e-Business Reference Modelling Framework for SMEs: An Enterprise

Architecture based Approach

Magido Mascate

and André Vasconcelos

INESC-ID, Instituto Superior Técnico, Universidade de Lisboa, Avenida Rovisco Pais, 1, 1049-001 Lisboa, Portugal

Keywords: Enterprise Architecture, e-Business Reference Model, Digital Strategy, SME, e-Business Architecture.

Abstract: Through the digital industry and economy, we find countless researches providing conceptual models aiming

to depict digital technology adoption by different businesses. However, according to existing studies, we

found that SMEs lack an e-business reference modelling framework that supports the design and adoption of

digital-enabled business models. Therefore, we exploit an adaptive and technology-independent approach to

propose an EA-based e-business reference modelling framework for SMEs in diverse business contexts. Our

framework comprises mainly of three interrelated building blocks, starting with the 1) situational analysis to

determine the motivating factors for change and barriers of the business environment; followed by SMEs

profiling. The SMEs profiling embodies the 2) SMEs’ readiness depiction based on the existence of digital

strategy, digital-value drivers’ catalogue, and business models proposals; and culminates with the 3)

description of the implementation based on e-business architecture. In addition, a fourth building block is

incorporated into the framework for e-Business solutions architecture, selection, and deployment into the

current SMEs' business context. In this study, we assume a practical approach, proposing and demonstrating

the application of tools that support the conception of an SMEs´ e-business in the business context in all the

different facets of our framework.

1 INTRODUCTION

The digital ecosystem and economy offer plenty of

opportunities for businesses to thrive. Although many

corporations and large firms easily engage and thrive

in the digital landscape, this is not the case of

countless SMEs from multiple business contexts. For

most of the countries around the globe, SMEs are the

cornerstone for the economic development of many

industries, specifically in developing countries.

Unfortunately, researches and literature pinpoint the

limited adoption of digital business or digital

supported business models by SMEs. For instance, as

discussed in summary by (Putra & Hasibuan, 2015),

many critical factors are appointed as drivers or

hinders. Hence, as many of the indicated factors are

intrinsic to a specific industry or country, notably two

problems are unfolded:

 SMEs’ lacking e-business reference models to

guide the adoption of e-business. Also,

https://orcid.org/0000-0001-5725-8932

https://orcid.org/0000-0003-0038-7199

 Literature lacking e-business reference modelling

frameworks.

Although SMEs’ e-business adoption behaviour

analysis falls beyond the scope of this work, we agree

that every business (enterprise) is a social system

(Hoogervorst, 2011, 2017) and behaves differently to

others, which is challenging to model its behaviour

for change. Herein, acknowledging the fact that

digital technologies are used for business purposes,

these businesses are assumed as having – managed or

unmanaged – enterprise architecture (EA) (Armour,

Kaisler, & Liu, 1999). Thus, we are induced to answer

the following research question:

 Which conceptual model should support the

development of technology-adaptive e-business

reference models based on enterprise architecture

of SMEs, in diverse industries or business

contexts?

Mascate, M. and Vasconcelos, A.

e-Business Reference Modelling Framework for SMEs: An Enterprise Architecture based Approach.

DOI: 10.5220/0008931906930700

In Proceedings of the 22nd International Conference on Enterprise Information Systems (ICEIS 2020) - Volume 2, pages 693-700

ISBN: 978-989-758-423-7

693

2 RELATED WORK

Our discussion over the main referenced works,

researches, literature, techniques related to e-business

frameworks that support our proposal follow two

streams of studies: one from the practitioners’

perspective related to the design of digital-enacted

business, and another from the academia perspective

related to the framing of e-business adoption’s

patterns of SMEs. Herein, we identified former

conceptual models serving as the basis for our

proposal.

2.1 e-Business Adoption Pattern

Framework

In our days, it is unimaginable a business that doesn’t

use ICT resources regardless of its size. Although the

concepts of e-business stand for the use of electronic

technologies in support of business activities,

researchers argue that its adoption approach by SMEs

and businesses, in general, must be adaptive and

technology-independent (Putra & Hasibuan,

2015)(Mišic & Zhao, 2009)(Fettke & Loos, 2006). In

fact, there are many e-business technologies and

technology-based frameworks. However, as

discussed in former studies, they lack guidance – to

support SMEs' decision-makers – on the e-business

adoption process, in diverse SMEs’ industry or

country’s context. Thus, e-business models are not

designed independently of the technologies (Mišic &

Zhao, 2009).

From the existing research, we identified the

baseline conceptual model for our study – “Initial

descriptive model of integrated e-business for SMEs

framework” – as by (Putra & Hasibuan, 2015). This

work suggests three facets:

1) for the critical adoption factors influencing the

SME e-business readiness,

2) for the readiness encompassing SME’s profiles in

a specific industry or country and,

3) for the implementation facet where SME’s

decision-makers decide to adopt an e-business.

The authors argue that the existing frameworks

“insufficiently provide a practical tool for SMEs to

implement e-business.” In addition, they claim the

need for an established set of CAFs of e-business for

SMEs as a source of indicators in signalling the

readiness of SMEs to adopt e-business. Considering

the SMEs’ idiosyncrasy and the business

environments, establishing a set of generic CAFs

could be misleading. Instead, we suggest establishing

purposeful tools and methodology to guide SMEs to

evaluate its context CAFs based on cross-industries

digital key elements of a moment in time of an SME

lifecycle. Although, we agree on the authors

summarized former research contextualizing SMEs'

readiness as based on strategic vision, enterprise

financial resources, management and employee’s IT

skills, attitude (motivation).

Also, they posit that SMEs’ readiness need to

“relate the CAFs into SMEs readiness profiles” and

suggest a readiness evaluation as

SMEs’ profiling.

From this standpoint, we agree on SMEs’ profiles as

relevant reference components for e-business

adoption patterns evaluation. However, an SME’s

Profile must span the readiness and implementation

facets, comprising all necessary e-business adoption

references. Also, an SME’s profile must be of digital

context addressing a digital strategy and digital

business model at readiness facet. By following our

approaches, SMEs' e-business will be well structured

for future evaluation of the e-business adoption

maturity.

Moreover, the author proposes an implementation

perspective based on SME’s value chain. We agree

that this perspective is appropriate for the overall e-

business adoption maturity evaluation; however,

SME's value chain encompass too many processes

(Porter, 2001), which could limit a concurrent e-

business adoption approach, becoming a barrier for

SME, specifically for those in developing countries.

Instead, we suggest a more granular adoption

perspective through value-streams, specific activities

in the value chain (The Open Group, 2017). To adopt

this approach, we propose a strict modification of this

baseline framework by adding necessary building

blocks to complement its functionality. In addition,

this approach is suitable for design science paradigm

to develop artefacts as the outcome of the analysis in

the context of people, organizations, and technology.

2.2 e-Business Model Designing

Frameworks

Following the contextual analysis, the strategic

options are spotted, and this could lead to business

innovation process through business model design. A

business model is an intermediary element between

strategy and tactics (Casadesus-Masanell & Ricart,

2010)(DuPont et al., 2018). For e-business modelling

purposes, we identified the BMC – a well-known

framework in the context of management, among

others within the EA discipline. Scholars have

proposed some extension of BMC to facilitate the

design of digital-enacted business model. One

extension that we found fitting our purpose is the EV

Framework (Cigaina & Riss, 2017) – based on BMC.

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This is a powerful framework that supports the

development of e-business models through core

digital concepts as 1) digital connected people, 2)

digital-connected businesses (organizations), 3)

digitally connected business assets, 4) business

information (set of data) as a digital resource, and 5)

digital services’ infrastructures – directly or indirectly

owned IT infrastructures (e.g. cloud computing).

Herein, we understood that SMEs pursuing

different business goals, within an industry or

country, can share the same digital key elements.

Therefore, these SMEs need to articulate their

business models in one or more of the BMC

components to pursue a specific strategy or course of

action and realize business drivers and goals.

Moreover, with this approach, one or more digital-

value drivers are explicitly linked to each digital key

element and BMC component. The EV Framework

is supported by a questionnaire-based methodology,

and this is useful for the elicitation of current or future

digital value drivers out of the business environment.

Additionally, within the EA discipline, we found

scholars and practitioners proposing mechanisms that

support the translation of BMC into architecture

models, with ArchiMate language (Iacob et al., 2014;

Meertens et al., 2012). Cigaina & Riss (2017) provide

valuable insights over the cross-industries digital

elements, the depiction of digital strategies through

its related digital-value drivers. Even Though, they

scope their research in the digital business model

design context only. So, we posit that adopting some

aspect of EV framework is helpful for SMEs’ e-

business modelling with ArchiMate. Also, the

integration of business models in our proposal aligns

with some BA practitioners standpoints (DuPont et

al., 2018). It’s recommended that e-business

architectures are based on business models and, in

turn, business models are aligned with business

strategy.

3 PROPOSED FRAMEWORK

Following, we present our SME´s e-business

reference modelling framework (∫-framework)

proposal. This framework is made up of three facets

encompassing three different levels of e-business

from conceptualization to implementation. Also, it

incorporates an extra deployment block addressing

the e-business solution architecture to be managed

outside the SME’s boundaries by e-business solution

providers. We present a similar approach as the

research basis by Putra & Hasibuan (2015), to

emphasize the devising of SME's e-business adoption

model. In the following sections, we demonstrate how

this analysis is accomplished, and different

methodologies and techniques are combined to

support our proposed framework (∫-Framework) (cf.

Figure 1).

3.1 Description of the ∫-Framework

We adopt the EA-based approach to propose an

integrated e-business reference modelling

framework. Essentially, this framework comprises

three facets (Putra & Hasibuan, 2015).

Figure 1: E-business reference modelling framework for

SMEs (∫-Framework).

First, for CAFs Analysis building block we

incorporate four components for the situational

analysis relying on extended STEP analysis over

cross-industries digital elements: people,

organization, information, and technology (cf. Table

1). In addition, the CAFs analysis are translated into

stakeholders’ motivation views with ArchiMate (cf.

Figure 2).

Second, for SMEs profiling, we span the SMEs’

profile covering both the Readiness evaluation facet

and Implementation description facet. Then, for

Readiness facet per se, we introduce components for

digital strategy, digital business model, and digital

value drivers catalogue as key elements for Readiness

assessment (cf. Table 2 – 3 and Figure 3 – 4).

e-Business Reference Modelling Framework for SMEs: An Enterprise Architecture based Approach

695

Moreover, to ensure that the SME’s readiness is

related to the CAFs, we rely on instances (people,

business, data, etc.) of environment’s digital elements

(people, organizations, information, and technology)

in the digital strategy building block – were the SWOT

analysis is performed (cf. Table 2).

Third, for Implementation design, we introduce the

E-Business Architecture building block, and we

substitute the SME value chain with e-business value

stream and e-business application by e-business

process. Additionally, we include the Information

map building component. E-business architecture

takes business model contents as reference inputs and

provides two reference artefacts: 1) e-business

information map, and 2) digital value (cf. Table 4 – 6

and Figure 5 – 7).

Fourth, within the SMEs business profile, we add two

key components: 1) business model content map (cf.

Figure 4), and 2) digital value map (a description of

the digital offer) (cf. Figure 5). Also, we integrate a

deployment facet into the SMEs’ environment; in this

new facet, SMEs’ e-business solutions are designed,

identified, or developed and deployed by (non-

technology) SMEs (cf. Figure 1). The deployment

includes the Information Systems Architecture (ISA)

building block and Applications repository

component and has as input the information map.

Further details are out of the scope of this study.

We adopt a technology-independent approach

(Putra & Hasibuan, 2015), and we ensure that

businesses systematically choose and adopt any

available e-business solution (Fettke & Loos, 2006)

in an evolutionary manner. To ensure the adaptability

and SME’s interoperability, the e-business

information maps are used as a reference in the ISA

of the specific industry – which provides application

selection references for SMEs’ e-businesses (cf. Table

7). While applications exist already in the SMEs

Context Applications Repositories, suitable e-

business applications can be instantiated into a

specific SME’s e-business profile.

4 CASE STUDY

In the following section, we demonstrate the

application of our proposed framework in designing

e-business reference models. Merkatos is an SME

operating in the marketing industry in Mozambique,

to provide traditional mass media marketing services

for diverse business sectors, mainly brick-and-mortar

Source: https://www.imf.org/en/countries/moz, visited on

2019/03/05

retailers. Merkatos' core competencies are the

production and publishing of graphical, audio, and

video marketing content. Since 2015, Mozambique is

facing an economic deficit leading to a 19.1%

inflation rate in 2016

. Therefore, Merkatos managers

are looking to “reduce 3% of publishing costs,” and

enhance the market access for premium customers to

increase profit by 1% by third Quarter(Q3) in 2020.

Merkatos expenditures on multimedia channels are

25% off the quarterly budget. Despite the company’s

need to continue using the mass media to reach

audiences randomly, they see potential of the internet

as a substitute and how it facilitates new entrants.

Through this scenario, we will demonstrate how to

implement the proposed framework to devise an e-

business adoption reference models for SMEs in this

country. This scenario alludes to some of the

Merkatos critical factors for digital enacted

businesses adoption - summarized in Table 1.

Table 1: Merkatos’ CAFs Analysis over Cross-Industry

Digital Elements.

This situational analysis of Merkatos external

context is complemented by SWOT analysis in Table

2. By coupling the inside and outside state of affairs,

Merkatos envisioned the business motivations and

depicted the strategic options. Table 3 presents the

industry generic digital-value drivers’ reference

catalogue. The catalogue heat-map signalling the

readiness gaps, whereas, Green mean Merkatos owns

supporting capabilities, or competences, or resource

for a specific value driver. Yellow mean Merkatos

resources, capability, and competence to be enhanced

to realize a specific value driver. Red mean Merkatos

important digital-value drivers in which an SME is

required to acquire the supporting competences,

Merkatos Context

CAFs

CAFs Categories

Social Technological Economic Political

CAFs Digital Elements

Stakeholders

(people)

‐ Low

technology

literacy.

‐ Growing

internet access

‐ Low income. ‐ Adoption ETA.

‐ Social

networking.

‐ Digital

consumers

‐ Mobile banking

‐ High inflation

rate

‐

Organization

(business)

‐ ‐ Growing

internet access

‐ High inflation

rate.

‐ Adoption of

ETA.

‐ ‐ Connected

partners

‐ Data and

content

roviders

‐ ‐

Information

(set of data)

‐ People network

effect

‐ People share

information

enl

‐ ‐ ‐ Data privacy

enforcement by

ETA

‐ ‐ ‐ Adaptive pricing ‐

Technology

(cloud, IoT,

etc.)

‐ ‐ Business usage

of cloud

storage.

‐ Lower Marginal

costs of digital

assets

‐

‐ ‐ Social network-

based solutions

‐ ‐

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capabilities, and resources. Grey generic industry or

business context’s digital-value drivers.

Table 2: Matching of CAFs with its Related SWOTs to

Develop Digital Strategy.

Figure 2: Merkatos E-Business Motivation Model.

Figure 3: Merkatos' E-Business Digital Strategy Model.

Table 3: Merkatos' Industry Digital-Value Drivers’

Catalogue.

Figure 4: Merkatos' E-business Model Diagram.

Table 4: Merkatos' Value Stream Definition.

Table 5: Merkatos' Value Stream Decomposition.

Merkatos’ Digital Strategic Options to

Reduce Cost

CAFs Digital Elements

(People, Business, Data, Cloud)

Related Weaknesses

(W):

- Personnel (employees)

with limited digital

skills;

Related Strengths (S):

- Expertise in multimedia

production;

- Knowledgeable of digital

content management;

- Competent in social media

platforms

CAFs Digital Elements

(People, Business, Data, Cloud)

Related Opportunities

(O):

- Socially networked

people;

- Internet-connected

businesses;

- Low publishing costs

Digital OW Strategy:

- Collaborate with

Internet marketers to

publish digital ads.

Digital OS Strategy:

- Develop a digital content

marketing channel.

- Provide a market access

channel for 24/7

availability.

Related Threats (T):

- Low technology literacy;

- The high cost of data

services;

Digital TW Strategy:

- Partner with operators

for SMS marketing.

Digital TS Strategy:

- Develop a social media

channel targeting local

subscribers only.

Merkatos Digital-

Value Drivers

BMC Components

Value

proposition

Customer

segments

Revenue

streams

Channels Customer

relationships

Key

partners

Key

resources

Key

activities

Cost

structure

CAFs

Digital

Elements

(Instances)

people

Social

network-

based

solutions

Digital

consumers

Digital

access

points as a

channel

Social

network-

based

customer

relationships

People

network

effect

business

Business

network-

based

customer

relationships

Connected

partners

Cost

reduction

by digital

make-or-

buy

flexibility

cloud

Social

Media

Marketing

Lower

Marginal

costs of

digital

assets

data

Customers

with high

Information

demands

Adaptive

pricing

Customized

channels

Better

knowledge

of customers

Data and

content

providers

Data as a

resource

Data

Management

Name Advertising Online

Description Delivery of product/service promotional information on social media channels.

Stakeholders Retail store wishing to advertise and social media subscribers (End-consumers)

Value People can see product/services Ads online

Value stream

stages

Description Participating

stakeholders

Entrance

criteria

Exit criteria Value item

Plan marketing

campaigns

The act of defining

the strategy,

objectives, and

metrics of the

Marketing

campaigns.

Retailer,

Marketing

Manager,

Finance Clerk

Customer

looking for

Advertising

plan.

Customer

Engage with

Merkatos

Ads

campaign

plans

available to

the customer.

Build a social

media channel

The act of building a

social media

marketing channel

like Facebook pages

Retailer,

Marketing

Manager,

Content

designer

The customer

selects the

Ads plan.

Customer

Approves

channels

Social media

channel

available to

customer

Manage

marketplace

Ads

The act of producing

digital content,

uploading, and

posting the Ads.

Retailer,

Marketing

Manager,

Content

designer

Customer

Approves

channels.

Customer

approves Ads

contents

Online Ads

visibility

Engage with

end-consumers

online

The act of promoting

Ads and interacting

with social media

subscribers

(consumers)

Social media

subscriber,

Marketing

Manager,

Content

Promoter

Customer

approves the

publishing of

Ads’ contents

Consumer

engages with

Ads contents

Consumers'

brand

awareness

rate.

Measure and

feedback

The act of evaluating

the marketing

channel’s

performance and

Optimization.

Marketing

Manager,

Retailers,

Content

designers

Consumer

engages with

Ads contents

Customer

receive

Feedback

Customer

intimacy rate.

Advertising Online

e-Business Reference Modelling Framework for SMEs: An Enterprise Architecture based Approach

697

Figure 5: Merkatos E-Business Value Stream Map Coupled

with a bundled Reference Digital Value.

Table 6: Merkatos' Value Stream and Capabilities

Mapping.

Figure 6: Value stream and capability mapping.

The implementation description is core and begins

with the translation of the Merkatos Key activities of

the E-business model into value streams. The value

proposition for end-consumers is providing

customers with local products and service

information anywhere at any time namely –

Advertising Online. For instance, one of the

Merkatos’ Key activity is Managing social media –

described in (APQC, 2019) – which requires upskills.

This new capability is coupled with Merkatos extant

capability – Development and management of media

campaigns, also described in (APQC, 2019). These

Figure 7: Merkatos' Reference Information Map.

Table 7: Merkatos E-Business Processes vs. E-Business

Systems Map.

core capabilities were translated into the following

value-adding activities:

1) Plan marketing program

2) Build a social media channel

3) Manage marketplace Ads

4) Engage with consumers online

5) Measure and feedback

As Merkatos E-Business Profile is concluded and

contain the artefacts from the e-readiness analysis to

the implementation descriptions, the senior managers

can engage on the next stage challenges – selecting

the e-business applications to adapt and deploy.

5 DISCUSSION

In this research we adopt an ex-post evaluation

strategy (Venable et al., 2012, 2014) to analyse how

our framework could support the design and

implementation of a manageable SME’s e-business in

line with the criteria proposed by Putra & Hasibuan

(2015), and in the context of design science paradigm.

We had limitations in applying our proposed

E-Business

Information

Entities

Plan

marketi

campaig

Build a

social

media

channel

Manage

marketplace

Ads

Engage

with end-

consumers

online

Measure

and

feedback

E-Business Systems

1…N

Planning

systems

Ads

campaig

n plan

Payment

systems

Payment

…

Social media

channels

Online Ads

visibility

trends

Customer

Relationshi

p System

Consumer

awareness

rate

Customer

intimacy

rate

Advertising Online

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framework in a real-business scenario; however, we

are analysing over the created reference models in the

previous section to depict the proposed framework

usability and suitability.

Following, we analyze our proposal over the

created artifacts also regarding former reported SME

limitation in the baseline research (Putra & Hasibuan,

2015). We recall these limitations in summary as –

“inadequate provision of practical tools for SMEs in

decision-making and implementations,” described as:

 Lack of an established set of critical adoption

factors of e-business for SME serving as the

source of indicators in signalling the readiness of

SMEs to adopt e-business.

 Trivial adoption of e-business applications

regardless of SMEs profile based on an

assessment of their capacity to adopt a specific e-

business application or readiness to adopt e-

business.

 Need for a well-designed implementation model

that is adaptive to technology and receptive to the

nature of SME, serving as a roadmap towards the

transformation of SMEs.

What Become Possible for e-Business Profiling.

We recognize that having an established set of drivers

and hinders from SME, for instance, operating in the

US market, could be a misleading reference for an

SME’s e-business adoption initiative in Mozambique.

However, possessing practical tools and a common

methodology guiding the assessment of the diverse

industry and business context CAFs became the

pragmatic approach. So, SME in any industry and

business context, could identify the relevant e-

business adoption factors (drivers/hinders) over

common cross-industry digital key elements of any

moment in time of a SME’s lifecycle.

Also, the SMEs’ readiness profiling based on

strategic vision over relevant digital hotspot of its

industry and business context demonstrated the

feasibility of our proposal. Though, SMEs could be

prevented from trivially adopting any existing

technology/e-business applications before they had

the motivation and understood both technical and

financial capabilities, regardless their ICT maturity

level. Additionally, by approaching a well-structured

implementation paradigm – E-Business Architecture,

SMEs can roadmap a technology-independent e-

business adoption process.

6 CONCLUSIONS

In this work, we exhaustively demonstrated how to

approach e-business adoption through EA reference

modeling. Also, we have evaluated the utility of the

proposed design solution against leading criteria, and

our conclusions regarding the baseline framework

proposed by Putra & Hasibuan (2015) is suitable to

couple managerial techniques and BA techniques to

support the design of e-business for SMEs. Moreover,

by integrating the two disciplines to build an e-

business framework could contribute to enhanced

decision-making for the e-business adoption process.

In short, we have achieved our objective of

providing a framework that supports the development

of SMEs e-business in diverse business contexts and

industries by integrating managerial and EA

practices. This achievement is fundamentally

sustained by 1) identification of knowledge base

conceptual models regarding e-business reference

modelling and adoption pattern from existing work;

2) analyzing the adaptability of baseline conceptual

models to suit the generic managerial frameworks and

EA practice components; and by 3) proposing a

framework and supporting tools. Henceforth, the

main contributions of this research are:

Scholars have a detailed, well-designed, and

technology-independent reference modeling

approach to support the SMEs’ e-business adoption

pattern description. Through extended common

managerial analysis tools for critical adoption factors,

facets become possible to identify an SME’s specific

drivers and hinders related to industry or context

transversal digital elements. For readiness

perspective, SMEs' readiness profiles are explicitly

related to context adoptions factors guiding the

depiction of SME change motivations and business

model innovations. And industry or context drivers

are cataloged for SMEs e-business adoption

referencing purpose. Moreover, a fine-grained e-

business architecture approach through SMEs value-

adding activities is demonstrated, independently of e-

business solutions being deployed at any stage of the

business lifecycle.

Practitioners engaging in e-business implementation

have an instrument to apply their competencies on

situational analysis to depict digital business value

drivers, and digital strategy and e-business models.

Also, to boost the understanding in how digital

service and technologies are deployed to realize

business goals. Moreover, they are benefited from a

new approach to handle SMEs’ e-business

architecture analysis and modeling, which is EA

architecture tools compatible.

e-Business Reference Modelling Framework for SMEs: An Enterprise Architecture based Approach

699

ACKNOWLEDGEMENTS

This work was supported by national funds through

Fundação para a Ciência e a Tecnologia (FCT) with

reference UIDB/50021/2020 and by the European

Commission program H2020 under the grant

agreement 822404 (project QualiChain).

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