Information and Knowledge Management using ArcGIS ModelBuilder

eBusiness Model Design and Evaluation: The Pieces Make
the Puzzle
Monika Magnusson
Karlstad University, Sweden
Monika.Magnusson@kau.se
Abstract: SMEs (Small and Medium-sized Enterprises) nowadays have to deal with the highly complex situation
of global competition, fast technology development and extensive business networking. Because of their importance
for the economy, it is essential that SMEs embrace new technology and adapt to societal changes such as
the increasing use of eCommerce. Few innovations in history offer as much benefits as eCommerce, at least
theoretically. However, many SMEs are poor at managing technology as a strategic weapon since their human
and financial resources are limited. There is a need in SMEs for elementary conceptual tools for designing and
evaluating their eCommerce model. While there are frameworks and methods for business model design and
evaluation, earlier research on eCommerce (or eBusiness) models often focus on business model categories
rather than how to design a specific company's plan for eCommerce. Further knowledge of these matters would
facilitate for SMEs to gain benefits from eCommerce. The purpose of this theoretical study is to suggest a conceptual
framework for the evaluation and design of eBusiness models in SMEs. The framework integrates eBusiness
model elements from earlier research with a model of organizational change levels. Additionally, a number
of variants or ‘values’ for the eBusiness model elements are proposed as a tool for design or evaluation together
with a set of ‘guiding questions’. The importance of IT in an eBusiness model is acknowledged as technology
factors are integrated in the framework. Furthermore, it is proposed that it is valuable to conceptually separate
the business model from the eBusiness model as some companies chose to offer a different value proposition or
target other customer segment in the eCommerce endeavor than in their traditional sales and marketing channels.
Keywords: eBusiness model, eCommerce, SME, eBusiness model design and evaluation
1. Introduction
Few innovations in history offer as much benefits as eCommerce, at least theoretically. For SMEs
eCommerce present a cost efficient way of marketing and selling their products and services to a
world-wide market, at a twenty-four seven basis. Small and medium-sized enterprises (SMEs) are
sometimes called the backbone of a country because of their importance for generating employment,
engendering competition and creating economic wealth (Hay & Kamshad 1994). Because of their
importance for the economy, it is essential that SMEs embrace new technology and adapt to societal
changes such as the increasing use of eCommerce even if this is not always an easy task. Today’s
SMEs must deal with the highly complex situation of global competition, fast technology development
and extensive business networking. Although the ideal is that all companies with prominent business
ideas will survive and prosper, the reality is different. A finely attuned interplay between several business
elements is also necessary. This interplay can best be described as a business model. A business
model is ‘a conceptual tool that contains a set of elements and their relationships and allows
expressing the business logic of a specific firm’ (Osterwalder et al., 2005:10). Accordingly, an eBusiness
model is a ‘blue print’ of how a company creates revenue by their use of eCommerce.
SMEs are sometimes claimed to be poor at managing technology as a strategic weapon due to limited
human and financial resources (Buratti & Penco 2001). There is a need in SMEs for elementary,
but yet powerful, conceptual tools for designing and evaluating their eCommerce model. However, the
relatively few frameworks and methods that exist (see for example Morris et al. 2005 and Osterwalder
et al. 2005) give limited support for designing the IT part of the (e-)business model. This is unfortunate
as the SMEs in the study of Kim et al. (2008) found the matching of technology with business needs
to be one of the major challenges and obstacles in forming an eBusiness strategy. The design or
evaluation of an eBusiness model in a structured and systematic way could assist SMEs in these
matters. The purpose of this study is therefore to propose a conceptual framework for the design and
evaluation of eBusiness models in SMEs. The study is theoretical in nature like most other studies of
business model elements.
2. Business models vs eBusiness models
There is still no consensus in academic literature regarding the definition of the concept ‘business
model’ (Morris et al, 2005, Yunus et al., 2010). In this study we will use the definition of Osterwalder et
al. (2005:10) that builds on a substantial literature review:
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