E-procurement in digitally clustered organisations: an analysis of sustainability

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Abstract
This paper examines the sustainability of e-cluster applications used within the context of e-procurement in order to analyse business models and identify factors important for viability of ‘digital proximity’ e-marketplaces. Survey-based functionality value analysis was used to examine development and operational costs, while workshops identified preferences of potential e-cluster members. The study identified two business models – subscription and pay-per-use. Analysis indicated that the pay-per-use model had more variable cashflow but had the potential for higher cost benefit particularly when aggregated procurement is adopted. The findings suggest that e-cluster management organisations have to be strategic in their deployment. The findings also suggested that e-cluster members preferred to pay for e-cluster sustainability through subscriptions rather than through advertising. In addition, the study indicated a lack of consensus with regards to the value attached to various functionalities of e-clusters and the sourcing of initial funding for the development of the e-cluster application.

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