2. Introduction
Methodology
e-Commerce Activity
e-Commerce Strategy and Manager Perception
Project Resources
Training and Support Needs
Conclusion
Future Direction
4. This chapter traces some of the
current e-business development
issues in selected regions of the UK
and looks at the extent to which take-
up of e-business has been facilitated
by government initiatives.
5. The aim of the research is to present a pilot
study for situational analysis of e-business/e-
commerce development
6. • 3.7 million SMEs in the UK at the start
of 2000 (UK online for Business)
• 99% of the business had less than 50
employees and they provided 45% of
the UK non-government employment
and 38% of turnover
• This gives an indication of the relative
importance of SMEs to the success of
present UK government e-commerce
initiatives
7. • In 2000, only 1.7 million smaller firms were connected to the
Internet, and still less, 450,000 of them, were trading online.
• A later survey by the UK Office of National Statistics revealed
significant variations in e-commerce implementation across the
UK
• London and the southeast region "considerably" outpacing
Internet sales in other regions (Saliba, 2001).
8. • The UK bought $28.6 billion in
goods and services
• London-based companies
accounting for $7 billion
• the northeast and east Midlands
spending less than $1.5 billion
"significant variations" that were
of interest to the researchers in
this case
9. The research undertaken has
focused on the lower spending
regions to try to ascertain what
are the limiting factors for
companies in these regions
11. • The period 1997-1999 saw
exceptional e-commerce growth
within the UK through many new
"get rich quick" ventures
supported by significant venture
capital input.
• At the same time, established
businesses looked to Internet
technologies to support or
revolutionize their existing
business processes.
12. • After a series of dot.com collapses, 2000-2001
venture capital has largely dried up, but the
market has continued to grow steadily with many
mergers and acquisitions between new and old
economy firms each supporting the other by
exploiting their experiences and core
competencies.
• In September 1999, the Performance and
Innovation Unit (PIU) published a report, "e-
commerce@its best," which found that the UK
was the leader in e-commerce developments
within Europe, but still behind the USA, Canada,
Australia, and Scandinavia on key measures of
business e-commerce use.
14. The approach to be taken was that of an in-depth
exploration of the factors that affect each of the
companies studied. It was decided that interviews
would be the most appropriate main data collection
method, with supplemental data being provided by
documentation related to each of the businesses.
Setting up and travelling to the interviews proved very
expensive in terms of resource time and meant that
one interview was eventually carried out over the
telephone to alleviate these problems.
15. • The interview consisted of 25 questions divided into three
key sections: e commerce strategy, project resources, and
technology;
• The interview combined open and closed questions, though
there was an emphasis on the need to draw out underlying
reasons and rationale for actions, so open questions were
more suitable.The interview combined open and closed
questions, though there was an emphasis on the need to
draw out underlying reasons and rationale for actions, so
open questions were more suitable;
16. All of the case studies are three SMEs, there are:
Company A is a wine and spirit merchant based in the
Midlands, employing 10 people
Company B is a pump manufacturer based in the West
Midlands and employs 14 people;
Company C is a furniture retailer based in Yorkshire,
employing 10 people and has a pure play business
model
17. Why choose these SMEs?
• In fact, two of the companies studied had
applied for UK Department of Trade and
Industry awards for excellence in e-business,
and one of the companies studied had won an
award for its Web site design and e-business
operation;
• All of the case studies are SMEs that have
established an e-commerce service in the last
18 months;
• All three of these companies are operating
successfully, though with different approaches
and attitudes.
19. • The UK has experienced a proliferation of business use of the
Internet in terms of the volume and variety of business
processes supported via e-mail, Web, and other means of
information distribution and dissemination (Duan, Mullins, and
Hamblin, 2000)
• All three of the case studies have access to the Web, a hosted
Web site, and external mail to communicate with customers,
which means that a comparison of their operations is likely to
provide interesting insights.
• All three Web sites are categorized as catalogue sites; however,
although this would normally equate with a situation where the
level of customer engagement is relatively low, two of the
companies relied heavily on the use of the telephone to build
customer relationships after the initial Web contact had been
made. In terms of historical technological issues, only Company
A actively sought the integration of legacy systems
20. • The findings to date suggest a lack of business to business
(B2B) e-commerce supported by integrated networks through
the supply chain.
• Company C, who deals with very large manufacturers down to
the individual artisan who makes a piece of furniture from
scratch in a little workshop, despite a stated wish for more
supply chain integration, this is not likely to be possible in the
near future
• Company A, where the customers did not want to see supply
chain integration mean this is a goal for the future rather than an
immediately achievable situation.
• Comments from those interviewed included the following: "Our
suppliers are not geared up to extranet"; "We are not large
enough to support that kind of system and we don't have large
orders.―
21. • Amongst those reasons identified by the research were cost of
development, infrequency of orders, and fear of being tied into
to a stronger companies system
• Issues such as the availability of grants and other monies to
undertake development were also explored and it became
apparent that this is problematic
• Company A also did a considerable amount of trade with other
companies that did not wish to be tied to a minimum order
level or a minimum delivery period.
23. • The two click and mortar companies
managers: e-commerce strategy did not
take precedence because e-commerce
revenues remain relatively minor
• The pure play manager: e-commerce
and business strategy "are the same for
us."
24. Manager Perception
harryvanyogya
@Harryvanyogya
The pure play manager: e-commerce and business strategy "are the same for us."
25. Manager Perception
The two click and mortar companies managers: e-commerce strategy did not
take precedence because e-commerce revenues remain relatively minor
26. • Company C, as the only pure play, built its business
model on e-commerce
• Company A's key drivers were a combination of first
mover advantage and competitor pressure, sees any
business coming from the e-commerce operation as
purely "extra" or "over and above."
• Company B's key drivers were competitor pressures,
it has never pursued an aggressive e-commerce
strategy
28. • Resource that explain how to develop a
company projects.
• A project development is used to
improve the performance of company
business
29. • Company A, developing website
with connecting application that
resourced by 40% of business link
funding.
• Company B, developed by CEO’s
company.
• Company C, developed by CIO
who is contributed by IT business’s
friends.
30. • Development of company applications
common needs funding
• They know the funding avaibility, but didnt
know to get it
• Government’s planning just become
discussion but didnt accomplish fluently
• More offers of funding by Business Link with
the high taxes, so the company would prefer
bank with the low taxes.
31. • Funding becomes a problem for
website/applications development
• Getting the funding resources can be done
by funding loan which the low taxes.
• Not only rely on the funding, but also the
workers or CEO who have IT competence
contributed to developing
website/applications so that the company
spend relative small funding (no need for IT
services developer).
32. • Support need to using an application
• Make training for employees
33. • Spend an extra funding for training necessary
• Surely there are other companies that take advantage of
training, ex: IT training services
36. • The authors are aware that given the
small sample size interviewed here
• The three organisations have
produced some strikingly similar
results
• This encourages us to feel that these
issues are pertinent and can be
explored in greater depth in an
extension of the work to date; of those
interviewed there was a lack of
awareness of the options for
businesses
37. • Many organisations appear to be prejudiced from prior
knowledge or experience of having to buy into
expensive EDI network integration through traditional
hub and spoke models
• One firm in particular showed a lack of awareness of
Web alternatives to the expensive and standard
controlled EDI network configurations of the previous
decades
38. The research suggests that further
information about alternative technical
solutions and evaluation of implementing
these solutions is necessary, and that the
role should be facilitated by impartial
sources — possibly through more focused
government initiatives
39. • Individuals within the business had
no time to look at possible
initiatives.
• In particular, one individual
interviewed stated that the firm's
profit margin had decreased
substantially, an occurrence
throughout their industry resulting
in a fear of investing any funds or
human resource into a "blue sky"
project
40. • There is some evidence within these
preliminary findings that the actual e-
commerce development within SMEs may
rely very heavily on the personal networks
of the managers
• There was evidence from two of the firms
of heavy reliance on friends who work
within the IT industry or have an interest
in developing home networks.
Interestingly, this included the pure play
business
41. • The results to date suggest knowledge of government
and other independent initiatives for supporting e-
commerce development within SMEs, but a significant
number of poor experiences using these initiatives
• At least one company had accessed the government's
e-business support site, but found the site to be
unhelpful, all documentation superficial, and full of
unrealistic promises with no online support network
available
42. • Companies such as Business Link actively
approached at least one business on a monthly
basis, suggesting that SMEs are made fully aware of
initiatives offered by local and national government
43. • One company had such a bad experience with
government initiative support that they asked the
representative to leave the site. The main problem
appeared to be that the representative had not had
time to fully research the business environment and,
as a result, had failed to establish trust with the
managers of the business
45. • The initial pilot study has barely scratched the surface of the
myriad of reasons why e-commerce take-up may differ
regionally within the UK.
• It is intended to take the research further now by expanding
the number of SMEs interviewed, while trying to balance the
different categories already identified.
46. • The methodology chosen
has worked well, but as
each interview lasts in
excess of an hour,
consideration needs to be
given. One possible
solution is to reduce the
number of questions asked.
• Some balance here must
be preserved with the
richness of the data and the
previously mentioned
rapport that was found in
the interview situation.
47. • A further issue that has been highlighted has
been that we may be directed to the wrong
person.
• A more easily achievable approach is that of
using a methodology to assess the potential
benefits of using an e-commerce strategy
48. • Their methodology has been designed to
support businesses in their move from
what they term level 2 to level 3.
Hackbarth and Kettinger (2000).
• Strategic managers were aware of e-
business activities, but have not identified
stakeholders or mission
statements/objectives to meet through
any strategy development methodology.
49. • identified issues for two out of the three companies is a lack of knowledge
and understanding about UK government funding initiatives for e-commerce
development in SMEs
• the UK Department for Trade and Industry will be approached to discover the
full range of information and grants available to SMEs and to ascertain how
to make this information more accessible to those SMEs who are unaware of
what help is available.
