The Impact of B2B Electronic Commerce Technology, Processes and Organization Changes: a Case Study in the Personal Computer Industry

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The Impact of B2B Electronic Commerce Technology, Processes and Organization Changes: A Case Study in the Personal Computer Industry

Daniel E. O'Leary

Abstract

This paper analyzes the impact of changes in technology, processes and organization on financial measures including “Days in Inventory,” “Days in Accounts Receivable,” and “Days in Accounts Payable,” focusing on firms in the personal computer industry. In particular, the impact of a portfolio of innovations, such as, build-to-order production, merge-in-transit, and other major innovations are investigated on disclosed and computed versions of those financial measures. The paper traces the innovations to major changes in classic financial measures apparently used in the personal computer industry.

This paper provides links between changes in systems and financial statement analysis, by providing a rationale for different sets of changes in classic financial measures and providing a basis for benchmarking differences. In addition, we analyze the relationship between disclosed measures and computed measures, finding some consistent relationships. Finally, I compare the firms in the sample to see which measures changed the most and which gave corresponding competitive advantage.

1. Introduction

Best practices embedded in business to business (B2B) e-commerce have led to major changes in technology, processes and organization structure that impact inventory, accounts receivable and accounts payable. The purpose of this paper is to investigate some of those changes and trace their financial impact on firms in the personal computer (PC) industry.

A wide range of new technologies, including the Internet, changes in processes, such as buy direct, build-to-order and merge-in-transit, and changes in organization structure, such as centralization of accounts payable and decentralization of accounts receivable, have led to major changes in financial positions. The...