XYZ is one of the online marketplace businesses in Indonesia that applied extended enterprise to support its business processes. This study aimed to find out how the application of extended enterprise carried out by XYZ and its partners. The capabilities, benefits, and challenges faced by XYZ in implementing this extended enterprise were analyzed. This research also formulate recommendations for the improvement of XYZ's extended enterprise. The qualitative methodology used in this study. Data collected based on observations, interviews, and literature studies which mapped to list out challenges based on factors of the extended enterprise and ABC model to show recommendations. The results of this study indicate several challenges faced, such as information mismatch, lack of service standards by partners, and differences in work culture between partners and XYZ. Recommendations that given include the provision of tools and support systems, establishing SLAs with partners, and the application of knowledge sharing between the organization's business units.