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SMEs in South Africa 125 an e-business application. According to Mandel (1999), SMEs in the USA are more likely to utilize Internet business strategies than their counterparts in Europe, due to the large homogeneous U.S. market. A ‘static’, advertising Internet website, for an SME in South Africa can start at the order of £10, 000 (Trialogue, 2000). This cost covers essentially marketing presence, with prices increasing as functionality is built in. As an organization progresses up the ladder it must undergo change and become more sophisticated in its use of technology. While business implements these new changes, it is ultimately able to improve business efficiencies. The five progressive e-steps that a business may potentially advance through are summarized by Courtney and Finch (2001) as follows: 1. E-mail: This is defined as the use of e-mail to send messages, either to provide internal communication between staff, or to allow communication between businesses and their suppliers and customers. In e-commerce, the focus is on the external use of e-mail. Some elements of Electronic Data Interchange (EDI) can also be regarded as messaging, such as sending a request for a quotation. 2. Website: This is the establishment by a business of a website or e-mail list to publish information about products and services, so that their customers can access this information online. It gives the business an opportunity to create a greater awareness of its products to its customers and it places the business into a worldwide market. The website can publish marketing information, prices, and stock levels. In relation to supply-side activities, this is the use of other businesses’ websites to identify suppliers and to acquire information on products and services. Checking the availability of products and services can also be done online; 24 hours a day, seven days a week. 3. E-commerce: This is the online interaction between a business and its customers, or a business and its suppliers, for the placement of an order. Online activities include issuing or receiving an invoice and an electronic payment. 4. E-business: This is the use of e-commerce to support the business relationship between a customer and a supplier, for example through the provision of interactive order progress tracking or online support. An integration of the supply chain links suppliers, manufacturing, and delivery, thus improving efficiencies and minimizing waste. 5. Transformed Organizations: The final outcome is the integration of all these activities with the internal processes of a business. The focus is customer service. Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
126 Cloete Factors that Affect E-Commerce Adoption The factors that affect e-commerce adoption are useful in determining the reason why an SME is at a certain level. These adoption factors are a result of the owner’s business outlook as well as the organization’s characteristics. Courtney and Fintz (2001) summarizes as follows: • Owner’s Characteristics Adoption of e-commerce is heavily reliant on the acceptance of ecommerce technology by the business owner. If the owner does not perceive the technology to be useful, nor understand its potential, then he/she will be reluctant to adopt it. The level of computer literacy of the owner and a lack of knowledge on how to use the technology will result in the business being less likely to adopt e-commerce (Kirby & Turner, 1993). If the owner is subjective and refers to the opinions of experienced people who recommend the adoption of e-commerce into the organization, then he is also more likely to accept their opinions (Harrison et al., 1997). SME owners are also concerned with return on investment. The pressure to show a return often leads to small firms being more concerned with medium-term survival rather than long-term viability (Akkeren & Cavaye, 1999). As a result, owners are often hesitant to make substantial investments when short-term returns are not guaranteed. • Organization’s Characteristics The amount of technology currently in use in the organization, such as PCs with modems and the use of email can make adoption easier (Iacovau et al., 1995). Businesses might adopt the use of e-commerce as a result of their competitors using it, so as not to lose their competitive advantage. If an organization has large amounts of data and transactions it is likely to influence its decision to adopt IT as this can help streamline operations and offer process efficiencies within the organization (Thong & Yap, 1995). In their research on small businesses, Akkeren and Cavaye (1999) found two factors affecting IT adoption that had previously not been recognized. The first was mistrust of the IT industry as some owners perceived the IT industry to be ‘over-selling’ the benefits of technologies and misinforming them. The second factor was a lack of time to get acquainted with the opportunities and challenges of the Internet due to its quick evolution rate. Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
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Acquisition Editor: Mehdi Khosrow-P
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The Economic and Social Impacts of
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