Research Question

Impact of B2B hubs on SMEs

A recent study by Lip-Sam and Hock-Eam (2011) showed that there is a growing adoption of B2B e commerce service by the SMEs in Malaysia. They found that among the SMEs, only 8.02% reported do not using e-commerce at all. Majority of them are in the adoption level of moderate (27.81%) and intermediate (32.62%).

Lip-Sam and Hock-Eam went on to identify the facctors that affected the adoption E commerce among the SMEs. They are as follows:

1. Familiarity of the CEOs with computers and the latest technology

2. The Malaysian SMEs agreed that the Internet service quality, IT cost, IT risk organizational readiness, IT strategy and external support are the factors that influenced e-commerce adoption. Among these, Internet service quality is the most important perceived e-commerce adoption factor

3. Surprisingly, external pressure was not identified as a factor

Another paper by Gulledge (2002) talks about the supplier reaction to the recent proliferation of eMarketplaces. Since many suppliers are SMEs, the impact on this segment of the business base is dramatic. It explaines that in early 2000s the supplier reactions were less enthusiastic. Suppliers have been ‘‘squeezed’’ in at least two ways. First, there are economic disincentives for supplier participation. If the exchange objective is supply chain cost reduction, suppliers will use traditional distribution channels if they can maintain profit margins by avoiding exchanges.

Second, suppliers are faced with a plethora of standards and technologies, so from a technology point of view, participation is difficult.With a new emphasis on SRM, service providers are finally producing solutions that are sensitive to the needs of suppliers. Many of these solutions are hosted, relieving suppliers from significant investments in complex and constantly changing solutions. The future exchange landscape is unclear, but it is clear that SRM will be a significant component after market consolidation. The primary lesson-learned in the last two years is clear: exchange success requires solutions that provide joint benefits to buyers and sellers.

Most importantly the paper provides a proposal for a new exchange model which is located at a first-tier supplier and is more sensitive to the needs of SMEs. The argument is made that a first-tier supplier has incentives to broker transactions, while large companies have incentives for mandating requirements. The general requirements for a first-tier supplier to own a hub have also been outlined.

Research Questions:

1         What are the critical success factors of B2B E hubs?

2         What are the impacts of B2B E Hubs on Indian SMEs?

3         What are the factors that influence the adoption of E hubs by Indian SMEs?

Goals of primary research

The goal of this research is divided into two categories:

1. To get an idea about the overall perspectives about on B2B Hubs from the MSME owners/managers/promoters themselves.

The results of the survey will be used to answer the following questions:

• What do the MSME owners/managers/promoters think about the usage of B2B E marketplaces?
• What according to them are the benefits of using B2B E marketplaces?
• What according to them are the reasons of not adopting B2B E marketplaces?

2. The second goal is to study certain characteristics (such as IT familiarity, employee strength, age of the company, usage of IT systems etc.) about each MSME and then try to find out whether there is any pattern in the adoption of B2B E marketplaces among MSMEs with similar characteristics.

An attempt has been made to create a predictive model model using Discriminant analysis to classify an MSME as an Adopter or a Non Adopter (of B2B hubs).