The purpose of this paper is to provide evidence of the influence of different e‐business technologies on capital productivity (CP). Productivity measurement is a useful tool to gauge business performance. However, currently there is little empirical evidence to support the impact of e‐business technologies on productivity.
In this paper, an empirical investigation of 132 small and medium enterprises (SMEs) in the UK telecommunication sector was carried out, using a hierarchical regression. In doing so, three different types of technologies that may be associated with e‐business (i.e. internet‐based applications, groupware applications, and collective systems) were considered.
The main findings are that any improvement in CP is significantly influenced by groupware applications and collective systems. Therefore, the UK SMEs and other large companies might be over‐investing in the development of web sites to support their internet presence, while under‐investing in promoting awareness and the use of these services to customers (i.e. groupware applications and collective systems).
Measuring the payoff is more difficult in e‐business environments because applications cut across boundaries thereby affecting multiple parties. Hence, alternative metrics to measure payoff from multiple perspectives could be necessary. Productivity measurements were conducted in the SME UK telecommunications sector, and hence findings are valid within this specific context.
The results of this paper provide interesting insights on the performance drivers of companies using e‐business technologies. The findings can guide managers in focusing their energies on e‐business technologies and represent an approach to determine which e‐business technologies are more likely to lead to a boost in productivity.
