Inherent E-Commerce Barriers for SMEs

Inherent E-Commerce Barriers for SMEs

Sushil K. Sharma (Ball State University, USA)
Copyright: © 2006 |Pages: 5
DOI: 10.4018/978-1-59140-799-7.ch100
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Abstract

Electronic commerce (e-commerce) is the fastest growing industry the world over and it impacts business, international trade, and national economies. The number of nations who are offering e-commerce solutions is increasing every year. Despite the downturn in the Internet economy represented by the crash of many “dot-com” companies, several forecasts continue to predict huge potential in global e-commerce over the next several years (Deschoolmeester & Van, 2000). For example, global business-to-business (B2B) commerce over the Internet is expected to reach between U.S. $2 trillion to about U.S. $10 trillion by 2004 (http://www.emarketer.com/ereports/ecommerce_b2b/welcome.html). Large businesses have found e-commerce a tool for exponential economic growth but small businesses are still far from the e-commerce revolution because of inherent problems in generally acquiring the basic e-commerce infrastructure and expertise. Governments of many nations are providing support and incentives for small and medium enterprises (SMEs) to use e-commerce platforms to expand globally to sell their products or trade online with other businesses, but the e-adoption campaign for SMEs to invest in online services has not been encouraging (A Study Report on Thailand, 2001; Sharma & Wickramasinghe, 2004; Sharma, Wickramasinghe, & Gupta, 2004). E-commerce certainly has been streamlining supply-chain activities, speeding inventory turnover, and reducing cycle times, yet SMEs don’t appear to be in the forefront of the e-commerce movement. SMEs have modernized and automated the way they do business and have been exploiting Internet technology to expand their reach and communication with their partners, suppliers, and customers, however, their use of such ICT tools is limited to mostly administrative matters (Beal, 2000; Ihlström & Nilsson, 2000). Many of the medium scale enterprises are using the Internet and ICT only for office automation such as word-processing, spreadsheets, accounting, and payroll (Poon & Swatman, 1997). SMEs in Asia have yet to take the actual plunge into e-commerce, are still skeptical of the e-commerce hype, and are reluctant to embrace much of the required technology (Haynes, Becherer, & Helms, 1998; Mehrtens, Cragg, & Mills, 2001). E-commerce is still relatively a new playing field for SMEs (Chau & Turner, 2002; Sugasawa & Liyanage, 1999).

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