Results indicate that benefits perceived as well as the potential business opportunities for these Manufacturing companies are key drivers for E-Business usage. Furthermore, management involvement and enthusiasm are found to be important factor for the process of E-Business adoption and ongoing usage.

As the commercial use of the Internet grows, it is becoming increasingly recognised that this is a very different business environment from its physical counterpart. It is widely accepted that companies are using the Internet because they believe they can gain competitive advantage. Poon and Swatman (1995), suggested that integration of Internet usage with business strategy is critical to its success. They also reported that the amount and reasons of integration, or lack of it, are still unknown.

However, during the last two decades, many manufacturing companies adopted the Electronic Data Interchange (EDI) technology to enter into the paperless economy. With the passage of time this perception has changed and now experts are debating whether businesses will abandon the well-structured, and planned EDI processes in favor of E-Business. Many Businesses choose EDI as a fast, inexpensive (when compared to ordinary mail) and safe method of sending purchase orders, invoices, shipping notices, and other frequently used business documents.

Initially, EDI was adopted to provide efficient information exchange between trading partners. In other words, EDI is defined as the electronic transmission of data such as purchase order, invoices, bills, funds and account balances from one computer to another with minimum human intervention. This computer-to-computer communication of data replaces the function of the business documents transmitted in a standard format.

Socka (1996), stated "Internet-based organizations such as CommerceNet have the potential to displace the established Value Added Networks (VANs)". In addition, Socka (1996) also reported that many companies had trouble implementing the necessary communication tools for EDI. For example, incompatible hardware, communications protocols and data files layouts made it difficult to turn one firm’s purchase order in to other company’s sales order. Furthermore, computers do not communicate directly with one another but rather through a common VAN, which are designed to overcome all these gaps. But in reality the use of a standard VAN format meant different protocol are required for different systems. This has led to incompatibility and disappointments. The problems with EDI are summarised below:

• Insufficient business volume to justify EDI implementation: Small firms do not see ample benefit from EDI. For example, small companies do not indulge in large transactions.
• Non-Value Added Technologies: Small companies are nervous and overly cautious when it comes to spending money on technologies that are not absolutely necessary for their operations ie Non Value Added technologies.
• No short-term payoff : Traditionally small firms favor investment with short payback periods.
• Hard hit Approach: Big companies dictate the type of network, the specific hardware and software, and standards to be adopted and the deadlines. Small firms dealing with large one see the action of the big companies as an economic injustice but they lack the power to confront.
• Other problems: Lack of education, inevitable changes caused by EDI (like fear of change, administrative changes, physical changes etc.) and data security issues.

These real problems promoted many companies to search for alternatives such as using the Internet to conduct their business operations (E-Business).

• Security On the Internet: Security on the Internet is a major problem. This is currently being handled by available encryption methods, but the biggest threat is still there according to McCartney (1997).
• No one owns the Internet: One important issue is the overall network reliability that strikes as a structural feature of the Internet. No one is responsible for its performance. Orr (1996) stated "If you have any problem, there is no toll free number you can call for customer service".
• Heavy Traffic may delay the business operations: It is also notable that heavy usage of the Internet can slow down the processes and ultimately affect the business.

Yin (1994) suggested that a case study approach is an appropriate choice of research method for this type of problems. This is particularly true when the:

1. researcher has little control over the environment;
2. events under investigation are contemporary; and
3. context of the research is important.

Accordingly, a case study would be used to gain an in-depth understanding of the research problem, which is stated as "Why and how Australian manufacturing companies used E-business for competitive purposes?"

Participant manufacturing companies were selected from a sample of companies which had expressed their willingness to engage in this type of research. Selection criteria for the participating companies included the size of the company, their views on competitive advantage of using the Internet and their business sector. These three case studies were designed to be carried out as a series of interviews and site visits or telephone interviews.

According to Iacovou et al. (1995) and Poon and Swatman (1995) critical success factors for using the Internet include:

1. reduced transaction costs,
2. better customer service,
3. more efficient information access,
4. global communications and
5. shortened communication cycles.

In addition Iacovou et al. (1995) pointed out that the benefits obtained from EDI use include both direct and indirect benefits. Direct benefits, such as reduced transaction costs or lower inventory levels, are relatively easy to quantify. On the other hand, indirect benefits such as better customer services and improved trading partner relationships, are difficult to quantify. Furthermore, Swatman (1993) pointed out that to achieve longer-term benefits from telecommunications-based information systems, an organisation needs to combine its inter-organisational systems strategy with existing business strategy.

It is interesting to note that the three companies did not state that they had gained direct benefits from the Internet use. In fact, they indicated that the savings and incomes obtained were small. Furthermore, none of the participants suggested that the lack of direct benefits would lead them to cease using the Internet. This suggests that the indirect and non-immediate benefits could be as important (if not more) as direct gains.

In this study, management involvement has also been identified as a critical success factor for E-Business use. Naturally, different manufacturers have established alternative business environments on the Internet, where they can carry out their usual business and networking activities "virtually". A model of describing the three phases of development and introduction of E-Business is illustrated below in figure 1.

Figure 1: Model for the development and introduction of E-Business

The model shows that as the as business relationship matures, the pattern of information exchange becomes more structured and intensive at the third phase. The model, is useful in analysing how participants are using the Internet to supplement typical business activities and how much it is used as E-Business. The model also illustrates that the three phases of E-Business introduction are distinctively different in their business focus as shown below:

The Internet, and in particular mailing lists and Usenet newsgroups, can be used to explore potential business opportunities. The First Phase (Web Presence Phase) is the most elementary phase. During this phase the user is mainly concerned with delivering to potential clients and customers marketing and promotion material. The process of Searching for Business Opportunities can be either a one or two-way approach. For example, the company which has a web page to advertise and market its products can do so through Usenet newsgroups (such as alt.industrial). The company responds to enquiries and at the same time provides product information. The main activities at this phase are:

• Establish web presence,
• Create home page,
• Provide corporate information, and
• Deliver marketing materials.

Once the First Phase achieves its aims and the company is still willing to pursue the use of the Internet to carry out some of its operations, the Second Phase (Electronic Commerce Phase) begins. The Electronic Commerce Phase enables companies to conduct some of their usual operations on the Internet. Following are some of the activities that can be conducted during the Electronic Commerce Phase:

• Creating online catalogues,
• Online order taking and order placing,
• Communicating with suppliers,
• Conducting Banking and making payments,
• Securing transactions, and
• Making delivery.

The third phase (E-Business Phase) commences when the company decides to embark on a full scale business activities on the Internet. The most important business functions that are likely to be conducted during this phase are:

• Merchandising and catalogue management.
• Order entry, confirmation and fulfillment.
• Returns.

• Shipping and freight.
• Warehousing and inventory management.
• Pricing, promotions, taxes, duties and freight.

• Payment cycles-credit cards, digital cash and bank transfers.
• Financial accounting.
• Reporting.
• Customer profiling.

During each phase, the Internet is used as a medium to explore collaboration possibilities, without incurring heavy time or expense overheads. This is achieved through enquiries posted on a mailing list and a number of Usenet newsgroups. This enables the manufacturer to make contact with a user who has published on this particular issue. Although the Internet is a very useful tool to Explore Collaboration Possibilities, further consolidation of the initial business contacts requires more direct interaction or perhaps another communication medium.

After identifying collaboration activities and pinning down preliminary collaboration plans, most participants feel comfortable, at least partially, in resorting to electronic mail for further exchanges. By now, the collaborators have already established a more in-depth business relationship and they know the people with whom they are communicating. What seems to be important is the ‘handshake’, which makes further virtual communications worthwhile. All participants agreed that Internet-based communication is preferred if it is more convenient and effective to both parties involved in the communication. At the same time, all agreed that telephone, fax, post and most often face-to-face meeting are still necessary. Electronic mail and the Web had been used during the various stages of business development.

All participants tend to use the Internet fairly extensively during all stages of business development. Again, electronic mail is the principal service used to exchange documents and information. It appears from the variety of activities carried out on the Internet, the Internet seems to be most useful for opportunity search and routine message exchange. However when deeper mutual understanding is needed, richer communication media such as Teleconferencing or even face-to-face interaction is important.

Information exchange increases the ability to seize business opportunities quickly and exploit them to the manufacturer’s full advantage so that future competitiveness is consolidated. This is similar to the ability to perceive the market potential of a new product and carry out rapid product development to capture market share. Both the ability to conceive bright ideas and to make them work in practice, will transform intangible benefits to tangible outcomes in Internet use. Furthermore, it appears that the manufacturer can preserve their edge gained by continuously applying entrepreneurship in business use of the Internet.

The results of this study suggest that perceived benefits and management involvement are two factors common for all the participating companies with a positive effect on E-Business use. By reviewing the way in which the Internet is used during the different stages of a business relationship, it would be possible to construct a model for manufacturers use of E-Business. However the limitations of the results generated by this study is partly due to the small sample size used.

By interviewing a group of three E-Business users from a variety of manufacturing sectors, it was possible to discover that while such competitive advantage does appear possible, it can as yet be described only as a "perceived" benefit. The results of the interviews was a key factor in constructing the model that reflects the way in which the E-Business has been used during the different stages of business development.

Finally, this paper outlined the research method used and provided a summarised background of E-Business and the case study used. Perceived benefits of the Internet and management involvement in adopting the Internet for business use, appear to be key driving forces for continued Internet use. With the aid of the developed model and the case study results, it was possible to analyse the ways in which the Internet is used as a supplement to the traditional business environment.

1. Iacovou, C. L. Benbasat, I. and Dexter, A. S. (1995), "Electronic Data Interchange and Small Organisations: Adoption and Impact of Technology", MIS Quarterly, December, pp. 465-485.
2. McCartney, L. (1997), " A safety net", Industry week, Vol. 246(8), pp. 74-78.
3. Orr, B. (1996), " Will the Internet get EDI going", ABA banking Journal, Vol. 88(2), pp. 70.
4. Poon, S. and Swatman, P. (1995), "The Internet for Small Businesses: an enabling infrastructure for competitiveness", Proceedings of the Fifth Internet Society Conference, Hawaii, June, pp. 221-231.
5. Socka, G. (1996), "EDI meets the Internet", Cost and Management, Vol. 70(5), pp. 14-17.
6. Swatman P. (1993), "Integrating Electronic Data Interchange with Existing Organisational Structure and Internal Application Systems: the Australian Experience", PhD Thesis, Curtin University of Technology, Perth, Western Australia.
7. Yin, R. (1994), "Case Study Research: Design and Methods", 2nd Edition, USA: Sage Publications, Inc.