Linking the old and new

“One of the primary benefits of EDI is the sharing of information between companies. This information sharing could come in the form of sending documents, raw data, money, etc. The difference is that newer interactive technologies have increased the size and scale of such interactions. For example, newer technologies utilize a networked framework, and are therefore capable of bypassing direct one on one links, allowing the possibility of simultaneous interactions between firms of a supply chain”. (Plank and Hooker 2014)

van Zyl conducted a literature review about electronic social networking in companies, and identifies several benefits and disadvantages (table 3). These can be used as arguments for or against implementation of web 2.0 tools in organisations. The study shows that social networking can increase productivity and innovations through more effective communication and identification of experts and opportunities outside own organisation. But at the same time perceived benefits of hierarchical knowledge transfer and fears of knowledge leakage and acts of vandalism may be the barriers to web 2.0 implementation.

New software and programs are created as the internet develops. The main difference in the old and new technologies are the amount of participants needed to be effective. For example, ERP systems are used to process information, create reports and to execute transactions, whereas “web 2.0 technologies are interactive and require users to generate new information and content or to edit the work of other participants”. (Chui et al. 2009)

Table 3: Impact of social networking/web 2.0 on organisations (van Zyl 2009)

Based on the extensive literature review about past SCM software and web 2.0 tools, some main differences can be pointed out and the potential added value web 2.0 can provide to buying organisations can be discussed.

Benefits Disadvantages

• Up to date contact information linked to

user maintained profiles • Potential source of information which can be used in social engineering attacks • Identification of experts, opportunities

and potential business partners • Spammers and virus-writers can set up false profiles

• Increased productivity and workflow

efficiency • Decreased productivity caused by employees spending too much time

networking and posting entries on blogs and Wikis

• Increased staff motivation and sense of

community through the accumulation of a digital reputation

• User generated content can be unreliable,

potential loss of confidential or sensitive information

• Retention of cumulative organisational

knowledge and experience in a fully searchable format

• Resource waste with regard to bandwidth,

server and network utilisation • More effective, appropriate and efficient

use of computer-mediated communication technologies

• Damage to organisational reputation either

through intentional acts of vandalism and misinformation or through negligent acts or omissions

• The ability to influence the perception of the organisation and/or brands through improved customer relations, viral marketing and innovation

The most profound difference between EDI, ERP, e-procurement tools and web 2.0 is the nature of working and doing business. Purpose of EDI and ERP is to create and share data about processes, such and costs and inventory levels, which are then used to support decision making processes. One can presume that the data is mainly quantitative. E-procurement is used to streamline purchasing processes, and make the whole process more efficient.

Web 2.0 is used to collaborate and share information with network members. The data can be the same as in EDI or ERP, but the purpose of web 2.0 is to deepen collaboration and create value through allowing members to share information on a larger and wider scale. More qualitative information can be passed through these tools. Web 2.0 may not be a direct buying channel, but the value is created in other functionalities and supporting activities. Web 2.0 can be used to negotiate, execute operations and projects and to source for information and customers and/or suppliers. Web 2.0 tools enable formation of networks, virtual groups and subgroups, sharing of documents, expression of opinions, chatting, online video meetings, notification of new updates and events, and a new way to illustrate data.

The weakness of web 2.0 is that as it is a set of collaborative tools, the value is dependent on the amount of users (Adebanjo and Michaelides 2010). But at the same time, competition is forcing companies to collaborate increasingly, and competition has shifted from company vs. company to supply chain vs. supply chain (Shatat et al. 2012). Existing SCM software, ERP and e-procurement, are mainly implemented to improve own processes and identify bottlenecks in own organisational processes, and the risks and benefits are not equally distributed among the supply chain. But web 2.0 on the other hand can be implemented to benefit the whole supply network. Web 2.0 can be used to improve SCM capabilities internally, but the value is really maximized when used together with external partners. The value is created through bidirectional and reciprocal activities and information sharing and from deeper supply chain integration. To succeed in the global competition, supply chain members need to find ways to exploit internal and external knowledge more efficiently. Web 2.0 tool enable smoother flow of information from organisation to another and from employee to employee, as users may directly link with each other and knowledge is no more hierarchically managed. Web 2.0 tools are cloud-based programs, which means that they do not require investments in hardware and infrastructure, and the tools are available on smartphones and can be used anywhere with an internet connection. In theory this would mean easier adoption and more agility as the tools are not location-specific.