2001 Conference (May 27-29)

Vancouver, B.C. Canada

Randall Whitaker and Ulf Essler

Interactivity in Electronic Commerce:
Shifting the Focus of Business Modeling




To date, business modeling of electronic commerce (eCommerce) is both confusing and confused. Our analyses of the cyberspace venue and business transactions, using second-order cybernetics principles and themes, highlight interactivity as the key dimension in eCommerce and the vantage of the consumer-observer as the referential basis for effective modeling. Our examination of interactivity has yielded a three-phase model for business transactions, a focus on agitecture (pattern of interactions / relationships), a new viewpoint on aggregation, and the construct of 'paramediation' as an improved characterization of value chain collaboration. These results provide a basis for our ongoing theoretical analyses and practical testing The purpose of this paper is to draw on the praxis of current research to illuminate the intersection of second-order cybernetics principles and enquiry into the rapidly-proliferating area of electronic commerce (eCommerce).

Business and management communities have been trying to understand eCommerce by analyzing cyberspace with theories and practices evolved in and for the physical business venue ("real space"). Such approaches underestimate how much cyberspace negates or obviates presumptions of established business practices and theories. Cyberspace has de-territorialized business, and eCommerce must be addressed in a new perspective unencumbered by historically-territorialized concepts. Furthermore, conventional business models focus on one (one's own) enterprise as a discrete producer of marketable outputs involved in a linear 'value chain' leading from raw materials to consumer. In practice, online businesses more closely resemble Normann and Ramirez's (1994) 'value constellations' - nonlinearly interconnected networks.

Business transactions can be usefully differentiated into three phases of interaction between supplier and consumer. Customer actions in the earliest, exploratory, poremptive phase are no longer constrained to vendor-selected channels of access. As a result, control over customer poremptive activity is surrendered to the customers themselves or to intermediaries. Business modeling must therefore account for fluid connectivity and interactivity among providers and customers.

Traditional business modeling focuses upon optimum enterprise infrastructure (structural composition) -- a view circumscribed by the bounds of the enterprise itself. We focus upon an enterprise's configuration of actions and operations -- a vantage whose delimitation expands to the bounds of those domain(s) in which the enterprise operates. We call such a configuration the enterprise's agitecture , which connotes an enterprise's activities as an entity within a domain of interactions with other entities.

Our agitectural emphasis has allowed us to take a fresh look at business modeling issues and eCommerce. We now approach eCommerce as the generation of interactional value in providing an affordance a consumer (e.g., an individual customer; another business) elects to pursue. We have recast the notion of 'aggregation' in terms of interactions rather than channels of access per se. We have also been able to redefine the conventional construct of 'intermediation' along a linear value chain as 'paramediation' among actors in a nonlinearly-connected value constellation. These and other innovations permit us to evaluate eCommerce in terms more appropriate to the emerging business venue of cyberspace.


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