“Small And Medium Enterprises & e-Commerce”
Prof. Ashok K. Sinha (India)
&
Prof. Nisha Singh (USA)
The ultimate motto of any business activity is to maximize the profit for the same they are finding and applying new ways and means to get success. Electronic commerce (EC) has changed the way of business and commerce in the world. EC is the new technology to do the business and its related activities. EC is one of the means to provide better services to customer sell them more products, services, furnishing all strategic information and save money by streamlining operation.
EC has changed the business scenario. Since 1960s EC has been around in various forms but since about 1993 new and constantly evolving technologies have enable commerce to perform E-business functions better and faster than ever before.
The rise of EC has largely been driven by several converging trends, namely global markets, emergent technology, and growing customer sophistication. Research has shown that small and medium-sized enterprises (SMEs) that have adopted EC perceive that it improves their sustainable competitiveness in a number of major ways. High growth SMEs frequently become involved in EC in order to improve marketing, sales and customer support. These SMEs tend to pay less attention to the significant matters of redefining core processes or reconfiguring their management of customer relationships and supply chains. A number of important questions are raised by the use of EC in high growth SMEs. The issues of whether EC really produces gains in SME competitiveness, and how these can be measured and attributed accurately deserve a more through examination. Competitiveness gains can be provisionally analysed under the areas of the potential target market,customer loyalty through branding and customer service, and the range of products/services that can be offered to current and/or prospective customers.Many of the costs of adopting EC are visible and quantifiable but relevant benefits are often hard to measure accurately.
The internet represents an important technology development projected to impact SME competitiveness. With some forecasts predicting an online population exceeding one billion in 2005 and practitioner press citing myriad organizational benefits from internet use many SMEs are increasingly looking for ways to capitalize on this new medium. At the same time even though surveys show many US and European SMEs have internet access, many seen to have adopted a “wait and see” posture toward internet use.
The differential connectivity has prompted increasing research whether and how. SMEs employ the internet in conducting business. Studies have examined industry and organizational factor that can impact both the cost and benefits SMEs face when establishing an online presence and generally found a positive relationship between manager perceived benefits and a firm’s adoption decision.
One key internet benefit noted in these studies is a SMEs ability to establish direct customer contact, which in turn, can reduce its reliance traditional channel intermediaries to relay information back and forth between a firm and its customers. The choice of whether or not to employ outside distributors to perform key business function represents important distribution channel governance decision from for firms. On one the hand by employing traditional channels a firm can capitalize on an intermediary distribution efficiencies and expertise.
Accordingly, we examine whether this customer communication benefit is related to increase SMEs internet use. With increasing internet use among both companies and consumer. SMEs have been able to employ this new medium to perform key organizational activities faster and more efficiently. Firms in general, can benefit from internet use by increasing their geographic reach raising transaction execution efficiency and reducing print costs. Firms can also employ the internet to communication with customers either through direct correspondence or an on-going web presence.
EC defined as the conduct of commerce in goods and services with the assistance of telecommunication and telecommunication based tools, has been widely touted as a technology that enables small to medium enterprises to compete on the same level as larger business. In most countries small and medium enterprises account for a significant share of production and employment and are therefore directly connected to poverty allocution. While in many respect SMEs are relevant for employment and as an income source.
SMEs are challenged by the globalization of production and the shift in the importance of the various determine of competitiveness. Though the rapid spread of ICTs markets in different parts of the world have become more integrated and ICT are also increasing in importance at the level of the enterprises, within the local business support infrastructure and within the government sector. ICT have the potential to assist SMEs directly by improving the efficiency of business process and through the development of new products and services, thereby establishing new business opportunities and markets. They also have a role in improving business services as in the hotel and tourism industry.
It is widely accepted that EC and internet technology can benefit an organizational. This is particularly true for SMEs. Akkeren and Cavaye (1999) and Purao and Campbell (1998) state that EC improves an SMEs ability to compete with larger organization and operate on an international scale. They also see EC as a tool for providing cost effective ways for SMEs to market their business partners. There seems to be a perception among owners of SMEs that there is a lack of business benefit from the adoption of EC.
Fallon and Moran (2000) found significant links between the size of the small business in terms of the number of employees and the level of internet adoption. Matly (2000) showed that the business sector was significantly associated with EC adoption. Not only do SMEs differ from their larger counterparts in day to day activities and management style but their perception of advantages and disadvantages of EC adoption have been found to differ as well. SMEs look to EC as means of improving sales, improving marketing, reaching new customer and markets and improving overall efficiency. However unlike larger business, SMEs tend to have short term or inadequate business plan in place when EC adoption is considered.
As such many small businesses fail to distinguish between tangible and intangible benefit focusing more on the immediate rather than long term (benefit) strategies. The cutting edge for business today is EC. Most people think EC means online shopping. But web shopping is small part of the picture. The term also a refers to online stock, bond transaction, buying and downloading software without ever going to a store. In addition EC includes business to business connections that make purchasing easier for big corporations.
The use of EC within SMEs will vary and any implementation should be driven by business needs rather than by technology. EC can open up radically new ways of working, but most SMEs should start by using EC to improve the effectiveness of what they currently do, such as providing an improved approach to marketing, communications and customer service, improvements which they could never afford if using conventional methods. This is the EC vision which they should work towards, rather than the get-rich-quick, sell-from-a-Web site approach – the vision which so much of the UK press would have us believe is the way forward.