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Key Indicators for Successful Inter<strong>net</strong> Commerce 137<br />
Placing the Study in Perspective<br />
The term e-commerce conjures various interpretations. Figure 1 clarifies the<br />
context in which e-commerce is referred to in this chapter.<br />
A Review of Issues Affecting E-Commerce Adoption and<br />
Implementation<br />
The following section reviews various reports of e-commerce in practice. The<br />
list of issues is not exhaustive, but rather an attempt to bring to the fore a varied<br />
number of issues that warrant attention.<br />
Adopting E-commerce: Business Benefits<br />
A large number of reports comment on the benefits of moving a business to an<br />
e-commerce setup. Auger and Gallaugher (1997) noted the following benefits<br />
affecting the adoption of an inter<strong>net</strong>-based sales presence for small businesses:<br />
First, it gives the business access to an affluent customer base and provides lower<br />
information dissemination costs. Secondly, transaction costs could be lower while<br />
a broader market can be reached. Thirdly, the e-commerce site should also help<br />
with additional channels for customer feedback, while at the same time it should<br />
enable consumer and market research.<br />
Kalakota and Marcia (1999, cited in O’Brien: 2002) provide a good overview<br />
of why companies are building e-commerce web-sites: generation of new revenue<br />
from online sales; reduced costs through online sales and customer support;<br />
attracting new customers via Web marketing and advertising; increased loyalty of<br />
existing customers via improved Web customer service and support; developing<br />
new Web-based markets and distribution channels for existing products; and<br />
development of new information-based products accessible on the Web.<br />
There may be many other reasons why companies are adopting e-commerce.<br />
However, whatever the reasons are, it is important to recognize factors that<br />
influence both success and failure.<br />
Problems Faced with E-commerce Adoption<br />
In addition to the benefits highlighted above, many reports also provide insight<br />
to the problems that accompany e-commerce enterprises.<br />
Wilson (2001) argued that many organizations fail because their venture<br />
capital firm got cold feet. He also noted that about one dot-com organization fails<br />
per day and many more are in trouble (failures like Pets.com and Garden.com are<br />
cited). Some mistakes that these organizations have made were: Too many<br />
competitors, short-term mentality, undisciplined growth, unrealistic revenue pro-<br />
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