The use of E‐commerce amongst thirty‐four Australian SMEs: An experiment or a strategic business tool?
| Date | 01 June 2003 |
| DOI | https://doi.org/10.1108/13287260380000773 |
| Published date | 01 June 2003 |
| Pages | 49-66 |
| Author | Stephen Chau |
| Subject Matter | Information & knowledge management |
Journal of Systems & Information Technology 7
49
THE USE OF E-COMMERCE AMONGST THIRTY-FOUR
AUSTRALIAN SMES: AN EXPERIMENT OR A STRATEGIC
BUSINESS TOOL?
Stephen Chau
School of Information Systems
University of Tasmania, Australia
ABSTRACT
The use of e-commerce and the I nternet is increasing in acceptance for a wide range
of businesses from large enterprises to small and micro businesses. While the literature
on e-business and e-commerce is evolving, there is limited substantive research focused
on the theory and practice of e-business systems amongst small and medium sized
enterprises (SMEs). This paper provides an insight into thirty-four SMEs actively
utilising e-commerce. The paper also provides a theoretical contribution by developing
a conc eptual model of e-commerce utilisation for SMEs within the A ustralian context,
which dep icts the relationship between the use of e-commerce by SMEs, the degree of
business transformation and the strategic significa nce of e-commerce.
Keywords: Case Study, Small Business, Electronic Comm erce, Business Transformation
INTRODUCTION
The background to this research involves the conceptual and practical concerns
arising from research into SME e-commerce. At the conceptual level definitional
differences on how SMEs are globally classified and how e-commerce has been defined
have made comparative research on SMEs and on e-commerce problematic.
Additionally, the tendency in Information Systems to adapt models developed from
large o rganisational exp eriences has often marginalised the significant differences
between large and small b usinesses, and how these differences impact on technology
related business transformation. At the practical level, although e-commerce adoption
amongst SMEs is now bette r understood, there remains a lack of detailed qualitative
case studies into their e-commerce utilisation. More specifically, there is little detailed
understanding how Australian SMEs actively use e-commerce as a strategic mechanism
or as a business support tool.
BACKGROUND
In the past, organisational theorists believed that small businesses were similar to
large businesses and, therefore, the application of o rganisational theory should be
equally as relevant to small businesses. However subsequent research has highlighted
differences between large and small organisations (Dand ridge, 1979; Welsh and White,
1981; Delone, 1988; Thong, 1999) that have challenged these beliefs.
These differences between large and small businesses are particularly evident in the
examination of small business technology adoption and utilisation. Past researcher s have
Journal of Systems & Information Technology 7
50
revealed at least six major factors influencing the ad option, innovation, management and
successful use technology by SMEs. These factors are the role of management, strategic
direction, available resources, technical complexity, information tec hnology (IT)
knowledge and education, and external issues (Cragg & King, 1993; T hong & Yap,
1995; Fuller 1996).
Previous small business and technology research concentrated on the impact of
technology on internal computing applications and systems. However the
implementation of e-commerce extends be yond the application of technology in internal
systems (P oon & Swatman, 1999). In this context, the applica tion of existing IT and
small business theory provides only a limited basis for examining the intricacies of SME
e-commerce. E-commerce has the capacity to transform not only internal p ractices but
also the methods SM Es use to interact with their tr ading partners, associates and
customers.
The ability of large businesses to conduct e-commerce differs substantially from the
capability of smaller businesses to implement e-commerce. SMEs are often
disadvantaged b y their ability to allocate resources and finance to new innovation and
this is compounded by a lack of technical skills and knowledge (Cameron & Clarke,
1996; MacGregor et al., 1 998; Poon & Swatman, 1996; Corbitt et al., 1997; Lawrence
& Keen, 1997; Freel, 2000; Van Beveren & Thomson, 2002). Even where the SMEs are
capable of conducting e-commerce, resear ch has highlighted they are often reluctant to
so (Lawrence & Chau, 1998).
Although SMEs may be disadvantaged in their ability to conduct e-commerce, SMEs
have traditionally been highly a daptive, innovative and agile within their competitive
business environments (Levy & Powell, 19 98). The Inter net and e-commerce provides
SMEs with an oppor tunity to attain a level of competitiveness in line with larger trading
organisations (Ihlstrom & Nilsson, 1999; Jeffcoate et al., 2002). E-commerce differs
from past implementations of IT in SMEs. Rather than b eing simply a support tool, e-
commerce has the potential be used as a strategic tool to develop new organisational
infrastructures, business relationships and value chains.
Initial research on SME e-commerce has focused on identifying factors that affect
the adoption of e-commerce and the po tential benefits derived from e-commerce ( Abell
& Lim, 1996; Lymer et al., 1997; Poon & Swatman, 1996; 1999). Direct and indirect
cost savings in communications and marketing, greater business exposure and increased
access to new customers and trading partners form some of the potential benefits and
drivers of adopting e-commerce. The slow uptake of e-commerce by SMEs has been
observed and subsequent research d etermining the factors that inhibit e-commerce
adoption has also been explored. These barriers include a lack of financial and
organisational resources, a lack of support from management, a lack of technology skills
and experience and a concern about security and privacy (Lawrence & Keen, 1997; Tan
& Te o, 1998; Tan & Ko nstapel, 1998; Purao & Campbell, 1998; Corbitt et al., 1997;
Carroll 1999). Other studies have found that the drivers for e-commerce adoption are a
combination of factors derived internally within the organisation and externally from the
business environment (Poon & Swatman, 1997; Feindt et al, 2002).
To date, there is a lack of empirically grounded heuristic IS models in the literature
that depict the actual utilisation of e-commerce by SMEs. Emergent models and
frameworks that initially appea red in the IS literature were often unsubstantiated or
lacked empirical valida tion. There is a nee d amongst the IS research community,
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