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Business process implications of e-commerce in construction organisations

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posted on 05.10.2006, 14:04 by Kirti Ruikar
The need for construction to change its traditional working practices has been repeatedly expressed in government, industry, and academic publications. The Internet has been a major catalyst for change in most industry sectors, including the construction sector. The implementation of Internet-based technologies, such as ecommerce for achieving business targets, bring about changes in an organisation, its current practices, systems, processes and workflows. It is therefore important to evaluate the business process implications of adopting e-commerce in construction organisations. This was the focus of this study. The early stages of the research established the possible benefits, barriers, and drivers for the adoption of e-commerce technologies within construction. This was done by conducting an industry-wide survey that explored attitudes, current usage, barriers and enablers of IT and e-commerce within the UK construction sector. Survey results indicated that the exact benefits of using e-commerce within the construction industry were not known and more needed to be done to establish the effects of incorporating e-commerce applications into construction business processes and to demonstrate the opportunities of e-commerce for construction. To address this need a typical business process model that used the principles of business process re-engineering and demonstrated opportunities for e-commerce, was developed. Using this model it was possible to illustrate how, with the use of ecommerce applications, different members of the construction supply chain could derive business benefits and overcome traditional process inefficiencies. In order to effectively adopt e-commerce technologies in construction, companies may have to reengineer their current working methods, which could lead to a step change in current work practices. To facilitate such a step change it was essential to study and document the impact of specific e-commerce applications on their current end-user business processes. Case studies were conducted for this purpose. The case study findings showed that the end-user companies had accrued several business benefits from using e-commerce tools. Issues related to management buy-in and organisational culture were the main barriers to the wider use of e-commerce within the construction industry. The case studies and earlier findings indicated that e-commerce is ‘here to stay’ and it will not be long before it becomes an industry norm. Taking this into account, construction companies who are currently using, and those who have yet to use, e-commerce tools need to take measures to successfully adopt and benefit from these tools. It is important for companies that seek to adopt ecommerce to assess their ‘e-readiness’ for adopting e-commerce tools to ensure a productive and beneficial implementation of these tools. To address this need an ereadiness model for construction organisations and a prototype application, VERDICT, that assess e-readiness were developed and implemented. The model is based on the premise that for any company to be e-ready, its management, people, process and technology have to be e-ready in order to derive maximum business benefits. The research findings indicate that the use of e-commerce is still in its infancy within the construction industry. The current use of e-commerce has resulted in process automation, however, there is no evidence of process re-engineering. Such practices, although beneficial in the short-term, can have long-term implications in that the end-users are not necessarily making full use of the technology and hence not deriving full benefits from it. The model and e-readiness assessment prototype developed as part of this study will enable construction organisations to successfully adopt e-commerce and exploit its potential.



  • Architecture, Building and Civil Engineering

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  • Centre for Innovative and Collaborative Engineering (CICE)

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A dissertation thesis submitted in partial fulfilment of the requirements for the award of the degree Doctor of Engineering (EngD), at Loughborough University.



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Architecture, Building and Civil Engineering Theses