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