Three Dimensional Elements for Sustainable e-Business Modelling
Mohammed Naim A. Dewan, Maruf Hossan Chowdhury and Mohammed A. Quaddus
Curtin Graduate School of Business, Curtin University, Perth, WA, Australia
Keywords: e-Business, Sustainability, Business Model, Blended Value.
Abstract: e-business modelling is a prevalent term now days as it converts technology into economic value. The
sustainability of the business is another global contemporary issue. Although e-business modelling and
sustainability are the two major global trends now but still there is no common understanding about the
elements that need to be used for a sustainable e-business model. Surprisingly, none of the e-business
modelling approaches even consider sustainability as a major element. In this paper, therefore, after
extensive literature review on e-business modelling and sustainability of the business we carefully identify
and determine the required elements for a sustainable e-business model. The elements are three dimensional
and selected from customer value area, business value area, and process value area so that the modelling
elements safeguard the interests of all stakeholders (customer, business, society, and environment) while
maintaining the sustainability.
1 INTRODUCTION
The term e-business modelling is widespread but it
is considered that only some views of e-business
have been investigated. Now days, to be competitive
it has become very important that all businesses
carefully validate their business objectives,
requirements, and strategies through a careful
process of formal business modelling with the
current global e-business and e-commerce
initiatives. But a very few business models talks
about the sustainability of the businesses. Although
sustainability issues are considered in some
modelling approaches, they are mainly in strategic
level and not in operational level. To develop a
better understanding about sustainable business and
to enhance the confidence in the feasibility of these
ideas such a modelling framework needs to be
developed that can be easily implemented by the
stakeholders successfully and that will truly
contribute to the innovative e-business modelling
ideas. For the long run sustainability business
modelling approaches only with strategic directions
are not sufficient, instead, a complete sustainable e-
business model with operational directions is
essential.
Blended value or shared value is introduced by
the scholars lately. According to the literature
(Emerson, 2006) blended value is the integration of
economic value, social value, and environmental
value. Blended value which is also referred as
“shared value can be defined as policies and
operating practices that enhance the competitiveness
of a company while simultaneously advancing the
economic and social conditions in the communities
in which it operates” (Porter, 2011). But these
blended value definitions in the literature do not
directly include the business value or the process
value. Business value is vital in the sense that it
safeguards the interest of the organisation and helps
to keep in track for achieving goals. Similarly,
process value is another vital element as it supports
to produce both customer value and business value.
Therefore, we define blended value as the
integration of economic value, social value, and
environmental value for both customer and business.
It is different from CSR (Corporate Social
Responsibility) value in the sense that CSR value is
separate from profit maximization and agenda is
determined by external reporting, whereas blended
value is integral to profit maximization and agenda
is company specific and internally generated. In
such a theoretical lacuna regarding blended value
and e-business modelling the aim of this paper is to
identify the required elements necessary to develop a
sustainable e-business model that will encapsulate
economic, environmental and social aspects in the
strategic and operational settings of organizations.
313
Naim A. Dewan M., Hossan Chowdhury M. and A. Quaddus M..
Three Dimensional Elements for Sustainable e-Business Modelling.
DOI: 10.5220/0003994003130323
In Proceedings of the International Conference on Data Communication Networking, e-Business and Optical Communication Systems (ICE-B-2012),
pages 313-323
ISBN: 978-989-8565-23-5
Copyright
c
2012 SCITEPRESS (Science and Technology Publications, Lda.)
We termed them as ‘blended value elements’. We, in
this paper: (i) explore and determine the important
elements in developing e-business model; and (ii)
investigate how the sustainability dimensions can be
integrated with the value dimensions in developing
sustainable e-business model. The following section
of the article covers extensive literature review on
business modelling, e-business modelling and
sustainability of the business. Section 3 explicate the
importance of the three dimensional elements in e-
business modelling. The identification of three
dimensional elements and their comprehensive
explanation is covered in Section 4. Section 5 is
consists of discussion on findings and further
research direction; and finally, Section 6 concludes
the article.
2 LITERATURE REVIEW
2.1 Business Modelling
The modelling approaches by Petrovic, Kittl, and
Teksten (2001) and Auer and Follack (2002) are
very similar, who view a business model as a model
that “describes the logic of a ‘business system’ for
creating value that lies behind the actual processes”.
Tapscott, Ticoll and Lowy (2000) provide a
typology of business models that they call b-webs.
In the methodology proposed by Afuah and Tucci
(2001), one can find a list of business model
components. Osterwalder and Pigneur (2002)
conceive the business model as the description of
the value a company offers to one or several
segments of customers and the architecture of the
firm and its network of partners. There are some
more researchers who have worked on business
modelling. Among them the research works of Zott,
Amit, and Massa (2010), Hawkins (2001), Stabell
and Fjeldstad (1998), Linder and Cantrell (2001),
Applegate (2001), Hamel (2000),
Papakiriakopoulos, Poulymenakou, and Doukidis
(2001) are worth mentioning.
What is found from the literature is that there are
number of terms used in business modelling.
Business model has been referred to as a statement
(Stewart and Zhao, 2000), a description (Applegate,
2000; Weil and Vitale, 2001), a representation
(Morris et al., 2005; Shafer et al., 2005), an
architecture (Dubosson-Torbay et al., 2002;
Timmers, 1998), a conceptual tool or model
(Osterwalder, 2004; Osterwalder et al., 2005; Teece,
2010), a structural template (Amit and Zott, 2001), a
method (Afuah and Tucci, 2001), a framework
(Afuah, 2004), a pattern (Brousseau and Penard,
2006), and as a set (Seelos and Mair, 2007) found by
Zott et al. (2011). There are even different aspects
that are used by the scholars for business modelling,
such as, product/revenue aspects, business
actor/network aspects, and marketing specific
aspects, etc. Although a number of researchers tried
to include value aspect in their modelling but none
of them precisely point out the contents of the value
that will be able to make a business sustainable.
2.2 e-Business Modelling
It has been found by a study of Zott et al. (2011) that
in a total of 49 conceptual studies in which the
business model is clearly defined, almost one fourth
of the studies are related to e-business. That means,
the majority of research into business models in the
information systems field has been concerned with
e-business and e-commerce; and there have been
some attempts to develop convenient classification
schemas (Al-Debei and Avison, 2010). Table 1
shows the elements that are used for business and e-
business modelling by different researchers. For
example, definitions, components, and
classifications into e-business models have been
suggested (Alt and Zimmerman, 2001, Afua and
Tucci, 2001). Timmers (1998) was the first who
defined e-business model in terms of the elements
and their interrelationships. Applegate (2001)
introduces the following six e-business models:
focused distributors, portals, producers,
infrastructure distributors, infrastructure portals, and
infrastructure producers. Weill and Vitale (2002)
suggest a subdivision into so called atomic e-
business models, which are analyzed according to a
number of basic components. Rappa (1999) provides
taxonomy of e-business models based on the value
offerings and mode of generating revenues.
Dubosson-Torbay et al. (2001) identify the
following principal dimensions for classifying
business models: user’s role, interaction pattern,
nature of the offering, pricing system, level of
customization, and economic control.
2.3 e-Business and Sustainability
A sustainable business maintains a balance among
economic development, environmental stewardship,
and social equity (Sikdar, 2003). In other words,
sustainable business means a business with dynamic
balance among three mutually inter dependent
elements: (i) protection of ecosystems and natural
resources; (ii) economic efficiency; and (iii)
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314
Table 1: Business modelling elements (adapted from Al-Debei and Avison, 2010).
Authors
Element indicators
Timmers (1998, p. 4)
Architecture, Value Proposition, Business actors and roles, Revenue sources.
Venkatraman and Henderson (1998, pp.
3334)
Architecture, Organization strategy, Customers,
Asset configuration, Knowledge leverage.
Linder and Cantrell (2000, pp. 12)
Business logic, Value Capture, Revenue sources.
Gordijn et al. (2000, p. 41)
Value proposition /exchange, Stakeholder network.
Petrovic et al. (2001, p. 2)
Business logic, Value proposition, Intermediate theoretical layer.
Amit and Zott (2001, p. 4)
Value proposition, Structure, Governance.
Torbay et al. (2001, p. 3)
Value proposition, Architecture, Network of partners, Relationship capital.
Stahler (2002, Online, p. 6)
Abstract, Simplification of current and future business reality.
Chesbrough and Rosenbloom (2002, p.
532)
Coherent framework, Mediating construct, Technology, Economic Value.
Magretta (2002, p. 4)
Value proposition, Customers, Revenue sources.
Bouwman (2002, p. 3)
Roles and relationships: company, customer, partners, Value proposition.
Hedman and Kalling (2003, pp. 49, 5253)
Key business components, Resources, Customers, Value proposition,
Network, Architecture, Structure, Dynamic.
Campanovo and Pigneur (2003, p. 4)
Conceptual, Intermediate theoretical layer.
Leem et al. (2004, p. 78)
Strategy, Revenue, Alliances.
Shafer et al. (2005, p. 202)
Business logic, Strategy, Value proposition, Value network.
Osterwalder et al. (2005, pp. 1718)
Conceptual tool, Business logic, Value proposition, Customer segments,
Architecture, Network of partners, Revenue.
Haaker et al. (2006, p. 646)
Blueprint, Network of firms, Customers, Value proposition.
Andersson et al. (2006, pp. 12)
Business actors and relations, Value exchange.
Kallio et al. (2006, pp. 282283)
Value proposition: information/goods/services, Industry participants:
customers/partners/ competitors/government.
Rajala and Westerlund (2007, p. 118)
Value proposition, Set of actors, Revenue.
Janssen et al. (2008, p. 204)
Business logic, Value proposition, Customers; Current or future business.
Rappa (2008, Online)
Revenue sources, Position in the value chain.
consideration of social wellbeing such as jobs,
housing, education, medical care and cultural
opportunities (Bell and Morse, 2009). It has been
evident that there is a positive correlation between
environmental and social sustainability and
economic return (Carter and Rogers, 2008). Even
though many scholars enlightened their study on
sustainability incorporating economic, social, and
environmental perspective but still “most companies
remain stuck in social responsibility mind-set in
which societal issues are at the periphery, not the
core. The solution lies in the principle of shared
(blended) value, which involves creating economic
value in a way that also creates value for society by
addressing its needs and challenges(Porter, 2011).
Moreover, most of the scholars provide with
hypothetical ideas for maintaining sustainability. A
comprehensive business model for sustainability
with operational directions is still not present.
E-business is the point where economic value
creation and information technology/ICT come
together (Akkermans, 2001). ICT can have both
positive and negative impact on the society and the
environment. But ccorporations have the knowledge,
resources, and power to bring about enormous
positive changes in the earth’s ecosystems
(Shrivastava, 1995). In consistent with the definition
of environmental sustainability of IT (Elliot, 2011),
sustainability of e-business can be defined as the
activities within the e-business domain to minimize
the negative impacts and maximize the positive
impacts on the society and the environment through
the design, production, application, operation, and
disposal of information technology and information
technology-enabled products and services
throughout their life cycle.
3 WHY THREE DIMENSIONAL
ELEMENTS IN SUSTAINABLE
E-BUSINESS MODELLING?
In the past, businesses limited their view of business
profitability as they were only aware of economic
gain and were focused on sound financial systems to
Three Dimensional Elements for Sustainable e-Business Modelling
315
maintain that gain. Similarly, businesses were only
concerned about economic value even when
delivering value to the customers. Then slowly the
trend for socially conscious businesses started and
now a day to compete in the market businesses need
to deliver not only the economic value but the
blended value. Customers now want to know what
total value they are receiving from the businesses.
Therefore, to deliver a total or complete value to the
customers businesses need to include economic,
social, and environmental value in their value
propositions.
As there are multiple stakeholders involved in e-
business modelling this research approach sincerely
considered the stakeholder theory while identifying
the elements of sustainable e-business modelling.
Stakeholder theory holds the idea that businesses
shall take decision considering the interest and
impact of all stakeholders. If a balance cannot be
ensured among the stakeholders, organizational
sustainability will be questioned (Freeman, 1984). A
sustainable organization try to maximize economic,
social, and environmental performance for a
sustainable and value based stakeholder relation
(Perrini and Tencati, 2006). To provide adequate
value to stakeholders and to manage relation with
them organizations need to develop specific
processes at different levels of organization
(Freeman, 1984). Such type of process development
shall be based on considering the economic, social,
and environmental interests of the stakeholders.
Hence, it can be summed up that stakeholder theory
indicates the development of a business model that
recognizes the value requirements of multiple
stakeholders to sustain the business.
Now if we look at the previous research in this
area what we see is that most of the business models
research in information systems field has been
concerned with e-business and e-commerce (Al-
Debei and Avison, 2010). A number of ideas exist
about e-business models of which most of them
provide only conceptual overview and concentrate
only on economic aspects of the business. None of
them exclusively considers the sustainability
aspects. Similarly, there is a growing number of
literature available about the sustainability of
businesses (i.e. (Bell and Morse, 2009, Stead and
Stead, 2000, Epstein and Wisner, 2001, Tanzil and
Beloff, 2006), etc.) which do not focus on e-
business. But the intersection of these two global
trends, e-business and sustainability, need to be
addressed. Although recently a very few researchers
talks about green IT/ICT concept (i.e. (Elliot, 2011,
Elliot and Binney, 2008, Hilty and Hercheui, 2010,
Melville, 2010, Houghton, 2010, Erek, 2011), etc.)
but none of them clearly explains how that concept
will fit in an e-business model to make it sustainable
and at the same time, to protect the interests of the
customers.
It is said that all firms, whether non-profit or for-
profit, create blended valuethe only issue up for
debate is the degree to which they maximize the
component elements of value (Emerson, 2003).
According to the literature, the sustainable value
must include values from three areas: (a) Economic
value, (b) Social value, and (c) Environmental value.
Importantly, businesses must also realise that to be
competitive in the market this value need to be
measured from three dimensions:
Dimension 1: What Value is demanded by the
Customers?
This means, the requirements that need to be
fulfilled to minimize gap of what value the
customers are receiving and what value they are
expecting. Businesses need to see whether the
customers are receiving the total value that they are
expecting, or not. If not, the businesses must identify
all the existing discrepancies and try to fulfil those
discrepancy requirements to deliver the total value to
the customers effectively.
Dimension 2: What Value is required by the
Businesses based on their Strategy to reach their
Goals?
Traditionally, customer requirements were the only
concern for the businesses to compete successfully
in the market and still now there is no doubt about
the importance of customer requirements in
business. But now only fulfilment of customer
requirements does not guarantee the long term
competency and profitability for the businesses. To
compete successfully every business must have their
own clear goal defined in their strategy that they
want to achieve in time. This dimension includes
with all the business requirements necessary to reach
the organisation goals.
Dimension 3: What Value is required by the
Businesses to have efficient Value Processes?
Just producing and delivering the value is not
enough to be competitive now a day. Rather, value
need to be produced effectively by the businesses to
compete and to ensure profitability for the long run.
To produce value effectively, efficient process is a
must. All the inefficiencies of the value processes
must be identified and corrected to produce the
value effectively. The requirements that are
necessary to make all the processes of a business to
be efficient are included in this dimension of
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measurement.
4 THE THREE DIMENSIONAL
ELEMENTS
Now, based on the discussion in Section 3 if the
sustainable value is measured from the above three
dimensions value requirements of a business can be
categorised into 9 (nine) groups as follows:
a) Customer value requirements (CVR): VOC
based
1. Economic requirements (EcVR1)
2. Social requirements (SoVR1)
3. Environmental requirements (EnVR1)
b) Business value requirements (BVR): Strategy
based
4. Economic requirements (EcVR2)
5. Social requirements (SoVR2)
6. Environmental requirements (EnVR2)
c) Process value requirements (PVR): Process
based
7. Economic requirements (EcVR3)
8. Social requirements (SoVR3)
9. Environmental requirements (EnVR3)
4.1 Dimension 1: Customer Value
Requirements for Sustainability
(CVR)
Generally, customer requirements indicate voices of
the customers (VOCs). Since rich literature is
available about VOCs, we are not explaining it
further. In a number of research approaches VOCs
are translated as customer requirements through
evaluation and validation (Wang and Hong, 2007,
Chan and Wu, 2005), (Han et al., 2001, Hwarng and
Teo, 2001, Chien and Su, 2003). But we, more
specifically, by customer requirements, mean the
total value (economic, social, and environmental)
that is demanded by the customer. This requirement
can be any or any combination of the economic,
social and environmental value.
Customers can be of different types, such as,
internal customers (shareholders, managers,
employees), intermediate customers (wholesale
people), ultimate customers (recipient of service,
purchasers, institutional purchasers), etc. (Chan and
Wu, 2005). When identifying customer
requirements, every organisation should ask itself
few general questions (Mazur, 2003):
Which customer will help them the most in
achieving their business goals?
Are all customer equally important to them, or
some are more valuable to them than others?
Usually, there are too many customer requirements
to be manageable and that is why of classification of
customer requirements is beneficial(Han et al.,
2001) and necessary to limit the budget of
investments. According to our approach, customer
requirements can be of 3 (three) types:
4.1.1 Economic Value Requirements for
Customer Requirements’ (EcVR1)
Economic value of a product or service has number
of different definition and explanation in the past
literature. Therefore, we are not going to define it
further; rather we focus on economic value
requirements for customer requirements. In our
approach, this customer requirement means any of
the customer’s value requirements which is
somehow economically related directly or indirectly
to the product or service that is to be delivered to the
customer. These economic requirements are not the
factors from business’s point of view which are
mentioned by Porter in his classical work on
Competitive Strategy (1980) and Competitive
Advantage (1985), instead these economic
requirements are the demands from the customer’s
point of view. In other words, these requirements
mean all types of economic benefits that the
customers are looking for. For example, price of the
product or service is directly related to the product
or service economically. Even quality, after-sales-
service, availability or ease of access, delivery, etc.
also appear under this category.
Generally, economic value requirements are
considered as the top prior requirement from the
customers’ point of view within all of the value
requirements except some product and services
whose value dimensions are different. From the
previous research it has been found that majority of
the customers look for economic value requirements
of the product or service before any other
requirements. For example, Schechter (1984) and
Bishop (1984) identified customers that equate value
with price. Zeithaml (1988) identified from a study
that customer’s equated value of the product or
service with low price. According to Porter (2011),
value for the customer is defined as benefits relative
to costs. In another study by Hoffman (1984) reveals
the salience of price in the value equations of
customers. Zeithaml (1988) also found that number
of customers consider value as price first and quality
second.
Three Dimensional Elements for Sustainable e-Business Modelling
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Business Value
Requirements
Customer Value
Requirements
Process Value
Requirements
Social
Value
Economic
Value
Environmental
Value
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The Three Dimensions Sustainability Dimensions
Figure 1: Proposed elements of e-business modelling.
4.1.2 Social Value Requirements for
‘Customer Requirements’ (SoVR1)
Social value requirement for the customer means
any value for the customer’s society. Almost all of
the products or services produce some sort of value
impact to the society. It will be very difficult to
identify many products or services which do not
have any social value impact, direct or indirect.
Also, there will be very few business activities
which are totally detached from producing some
kind of social value. If it is true that most of the
businesses produce some kind of social value,
positive or negative, then the social value
requirements also must be encountered at the core of
the business model. Today’s customers are
interested to see the contribution or impact of the
product or service or operations of the business
organisations to the society they are living. These
social value requirements are not the social
responsibilities that the business organisations are
thinking to perform; rather these are the
requirements that the customers are demanding or
expecting from the products or services or from the
supplier of the products or services when they
consume that product or service.
Social value requirements can be of different
dimensions. Such as, it can be directly related to the
product or service of the business, such as,
knowledge of the customers’ society, customers’
safety of the product, customers’ health (fresh food,
harmful packaging or ingredients in the food, life-
saving medicines), etc.; or it can be indirectly related
to the business, such as, generating local
employment, supporting education, health and
welfare, loans and assistance to the charities, etc.
Social value requirements may also include
employment policies of the organisation that ensure
diversity, including gender, race and religion, proper
work environment for all the staff that meets social
necessities, encouraging or allowing organisation’s
staff to get involved in fundraising and volunteer
activities for the disadvantaged within the society,
offering business education, community training
programs, etc. Porter (2011) identifies three ways to
create economic value for the customer by creating
social value- by re-conceiving products and markets,
by re-defining productivity in the value chain, and
by building supportive industry clusters at the
company’s locations.
4.1.3 Environmental Value Requirements
for ‘Customer Requirements’ (EnVR1)
Customers, suppliers, and public are increasingly
demanding that businesses minimize any negative
impact of their products and operations on the
natural environment (Klassen and Whybark, 1999).
Customers now a day do not just look at the
economic value of the product or service, they also
want to know whether that product or service or the
supplier of that product or service cause any impact
on the environment. Because they believe ‘business
have major role to play in helping and enhancing the
environment’ and thus, every business should
develop sound environmental management policies
for processes and products (Demirdogen, 2007). It is
also believed now by the customers that there are
number of ways how businesses can reduce the
impact on the environment, for example, sourcing
responsibly, such as, using recycled materials and
sustainable timber, creating an efficient and fuel-
efficient distribution network, creating recyclable
products, minimising packaging, working with
suppliers and distributors who take steps to minimise
their environmental impact, buying locally to save
fuel costs, etc. As a whole, the customers want the
businesses to act more responsibly by performing an
important and positive role in the society through
creating additional environmental value for the
future generations.
Bovea and Vidal (2004) suggest how more value
can be added to the product for the customer by
integrating environmental impact, costs and
customer evaluation during the product design
process. Munoz and Sheng (1995) present a model
which they believe can serve as a framework for
decision-making in environmentally conscious
manufacturing.
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4.2 Dimension 2: Business Value
Requirements for Sustainability
(BVR)
It is proven that better quality of the products or
services lead to the fulfilment of customer
requirements or higher customer satisfaction. But
only fulfilment of customer requirements does not
guarantee the future profitability of the businesses as
the market changes. Therefore, businesses need to
think in advance about how to sustain the
profitability in the long run. Strategic managers will
be mainly responsible to identify the business
requirements by evaluating the current situations and
the future directions of the businesses. Managers
must clearly define their goals and targets when
identifying these requirements. The businesses must
consider its future strategy and all the cost drivers
relative to its operations when selecting these
business requirements. For example, there can be a
number of different business goals that businesses
may aim to achieve in the long run based on their
current circumstances. But whatever the goals are, to
achieve them there are always relative business
requirements that need to be fulfilled. Porter (1980,
1985) provides with a list of common cost drivers
which may guide all the businesses during the
business requirements selection to achieve their
goals. Business requirements can be of different
types depending on what type of business that is. All
business requirements can be classified into 3 (three)
groups:
4.2.1 Economic Value Requirements for
‘Business Requirements’ (EcVR2)
Economic value requirements for business
requirements are those requirements which add
some economic value to the business directly or
indirectly if they are fulfilled. These economic value
requirements are very similar to the requirements
explained in the section EcVR1 except that those
economic requirements are demanded by the
customers and these economic requirements
(EcVR2) are identified by the businesses to be
fulfilled to achieve the planned future goals. For
example, reducing the cost of production, increase of
sales and/or profit, getting cheaper raw materials,
minimizing packaging and delivery cost, replacing
the employees with more efficient machinery,
reducing costs by implementing more efficient
supply chain management systems, saving of time
and energy, etc. add some sort of economic value to
the businesses. Generally, the ultimate goal of
adding some economic value to business is to pass
the savings to the customers in the competitive
market and maximise profit.
4.2.2 Social Value Requirements for
‘Business Requirements’ (SoVR2)
These social value requirements are to add some
value to the society from business’s point of view if
they are fulfilled. Types of social values are
discussed in the section SoVR1. These value
requirements (SoVR2) reflect what social value the
business is planning and willing to deliver to the
customers’ society in time regardless of the
customers’ demand. For building societal value,
Nelson (1998) proposes an approach based on three
elements: (i) efficient and ethical pursuit of core
business activities, such as, creating local jobs,
paying taxes and royalties, implementing social
human resource policies, etc. (ii) social investment
and philanthropy, such as, offering training program
to the community, running employee volunteering
schemes, business education projects, sponsoring
community development trusts, civic improvement,
etc. and (iii) contribution to the public policy debate,
such as, supporting progress for good governance
including anti-corruption initiatives and human
rights standards, contribution to the social policies
including education, training, local economic
development, employment management, etc. Adding
social value by the businesses can be a part of
different types of business goals depending on the
business natures. Part of the goals can be simply for
the wellbeing of the society, or can be for the
competition in the market. For instance, Lever Bros
Ltd. uses few principles to focus on social value,
such as, emphasising on employees personal
development, training, health, and safety; improving
well-being of the society at large; using world class
expertise base human safety to ensure consumer
safety; improving living conditions of its employees,
etc. (Zairi and Peters, 2002). Through participation
in community-based programs such as sponsorships,
donations, and employee volunteer programs, global
firm Fortis commit to work to fight illness and
disease, promote education, aid and protect children,
and prevent homelessness and hunger (Snider et al.,
2003) to add social value.
4.2.3 Environmental Value Requirements
for ‘Business Requirements’ (EnVR2)
To be competitive in the market businesses need to
act environmental friendly now a day. According to
Denton (1994), adding environmental value can be a
Three Dimensional Elements for Sustainable e-Business Modelling
319
competitive advantage for the businesses since
businesses can differentiate themselves by creating
products or processes that offer environmental
benefits. As mentioned in the section EnVR1 above,
there are number of ways how businesses can
minimise the impact on the environment. By
implementing environmental friendly operations
businesses may achieve cost reductions, too. For
example, minimum use of environmentally-toxic
chemicals, reduced contaminations, recycling of
materials, improved waste management and reuse or
recycling of waste, using fuel efficient machineries,
minimize packaging, using recycled water, etc.
reduce the impact on the environment and at same
time they may reduce the costs of the businesses.
One of the principles of Lever Bros Ltd. is to take
great care to minimize the environmental impact of
all their operations- from raw material procurement,
product design, manufacture and distribution- to use
and disposal (Zairi and Peters, 2002). In the section
EnVR1, we discussed environmental value
requirements that are demanded by the customers
but these environmental value requirements are
identified by the businesses for their different
business goals that they aim to achieve in time.
4.3 Dimension 3: Process Value
Requirements for Sustainability
(PVR)
Process value requirements are the requirements that
need to be fulfilled to have an efficient value
creating process within the existing business
processes. Even though customer satisfaction can be
obtained effectively and efficiently for some time by
fulfilling various customer requirements, an
organisation still cannot ensure future profitability if
it lacks value creating capability (Wang and Hong,
2007). Process value requirements are identified
from the gap between what is being achieved and
what need to be achieved from the existing value
processes. These requirements are not demanded or
identified by the customers rather they are identified
by the business itself by looking at what amount of
value it is currently producing and what amount of
value it is supposed to produce to safeguard the
interest of customer value and business value. For
example, inaccurate or slow manufacturing of a
product or service by employee or machinery,
untimed delivery, inefficient processes caused by
lack of training, social misconducts, unproductive
waste management, unplanned pollution (air, water,
sound) management, etc. and any other inaccuracies
within the existing processes which can be corrected
without or with very low efforts and/or investments
are identified as value requirements. Common steps
for optimizing business processes which are
analysing, designing, implementing and evaluating
can be followed to have an efficient value creating
system within the organisation. The ‘Process value
requirements’ can be any of the following 3 (three)
types:
4.3.1 Economic Value Requirements for
‘Process Requirements’ (EcVR3)
Economic value requirements for value requirements
are mainly related to the cost savings within the
existing business processes which can be later
transferred to the customers. Again, this additional
value (cost savings) is not demanded by the
customers, instead the managers identify those value
creating inefficiencies within the existing processes
and try to correct them which result in some sort of
economic benefits for the organisations. Then those
economic benefits can be passed to the customers as
economic value by the organisations. For example,
employing skilled workers, keeping up with the up-
to-date technologies, providing adequate amount of
training, using efficient energies, improved supply
chain management systems, etc. can increase the
efficiency of the value processes that can certainly
add some economic value to the organisation that
can be transferred to the customers, if required.
4.3.2 Social Value Requirements for
‘Process Requirements’ (SoVR3)
Recent expectation from each society is that every
business should act honestly and ethically. Value for
the society can be of different types: basic value,
ethical value, voluntary value, etc. To identify the
social value requirements for value requirements
managers look at the whole value process of the
organisation and see whether there is any scope to
add some value to the society they are operating
within the existing value process systems.
Sometimes the businesses even do not hesitate to
spend some extra (investment) or to give some extra
effort if there are chances to add some social value.
In the sections SoVR1 and SoVR2, we have already
explained about what the social value is and their
examples. SoVR3 is different from SoVR1 and
SoVR2 in the sense that SoVR1 requirements are
demanded by the customers, SoVR2 requirements
are identified by the managers that they are planning
to deliver to the customers in the future, and SoVR3
requirements are identified by the managers but they
are identified within the current value process
ICE-B 2012 - International Conference on e-Business
320
system so that they can be fulfilled and delivered
immediately. For instance, educating disadvantaged
children, organising skills training for unemployed
people, employing disabled people, establishing
schools and colleges, sponsoring social events,
organising social gathering, organising awareness
programs etc. can add value to the society and most
of these requirements can be easily fulfilled by the
businesses without or with a little investments or
efforts.
4.3.3 Environmental Value Requirements
for ‘Process Requirements’ (EnVR3)
These value requirements need to be fulfilled to
minimize the impact of current value processes on
the environment. To fulfil these requirements, the
businesses try to find and implement all the
necessary steps within the existing processes that
will stop or reduce the chances of effecting the
environment, thus, adding some value to the
environment. Similar to SoVR3, these requirements
are also identified within the current value process
system by the managers so that they can be fulfilled
and can start adding more value immediately.
EnVR1 requirements are demanded by the
customers but EnVR3 and EnVR2 are identified by
the businesses themselves to increase the value by
increasing the efficiencies in the business processes
now and in the future respectively. For example,
leakage of water/oil/heat, incompetent waste
management, inefficient disposal and recycling of
materials, unplanned pollution (air, water, sound)
management, uncontrolled ecosystem stress, heating
and lighting inefficiency, etc. will result in
incompetency in the value processes for the
businesses. Thus, by fulfilling these requirements
businesses may get rid of these inefficiencies and
add value to the value creation processes.
5 DISCUSSION AND FURTHER
RESEARCH
It has been found from the above discussion that
focusing only on the customers demand is not
enough to be competitive regardless of whether the
demand is economic, social, or environmental. As
mentioned above, customer satisfaction can be
obtained effectively and efficiently for some time by
fulfilling various customer requirements but still an
organisation cannot ensure future profitability if it
lacks value creating capability. Moreover, only
fulfilment of customer requirements does not
guarantee the future profitability of the businesses as
the market changes. To be competitive and to
maintain the sustainability an e-business must
consider values (economic, social, and
environmental) from all three dimensions: customer
value requirements, business value requirements,
and process value requirements. It is also found that
each of the blended value elements (customer value,
business value, and process value) need to be related
to all of the sustainability elements (economic,
social, and environmental). What is also realised that
within the blended value elements the customer
value and the business value are partially dependant
on process value as the process value supports the
customer value and the business value.
Based on the three dimensional elements of e-
business model our further research will be directed
at the development of an e-business model based on
blended value which will be sustainable and
simultaneously will safeguard the interests of all the
stakeholders. Therefore, the main objectives of the
further research in this area can be defined as
follows:
To investigate how the concept of blended value
dimensions can be used in developing an e-business
model.
To investigate how these three dimensional
elements can be used to determine the
optimal/appropriate design requirements in
developing an e-business model.
To develop avalue-sustainability’ framework
for modelling e-business in conjunction with
‘blended value’ and ‘sustainability’ concepts.
6 CONCLUSIONS
There can be found a number of ideas and proposals
about business modelling and e-business modelling
in the literature and few of them used ‘value’ as the
main element of their modelling. But in their
approaches ‘value’ is measured mainly from the
customer’s point of view and not from the business
point of view or the process point of view. Which
means ‘business value’ and ‘process value is fully
ignored in the previous approaches. Recently some
scholars are talking about ‘sustainable value’,
‘shared value, or ‘blended value’; even them did not
consider ‘business value’ or ‘process value’.
Moreover, none of them clearly explicated the value
elements that will protect the interests of the
customer and the business. In this paper, we have
shown the important elements that should be used
for a sustainable e-business model after extensive
Three Dimensional Elements for Sustainable e-Business Modelling
321
literature review. From the literature we have
explored and determined that the three dimensional
elements should be used in developing sustainable e-
business model. We have also shown why these
three dimensional elements should be used for
sustainable e-business modelling. Furthermore, we
have investigated and shown how the sustainability
dimensions can be integrated with the value
dimensions in developing sustainable e-business
model.
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