A Framework for Performance and Value Assessment of E-Business Systems in Corporate Travel Distribution

  • A. M. Chircu
  • R. J. Kauffman


This chapter proposes and illustrates a framework that the authors call the value life cycle for e-commerce systems. Based on recent research results that relate to technology investments in the corporate travel industry and related theoretical and empirical perspectives, the authors lay out the corporate travel e-commerce system solutions value life cycle. The perspective involves estimating the maximum value that that an organization can obtain by implementing an e-commerce system in a specific industry and competitive environment. It also considers multiple factors that act as value contingencies for the implementation process. These create barriers to value accrual and to post-implementation performance assessment. The analytical perspective emphasizes the importance of comparing the expected value from the evaluation stage with the realized value from actual system usage. The authors highlight a key finding for corporate travel procurement specialists: the value of e-commerce systems infrastructure is surprisingly dependent on a variety of factors in the implementation environment of the organization, and as a result, the authors suggest that investments in this kind of technology be made with considerable caution and a clear sense of the potential pitfalls that may lead to insufficient value accrual.


Reservation System Investment Evaluation Technology Investment Information System Research Business Travel 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Alter, S., Ginzberg, M. (1978) Managing uncertainty in MIS implementation. Sloan Management Review 20(1): 23–31Google Scholar
  2. Attewell, P. (1992 ) Technology diffusion and organizational learning: The case of business computing. Organization Science 3(1): 1–19CrossRefGoogle Scholar
  3. Bakos, J. Y. (1991) A strategic analysis of electronic marketplaces. MIS Quarterly 15(4): 295–310CrossRefGoogle Scholar
  4. Bakos, J. Y. (1997) Reducing buyer search costs: Implications for electronic marketplaces. Management Science 43(12): 1676–1692MATHCrossRefGoogle Scholar
  5. Bakos, J. Y. (1998) The emerging role of electronic marketplaces on the Internet. Communications of the ACM 41(8): 35–42CrossRefGoogle Scholar
  6. Bakos, J. Y., Brynjolfsson, E. (1993) From vendors to partners: Information technology and incomplete contracts in buyer-supplier relationships. J Organizational Computing 3(3): 301–328CrossRefGoogle Scholar
  7. Barua, A., Kriebel, C. H., Mukhopadhyay, T. (1995) IT and business value: An analytic and empirical investigation. Information Systems Research 6(1): 3–23CrossRefGoogle Scholar
  8. Barua, A., Lee, C. H. S., Whinston, A. B. (1996) The calculus of reengineering. Information Systems Research 7(4): 409–428CrossRefGoogle Scholar
  9. Barua, A., Ravindran, R., Whinston, A. B. (1997) Efficient selection of suppliers over the Internet. J Management Information Systems 13(4): 117–137Google Scholar
  10. Beath, C. M. (1991) Supporting the information technology champion. MIS Quarterly 15(3): 355–372CrossRefGoogle Scholar
  11. Benaroch, M., Kauffman, R. J. (1999) A case for using real options pricing analysis to evaluate information technology project investments. Information Systems Research 10(1): 70–86CrossRefGoogle Scholar
  12. Brynjolfsson, E., Hitt, L. M. (1995) Information technology as a factor of production: The role of differences among firms. Economics ofInnovation and New Technology 3(4): 183–200CrossRefGoogle Scholar
  13. Brynjolfsson, E., Kemerer, C. F. (1996) Network externalities in microcomputer software: An econometric analysis of the spreadsheet market. Management Science 42(12): 1627–1647MATHCrossRefGoogle Scholar
  14. Brynjolfsson, E., Hitt, L. (1998) Beyond the productivity paradox. Communications of the ACM 41(8): 149–55CrossRefGoogle Scholar
  15. BusinessWeek (January 17, 2000) B2B: The hottest net bet yet? Accessed via www.businessweek.com/2000/00_03/b3664065.htmGoogle Scholar
  16. Campbell, J. (September 4, 2000a) Sabre to get Get There. Business Travel News, accessed via www.btnonline.com/db_area/archives/2000/09/00090401.htmGoogle Scholar
  17. Campbell, J. (June 12, 2000b) GetThere, e-Travel push bypass. Business Travel News, accessed via www.btnonline.com/db_area/archives/2000/06/00061210.htmGoogle Scholar
  18. Campbell, J. (June 12, 2000c) Amex makes booking play. Business Travel News, accessed via www.btnonline.com/db_area/archives/2000/06/00061203.htmGoogle Scholar
  19. Campbell, J., McNulty, M. A., Vallejo, M., Welt, S. (April 26, 1999) Big buyers benchmark. Business Travel News, accessed via www.btnonline.com/db_area/archives/1999/04/99042632.htmGoogle Scholar
  20. Chircu, A. M. (2001) Intermediation in electronic commerce. Unpublished doctoral dissertation, Carlson School of Management, University of Minnesota, Minneapolis, MNGoogle Scholar
  21. Chircu, A. M., Kauffman, R. J. (2000a) Comparing the business value of traditional and electronic B2B procurement systems. Presented at the 11th Workshop on Information Systems and Economics, Brisbane, AustraliaGoogle Scholar
  22. Chircu, A. M. Kauffman, R. J. (2000b) Limits to value in electronic commerce-related IT investments. J Management Information Systems 17(1): 61–82Google Scholar
  23. Chircu, A. M., Kauffman, R. J. (2000c) Reintermediation strategies in business-to-business electronic commerce. International J Electronic Commerce 4(4): 7–42Google Scholar
  24. Chircu, A. M., Kauffman, R. J., Keskey, D. (forthcoming) Maximizing the value of Internetbased corporate travel reservation systems. Communications of the ACMGoogle Scholar
  25. Clemons, E. K (1991) Evaluation of strategic investments in information technology. Communications of the ACM 34(1): 22–36CrossRefGoogle Scholar
  26. Clemons, E. K, Row, M. C. (1991a) Information technology at Rosenbluth Travel: Competitive advantage in a rapidly growing global service company. J Management Information Systems 8(2): 53–79Google Scholar
  27. Clemons, E. K, Row, M. C. (1991b) Sustaining IT advantage: The role of structural differences. MIS Quarterly 15(3): 275–292CrossRefGoogle Scholar
  28. Clemons, E. K, Hann, I. (1999) Rosenbluth International: Strategic transformation of a successful enterprise. J Management Information Systems 16(2): 9–28Google Scholar
  29. Clemons, E., Hann, I., Hitt, L. (1998) The nature of competition in electronic markets: An empirical investigation of online travel agent offerings. Working paper, Wharton School of Business, University of Pennsylvania, Philadelphia, PAGoogle Scholar
  30. Cohen, W. M., Levinthal, D. A. (1990) Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly 35(1): 128–152CrossRefGoogle Scholar
  31. Conrades, G. H. (September 1, 2000) Managing on the fault line: Forces of change in the Internet economy. Vital Speeches of the Day 66(22): 702–704Google Scholar
  32. Davern, M. J., Kauffman, R. J. (2000) The value of decision technologies: Discovering potential and realizing payoff. J Management Information Systems 16(4): 121–143Google Scholar
  33. Davis, F. D. (1989) Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly 13(3): 319–341CrossRefGoogle Scholar
  34. Degeratu, A., Rangaswamy, A., Wu, J. (August 1999) Consumer choice behavior in online and traditional supermarkets: The effects of brand name, price, and other search attributes. Working paper 03–1999, eBusiness Research Center, Pennsylvania State University, College Park, PAGoogle Scholar
  35. Feldman, J. M. (January 1999) Battle of the mouse clicks. Air Transport World 36(1): 49–51Google Scholar
  36. Gartner Group (February 28, 2000) Internet travel: Popular, and still more opportunity, accessed via www.gartner.comGoogle Scholar
  37. Grover, V., Jeong, S. R., Kettinger, W. J., Teng, J. T. C (1995) The implementation of business process reengineering. J Management Information Systems 12(1): 109–144Google Scholar
  38. Harteveldt, H. H., McQuivey, J. L., Bermont, B., DeMoulin, G. (March 2000) Online business travel’s boost. Forrester Research Report, accessed via www.forrester.comGoogle Scholar
  39. Hjermstad, M. (November 15, 1999) IATA survey: Corporate travelers heed policy when buying. Business Travel News, accessed via www.btnonline.com/db_area/archives/1999/11/99111513.htmGoogle Scholar
  40. Howell, J. M., Higgins, C A. (1990) Champions of technological innovation. Administrative Science Quarterly 35(2): 317–341CrossRefGoogle Scholar
  41. Johnson, M. A., Sherlock, N. R. (1999) Business travel forecast. Business travel and corporate travel management: capitalizing on emerging trends. National Business Travel Association, accessed via www.nbta.org/basicsltravelforecast.htmGoogle Scholar
  42. Kalakota, R., Robinson, M. (1999) e-Business: Roadmap for success. Addison-Wesley, Reading, MAGoogle Scholar
  43. Katz, M., Shapiro, C (1986) Technology adoption in the presence of network externalities. J Political Economy 94(4): 822–841CrossRefGoogle Scholar
  44. Katz, M., Shapiro, C (1994) Systems competition and network effects. J Economic Perspectives 8(2): 93–115CrossRefGoogle Scholar
  45. Kauffman, R. J., McAndrews, J., Wang, Y. (2000) Opening the ‘black box’ of network externalities in network adoption. Information Systems Research 11(1): 61–82CrossRefGoogle Scholar
  46. Lee, H. G., Clark, T. H. (1996) Market process reengineering through electronic market systems: Opportunities and challenges. J Management Information Systems 13(3): 113–136Google Scholar
  47. Leonard-Barton, D. (1992) Core capabilities and core rigidities: A paradox in managing new product development. Strategic Management J 13: 111–125CrossRefGoogle Scholar
  48. Leonard-Barton, D., Deschamps, I. (1988) Managerial influence in the implementation of new technology. Management Science 34(10): 1252–1265CrossRefGoogle Scholar
  49. Limone, J. (August 28,2000) Rosenbluth Interntaional sticks to its theme of ‘bucking trends.’ Travel Weekly 49(69): 23Google Scholar
  50. Lucas, H. C, Jr. (1999) Information technology and the productivity paradox: Assessing the value of investing in IT. Oxford University Press, New York, NYGoogle Scholar
  51. Luehrman, T. A. (1998) Investment opportunities as real options: Getting started on the numbers. Harvard Business Review 76(4): 51–67Google Scholar
  52. Lynch, J. G., Ariely, D. (2000) Wine online: Search costs and competition on price, quality and distribution. Marketing Science 19(1): 83–103CrossRefGoogle Scholar
  53. Malone, T. W., Yates, J. Benjamin, R. I. (1987) Electronic markets and electronic hierarchies. Communications of the ACM 30(6): 484–497CrossRefGoogle Scholar
  54. McNulty, M. A (April 27, 1998a) TravelNet shuts its doors. Business Travel News, accessed via www.btnonline.com/db_area/archives/1998/04/98042752.htmGoogle Scholar
  55. McNulty, M. A (August 17, 1998b) Technology costs are high, but ROI is swift. Business Travel News, accessed via www.btnonline.com/db_area/archives/1998/08/98081701.htmGoogle Scholar
  56. McNulty, M. A (November 2, 1998c) For online booking, focus turns to usage. Business Travel News, accessed via www.btnonline.com/db_area/archives/1998/11198110219.htmGoogle Scholar
  57. McNulty, M. A (March 22, 1999a) Oracle buys e-Travel. Business Travel News, accessed via www.btnonline.com/db_area/archives/1999/03/99032250.htmGoogle Scholar
  58. McNulty, M. A (June 7, 1999b) AXI hits open market. Business Travel News, accessed via www.btnonline.com/db_area/archives/1999/06/99060725.htmGoogle Scholar
  59. Moore, G. C., Benbasat, I. (1991) Development of an instrument to measure the perceptions of adopting an information technology innovation. Information Systems Research 2(3): 192–222CrossRefGoogle Scholar
  60. National Business Travel Association (December 14, 1999) Net fare white paper. Accessed via travelvault.nbta.org/pubs/netfares.htmGoogle Scholar
  61. PhoCusWright (December 14, 1999) Sabre’s big teeth are coming in. WebTravel News/The Insighter 3 (9): accessed via www.webtravelnews.comGoogle Scholar
  62. Putnam, M., Dolberg, S., Sharrad, J., Lanpher, G. (Januaty 1999) Business services on the net. Forrester Research Report, accessed via www.forrester.comGoogle Scholar
  63. Rice, K (August 7, 2000) Corporate travel booking sees major growth. WebTravelNews, accessed via www.webtravelnews.com/642.htmGoogle Scholar
  64. Riggins, F. J., Kriebel, C. H., Mukhopadhyay, T. (1994) The growth of interorganizational systems in the presence of network externalities. Management Science 40(8): 984–998MATHCrossRefGoogle Scholar
  65. Rogers, E. M. (1983) Diffusion of innovations, 3rd edn. Free Press, New York, NYGoogle Scholar
  66. Rosen, C. (Februaty 21, 2000a) Online booking cuts prices 20%. Business Travel News, accessed via www.btnonline.com/db_area/archives/2000/02/00022116.htmGoogle Scholar
  67. Rosen, C. (March 6, 2000b) Tech companies turning focus on integrating with outside systems. BusinessTravelNews, accessed via btnonline.com/db_arealarchives/2000/03/00030621.htmGoogle Scholar
  68. Shankar, V., Rangaswamy, A, Pusateri, M. (August 3, 1998) The online medium and customer price sensitivity. Working paper 04–1999, eBusiness Research Center, Pennsylvania State University, College Park, PAGoogle Scholar
  69. Spradling, R. (August 3, 1998) Op-ed: Evaluating self-booking. Business Travel News,accessed via www.btnonline.com/db_area/archives/1998/08/98080329.htmGoogle Scholar
  70. Spradling, R. (July 2000) What’s the real bottom line on e-business in the travel industty? Senior Management Position Paper, Maritz Travel Company, accessed via www.maritztravel.com/mtclfeature/default.htmGoogle Scholar
  71. Srinivasan, K, Kekre, S., Mukhopadhyay, T. (1994) Impact of electronic data interchange technology on JIT shipments. Management Science 40(10): 1291–1304MATHCrossRefGoogle Scholar
  72. Teece, D. J. (1987) Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. In: Teece, D. J. (ed.) The competitive challenge. Harper & Row, New York, pp.185–219Google Scholar
  73. Thompson, M. J. (June 7, 1999) Corporate travel: An emerging killer app. The Industry Standard, accessed via www.thestandard.com/metrics/display/0,1283,903,00.htmlGoogle Scholar
  74. Thong, J. Y. L., Yap, C.-S., Raman, K. S. (1996) Top management support, external expertise and information systems implementation in small businesses. Information Systems Research 7(2): 248–267CrossRefGoogle Scholar
  75. Travel Weekly June 23,2000) The top 50, www.twcrossroads.com/news/newswrapper.asp? ArticleID=21662Google Scholar
  76. Weill, P. (1990) Do computers payoff? ICIT Press, Washington, DCGoogle Scholar
  77. Welt, S. (March 8, 1999) Tiered pricing gains foothold. Business Travel News, accessed via www.btnonline.com/db-rea/archives/1999/03/99030815.htmGoogle Scholar
  78. Werthner, H., Klein, S. (1999) Information technology and tourism: A challenging relationship. Springer, Wien New YorkCrossRefGoogle Scholar

Copyright information

© Springer-Verlag Wien 2001

Authors and Affiliations

  • A. M. Chircu
    • 1
  • R. J. Kauffman
    • 2
  1. 1.Management Science and Information Systems, McCombs School of BusinessUniversity of TexasAustinUSA
  2. 2.Information and Decision Sciences, Carlson School of ManagementUniversity of MinnesotaMinneapolisUSA

Personalised recommendations