Ebusiness barriers to growth within the SME sector
| Date | 01 June 2003 |
| Pages | 1-25 |
| Published date | 01 June 2003 |
| DOI | https://doi.org/10.1108/13287260380000771 |
| Author | Paul Jones,Paul Beynon‐Davies,Elizabeth Muir |
| Subject Matter | Information & knowledge management |
Journal of Systems & Information Technology 7
1
EBUSINESS BARRIERS TO GROWTH WITHIN THE SME
SECTOR
Paul Jones
Coleg Sir Gar, Wales, UK
Dr Paul Beynon-Davies
University of Wales, Swansea, Wales, UK
Dr Elizabeth Muir
University of Glamorgan, Wales, UK
ABSTRACT
The development o f Ecommerce within Small and Medium Enterprises (SMEs) in
Wales is restricted by a number of barriers. Various projects initiated by government
and a cademic bodies ex ist to assist SMEs overcome these barriers. Ho wever, whether
these projec ts represent the needs of SMEs is debatable. The opportunity for SMEs to
exploit information communication technolo gy has increased due to the improved
affordability and sophisticatio n of computing equipment, along with the development
and utilisation of the Internet. This progress has seen the emergence of Ebusiness and
Ecommerce, whereby SMEs can operate, communicate and trade in global markets.
Recent surveys by academia, government and trad e bodies have identified Wales as the
worst performing region for Ebusiness in the U K with sceptical attitudes towards its
increased adoption.
This paper reports on a quantitative study investigating Ebusiness utilisation within
SMEs in Wales. Specifically this paper focuses on the key barriers influencing the
adoption of Ebusiness within SMEs in Wales. The survey of the Cardiff Chamber of
Commerce (CCC) membership was undertaken in 2001. The CCC is a trade body of
approximately 1000 SMEs enco mpassing a geographica l area covering Cardiff,
Bridgend, Newport and the Valleys areas. The postal survey and telep hone follow up
achieved a response rate of 100 SME cla ssified enterprises, a response rate of
approximately 10%.
Academic research has identified these barriers as deficiencies in financial
resources, time, information and skills; concerns over security, legal issues and
competition and doubts over the applicability of Ebusiness to their business practices
and cultura l and infrastructure issues. These barriers are a major influence as to how
Ebusiness will develop within SMEs a nd this p aper identifies the significance of each
factor in constraining growth. The paper concludes by investigatin g the assistance for
SMEs from academia, government and trade to develop E business activities and
questioning whether these are representative and effective mechanisms for this sector.
This paper contributes to knowledge by appraising and contrasting existing barriers to
Ebusiness litera ture and compa ring it with the relevant S OGM literature. Secondly it
classifies barriers in two ways by type and time of occu rrence. Finally the paper
Journal of Systems & Information Technology 7
2
recognises that the support mecha nisms for Ebusiness within SMEs remain unproven
and require further investigation to verify their effe ctiveness.
Keywords: Ebusiness, Ecommerce, SME, Barriers
INTRODUCTION
The speed of growth of Ebusiness technologies within Small and Medium
Enterprises (SMEs) in Wales is restricted by several b arriers to development. Various
projects b y academia, government and trade bodies have been initiated to aid SMEs in
Wales overcome these barriers. However, whether these projects represent the need s and
voice of SMEs is open to debate. This paper evaluates and co ntrasts the barrie rs to
Ebusiness literature, charts the results of a recent survey identifying the significance of
these barriers to growth; questioning the role of the public and private sector in
overcoming them.
DEFINITIONS OF EBUSINESS AND ECOMMERCE
The terminology involved within the field of information communication technology
(ICT) usage is vast and contrad ictory. The activity within electronic markets is generally
referred to as Ebusiness or Ecommerce ( Turban, Lee, King & Chung 2000). The
authors regard Ebusiness as a superset of Ecommerce. In turn Ecommerce can be
considered a superset of Internet commerce or Icommerce (Beynon-Davies, Jones, &
Williams, 2002) see Figure 1. Ecommerce is defined by Kalakota & Whinston (1 996) as
‘…buying and selling of information, p roducts and services via computer networks’.
Whilst Sewell & McCar they (2001) define Ebusiness as ‘business facilitated by the
exchange of information across electronic networks. Ebusiness is about using the
convenience, availability and worldwide re ach of I CT to enhance existing business o r
create new business’.
• Ebusiness. Business can either be co nsidered as an entity or as the set of
activities asso ciated with a commercial organisation. We tre at Ebusiness as the
utilisation of information and communication technologies to support all the
activities of business
• Ecommerce. Commerce co nstitutes the exchange of products and services
between businesses, groups and individuals. Commerce or trade can hence be
seen as one o f the essential activities of any business. Ecommerce focuses on the
use of ICT to enable the external activities and relationships of the business with
individuals, groups and other businesses
• Icommerce. Internet commerce is the use of Internet technologies to enable
Ecommerce. Such technologies are becoming the key standards for intra and
inter-organisational communication (Beynon-Davies et al., 2002a)
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