of an organization's
value chain position, and integrates its e-commerce, customer
relationship, knowledge, supply chain and logistics management
applications.
GartnerGroup (1999b)
$ The intent of e-business is to apply the bene®ts of Internet technologies
to better manage a company's total value chain with a focus on
work¯ow, distributed workgroup computing and Internet-centric
operations at all levels.
High Latitude. (1999)
$ E-business means more than just buying and selling via the InternetÐit
means building on the information technology platform on which the
businesses of tomorrow will run.
Oracle Corp. (1999)
RESEARCH ARTICLE Knowledge and Process Management
158 C. W. Holsapple and M. Singh
Relationship between e-commerce, c-commerce,
and e-business
Our analysis of c-commerce and e-business shows
that they are entirely consistent with the taxonomy. Indeed, we have found no de®nition of either
notion that is outside the scope of the original
taxonomy. Another interesting ®nding is the threelayer structure that these additional concepts
contribute to the taxonomy. E-commerce, in its
popular, narrow trading sense occupies the top
layer with c-commerce on the next stratum. The
broader connotation of c-commerce stems from the
fact that collaboration cannot happen without
shared activities among participants and necessarily involves information exchange.
E-business, with its main emphasis on value chain
and intended effects, occupies the foundational
layer of the triangle. It has the broadest meaning
among the three concepts guiding the manifestation
of trading, information exchange, and other business activities. As a consequence, e-business can be
considered an over-arching concept and we refer to
the structured taxonomy in Figure 7 as the ebusiness taxonomy. We use it in the discussion that
follows to introduce an integrated de®nition of ebusiness that encompasses all of the taxonomy's
elements. The taxonomy can be used by practitioners and researchers as a uni®ed, relatively
complete perspective for understanding the varied
notions and their interrelationships.
De®nitions control and guide the focus of
research efforts, business practices, and educational initiatives. Without some kind of overarching de®nition and structure for a ®eld,
`progress is but a fortunate combination of circumstances, research is fumbling in the dark, and
the dissemination of knowledge is a cumbersome
process' (Vatter, 1947). Through its synthesis,
Figure 7 suggests that it is possible to have
a single unifying de®nition for e-commerce/
c-commerce/e-business that accommodates all
®ve views of the taxonomy. In this spirit, we
advance the following de®nition of e-business,
visually represented in Figure 8:
Electronic business is an approach to achieving
business goals in which technology for information
exchange enables or facilitates execution of activities in
and across value chains, as well as supporting decision
making that underlies those activities.
This de®nition follows from an integrated
characterization of e-commerce (Holsapple and
Singh, 2000a) and embraces each of the taxonomy's ®ve views and three layers. The de®nition
does not try to enumerate pertinent technologies
because they are numerous and subject to change.
Nor does it enumerate possible business goals or
activities in a value chain. The former involves
various effects at multiple levels. The latter are
well known and encompass the notion of trading;
Figure 8 Integrated view of electronic business
Knowledge and Process Management RESEARCH ARTICLE
Electronic Commerce, Electronic Business, and Collaborative Commerce 159
they include both collaborative and noncollaborative activity.
By including activities both within and across
value chains, the de®nition allows for both
intra-organizational relationships and transorganizational relationships (i.e. business-to-business and business-to-consumer). The integrated
de®nition emphasizes that e-business involves not
only electronic support for the execution of
activities (i.e. transactions), but also electronic
support for the decisions that shape these activities. Decision-making underlies each activity in a
value chain, and can bene®t from (or even require)
the use of technology. Wilder (1999b) emphasizes
the increased importance of technology for business decision-making in electronic organizations.
An examination of decision support aspects of
electronic commerce appears in Holsapple, Joshi
and Singh (2000).
A KNOWLEDGE MANAGEMENT VIEW OF
ELECTRONIC BUSINESS
Businesses operate in a knowledge-driven economy and increasingly function as knowledgebased organizations (Holsapple and Whinston,
1987; Drucker, 1993; Reich, 1998). This is an
economy where the value of knowledge as input
and output is growing; knowledge is a key
ingredient of what is bought and sold (both
explicitly and implicitly); knowledge resources
are rising in importance relative to traditionally
recognized resources (e.g. ®nancial, material); and
new technologies and techniques for managing
knowledge resources are emerging (Stewart,
1998a). Broadly speaking, knowledge management
(KM) is concerned with making the right knowledge available to the right processors (human or
computer) at the right times in the right presentations for the right cost (Holsapple and Joshi, 1999).
Accepting the proposition that e-business occurs
within and among knowledge-based organizations
in the knowledge-driven economy, it is important
for e-business perspectives to explicitly recognize
knowledge, plus processes and technologies for
managing it. E-business can be seen as part of an
organization's conduct of knowledge management, which includes such knowledge manipulation activities as acquiring, selecting, internalizing,
generating, and externalizing knowledge (Holsapple and Joshi, 1999). These knowledge manipulation activities are linked into various patterns by
knowledge ¯ows. In many cases, both the manipulation activities and the ¯ows that connect
them can be electronically enabled, facilitated, or
performed.
We contend that a KM-oriented perspective of
e-business is bene®cial in furnishing a common,
organized, uni®ed foundation for understanding
and managing electronic organizations in the
knowledge economy. However, knowledge management is not mentioned in any of the ecommerce de®nitions compiled to derive the
taxonomy, nor in any of the c-commerce/ebusiness de®nitions found to structure it. Because
KM goes well beyond the notion of information
exchange, it follows that the taxonomy and ebusiness de®nition can be improved by incorporating it.
More than information is involved in the conduct
of e-business. E-business employs multiple types
of knowledge, of which information is just
one kind. `All information is knowledge, not
all knowledge is information' (Machlup, 1980).
Wilder (1999b) states that organizations are going
through an e-transformation which is characterized by several factors and one of them is a rapid
transfer of knowledge, both within companies and
across the value chain. But the conduct of ebusiness involves more than transferal or exchange.
Certainly, ¯ows are important, but so is the
processing that precedes and follows an exchange
(e.g. deriving, discovering, assimilating, organizing, extracting knowledge). E-business can be seen
as the electronic part of an organization's conduct
of KM.
Knowledge and knowledge management
Knowledge exists when there is a usable representation of something (Newell, 1982). Representations can be material, electrical, behavioral, mental,
and so forth. It is not uncommon to see distinctions drawn between data, information, and
knowledge. For example, data imbued with relevance is said to be information, and information
imbued with context is said to be knowledge
(Gantz, 1998). These classi®cations may be
interesting, but they focus on only one type of
knowledge: knowledge that describes the state
of some world. Aside from this descriptive knowledge (`know what'), there are other important
types of knowledge that need to be managed
(Holsapple, 1995). These include procedural knowledge, which is a step-by-step speci®cation for
accomplishing some task (`know how'), and
reasoning knowledge which speci®es what conclusion can be drawn when a particular situation
exists (`know why').
Knowledge management is concerned with
RESEARCH ARTICLE Knowledge and Process Management
160 C. W. Holsapple and M. Singh
ways in which computers and humans represent
and manipulate these types of knowledge.
As such, KM involves much more than the
information transferals found in e-commerce/
c-commerce/e-business de®nitions. It also involves ¯ows of procedural and reasoning knowledge, plus various manipulations of any types of
knowledge that are possessed, have been received,
and are to be transferred. Technological means for
manipulating descriptive, procedural, and reasoning knowledge are well known (Holsapple and
Whinston, 1988). Moreover, new technologies
continue to emerge for fostering knowledge
access, sharing, preservation, and reuse in
organizations (O'Leary, 1998; Holsapple and
Joshi, 1999).
Activities that an organization's participants
perform when manipulating knowledge resources
can be viewed on several levels. At a high level,
there are such activities as experimentation and
decision making. At a more elemental level, four
kinds of knowledge manipulation activities recur
in the conduct of KM: acquiring, selecting, internalizing, and using (Holsapple and Joshi, 1999).
Acquiring refers to identi®cation, capture, and
organization of knowledge from the external
environment for transforming to an internalizing
and/or using activity within an organization.
Selecting refers to identi®cation, extraction, and
organization of knowledge from an organization's
own knowledge resources for transferal.
Internalizing refers to assimilation, storage, and
internal distribution of knowledge that has been
acquired, selected, or generated. It results in
structural and/or content changes to an organization's knowledge resource. The changes may
involve addition, replication, elimination, and
modi®cation. Using is the activity of applying
knowledge. Knowledge can be used for generating
new knowledge by either deriving it from existing
knowledge. (e.g. via analysis) or discovering new
knowledge in the context of what is known (e.g.
via creative insight). Knowledge can also be used
for externalizing: producing organizational outputs
by incorporating knowledge into goods and services, by using knowledge to transform raw
materials into products.
Every organization faces challenges of how to
implement individual knowledge manipulation
activities. There are also challenges of how to
arrange multiple knowledge manipulation activities subject to environmental and resource constraints. How these challenges are met determines
the organization's degree of success in recognizing
and satisfying its knowledge needs. Leadership,
coordination, control, and measurement are
important in this regard (Holsapple and Joshi,
1999). Ultimately, its approach to KM affects an
organization's competitiveness (Holsapple and
Singh, 2000b).
Knowledge management and electronic business
The present economy has been variously described
as the network economy, the digital economy,
and the knowledge economy. At the intersection
of these concepts we ®nd the e-commerce/ccommerce/e-business phenomenon. The explicit
sale of knowledge is widespread and the implicit
sale of knowledge (via incorporation into bundles
of goods and services) is ubiquitous (Stewart,
1998b). Electronic business is an important facilitator, enabler, and driver of the knowledge
economy. Success in this economy requires effective management of an enterprise's knowledge
resources. We use the term e-knowledge to refer to
technology and attendant strategy that helps
accomplish knowledge manipulation activities
and the ¯ows among them.
As Figure 9 suggests, KM underpins the entire
value chain and is instrumental in achieving
various business effects. Knowledge and its
manipulation are inherent in every business
activity and subsume the limited notion of information exchanges. The decision making that
underlies every trade is a knowledge-management
episode. Figure 9 also suggests that e-knowledge is
a foundation for e-business, although it may also
have some non-business (e.g. recreational) manifestations. We contend that both practitioners and
researchers should be aware of and can bene®t
from a view that relates e-business to the knowledge-driven economy:
Electronic business is an approach to achieving
business goals in which e-knowledge enables or facilitates the execution of activities in and across value
chains, as well as the making of decisions that underlie
those activities.
As Figure 10 shows, we have adapted the
integrated e-business de®nition by substituting
for information-exchange technology the richer
concept of e-knowledge. In this view, e-business
deals not only with descriptive knowledge (i.e.
information), but also with procedural and reasoning knowledge. For instance, it includes applet
processing which involves transfer of procedural
knowledge (as distinct from information) from a
server to a client. In this view, e-business also
involves more than transfer. For example, it
includes generation of knowledge by online calculators or expert systems.
Knowledge and Process Management RESEARCH ARTICLE
Electronic Commerce, Electronic Business, and Collaborative Commerce 161
The unifying de®nition establishes a connection
between two megatrends reshaping the business
world: e-business and knowledge management. It
has been observed that `. . .the very nature of
organizations is changing from an emphasis on
working with materials to an emphasis on working with knowledge and we will eventually come
to view work with material goods as a secondary
or almost incidental aspect of an organization's
mission. Furthermore, managing an organization's
human and ®nancial resources will also become
exercises in knowledge management' (Holsapple
and Whinston, 1987). E-business occurs in a world
of these knowledge-based organizations, employing technology for representing and processing
knowledge throughout a network of value chains.
Figure 9 Relationships between e-commerce, c-commerce, e-business, and e-knowledge
Figure 10 Knowledge-management view of electronic business
RESEARCH ARTICLE Knowledge and Process Management
162 C. W. Holsapple and M. Singh
An organization's e-business and knowledge management initiatives need to be aligned on the
common ground of e-knowledge.
CONCLUSION
E-commerce, c-commerce, and e-business have
diverse meanings. These are often poorly,
partially, or narrowly understood. This paper
introduces an organized way of viewing the econfusion by structuring a ®ve-fold taxonomy and
synthesizing an integrated perspective of ebusiness. This integrated perspective does have a
limitation: it is based on the concept of information
exchange shared by e-commerce, c-commerce, and
e-business de®nitions. But this concept is only part
of a much more extensive one known as knowledge management.
To further the emergence of e-businesses, identifying and managing knowledge in an e-business
is one of the critical issues academics and practitioners need to consider (Braganza and Lambert,
1999). Toward this end, we have extended the
taxonomy to re¯ect the knowledge management
setting in which e-commerce/c-commerce/ebusiness occurs, and we have introduced a
knowledge-oriented de®nition of e-business as
a common, organized, and uni®ed foundation
for understanding and managing the modern
electronic organization. The result is a uni®ed,
over-arching perspective that brings the interrelated notions of e-commerce, c-commerce,
e-business, and e-knowledge together under one
umbrella.
This perspective recognizes that e-business happens in a knowledge-driven economy, that it deals
with types of knowledge other than information,
and that it can involve more than transfers
between knowledge manipulation activities. That
is, e-business can be seen as being based on eknowledge: technologies and attendant strategies
for representing and processing knowledge. It
should be noted that there are many nontechnological approaches to managing knowledge;
these are outside the immediate scope of
e-business.
The KM view of electronic business indicates
that e-knowledge enables and/or facilitates the
implementation of value activities. E-knowledge
can also support the making of decisions that
underpin these implementations. Thus, such
technologies can contribute to a ®rm's competitiveness by enhancing the performance and outcome of one or more value activities. Further
research is needed to investigate what activities
in the conduct of KM are potential sources of
competitive advantage via electronic business
practices.