Key Words: eBusiness, Government, IT-Policy, Bureaucracy, Infrastructure, Political Environment, Organization, Organizational IT-Maturity, Structure and Size,

Organizational Culture, Power and Politics, Management Styles, Technology, IT Professionals, eSecurity, eTransactions, Opportunities and Threats. 1. INTRODUCTION Information Technology (IT) has revolutionized the organizational structures and performance of all the public, private and other social organizations round the globe. Since 1990s IS applications have penetrated into almost all dimensions of human life. The initial usage of computer-artifacts was automation of the routine tasks, therefore, the technology played back-office role in the organizational environments. Gradually the technology developed by offering multiple packages to be used at different levels of the management and the organizational practices (Laudon, 2003). Pakistan is on its way to digital modes of governance and business. Like any other developing country, Pakistan is also passing through good and bad experiences, however, unless adequate measures are introduced in customizing the technology, mismanagement always results in wastage of resources, problems in usage and sometimes total termination of the projects (Glass, 1998). Survey after survey reveals that most IT projects fail, cause new organizational problems and eat budget (Glass, 1998; Deva, 2003). In many industries, such as banking and telecommunication, it is virtually impossible for an organization to compete unless its customers are given the level of service that is only possible with high technology systems. Now organizations are conducting business online i.e. eBusiness. According to (Rogers, 2002) eBusiness means interacting and serving the customers online which uses IT to expedite the exchange of information for communication and coordination both inside and outside of the organization and to manage the internal processes and external relationships with customers, suppliers and other entities. This research aims at identification of organizational, human and environmental context of the eBusiness in Pakistan as computerization in the developing countries has several common problem, however, each country also has its own issues, which must be

accommodated by the system developers through the customization of the new systems. Thus the research problem for this research can be stated as given the dangers of IT-projects both in private and public sector how are the conditions for eBusiness in Pakistan with regard to its contextual factors and how could they be streamlined according to the requirements of new systems? 2. REVIEW OF THE EXISTING LITERATURE 2.1 Global Perspective of eBusiness 2.1.1 Technological Dimension IT is considered as a magic potion for all management and business problems (Lee and Wang, 2001). Developed world is enjoying the benefits while developing countries are on way to digitization yet, there are technological gaps between the developed and developing countries in use of IT. Advanced nations are using leading-edge technologies, while developing countries lack state-of-the-art technology, consequently they are lagging behind. Willcocks and Plant (2001) share the same view. In developing countries like Pakistan acquisitions, installation, use, and maintenance of IT along with training of user is a barrier to eBusiness. Similarly, due to poor and below standard IT-education institutions, developing countries are facing the challenge of the scarcity of qualified IT-professionals in order to meet their national requirements of the eBusiness. 2.1.2 Social and Cultural Dimension Several social and cultural factors threaten implementation of IT in business. Turban,

McLean and Wetherbe (2004) considered following as major issues: codes of ethics, intellectual property rights (primarily digital property), accountability (for actions are non actions), personal and data privacy (including dataveillance electronic monitoring, data accuracy and data accessibility), censorship, and ownership of information which fall under the umbrella of IT ethics, while Wise and Morrison (2000) opine that social and cultural differences between the developed and developing nations are the barriers to IT diffusion and growth of eBusiness in the developing countries. The conditions and environment of the developing and technically advanced nations is almost different. Bhatnagar and Schware (2000) points that the needs, requirements and resources of countries and organizations vary according to their human and capital resources, goals and objectives, structures, size, business operations and management, so is the case of the technology. Similarly, banking, telecommunication, public and private sectors have their own limitations with reference to digitization. Furqan (2004) observed the unavailability of proper infrastructure, frequent failures of power, faulty telephone cables, limited use of internet, the issue of security of transactions on internet and high bandwidth rates as notable barriers of eBusiness. IT for good is a reality and no country and sector can be imagined without use of IT. With reference to overcome barriers for development of IT and eBusiness, several options are available which developing countries can opt according to their local conditions and requirements. These include: Leading vs Tested Technologies, Technological vs Business Projects, and Tailored vs Off-the-Shelf Development Systems. Yet, developing countries like Pakistan cannot afford costly off-the-shelf systems because of its economic constraints, where it has its own IT-workforce, which can tailor the systems that best suit the businesses, however, quality of IT professionals and brain drain of qualified professionals is a question for policy makers.

2.2

eBusiness in Pakistan

Impact of IT and eBusiness is most visible in the context of developing economies, as it plays a significant role in the development of todays economies (Bhatnagar, 2000). In Pakistan, eBusiness is still in its infancy but it is growing, where banking and telecom sectors are playing leading role. Yet the pace is slow because of many unfavorable conditions i.e. governmental, organizational and technological. Nizamuddin and Khalid (2001) and Ibrahim (2004) reports that in Pakistan, IT business is growing at annual rate of 50% per annum, where PCs growth rate is 30% per year; similarly Pakistan imported 350,000 new systems in 2002-2003, out of which 65% were non-branded, where sale of laptops grew to 35% from 15% and in the same period Pakistans import of computer hardware and associated devices was around $20 million. The numbers of PCs in the country are between 1.5-1.6 million, currently s/w exports reached $2.2 billion and expected to cross $ 10 billion in 2010 (Zarmeene, 2006). Likewise, according to (PTA, 2006) in 1991, 90% telephone lines were converted to digital; in 1995 Internet Service Providers started providing Internet facility, now out of 250 more than 85 ISPs are operational with 7.5 million users. Moreover, government has reduced the bandwidth tariff from $87,000 to $1,400 per mbps to encourage

the development of IT culture by providing relief to the end users. IT policy and action plan was announced in 2000, new IT educational institutes were opened and IT professionals were hired to impart IT training in universities (Ara, 2001). Nationwide IT seminars, exhibitions and competitions were arranged and Cyber Cafes were opened to create awareness for IT and Internet use. Several task forces have been established to take care of the multiple areas of the technology and its continuing support to certain areas of the life (Naeem, 2003). There is an increasing trend of internet users which reached to 7.5 million in 2008 from 0.01 million in 1997-98, similarly, development of telecom and internet infrastructure is a prerequisite of eBusiness. In Pakistan, telecom sector is growing at 170.2% with total teledensity of 43.52 in July 2007 (Pakistan Economic Survey (PES), 2005-2006; Shabbir, 2004; Pakistan Telecommunication Authority (PTA), 2008). Moreover, government has announced incentives to enhance telecom sector i.e. Telecom Deregulation Policy-July 2003, Mobile Cellular Policy-January 2004 and Broadband Policy-December 2004 (PES, 20052006). Currently there are more than 60.97 million cellular phone subscribers throughout the country including Azad Jammu & Kashmir with an addition of 1.6 million subscribers each month (PTA, 2008).

Most of the banks in developed world are providing eBanking services to their customers which refers generally to all forms of financial transactions relating to commercial activities, including both organization and individuals that are based upon the processing and transmission of digitized data, including text, sound and visual images (Adeel, 2004). Similarly, Ashar (2002) is of view that the concept of anytime, anywhere, anyplace banking is a big convenience for all concerned, where internet or digital banking is really making anytime, anywhere, anyplace banking practical.

According to Shamshad (2006) 3,424 branches are providing real-time online banking facility to the account holders in Pakistan as against 7,406 branches of 41 banks which mean that 47.27% branches are working online. The commercial banks have registered a growth of 45% in opening new online branches in the 2nd quarter of 2006 (Shakaib, 2006) however pace of digitization is still slow due to several factors. Similarly, mobile banking is introduced officially in 2006, is also in its initial stages as its services has limited advantage due to mini-statements retrieval facility (Zarmeene, 2006).

Recent survey (Bakhtiar, 2005) conducted in Peshawar, Mardan and DIKhan have found that only 5% of the customers know about Automated Teller Machine (ATM), while 95% have no knowledge of ATM. Moreover, only 8% are aware of online account facility and 92% know nothing. Likewise, 12% customers were aware about debit and credit cards facility where 88% customers response was negative.

Table 1: Branches of Domestic & Foreign Banks in Pakistan Categories June June June June June December 2005 2006 2007 2008 2009 2010 Domestic 7,272 7,280 6,829 6,872 7,089 7,301 Banks Foreign 80 78 70 67 82 105 Banks Total 7,352 7,358 6,889 6,939 7,171 7,406 Comparison of eBanking Services in Pakistan eBanking mBanking BANKS Debit Credit * ** ATM Card Card Locator ABN AMRO $ Askari Commercial Bank Bank Alfalah Citi Bank Faysal Bank Habib Bank Ltd MCB Metropolitan Bank NBP Soneri Bank Standard Chartered Bank UBL Union Bank

ATM Network 1LINK & Cirrus 1LINK 1LINK MNET MNET 1LINK MNET & Cirrus MNET 1LINK 1LINK 1LINK & MNET 1LINK 1LINK

***

* eBanking: Electronic Banking vary from bank to bank but generally includes viewing eStatements and fund transfers. Requires logging into website. ** mBanking: Mobile Banking, may refer to accessing mini-statements of accounts and funds by accessing websites via cell phone *** Citi Bank has an exclusive eCard for online transactions $ Only offers viewing/receiving eStatements

2.3 Major Issues of eBusiness in Pakistan A vision of wired Pakistan (widespread connectivity) (Hussain, 2001) has become buzzword among almost every literate and even illiterate Pakistani and it is being used as a status symbol. People talk about IT to learn more and thus be part of newly emerging cyber-community. It cannot, however, be taken for granted, because the risks involved in IT-adoption process are evident from finding of Sauer (1993) that 70% of IS projects are failing. Thus zest and zeal of community need to be administered at all bureaucratic, political, educational, social and cultural levels besides streamlining the technology. eBusiness in Pakistan like other developing countries is facing different challenges in process of computerization, because digitization is a sociotechnical and multidisciplinary activity, though computerization is comparatively easy in developed countries because of the availability of technical, financial and human infrastructure but it is difficult in developing nations like Pakistan due to non availability of required resources, infrastructure and skills. With this context, eBusiness in Pakistan is facing many challenges (e.g. governmental, organizational and technological), that is why growth and pace of eBusiness is slow. According to Moreno (2001) low computer education, technology sensitization, lack of basic understanding of how-to use Internet, high cost of computers, lack of understanding of English language, unstable political and legal environment, poor regulatory framework for eBusiness and brain drain are notable barriers of eBusiness in Pakistan. The most fundamental need of eBusiness is provision of infrastructure to encourage eTransactions, which is a challenge for the developing countries to overcome. The infrastructure needs to have sufficient bandwidth, it needs to be able to support high traffic, and provide secure and reliable connections. The availability of sufficient infrastructure and consistency of electric power within the country plays significant role in the success of eBusiness. The issue of security in the age of Cybercrime is costlier to businesses than physical crime and major area of concern, and it is one of the main barriers to eBusiness (Weill and Vitale, 2002). eBusiness in Pakistan is mushrooming at a very humble pace, yet security and privacy are the issues which are discouraging customers to enjoy facilities of eShopping and eBusiness. Though Pakistan has taken initiatives to improve the security and provide legal cover to eSignatures and eDocuments through promulgation of Electronic Transactions Ordinance (ETO) 2002 and Electronic Crimes Act (ECA) 2007, yet theses meet only about 15 to 20% needs of eBusiness (Dawn, 2006). Researchers suggests that in ISD scenario and use problems, organizational context is mostly characterized by: for example, structural complexities; imposing management styles; political conflicts between different organizational stakeholders; users developers gaps and cultural diversities among different groups involved in the system development and use environments (Markus 1983; Drummond 1996) . With reference to Pakistan, eBusiness is facing

the issues in the areas of organizational culture, organizational power and politics, management styles and organization structure and size due to organizational IT immaturity. Development of an eBusiness system is a socio-technical venture, which needs well contrived feasibility studies. Misalignment of IT with business objectives may leads to the failure where Sauer (1993) states that more than 70 % IT-projects fail due to miscommunication and misalignment of the new system with business. An analysis of the failure phenomena suggests that whatever level of failure is, the major cumulative reason is misalignment between IT and the characteristics of the organization, while degree of alignment determines degree of success and failure. Misalignment results in misunderstanding and thus conflicts, which reveals in several forms such as user resistance to change demanded by technological transformation (Kundi and Nawaz, 2006). Experts

suggests humanization of technology for IT-business alignment i.e. computer should be given human face. When Berners-Lee (1996) developed World Wide Web in 1989, he wanted it to become a communications facilitator free from regulations, but its misuse has created many social problems for the business and societies. Though Pakistan has implemented laws regarding computer crimes, yet these laws do not affect offenders outside of that sovereign state. With passage of time, advanced countries infused technology into their socio-cultural setup, however as a developing country, Pakistan is on way to achieve the targets of digitization, but still lack proper legal infrastructure to regulate IT associated socio-cultural and ethical problems. Hussain (2001) noted that major issues for IT -education in Pakistan include the poor quality of teaching, poor monitoring of the progress of IT institutes on part of government and lack of uniformity in the courses offered by so called IT institutions besides the outdated curricula. Likewise, bureaucracy is another hurdle for eBusiness in Pakistan, there is wide evidence that success and failure of an IT infusion process significantly depends on senior managements support in any organization (Khan, 2003).Same is arguable for Pakistan, where senior management (related political and bureaucratic structure such as Ministry of Science & Technology (MoST) and IT Commission) has to play dominant role in making or breaking the IT strategies, which are initiated both at public and private levels of development. If there is a wider gap between what senior executives are saying in the official statements and the reality, the process of development is more likely to be pulled back instead of pushed ahead. Educated and motivated administrative machinery can effectively formulate and implement the policies. The existing literature upholds that government (government IT policy, bureaucracy, stability of the political environment, and development of physical and legal infrastructure for IT); organization environment (structure, size, management, culture and organizational IT maturity) and technology (h/w, s/w and IT professionals) are the critical success factors of eBusiness which if favorable offer unprecedented opportunities for eBusiness in Pakistan and become threats in case of unfavorable conditions.

RESEARCH MODEL AND INCLUSION OF RESEARCH VARIABLES

E-Security Intervenning variable Political stability

Govt. Policies

Trsut Measures

Web Design

E-business
Independent variable

Awareness

IT Professionals

Infrastructure

Personal Training

Dependent Variables

Moderating variable

Generation of Hypothesis

A statement that the researcher believes to be true and tests against the data collected. It may get disproved later on, and would be rejected. Otherwise the hypothesis would say to be substantiated and validify the given criteria. In our research, we set the following hypothesis;

1) Business sector is of the view that infrastructure is adequate to boost the online business activity than the consumers. 2) - Enhanced security measures will result in wider user base of E-Business.(regression) 3) - Cyber laws and Govt. policies establish trust resulting in acceleration of online business activity.(anova) 4) Consumers are of the view that Personnel training would significantly contribute towards target achievement than the Government. 5) Consumers are of the view that Increase in number of IT professionals will positively affect overall business turnover than the government.(R)

6 ) -With enhancement of Political stability the e-business progress will improve in country. (reg) 7) Organizations IT maturity shall significant increase the success of e-Business.(reg) 8) Management education is important for development of conducive e-business environment.(REG)

Questionnaire Design

As discussed in Research design phase, a questionnaire was designed to collect relevant data from the target population. Questionnaire was a self made one and included 40 questions discussing different variables in addition to 8 questions on demographic variables. A likert scale was used for setting the questions numbered from 1 to 5. Questions related to Infrastructure provided by the govt. in context to the personnel training were set to ascertain the level of agreement by the respondents. Awareness related questions were set to determine the level of information among the people and general know how of E business. E security and Policies related to e business were also made a part of the tool in assessment process in addition to the trust of the respondents towards E buying/selling.

Questionnaires were distributed among groups, divided on the basis of certain criteria like age, education level and income level as young, educated and middle and high income groups are likely to be involved in E business. Questionnaires were got filled up at the spot so as to avoid

any ambiguities and eliminate the possibility of any biases to creep in. This also ensured the maximum response and thus as a result 184 responses were recorded out of 210 distributed.

Test of Reliability and Validity

To find out the reliability of the questionnaire, an initial questionnaire was distributed to twenty respondent. Based upon their response following results were taken to assess Cronbachs coefficient realiabilty. Reliability and Validity Analysis Factors Govt. IT Policy IT Professionals Infrastructure Political Envt. Orgzl. IT Maturity eBusiness Awareness Web Design E-security Trust measures Personnel Training No of Items Alpha value 2 3 5 2 3 7 0.63 0.73 0.84 0.76 0.51 0.78 0.81 0.57 0.66 0.70 0.75 Mean Variance Explained 3.23 3.06 2.59 2.81 3.01 3.22 3.50 4.07 3.90 3.01 2.90 Reliability 0.69 0.57 0.71 0.67 0.70 0.66 0.74 0.68 0.59 0.62 0.65

The closer the reliability to 1, th better is the result. But the lower limit for the crondachs alpha is 0.7(Robbinson 1991). There are several types of validity, however convergent validity is

measured by average extractives for each factor during the reliability analysis that should be 0.5 are better(Igbaria and Iivari 1995). For our result of crondach alpha most are factor in range of 0.5 to 0.8 considered quite satisfactory for conducting an exploratory research.

Population and Sampling

The sample population of this study was organizations who are using e- business infrastructure in any form. The sampling technique use was stratified sampling so that every segment of the population get the proportionate representation in the sampling and no biasness is included in the sample of the data. The care was exercised in the selection of data. So that a balanced and proper inclusion of all the segments is made assure.

Findings:
As per finding of study, the major problem in the country for low E-business activity is poor infrastructural facility. The government has not provided the proper resources due to which there is lack of e-business readiness and turnover. The 2nd reason of low e-business activity is the lack of security provided by the government due to which the business sector has low trust. Moreover, the increasing rate of online theft password theft, website hacking and related issues has threatened the participants of e-business to limit their activities. Additionally, the political instability in Pakistan and poor governance has created a lot of problems due to which local as well as foreign investors are reluctant to invest in this sector. This lack of trust in the government policies has badly affected the growth of e-business activity in the country.