Electronic markets, data access and collaboration: relative value to performance in firm operations

Purpose – This paper aims to examine the direct and indirect effects of the use of electronic markets (e‐markets), access to online data and trading partner collaboration on operational performance. Design/methodology/approach – This study involved survey data from 233 Australian firms. Data were provided by members of the Chartered Institute of Purchasing and Supply Australia, who reflected upon relevant practices and performances of their firms. Structural equation modeling was used to analyze the data. Findings – The results show that whilst all three direct effects are non‐significant, when the indirect effects are taken into account, the total effects are significant in strength. This suggests that use of e‐markets, access to online data and collaboration with trading partners, when taken in isolation, are not as effective as could be expected. However, when these factors are implemented together, their value and impact becomes significant. Research limitations/implications – The study is limited to Australian firms. Practical implications – The results highlight that investments in information and communication technology must be deployed in an holistic manner, for example, by combining use of web‐based applications and market mechanisms with effective data sharing and collaboration, if they are to produce significant improvements in operations. Originality/value – While e‐markets may have been viewed as a mechanism for reducing the costs of inputs and/or as a new demand channel, this study establishes that more value can be extracted when this technology is viewed and exploited in a more strategic manner. E‐markets should be used in concert with access to data and collaboration with trading partners who are able to exploit the opportunities for mutual benefit.