1864
A Prototype E-Business Model to Create a Competitive Advantage in SMEs
Step 1
R & D
Step 2
Product
Step 3
Marketing
/Sales
Step 4
Service
Company ICT and Internet infrastructure
Human resources
Input Output
Primary Activities
Support Activities
Traditional Value Chain
What customers want?
What is e-business vision?
After sale service?
Information,
Communication,
Feedback?
Becomes primary activity
Figure 2. Traditional value chain design (Source: Hill and Jones, 1998)
Goal
Time
You are here
And next year?
And next year?
And next year?

Where
should we
be next
year?
An incremental approach
to company's development
will not work in the e-
business world.
Why some companies stagnate ?
Incremental Approach
Goal
Time
You are here
Work
backwards
Where do we
need to be 3
years from
now?
An e-business vision
combines a clear
understanding of where
you need to be with what
needs to be done.
W hy some companies grow ?
Thinking Ahead Approach
Figure 3. E-business planning approach (Source: Kalakota and Robinson, 2001)
1865
A Prototype E-Business Model to Create a Competitive Advantage in SMEs
business goal is to focus on cost reduction

DQG LQWHUQDO HI¿FLHQF\ &KHQJ /L /RYH
& Irani, 2001). Our research showed that
SMEs who are able to integrate internally
are more successful and employ skilled and
knowledgeable staff.
Stage 4: Full integration with free information
ÀRZEHWZHHQVXSSOLHUVRUJDQLVDWLRQDQG
customers7KLVLVWKH¿QDODQGIXOOLQWHJUD-
WLRQZLWKDIUHHLQIRUPDWLRQÀRZZKHUHWKH
business goal is to create market value and
competitive advantage by using the Internet
technology. This stage enables supply chain
integration and more effective in-sourcing
and outsourcing. It also allows for sophisti-
cated online business to interrelate internally
as well as externally (Van Hooft & Stegwee,
2001; DTI, 2000). SMEs presented in this
study have not yet reached this stage of full
integration. However, this stage is seen as
an essential pa rt of implement ing a n e -bu si-
ness strategy.
It is important to stress that the four basic
elements of e-business integration should not be
V HH Q D VD O L QH D US U R F H VV E XW U DW K H UD V WK H ³E X L O G L QJ 
blocks” of various factors helping SMEs to take a
step at a time and when ready. The proposed build-
ing stages of integration support the government’s
e-business adoption ladder model (Kaplan &
Norton, 2003) and contradict Levy and Powell’s
(2003) statement that the stage model is inappropri-

ate and misguided. In addition, all four elements
of e-business integration have been seen as key
enablers of a full e-organisational integration that
ZLOODOORZIUHHLQIRUPDWLRQÀRZEHWZHHQVXSSOL-
ers, the organisation, and customers. In exchange,
WKLVZRXOGFUHDWHSUR¿WDEOHJURZWKWKDWSURYLGHV
a customer-tailored product and service and add
VXSHULRUYDOXHWRWKH¿UP3RUWHU
The proposed prototype model is based on our
¿QGLQJVDQGOLWHUDWXUHUHYLHZDQGLWGHWHUPLQHV
the strategic elements that translate into an enter-
SULVHWKDWLVERWKHI¿FLHQWDQGÀH[LEOHDOORZLQJ
the company to adapt, change, grow, and innovate.
The relationship between value creation, innova-
tion, and integration forms the core of e-business
planning. This approach allows the company to
take either a short- or long-term solution. The
short-term solution is where a company uses
existing applications and builds upon them in
their own time. The long-term solution is where
a company starts over with new applications as
the core business. This way, companies with no
¿QDQFLDOVXSSRUWFDQPLQLPLVHULVNVDVVRFLDWHG
with an expensive enterprise framework planning
and investment approach.
CONCLUSION AND IMPLICATIONS
In this chapter, we have reviewed the current litera-
WXUHJRYHUQPHQWVXSSRU WIRU60(VEHQH¿WVDQG
barriers of adopting and implementing e-business
strategies in organisations, and proposed a new

prototype model, which suggests new ways of
creating competitive advantage through e-busi-
ness. Guided by the general alignment models and
literature review, we presented a prototype model
CATE-b that develops an e-business strategy for
SMEs. It can be used for SMEs that do not want to
take the radical approach to e-business and could
build upon their existing technology, and also for
SMEs that start over with new applications as a
core business.
Our proposed agenda builds upon existing
capabilities of the organisation and will ensure a
SURSHU¿WZLWKWKHVW UDWHJLFJRDOVRIWKHRUJDQLVD-
tion as a whole. We expect this prototype model to
aid SMEs in taking full advantage of the current
publicity surrounding e-business, while avoid-
ing projects which can turn out to be costly and
disadvantageous. However, we anticipate that
RZQHUVPDQDJHUV ZLOOEH IDFLQJVRPH GLI¿FXO-
ties while implementing a prototype CATE-b
model. For example, many organisations still
have 20-year-old legacy IT systems which cannot
be discarded, so it makes it harder for organisa-
1866
A Prototype E-Business Model to Create a Competitive Advantage in SMEs
tions to integrate. Furthermore, owners/managers
PD\H[SHULHQFHGLI¿FXOWLHVVXFKDVHPSOR\HH
resistance when attempting to transform an old
business design, based on physical realities into
a new design rooted in the digital virtual require-

ments of tomorrow. Whatever the limitations of
the prototype model CATE-b may be, our belief
LVWKDWWKHEHQH¿WVDUHJUHDWHUWKDQWKRVHRIIHUHG
by alternative models. E-business offers greater
operational advances and opens wider markets
than traditional business models. SMEs must fol-
low the new trend of e-business if they are to stay
SUR¿WDEOHDQGFRQWLQXHWRWUDGH/DUJHUHPSLULFDO
research, followed by in-depth case studies, will be
FDUULHGRXWWRWHVWWKHYDOLGLW\RIFXUUHQW¿QGLQJV
and suitability of the prototype model.
Our conclusion is that successful managers
should anticipate the impact of recent economic
and technological changes on their current busi-
nesses. Going digital is not a luxury anymore, it
has become a necessity. However, digitalisation
requires a systemic approach and gradual integra-
tion and application depending on the size and the
capital available in the organisation. To thrive in
today’s dynamic environment, companies must
consciously choose the next phase in their growth
and evolution. This is the age of continuously as-
sessing their e-business processes. The challenge
confronting today’s manager is in the creation,
execution, and ongoing evolution of a successful
e-business plan. So the message to SMEs would
be: to be customer focused; value creation is a
continuous process; transform business processes
into digital form; start small, build on success,
and learn.

ACKNOWLEDGMENTS
We would like to thank all those managers and
directors involved in the interviews for their time
and generosity.
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F. Zhao, pp. 238-260 , copyright 2006 by IGI Publishing (an imprint of IGI Global).
1870
Copyright © 2009, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited.
Chapter 6.10
Analysis of Business
Process Models in Enterprise
Web Services
Mabel T. Kung
California State University-Fullerton, USA
Jenny Yi Zhang
California State University-Fullerton, USA
ABSTRACT
This article reports a series of process-based
models for the development of e-business using en-
terprise software applications. Merging manage-
PHQWW HFK QRORJ \L QZRU NÀRZV \VW HP VLVD FU LW LFD O 

step to provide service-oriented architecture and
on-demand business. We propose a value-ori-
ented process technique as a strategic alignment
to improve investment value. Our framework
focuses on the guidelines for traditional users
WRLGHQWLI\WKHVWUXFWXUDOFRQÀLFWVLQLQWHJUDWLQJ
:HEVHUYLFHV$FRPSDUDWLYHVWXG\RIZRUNÀRZ
models for intra-and inter-organizational process
FRQWURO LV SUHVHQWHG 7KLV DUWLFOH LGHQWL¿HV WKH
current progress in the adaptability in the de-
sign of process models coupled with structural
FKDQJHVRIZRUNÀRZYLHZV7KHVWXG\SURYLGHV
a resource list of successful implementations
for practitioners in organizational management.
The research highlights the motivation of market
facilitation, expert sharing and collaboration that
enable commercial applications to support com-
plex heterogeneous, autonomous and distributed
information systems.
INTRODUCTION
%XVLQHVVSURFHVVPRGHOLQJLVDVLJQL¿FDQWDFWLYLW\
in enterprises as e-business and enterprise integra-
tion drive the need to deploy business processes
online (Aissi, Malu, & Srinivasan, 2002; Weiss
& Amyot, 2005; Sewing, Rosemann, & Dumas,
2006). Most business process modeling efforts
are knowledge-intensive and require organiza-
tions to formalize a large number of complex
inter- and intra-organizational processes to fa-
1871

Analysis of Business Process Models in Enterprise Web Services
cilitate their ensuing deployment in large-scale
ZRUNÀRZV\VWHPVLQHQWHUSULVHSODQQLQJ7DJJ
2001). These management systems need to be
integrated with the tools of a process to perform
within it: productivity tools, specialized technical
support systems, such as CAD systems, graphic
packages, enterprise-wide integrated software
applications, such as enterprise resource plan-
ning (ERP), customer relationship management
(CRM), mail systems and other communication
systems. When the applications become more
modulated and service-oriented, there will no
longer be work-alone software. (Cimatti, Clarke,
Giunchiglia, & Roveri, 2000).
The most common application for process
PRGHOLQJFRQWURODQGPDQDJHPHQWLV:RUNÀRZ
Management Systems (WfMSs). The technology
has become readily available (van der Aalst, De-
sel, & Oberwies, 2000; van der Aalst & van Hee,
2002; van der Aalst & Jablonski, 2000; Fischer,
2001; van der Aalst & van Dongen, 2002; Grigori,
Casati, Dayal, & Shan, 2001; Herbst & Karagi-
annis, 2000; Cook & Wolf, 1999). Commercial
ZRUNÀRZPDQDJHPHQWV\VWHPV:I06VVXFK
as Staffware, IBM MQSeries, and COSA offer
generic modeling and enactment capabilities for
structured business processes. Besides stand-
alone systems, WfMSs are becoming integral
components of many enterprise-wide information

systems (Leymann & Roller, 2000). Consider, for
example, Enterprise Resource Planning (ERP)
systems such as SAP, PeopleSoft, Baan and Oracle,
Customer Relationship Management (CRM) soft-
ware, Supply Chain Management (SCM) systems,
Business to Business (B2B) applications which
HPEHGZRUNÀRZWHFKQRORJ\
The introduction of large scale systems such
as the ERP system changes the structure of the
organization of software applications. This moves
from numerous independent software develop-
ment procedures to an integrated Web based
software framework with components for differ-
ent purposes. Although ERP system can improve
organization’s performance, standardized ERP
system from the vendor such as SAP, need to be
customized to be deployed in an organization. It
KDVWREHFXVWRPL]HGWR¿WWKHEXVLQHVVJRDOVRI
the company. This customization needs the con-
tinuous input of end user involvement. In order for
the dynamics of the Web services to succeed, the
deployment team needs to understand the business
processes of the company that can be incorporated
L QW R DZR U N ÀRZ G H V LJ Q 7 K HG H VLJ Q OD \RX WF D Q W K H Q
be used for discussions with the management and
end users to provide better understanding of the
processes during changes.
&XUUHQWO\ ³(LJKW\ SHUFHQW RI WKH VRIWZDUH
that needs to be written has already been done
collaboratively” (McKendrick, 2006). It was

estimated that in U.S. alone, there would be 55
million user developers compared to 2.75 million
professional software developers (Sutcliffe &
Mehandjiev, 2004). Because the user developed
software may affect the entire organization’s sys-
W HP PRU HF KDO OH QJH VD QG FRQ À LF WLV VXH VD UL VHL QD 
more dynamic state (Bergeron & Berube, 1990).
Although the centralized Information Technology
(IT) department provides the traditional support
of the enterprise-wide system, integration and
ZRUNÀRZ GHVLJQ DUH IDU IURP WULYLDO :LWKRXW
appropriate policies and control mechanisms,
user development cost can be higher than the
EHQH¿WLWEULQJVLQ*DOOHWWD+XIQDJHO
The cost related to such user software includes
poor security, incompatible hardware and soft-
ware, inadequate documentation (Davis, 1988),
L Q V XI ¿F LH QW YD O LG D W LR Q D QG WH V W L QJ $ O DY L :HL V V 
1986; Davis, 1988; O’Donnell & March, 1987),
DQGLOOGH¿QHGSROLFLHVUHJDUGLQJDFFHVVWRFRU-
porate databases (Alavi & Weiss, 1986). Without
DVWUXFWXUHGSURFHVVFRQWUROÀRZRUSROLF\FRO-
laborative computing in enterprise wide systems
can hardly be effective.
This article presents the components of a
standardized business process with the empha-
sis from the user point of view. The individuals
involved in each process have the skills and
human capital that complement one another.
1872

Analysis of Business Process Models in Enterprise Web Services
Next, a value-oriented framework is proposed
as a benchmark for economic assessment. The
synthesis and the process-based approach are
discussed to align with organizational strategic
goals. In this context, the types of inputs, the
nature of tasks needed to perform the activity, the
sorts of coordination required among the various
tasks, and the intended scale of output depend on
the internal top management reactions to assess
values in the production level as well as the social
level among the employees. Lastly, a summary of
FXUUHQWUHVHDUFKLQZRUNÀRZPRGHOVSURYLGHVWKH
technological and managerial issues involving the
current designs in organizations. By combining
these different streams of research, our objective
is to provide guidelines and structural designs to
enable evaluations of process goals to improve the
overall value of enterprise Web services.
BUSINESS PROCESS
A business process is composed of a series of con-
tinuous actions or operations that are performed
upon a commodity (Childe, Maull, & Bennett,
1994). It is usually initiated by a customer. It
must provide results directly to a customer, who
may be internal or external to the company. CIM-
OSA Standards Committee (1989) has subdivided
processes into three main areas: manage, operate
and support. The CIM-OSA framework regards
manage processes as those which are concerned

with strategy and direction setting as well as with
business planning and control. Operate processes
are viewed as those which are directly related to
satisfying the requirements of the external cus-
tomer, for example the logistics supply chain from
order to delivery. They are sometimes referred to
as core processes. Support processes typically
act in support of the management and operate
SURFHVVHV7KH\LQFOXGHWKH¿QDQFLDOSHUVRQQHO
facilities management and information systems
provision (IS) activities.
Information systems (technologies) make an
impact at different levels (Brancheau & Brown,
1993; DeLone & McLean, 1992; Harris, 2000;
Powell & Moore, 2002; Seddon, 1997; Andreescu,
2006): system or information level, individual
level, group level, organization level, and system
or information quality level. When user develops
application changes in organizational information
V\VWHPWKHVHPRGL¿FDWLRQVZLOODOVRDIIHFWDOOIRXU
different levels. Without careful coordination at all
levels, the organization will not obtain the possible
EHQH¿WWKDWWKHXVHULQWHQGVWREULQJ&RQVLGHUWKH
coordination from the process perspective. The
collaboration begins in these stages: (1) manage
processes are related to organizational level,
(2) operational processes are related to system
and information level and individual level, and
(3) support processes are related to group level
LQÀXHQFH

Traditionally, project initiatives begin from
WKHWRSPDQDJHPHQWOHYHODQG¿OWHUGRZQWRWKH
lower level. However, sometimes a project may
start from the bottom level with an idea to modify
the existing system to improve effectiveness or
HI¿FLHQF\RIWKHLUMRE7KLVLQLWLDOLGHDZLOOWKHQ
be presented to the tactical middle management
level to convert it into higher-level business
requirement and redirected back to upper man-
agement. Upper management will then judge it
based on its strategic direction. If the proposal
is approved, it will be sent back to tactical level
where it will be converted to a detailed plan on
how to perform the project. The project will be
divided into sub processes and activities, which
will then be transferred to operational level
where the implementation takes place. Figure 1
illustrates the hierarchical processes within the
infrastructure:
•
Strategic level: The top level process mainly
deals with direction setting, high-level strate-
gic planning activities. One common problem
with many improvement initiations being less
1873
Analysis of Business Process Models in Enterprise Web Services
successful is the lack to the organizational
strategy, or the big picture (Rummler &
Brache, 1995; Hacker & Brotherton, 1998).
6RPHWLPHVDQLQLWLDWLRQPLJKWEHEHQH¿FLDO

in local operation level, but might be malicious
for the enterprise-wide strategy. In most IS
projects, manage process acts as an overall
management that takes ideas about direction
based upon business requirement reported
from the operational level, decides whether or
not to proceed it based on its alignments with
the company’s overall direction, and sets the
high-level goal for the project. Competitive
advantage requires the learning, change and
adaptation processes over the time horizon
in terms of the availability of resources and
the capabilities of the users involved. (Helfat
& Peteraf, 2003; Adner & Helfat, 2003). The
&(2DQG&,2¶VRI¿FHKDVWKHUHVSRQVLELOLW\
WRGH¿ QHW KHVW UDWHJLFHQWH U SU LVHDUFK LWHFW X UH
that provides the infrastructure for activities
in each of the business units, the tactical level
and the operational levels. Strategic level will
decide the organizational level impact from
the project.
•
Tactical level: This level serves as a con-
verting or communication level. It performs
several critical roles:
R Transfers the high level strategy into plans
on how to convert an initiated idea into
D¿QLVKHGSURGXFW
R Serves as a bridge between business
perspective and technical perspective

R Provides guidance and support at opera-
tion level.
This level is the most important among all three
levels. It serves as a glue to combine strategic and
operational process all together. It encourages the
creativity of user, and at the same time guarantees
the quality and integrity of user development. The
level does all the managerial tasks that directly
related to the project, for instance, agreement of
requirement changes, monitoring project time-
table, and quality control. Meeting customer and
SDUWQHU GHPDQGV ZLWK SURDFWLYH DQG HI¿FLHQW
services, special attention to preferred business
alliances such as joint market launches, analyst
EULH¿QJV WHFKQLFDO FROODERUDWLRQ RU SUHPLXP
customer support, help increase custom satisfac-
Figure 1. A hierarchical process perspective (or top-down and bottom-up perspective)
Strategic
level
Tactical
level
Operational
level
CEO, CIO,
Steering committee
Middle manager
manage
support
operation
End user