Adoption of extranet in SCM: significance and drawbacks: a case study of two companies

Abstract: In recent times, extranet has been used extensively in SCM by business firms
with exchange partners to achieve operating efficiency. And organizational
factors play a pivotal role to fully acknowledge the benefits of extranet in
SCM to achieve this efficiency. The purpose of our study is to gain a better
understanding of extranet adoption in SCM and to find out the benefits and
drawbacks of the extranet adoption. Our study showed with empirical data of
two company’s (LKAB, Sweden and DHL, Bangladesh unit) that there is a direct
relationship between organizational factors and extranet adoption.
Organizational factors should be taken into consideration actively to see
and measure how these factors are affecting the adoption processes to
calibrate organizational practices to gain utmost benefits. The extranet
investigated differed from what the literature suggested on many points.
One of the features that has been revealed from the study that LKAB did not
perceive most of the extranet benefits, and the reason is that LKAB has
only few fixed customers and they used their extranet system as a
supplementary services to their core businesses. On the other hand, DHL
made the extranet system as their core business process: thus acknowledging
most of the benefits in a positive way. Extranet has the potential to
provide far more benefits to companies than they perceive and it is
changing faster than the literature emerges. Technological improvements
offset major disadvantages that once researchers considered obstacle to
extranet implementation. Our research indicated that all members of the
company, from top management personnel to first level employees should have
the positive mindsets to adapt to contemporary developments in technology
to reap the maximum benefits of extranet.