Ecommerce For Small Enterprise

Institutefor
DevelopmentPolicy
andManagement
TheUniversityofManchester
eCommercefor
SmallEnterprise
Development
AHandbookfor
Entrepreneurs
inDevelopingCountries
2006
RichardDuncombe&RichardHeeks
IDPM,UniversityofManchester
RobertKintu&BarbaraNakangu
FIT(Uganda)
SunilAbraham
Mahiti
Writtenby:
RichardDuncombeandRichardHeeks
InstituteforDevelopmentPolicyandManagement(IDPM)
UniversityofManchester,PrecinctCentre,Manchester,
M139QH,UK
Tel:+441612752800
Fax:+441612738829
Email:richard.duncombe@manchester.ac.uk
Email:richard.heeks@manchester.ac.uk
RobertKintuandBarbaraNakangu
FIT(Uganda)
Kampala,Uganda
Email:robert@fituganda.com
SunilAbraham
Mahiti
Bangalore,India
Email:sunil@mahiti.org
Publishedby:
InstituteforDevelopmentPolicyandManagement(IDPM)
Email:idpm@manchester.ac.uk
Web:http://www.sed.manchester.ac.uk/idpm
Developedfroma
projectsupported
by:
BuildingDigitalOpportunities(BDO)Programme
DepartmentforInternationalDevelopment
1PalaceStreet,London,SW1E5HE,UK
Email:enquiry@dfid.gov.uk
Web:http://www.dfid.gov.uk/
CommonwealthTelecommunicationsOrganisation(CTO)
ClarevilleHouse,2627OxendonStreet,London,SW1Y4EL,
UK
Email:info@cto.int
Web:http://www.cto.int
Thishandbookcanbeusedtogetherwith 'eCommerceforSmallEnterprise
DevelopmentAHandbookforEnterpriseSupportAgenciesinDeveloping
Countries',whichhasbeendesignedspecificallyforusebyagenciesthatare
assistingmicroandsmallscaleenterpriseswitheCommerce.
View/downloadbothhandbooksfrom:
http://www.ecomm4dev.org/
View/downloadadditionalhandbooksconcerningICTsandenterprise
developmentat:
http://www.sed.manchester.ac.uk/idpm/research/is/ictsme/index.htm
ListofContents
HowToUseThisHandbook ................................................................................. 1
A.Introduction ........................................................................................................ 2
A1.WhatIseCommerce?...................................................................................... 2
A2.HowCaneCommerceHelpImproveYourBusiness? ..................................... 3
A3.eCommercePitfalls......................................................................................... 4
A4.WhatYouNeedToDoForeCommerce......................................................... 6
B.SmallEnterpriseOnTheRoadToeCommerce ................................................ 7
B1.MovingUpTheeCommerceLadder ............................................................... 7
CaseStudy1:SeduWeldingandFabrication eCommerceStep1........................ 9
CaseStudy2:MukonoWomen'sAIDSTaskForceeCommerceStep2............ 10
CaseStudy3:AdamSonseCommerceStep3................................................... 11
CaseStudy4:StarCafeCommerceStep4 ...................................................... 12
CaseStudy5:KamalBellsElementsofeCommerceStep5.............................. 13
CaseStudy6:ProjectToeHoldGettingtoeCommerceStep6 .......................... 14
C.AreYouReadyForWebBasedeCommerce? ................................................ 15
C1.HowToAnalyseYourEnterprise.................................................................. 16
C2.TenTipsForeCommerce.............................................................................. 19
C3.WhatKindOfeCommerce? .......................................................................... 21
C4.eCommerceFacilitators................................................................................. 22
D.eCommerceBestPracticeGuides .................................................................... 24
AdviceSheet1:GettingConnectedAndMakingAStart ..................................... 24
AdviceSheet2:UsingElectronicMail(Email)................................................... 25
AdviceSheet3:eCommerceSkills ...................................................................... 26
AdviceSheet4:WebDevelopment ..................................................................... 27
AdviceSheet5:OnlinePromotion....................................................................... 28
AdviceSheet6:NetworkingAndCommunitiesOnTheInternet ......................... 29
AdviceSheet7:ContractingOutWebServices ................................................... 30
AdviceSheet8:OrderFulfilmentAndLogistics.................................................. 31
AdviceSheet9:CostsOfWebBasedeCommerce .............................................. 32
AdviceSheet10:SomeLegal/RegulatoryIssues ................................................. 33
AdviceSheet11:Web Security ........................................................................... 34
AdviceSheet12:OpenSourceSoftware.............................................................. 35
E.UnderstandingMoreAbouteCommerce......................................................... 36
E1.Glossary/Jargonbuster ................................................................................... 36
E2.FurtherInformation WebBasedSources .................................................... 38
HowToUseThisHandbook
Thishandbookisdesignedforentrepreneursrunningsmallenterprisesindeveloping
countriesincludingmicroenterprises.Thehandbookwillalsobeusefulfor
entrepreneursinmediumsizeenterprises.Thehandbookisdesignedforthosewho
arenewtoeCommerceandhavelittleknowledgeofwhatisinvolvedaswellasfor
thoseinenterprisesthatarealreadyusinginformationandcommunication
technologies(ICTs)intheirbusinessesincludingcomputers,emailandmobile
phones.
Theobjectivesofthehandbookareto:
OutlinesomebasicinformationabouteCommerceforenterprisesincluding
thebenefitsandthepitfalls(SectionA).
PresentsomecasestudiesshowinghoweCommercehasbeenusedinpractice
bysmallenterprises(SectionB).
HelpyoumakedecisionsabouteCommerce(SectionC).
ProvideinformationaboutdifferentaspectsofeCommerce(SectionD).
DirectyoutowardfurtherinformationoneCommerce(SectionE).
First,readthrough SectionA tolearnmoreabouteCommerce.ThenlookatSection
Banddecidewhereyouareonthe'eCommerceladder'.Youcanthenlookthrough
casestudiesofenterprisesusingeCommerce.
SectionCwillhelpyoutofindoutifyourenterpriseisreadyforeCommerce.
SectionC1asksyoutothinkaboutyourbusinessgoalsandcarryoutananalysisof
yourownenterprise.Theanalysisfocusesonyourpotentialfor'webbased
eCommerce'andexaminesyourmarkets,yourcustomers,yourproductsandservices,
yourlocation,yourskills,technologyandfinances.
YouwillthenneedtodecidewhatlevelandtypeofeCommercewillsuityou.
SectionC2willhelpyoudothisbysuggestingsomeofthecostsandbenefitsforeach
'steptoeCommerce'andtheoveralllikelyimpactofeCommerceonyourbusiness.
Afinaldecisionyouwillhavetomakeconcernswhetheryoushoulddevelop
eCommerceyourselforwhetheryoushouldworkthroughan'eCommercefacilitator'.
SectionC3 outlinessomestrengthsandweaknessesofarangeofeCommerce
facilitatorsyoumaywishtotradewithorconsiderforsupport.
Finally,lookatSectionD,whichprovidesinformationonvariousaspectsof'best
practice'ineCommerce,andSectionEwhichprovidessourcesoffurtherinformation
abouteCommerce.
A.Introduction
Therearetensofmillionsofsmallenterprises,includingmicroenterprises,in
developingcountries(DCs).Morethan90%ofallfirmsinDCsaremicroandsmall
enterprises(MSEs),andthesetypicallycontribute8090%ofallemployment.They
arealsosignificantinwealthcreation,makingupperhapsaroundaquarterofgross
domesticproductandoftencontributingtoexportsaswell.
Inanincreasinglycompetitiveandglobalisedworld,MSEsneedtocompetemore
effectivelyinordertofurtherboostdomesticeconomicactivityandcontributetoward
increasingexportearnings.MSEswillalsocontinuetoplayanimportantrolein
increasingemploymentandincomesandthuscontributetopovertyreductionona
sustainablebasis.
eCommerceisemergingasanewwayofhelpingbusinessenterprisestocompetein
themarketandthuscontributingtoeconomicsuccess.eCommercecanhelpdeliver
economicgrowth,increasedbusinessopportunities,enhancedcompetitivenessand
betteraccesstomarkets.Atpresent,thoughmostsmallenterpriseslackthe
knowledgeofhowinvestmentineCommercecouldbenefittheirbusinessesandhelp
themdevelopthatcompetitiveedge.Thisisatatimewhentheopportunitiesfor
smallenterprisestoadopteCommercearegrowingduetoimprovedaccesstothe
technicalandcommunicationinfrastructure.
ThishandbookwillhelpyoutounderstandmoreabouteCommerceandwhat
eCommercehastoofferyourbusiness.Itwillhelpyoutodecideifyouneed
eCommerceinyourbusiness,andthetypeofeCommercethatcanbenefityour
business.
A1.WhatIseCommerce?
eCommerceinvolvesthesaleorpurchaseofgoodsandservicesovercomputer
networksbybusinesses,individuals,governmentsorotherorganisations.eCommerce
buildsontraditionalcommercebyaddingtheflexibilityandspeedofferedby
electroniccommunications.Thiscanfacilitateimprovementinoperationsleadingto
substantialcostsavingsaswellasincreasedcompetitivenessandefficiencythrough
theredesignoftraditionalbusinessmethods.
eCommerceistheapplicationofcurrentandemerginginformationand
communicationtechnologies(ICTs)toconductbusiness.Theseincludeexisting
technologieslikelandlinetelephoneandfax,buttheICTsofferingmostscopefor
smallbusinessesaremobilephones,electronicmailandotherInternetbasedservices.
However,eCommerceisnotjustaboutusingnewtechnologies.eCommercecanalso
helpsupportprofitablebusinessrelationshipsandassistyoutomoreeffectively
manageandrunyourbusinessenterprise.Thiswillinvolvecreatingmoreeffective
externalinteractionswithcustomers,clients,collaboratorsandsuppliers,butitcan
alsomeanimprovinginternalbusinessefficiencyandeventheemergenceofnew
productsandservices.
eCommercemayinvolvesellingdirectlyfrombusinessestoconsumers(B2C
eCommerce).Forexample,anumberofcraftproducersandtourismenterpriseshave
alreadyfoundsomesuccessdealingdirectlywithcustomers.
eCommercecanalsobeconducteddirectlybetweenbusinesses(B2BeCommerce).
ThisisbyfarthemostcommontypeofeCommerceatpresent.B2Bactivityincludes
portalsthatoperateaselectronicmarketplacesorasauctionsites.Benefitsof
eMarketplacescanincludereducedcosts,betterresearchandquickertransactionsfor
buyers.Rewardsforsellersincludeimprovedcustomerservicelevelsandcheaper
exposuretocustomers.
Thereisalsobusinesstogovernmentactivity(B2GeCommerce)thatreferstothe
growthinsupplyofgoodsandservicesforonlinegovernmentprocurement
potentiallyalargegrowthareaindevelopingcountries.
A2.HowCaneCommerceHelpImproveYourBusiness?
eCommercecanprovidesubstantialbenefitsforyourbusinessviaimproved
efficienciesandraisedrevenues.Itcanenablenewwaysofworkingtoemergeas
yourbusinessfacesthefutureandembracestheneweconomy.eCommerceenables
youtogainaccesstobetterqualityinformation,andthusempowersyoutotake
informeddecisionsaboutyourbusiness.
Mostimportantly,eCommercecangiveyourenterpriseacompetitiveadvantage.It
canhelpstrengthenyourmarketpositionandopenupnewbusinessopportunitieswith
thepotentialtoimproveprofits.BenefitsofeCommercecanariseinthefollowing
ways:
CostReductionBenefits
Reducedtravelcosts:byusingamobilephone,emailandotherICTsto
substituteforjourneys.
Reducedcostofmaterials:moreinformationmeansbetterchoiceofsuppliers
andmorecompetitiveprices.
Reducedmarketinganddistributioncosts:forexample,publishingabrochure
onlinecanreachanunlimitednumberofpotentialexportcustomersandallow
regularupdate.
Reducedsalescosts:theInternetprovidesunprecedentedopportunitiesfor
businessestoreducethecostsoftradelocallyand,evenmore,acrossborders.
Moreefficientsupplychainmanagement: caneliminatetheneedfor
middlemenleadingtolowertransactioncosts(includingmarketing,sales,
transactionprocessing),reducedoverhead,andreducedinventoryandlabour
costs.
Improvedinternalfunctions: cuttingdownonmeetings,improvingthe
exchangeofcriticalknowledge,eliminatingredtape,andstreamlining
communications.
MarketBenefits
Greaterreach:awebpresencecanallowyoutoreachouttocustomersfar
beyondyourimmediatelocation.
Morebrandawareness:offeringnewavenuesofpromotionforproductsand
services.
Improvedcustomerservice:providingmoreresponsiveordertakingandafter
salesservicetocustomersthis,inturn,canleadtoincreasedcustomerloyalty.
Increasedmarketawareness:youcanbecomemoreawareofcompetition
withinyourmarketandmoreawareofmarketchanges,whichcanleadto
product/serviceinnovationorqualityimprovement.
OtherCompetitivenessBenefits
Increasedefficiency:eCommercenotonlyreducescostsbutitcanalso
increasethespeedoftransactionsbothbuyingandselling.
Continuoustrading:suppliersandcustomers,iftheywish,canaccessa24
hour/7daysalesserviceparticularlyimportantwhentradingthroughtime
zones.
Specialisation:eCommercecanhelpyoutofocusyouractivitiesmakingit
easiertobuildrelationshipswithotherenterprisesandcommunicateyour
needstosupportagencies.
Manyofthesebenefitscanbegainedthroughrelativelymodestinvestmentsinnew
technologyandsystems.Greaterbenefitsmayaccrueastheenterprisemovesupthe
eCommerceadoptionladder(seeSectionB1).Itisimportanttorealise,however,that
thebenefitsoutlinedarenotexclusivelytiedtoeCommerce.Forexample,market
benefitsmaybeachievedmoreeffectivelythroughbetterbusinessnetworkingandthe
buildingofpersonalbusinessrelationships,ratherthanthroughuseoftheInternet.
ThisemphasisestheimportanceofadoptinganapproachtowardseCommercethat
putsbusinessobjectivesfirst,rather thanbelievingthattechnologyalonecandeliver
thebenefitsdescribedabove.
A3.eCommercePitfalls
TherearegreatpotentialbenefitsbuttherearealsopitfallsofgoingintoeCommerce.
Theyarethefinancialcosts,thebusiness'opportunitycosts' andthedangersoffailure.
Thesearedetailedbelow:
eCommercewillbringextracostsaswellaspotentialcostsavings.Thestart
upcosts(initialinvestmentinacomputer/networkconnection,etc)willbe
highandtherewillbeadditionalrunningcosts(seeAdviceSheet9).
eCommerceactivitywillneedtoruninparallelwithexistingbusiness
methods.Forexample,youwillneedtocontinuetoproducepaperbased
marketingmaterial(brochures,stationery,leaflets,etc)aswellasbuildingup
yourwebpresence.Thiswillduplicatesomeactivitiesaddingtooverallcosts.
eCommercemaydivertattentionawayfrommoreimportantofflineactivities.
Itisimportantthatonlineandofflineeffortsarenotincompetitionwitheach
otherwithinabusiness.Infact,formostMSEs,offlineactivities(suchas
facetofacemeetingsandpersonalnetworking)willremainfarmore
importantthanonlinecommunication.
AneCommerceventuremaywellfailcompletelylikeanynewbusiness
venture.Thishighlightstheimportanceforsmallbusinessesofnotthrowing
alltheireggsintotheeCommercebasket.
However,therearealsorisksofignoringeCommerce! Technologyandinnovation
canbringpositivechangestoyourbusinesswhichcanimprovethewayyoudo
businessinthefuture.Therisksofnoteffectivelyembracingtechnologymaybefelt
throughoutyourbusinessinyearstocome.Forexample:
Havingnowebsite,orabadlydesignedormarketedwebsite,mayputyour
businessatadisadvantageascomparedwithyourcompetitors,particularlyif
youareanexporteroratourismbusiness.
Unsuitableorinadequatetechnologycanmeanthatyourenterpriseiswithout
thecommunicationssystemsthatitneedstocompeteefficiently.
Increasingly,enterprisesthatlackacustomerandsalesdatabasemayfindit
difficulttocarryouttheregularandeffectivedirectmarketingand
communicationthatcompetitorsconduct,andwhichcustomersexpect.
A4.WhatYouNeedToDoForeCommerce
Thebasicrequirementstogetstartedareasfollows:
Acomputer.
Alandlinetelephone.
Amodem. Thisdeviceconvertsdigitalinformationfromcomputersinto
electronicsignalsthatcanbetransmittedovertelephonelines.
Internetbrowsersoftware.Thisusuallycomesinstalledalreadybutmake
surewhenpurchasingyourcomputeryouaskifithasthissoftware.
TheservicesofanInternetServiceProvider(ISP). Theseprovideyouwith
accesstotheInternet.
Anemailaddressinorderthatlocal,regional,andespecially,international
customerscancommunicatewithyou.
SeetheAdviceSheetslaterinthishandbookformoredetailsofallthese
requirements.Rememberthatyoudonothavetoownalloftheseyourself you
couldaccessthemviaatelecentreorInternetcaf,oryoucouldshareownershipwith
otherentrepreneurs.YoucanalsomakeastartoneCommercejustusingamobile
phone.
Butdon'tforgetpersonalfacetofacecontactisstillthemostimportantmethodof
businesscommunication particularlywithyourcustomers.Therearestillmany
effectivewaystobuildyourbusinesscommunicationsthatdon'tinvolvemodern
technology,suchas:
Buildingagoodreputation foryourbusiness.Thiswillhelptospread
informationaboutyourbusinessthroughwordofmouth.
Aprofessionalimagewillhelptopromoteyourbusiness.Theuseofa
printedbusinesscard,aletterheadandalogo,orsignboardoutsideyour
businesspremiseswillhelpinthisrespect.
Advertisingyourbusiness.Theuseofprintedleaflets,posters,cardsinshops
oradvertsinlocal/nationalpaperswillreachawidecustomerbase.
TheuseofeCommercetechnologieswillhelpyoubuildonthesegoodbusiness
practices:forexample,usingtheInternet(oramobilephone)topromoteyour
businesstotakeorgiveordersortocommunicatewithyourcustomersatacheap
rateviaemail.
B.SmallEnterpriseOnTheRoadToeCommerce
Thissectionoutlinesthe'stepstoeCommerce'describingthedifferingstagesof
eCommercedevelopmentthatyoumayfindin asmallenterprise.Itdoesthisthrough
amodelandthenpresentationofsixreallifecasestudiesofsmallenterprisesusing
eCommerce.ThecasestudiesshowhowenterprisesarebenefitingfromeCommerce,
aswellassomeofthepitfalls.WhichstepoftheeCommerceladderareyouon?
Readthroughthecasestudies.Youmayidentifyanenterprisethatisatasimilar
stagetoyourown.
B1.MovingUpTheeCommerceLadder
The'steps'modelcanhelpyouunderstandthedifferenttypesofeCommercebusiness
applicationsyoumayencounter.Itmayalsohelpyoutoidentifythetypeof
assistanceyoumayrequire.
Step1.StartingOut:Simplemessagingusingmobilecommunications
Currently'wireless'communicationsincludingshortmessagingservices(SMS)
provideacheapandwidelyavailableoptionforenterprises.Mobilephonesoffera
numberofkeyadvantagesoverfixedlinecommunicationsforsmallbusinessessuch
asinstantcommunicationswithcustomersandsuppliers,evenwhenonthemove.
Theyalsoprovidegreaterconnectivityandnetworkcoveragethanlandlinesusers
canbeinstantlyconnectedbytextmessagesandmobilechatapowerfulmarketing
andadvertisingtool.
Step2.GettingOnline:Emailmessaging
Youcansendorreceiveemailsfromacomputerterminaleitherlocatedonyour
businesspremisesorviaafacilitator(suchasanInternetcafortelecentre).Emailis
acheap,quickandreliablewaytoexchangebusinessinformationwithcustomers,
suppliers,andbusinesscontactswhoarealsoconnectedtoemail.Avarietyof
informationcanbesentnotjustmessages,butdocuments,photographs,drawings,
oranyothercomputerdatafile(seeAdviceSheet2formoreinformationonemail).
Step3.WebPublishing
Webpublishingcanbeusedtomakeenterpriseinformationavailablebyusingan
onlinebrochure,forexample.Itssimplestformmayconsistofa34pagewebsite
givingabasicbusinessprofile,someinformationaboutproductsandservices,and
contactinformation physicalandpostaladdress,telephoneandfax,andemail
contact.Inamoreadvancedformitmayincludeanonlinecatalogueanonline
versionofaconventionalcataloguethatcanbeeasilyupdated.Evenasimpleweb
presenceofferstheabilitytoaccessawidepotentiallyglobal marketwith24/7
accessibility.(SeeAdviceSheet4formoreinformationoncreatingwebsites.)
Step4.WebInteracting
Webinteractionwillallowcustomers(forexample)morescopetobrowsethrough
images,descriptionsandspecificationsrelatingtoyourproductsandservices.Itmay
allowthemtosubmitemailenquiryforms,toorderonline,touseonlineservicesorto
useashoppingcartfacilityandorderconfirmation thatcouldbepaidforand
fulfilled(delivered)offline.Interactionoverthewebcanimprovecustomerservice
andresponsetocustomerqueries.
Step5.WebTransacting
ThiscanbetermedashavingafulleCommercecapabilitythatcoversthewhole
transactionprocessfromtheplacingofanordertoonlinepaymentforgoodsand
servicesviasecurenetworks.ForB2CeCommercethiswillinvolvemakinguseof
securecreditcardpaymentsystems,andforB2BeCommercewillinvolvepayment
throughsecurebankingsystems.
Step6.WebIntegration
eCommercemayalsotakeonawiderrolewithinabusinessthroughwebintegration.
Webintegrationprovidesanelectronicplatformthatlinkscustomerfacingprocesses
suchassalesandmarketing(the"frontoffice")withinternalprocessessuchas
accounts,inventorycontrolandpurchasing(the"backoffice").Thisisoftencalled
eBusinessorthebusinessmaybedescribedasbecomingfully"eenabled".eBusiness
linksinternalsystemswithexternalnetworks(customers,suppliersandcollaborators)
viatheInternet. Integratingsystemscanmakeiteasierandcheapertodobusiness,
anditcanencouragecustomerloyaltyandrepeatbusiness.
CaseStudy1:SeduWeldingandFabrication eCommerceStep1
Overview:Amicroenterpriserunbyasingleentrepreneurproducingfabricated
metalproductswindows,doorframesandbedswithtwoemployees,anda
turnoverofaboutUS$300600peryear.Theenterprisesellstolocalmarketsand
servesmanysectorsincludingtheconstructionsector,supplyingwindowsand
doorframes,andruralschoolsandhospitalssupplyingbeds.Theenterprisemainly
sellstoindividualconsumersandschools.
ICTResources:TheenterprisehasamobilephonewhichcosttheownerUS$80and
requiresamonthlyfeeofatleastUS$4 ofairtimetooperateonthenetwork.This
enterprisehasnofinancialsupportanddependssolelyonincomegeneratedand
savings.
eCommerceBenefits:
Theuseofamobilephonehasgreatlyimprovedbusinessbyenablingconstant
accesstocustomers,evenwhentheentrepreneurisawayfromhisbusiness
site.
Bothcustomersandsupplierscanbecontactedgivinganimmediateresponse
anddirectcommunicationthathastremendouslycutdowntransportcostsand
givenaccesstoawidermarket.
Thephonehashelpedhimforgeapersonalrelationshipwithclientsforrepeat
orders.
Supplierscanalsobereadilycontacted.
Theenterprisehasbuiltuseofthephoneintoitsmarketingstrategyby
distributingthephonenumberwheneverpossibleviabusinesscardsand
displayingitonfinishedproducts.
eCommerceChallenges:Thephoneitselfdoesnotbringchallenges.Astofurther
eCommercesteps,thebusinessownerregardsotherICTs(suchascomputers)astoo
expensivetouse.Besideshedoesnotknowhowtousethem.Hepreferstospendhis
resourcesonacellphoneashecouldnotriskbeingwithoutoneinhisbusiness.
eCommerceSupport:Theenterprisehasnotreceivedanysupportexceptinthe
sensethatthemobilenetworkproviderdeliverstheinfrastructure requiredforthe
phone.
LessonsLearned:Thephoneshouldbeavailableforuseatalltimesoftheday.
Hence,itisadvisabletojoinnetworksthatdonotchargeaservicefee.Itis
important,therefore,tocomparethepackagesthatphonecompaniesareofferingin
ordertominimisecostsandselectaservicethatwillmeetyourneeds.Unfortunately
helostmostofthenumbersofhiscustomersandcontactswhenhismobilephonewas
stolen thisreinforcestheimportanceofkeepingbackuprecordsalso.
CaseStudy2:MukonoWomen'sAIDSTaskForceeCommerceStep2
Overview:MWATFisaselfhelpenterpriseproducingtreeseedlings,vegetablesand
metallicstoves,employingsixtywomen,withaturnoverofUS$3,600.Itservesthe
homemarketonly.Thevegetablesareperishablesotheyonlyharvestwhentheycan
besureofthemarket.
ICTResources:TheenterprisehasnodirectaccesstoICTsbutusesacommunity
telecentrethatislocated2kmawayfromtheirpremises.Theyregularlyusethe
telecentrelandlinephonethatchargesthemUS$0.25perminute.Theyalsousethe
emailservicetocorrespondandcommunicatewithagenciesinathomeandabroad.
Theyusuallyusetheemailservicestwiceaweek(costingUS$0.025perminute).
Sincetheconnectionsareslowitcantakeuptotwentyminutestocompletetheir
communication.
eCommerceBenefits:
Thetelephoneserviceisusedtoascertainthemarketfortheirproducebefore
theyharvestortaketheirproducetomarket.
Thephonehassavedbothtimeandmoney,givingrisetobetterprices.
Viaemail,theyhavebeenabletoestablishcontactswithanumberofnew
organisationsandindividualswhohavesubsequentlyofferedassistance.
eCommerceChallenges:Thecomputercurrentlyprovidedatthetelecentrearetoo
fewjusttwoforthewholelocalcommunity andalsotooslow.Slowtransmission
speedsalsomeanhighcostsforaccess.
eCommerceSupport:MWATFhasreceivedsupportfromthetelecentrewhichhas
offeredcomputertrainingtothestaffandsomemembersatasubsidedrate.They
havealsoassistedwithtrainingofthestaff,anddemonstratedhowtheInternetcanbe
usedtosearchforinformation.ThetelecentrealsopassesonmessagestoMWATF.
Hencethetelecentreisanimportantpointofcontactfortheorganization.
LessonsLearned:Whenusingthetelecentreusersareencouragedtohaveletters
typedbeforehandandthenjustcopiedtosend.Thiscostslesscomparedwith
composingaletteronline.Itisalsoimportanttousethetelephoneeffectivelytofind
outaboutthemarketorthepricesbeforesettingofftomarket thisisespecially
valuableifthemarketisfarfromthelocality.Theenterpriseintendstoinstalla
phoneattheirpremisesthatcanbeusedbyitsmembersatacheaperrate.
10
CaseStudy3:AdamSons eCommerceStep3
Overview:Thebusinessmakesmachineryusedinplantationssuchasmachineryfor
processingcoffee.Theyhavenineemployees,andrecentannualturnoverwas
US$126,000.Theirmainmarketisthehomedistrictbut5%ofturnovercomesfrom
exports theyhavebeenexportingmachineryforfiveyears.
ICTResources:Theyhavefivelandlinephonesandthreemobilephones.In
addition,thereisasinglepersonalcomputer(PC)operatinginthebusinessforemail,
Webandotherpurposes.ThePChasaUPSbackupsystem.AdamSonsalsohas
createditsownwebsite.
eCommerceBenefits:
Theyhaveattractedprospectiveclienteleandenthusiasticpersonswhohave
browsedthroughtheirwebsitetogetinformationregardingtheircoffee
machineryunits.
Theyhavereceivedanumberofvisitorsbyensuringthatthesiteislistedon
somemainWebsearchengines.
TheyhavealsofoundbenefitsasusersoftheWebforexampleinfinding
informationtheyneededaboutgasolinepoweredgenerators.
Emailhasbeenusefulinsavingcostswhencontactingexternalclientsor
supplierssomeordersarealsoreceivedviaemail.
eCommerceChallenges:
Climaticconditionsintheirlocationcancauseproblems,includingsome
unreliabilityoftelecommunications.
Thehighchargesforairtimewhenusingmobilephones.
Problemsupgradingwebsitetoobtaindetailsofinterested/prospective
customers.
eCommerceSupport:Theyhavereceivednodirectsupport,buttheentrepreneur
wasmotivatedtomakeawebsitebyafriendbasedintheUSwhosaidthatthiswould
helpenhancethescopeofthebusiness.
LessonsLearned:
Theentrepreneurstates"Advertisinginnewspapersturnsouttobeexpensivebutifwe
haveawebsite,wecanjustputtheURLofthewebsiteinthenewspaperwhich
savesalotofspace/money.Interestedpartiescanlogontothenetandfind
informationaboutourbusiness.Thusitshouldbeontheagendaofevery
entrepreneurtohaveawebsite". Healsostatedthatcustomersaremoreenthusiastic
aboutreputablecompaniesandhavingawebsitegivesweighttoacompany's
reputation.Theyplantoupgradethewebsiteinordertoaddmoretransactional
functionalitytoit,likeachatfacilitytoallowonetooneinteractionwithclients.
Theyrecommendseekingoutagoodnetworkconnectionthatoffersattractiveand
lessexpensivepackages.Theentrepreneurwouldliketoseegovernmentagencies
supportingawebsitespecificallyfor/aboutsmallenterprises,includingaproduct
cataloguedisplayingimageswitheasywaystoordertheproducts.
11
CaseStudy4:StarCafeCommerceStep4
Overview:Thisenterpriseroasts,blendsandpackagescoffeeproductsandhas15
employees.Thecustomerbaseislargesincecoffeeiswidelysoldlocally,including
inruralareas.Theenterprisesuppliesbusinesses,traders,supermarkets,restaurants,
shops,andoffices,withthelocalmarketmakingup99%ofturnover.Theenterprise
isplanningtotargettheexportmarket,andseesitseCommercebaseasanimportant
foundationforthis.
ICTResources:TheenterprisehasaccesstotwocomputerswithInternetaccessthat
wereacquiredin2001/2002.Italsohasafaxandphones(bothlandlineandmobile).
Thecompanyhassetupitsown websitethatprovidesdetailsoftheproductsitoffers.
eCommerceBenefits:
70%ofthesupermarketsandhotelsthattheenterprisesupplieshaveemail
(thoughmostotherlocalcustomerstendtousethetelephonetoplaceorders).
Emailisakeytooltocreateorstrengthenpersonalisedrelationshipswith
majorclientsthroughfastercommunicationlinks.
StarCafhasbecomebetterknownandmanynewbusinesscontactshave
beenmadethroughitswebsiteandemail.
Thewebsitehasalreadydemonstratedthatitisacosteffectivewaytoreach
outtotheexportmarket.Theyestimatethecostsforanetworkconnection
anddesigningandhostingthewebsitetobeaboutUS$2500peryear.
Theenterprisealsousesemailformostbusinesscorrespondencethishas
provedtobeamoreefficientandcosteffectivewayofcommunicationthan
nonICTbasedmeans.
ServicebreakdownsandslowdialupInternetconnections.
HighinvestmentcostsfortheICTs.
Lackofsufficientknowhowrelatedtouse ofICTsandtheirfuture
development.
Logisticalrequirementsforthedeliveryofphysicalgoodsinordertofulfil
electronicorders.
eCommerceSupport:Theenterprisehasnotreceivedanysupportintheareaof
eCommerce.Thecompanyhaditsowninhousestrategiestofinancetheseideas.
Thegeneralmanagerindicatedthatoncethebenefitsseemtojustifythecoststhenan
ideaisconsidered.
LessonsLearned:Enterprisesshouldapplycost/benefitanalysisanddetermineif
theyreallyneedthetechnology.Requirementsneedtobespecifiedcarefullyand
enterprisesshouldshoparoundfordifferentwaysofsolvingproblemsinacost
effectivemanner.
12
CaseStudy5:KamalBellsElementsofeCommerceStep5
Overview:Thebusinesshas40employeesandwasestablishedin1983.They
manufacturemachineandpressedmetalcomponents.Theircustomersare100%
homemarketbutsomeexportproductscontainingtheircomponentsareusedinthe
motorindustry.Theirmaincustomersarelargemotorengineeringcompanies,and
recentannualturnoverwasalmostUS$400,000.
ICTResources:Thecompanyhasfourphones(twolandlineandtwomobile)and
threepersonalcomputers,onewithanInternetconnection.Theymakeuseof
standardaccountingsoftwareandacustomisedsystemforbillingandinvoicing.
Theyuseemailbuthavenocompanywebsite.However,theyareabletotransact
onlinebymakeuseofwebsitesownedbysuppliersorcustomers.
eCommerceBenefits:
AccesstoamobilephoneisveryusefultotheCEOwhoisalwaysonthe
move.
Emailhasmadecommunicationmuchfasterandeasier
Theyhaveregisteredwithanexportportalwebsitethroughwhichtheyhave
receivedalotofinformationfromvarioussimilarunitsandclientsfromall
overtheworld.
Theyhavesavedtimeandmoneybycompletingtransactionsonline.For
example,fromonemajorcustomertheyreceivedorderdetailsviaemail.They
thenusedthecustomerwebsitetofillinallnecessarydetailsabouttheorder,
enablingittobeprocessedelectronically.Allfurthercorrespondencewas
conductedviaemailsothattheentiretransactionwascompletedonline.
SlowaccessspeedsduetolimitedICTinfrastructure
LackoftraininginICTs.
Needtointegratebasicbusinessprocessessuchasinventoryandproductlists
withwebbasedtools.
eCommerceSupport:Thebusinesshasreceivedsupportintheuseofemailand
otheraspectsofeCommercefromoneoftheirmainclients,whoarealready
experiencedinusingeCommerce.
LessonsLearned:Thereisaneedforacontinuousupgradingoftechnology.
However,alongwithtechnologyitisimportantthehumanelementisretainedinthe
unitlikethebusinessownersays"eachemployeeinmyunitistreatedlikeafamily
member,andwediscussvariousproblemstogether".Hence,too,thehumanelement
mustalsoremainindealingswithsuppliersandcustomers. Locationisalso
important:theyhavebenefitedfrombeinglocatedalongsideheavyICTusing
enterprises.
13
CaseStudy6:ProjectToeHoldGettingtoeCommerceStep6
Overview:ToeHoldmanufacturesandmarketstraditionalleatherslippersand
sandals.Thesearemanufacturedbyartisansofalocalmarginalisedcommunity
Establishedin1999,itisrunonacooperativebasiswitheightfulltimeemployees.
ToeHold'scustomersaremainlyshoeshopsandboutiquesinAustralia,Japan,Italy
andothercountries.
ICTResources:Thecompanyhasthreecomputersatitsheadofficeandoneinthe
manufacturingcentre.ToeHoldcommunicateswithitscustomersanditsown
manufacturingunitviaemail.Itswebsitecontainsacatalogueofitsproductsand
customersareabletobrowseandpurchaseitsproductsviatheintegratedshopping
cartapplication.
eCommerceBenefits:
Workersinthevillagesareabletospeaktotheirheadofficesviamobile
telephony.Decisionsgettakenfasterandmorecheaply,removingtheneed
fortravel.Decisionsalsogetcommunicateddownthelinemorequicklyand
cheaply.
Requestsarereceivedviaemailandcompanyrepresentativesfollowupwitha
quotation.Clientsalsouseemailtosendinsuggestions,alterationsand
photographicevidenceofdamage/faultsinproductsthatmightneed
replacement.ThishelpsToeHoldimprovethequalityoftheirproductdesign.
Ordersarereceivedviathewebsitethatwouldotherwisebeveryunlikelyto
come:ToeHold'sexportambitionswouldhavebeenverydifficulttofulfil
withouteCommerce.
Amanagementinformationsystemkeepstrackofcustomersandpredictstheir
buyingpatterns.Thishelpstheenterprisetooptimisetheirleatherand
accessoriespurchasesandkeepinventorylevelslow.
eCommerceChallenges:Powersupplyremainserraticinthevillages,whichcan
sometimesundermineuseofemail. Internetconnectivity isalsolimitedinruralareas
andfindingtrainedstaffisdifficult.ToeHoldisalsoconcernedaboutretainingthe
intellectualpropertyrightsofitsoriginaldesignsshowcasingthesedesignsonthe
webmeanstheycouldbecopiedbyothers.
eCommerceSupport:AlocalISPofferedafreetemplatebasedshoppingcart
application.DonoragencieshavealsoprovidedToeHoldwithcomputersand
softwareatsubsidisedcosts.
LessonsLearned:Adigitalcameraisusefulasimagesofnewproductsortest
designscanbeeditedanduploadedquicklyontoawebsite,andimagesarean
importantelementofwebbasedsales.ToeHoldhastrainedstaffmembersintheuse
ofcomputersandtheycannowmanagemostcommunicationviaemail. Theartisans
comefromapoorer sectionofsocietyandtheirliteracylevelsarelow.Thishassofar
preventedthemfrombeingpartoftheeCommerceprocess.ToeHoldistryingto
bringtheirlevelstoabasicstandardsotheymaytakeamoresubstantialroleinusing
ICTs,butthisrequiresaconcertedeffort.Thefirmseescreationofamore
sophisticatedwebsiteasvaluableforfuturesalesforexampleenablingbuyersto
createtheirownfootweardesignsorcolourcombinations.
14
C.AreYouReadyForWebBasedeCommerce?
BeforemakingadecisionaboutwhattypeofeCommercetoadoptandwhetheryou
arereadyforwebbasedeCommerceyoushouldensurethat:
Youhaveclearlydefinedyourbusinessgoalsandstrategies.
YouintendtouseeCommerceincreativewaystoimproveexistingbusiness
toolsandcapabilities.
Youareabletosuccessfullybalanceyouexistingofflinecommerceactivities
andnewonlineeCommerceactivities.
Youhavearealisticandachievableplanforrealisinggenuinebenefits.
PlanningforeCommerceinvolvessettingachievablebusinessgoals,developing
businessstrategiestoachievethosegoals,andmakinguseofpracticalbusinesstools.
Table1canhelpyoutoidentifyyourbusinessgoalsandhelpyoutoconsider
potentialstrategiesandpracticaltoolstoachievethosegoals.
Table1.BusinessGoalsandStrategies
PossibleBusinessGoals
Increaserevenuefrom
existingcustomers
BusinessStrategiesYou
CouldAdopt
Buildrepeatorders.
Developcustomerloyalty.
BusinessToolsYou
CouldUse
Increasedadvertisingand
promotion.
Bettercommunication.
Bettercustomerservice.
Locatenewcustomersin
existingornewmarkets
Expanddomesticmarkets.
Exploreexportmarkets.
Bettermarketinformation.
Attendanceattradeshows.
Bettercrossborder
businessnetworking.
Diversifyproductsand
services
Developmentofnew
productsorservices.
Marketresearch.
Useofconsultantsand/or
technicalassistance.
Increasecompetitiveness
throughproduct/service
innovation
Undertakeproductor
processimprovements.
Technologyupgrading.
Newproductionorservice
technology.
Branding.
Improveddesignand
packaging.
Standardscompliance.
Employeeinvolvement.
Increasecompetitiveness
throughcostreduction
Internal/external
businessefficiency
improvements.
Betterpurchasing.
Workforce/resource
planning.
Trainingandskills
development.
15
eCommercetechnologiescanhelpbringimprovementtoallofthebusinesstool
exampleslistedinTable1particularlythosethatinvolvebettercommunications
usingemailormobilephones,forexample.
Itwillalsobeimportantthatyouareabletoprioritiseyouractionsinorderthatyou
canuseeCommercetoproducebenefitsintheareasthataremostimportanttoyour
business.Forexample,ifyourmainstrategyistobuildrepeatordersthenefficient
andeffectivecommunicationswithyourexistinglocalcustomerswillbeparamount.
Here,effectiveuseofmobilecommunicationsratherthanwebbasedeCommerce
shouldprobablybeprioritised,sothatyoucanalwaysbeintouch withallyour
customersandtheycanalsoleavemessagesforyou.
C1.HowToAnalyseYourEnterprise
TheuseofwebbasedeCommerceislikelytoaffectallaspectsofyourbusiness.
Therefore,itisveryimportantforyoutoanalyseallaspectsofyourbusinessbefore
youmakeanydecisionsregardingeCommerce.Gothroughthefollowingsetsof
questionsandnotedownsomeresponsesthatapplytoyourbusiness.Thenreadthe
commentsalongsidethequestionstogainsomefeedback.
First,youshouldconsideryour Market
Areyourmaincompetitorsmarketing
orsellingsimilarproductsorservices
overtheInternet?
Doyourmaincustomersorsuppliers
haveaccesstotheInternetorarethey
seekingtouseeCommerce?
Feedback:Ifyouansweredpredominantly
'Yes'thenyouneedtoconsiderwhether
youareahead,onapar,orbehindin
comparisonwithyourcompetitors,
customersandsuppliers,inusingthe
InternetandeCommerce.Ifyouanswered
predominantly'No'thenwebbased
eCommercemaynotbeapriorityforyou.
andthenyour ProximitytotheMarket
Whereareyourmain
customersandsuppliers
located?
Whereareyourbusiness
premiseslocated?
Feedback: Ifyourcustomersorsuppliersarelocated
overseas,andyouarelocatedinawellconnected
urbanarea,thenyouhavehighpotentialforwebbased
eCommerce.Ifyourcustomersorsuppliersarelocated
incountryandyouarelocatedinaruralarea,thenyou
maywanttoconsiderusingamobilephoneorgaining
accesstoatelecentretouseemail.
16
whataboutthe ProductsandServicesyouoffer
Doyourproductsorserviceshave
broadorspecialised(niche)market
appeal?
Areyourproductsorservicessuitable
formarketingorsellingoverthe
Internet?
Canyourproductsorservicesbe
deliveredelectronically?
Feedback:Morespecialisedproductsor
servicesaremoresuitedtoInternet
marketingorselling.Conversely,ifyour
productsorservicesareservingsaturated
marketswheretherearelargenumbersof
competitorsthenyourpotentialforweb
basedeCommercemaybelower.Ifyou
areunsureaboutthesuitabilityofyour
productsthenyouneedtodosome
additionalmarketresearch.
payspecialattentiontoyour ExistingCustomers
Areyourcustomers'otherbusinesses'or
'finalconsumers'?
Feedback: Ifyourcustomersarelarge
ormediumscalebusinessesoperatingin
highpotentialsectorsoriftheyare
consumerswithhighdisposableincomes
Areyourbusinesscustomerssmallor
thenyouhavehighpotentialfor
largeenterprisesororganisations?
eCommerce.Ifyourcustomersarelow
incomeconsumersorsmalland
Areyourcustomersoperatinginsectors
mediumscaleenterprisesoperatingin
thathavehighorlowpotentialfor
lowpotentialsectorsthenyoumayhave
eCommerce?
lowerpotentialforeCommerce.Ifyou
Ifyouselltofinalconsumers,dotheytend areunsurethenyouneedtodosome
additionalmarketresearchconcerning
tohavehighdisposableincomesorlow?
yourcustomers.
nextconsideryour Business
Isyourenterpriseneworwell
established?
Feedback: Thesizeandthegrowthrateofyour
enterprisearenotasimportantasyourmarket,
yourproductsandthenatureofyourcustomersfor
Howmanyemployeesdoesyour determiningyourpotential.However,ifyouhave
alargerwellestablishedbusinessesthenyouare
enterprisehave?
morelikelytohavegreateravailableresourcesfor
investmentinwebbasedeCommerce.Onthe
Isyourenterprisegrowing,
otherhand,ifyouhaveagreaternumberof
contractingorreasonably
employeesthenclimbingthestepstoeCommerce
stable?
maypresentgreaterchallengesintermsof
transformingskillsandattitudesacrossyour
Whatwastheturnoverofyour
workforce.Smallerenterprisesemployingtwo
enterpriseinthelastfinancial
fivepersonsmayfinditeasiertoadapt,althoughit
year?
islikelythatavailableresourceswillbelower.
17
your AccesstoICTs
Doyoucurrentlyhaveaccesstoemailorthe
Internetonyourbusinesspremisesorviaathird
party?
Doesyourenterprisecurrentlyhaveawebsite?
AreyourinternalITsystemsnetworked?
Towhatextentareyourbusinessprocesses
(customerdatabase,accounts,invoicing,
purchasing,etc)computerised?
Feedback:Ifyouarealreadya
computer/emailorInternetuser
andthosefacilitiesare
accessibleonyourbusiness
premises,youhavegreater
potentialtoclimbthestepsto
eCommerce.Ifyouhaveyetto
deployICTswithinyour
enterprisethenyouneedto
considercarefullytheissues
coveredinthishandbookand
decidewhattypeofICTs
wouldbemostbeneficial.
your ICTandBusinessSkills
AreyouanICTenthusiastanddo
youhaveICTskills?
Areyouremployeesfamiliarwith
ICTsandwhatistheirlevelofICT
skills?
DoyouhaveICTsupportavailable
'inhouse'ordoyoudependupon
externalmaintenanceand
developmentofyourICTs?
Feedback:Enthusiasm(commitmentand
leadership)isprobablythemostimportant
skillyoucanbringtoanyeCommerce
initiative.Itwillalsobenecessarytodevelop
thetechnicalandbusinessskillsto
successfullyimplementthetechnologyand
theinnovationsthatwillleadtonewwaysof
doingbusiness.IfyoualreadyhaveICT
skillsandexperiencethiswillgreatlyincrease
yourpotentialforeCommerce.However,
goodbusinessskillstheabilitytorecognise
hownewtechnologycanbeusedbothwisely
andcosteffectively arelikelytobemore
importantthanyourtechnical skills
your BusinessEnvironment
Arelocaltelecommunicationservices
providedtosuiteCommerce?
Feedback:Theabilityofyourenterpriseto
climbthestepstoeCommercewilldepend
notonlyuponyourownskills,butalso
Howadvancedisyournationregarding uponthelevelofsupport,andthe
constraints,thatexistlocally.Anincreased
thelegal,regulatoryandbanking
levelofawarenessofthese'ereadiness'
requirementsforeCommercee.g.,
issueswillhelpyouunderstandthe
securepayments?
constraintsunderwhichyourenterpriseis
likelytobeoperating.
Towhatextentcantransportand
deliverysystemsmeettheneedsof
potentialeCommercecustomers?
18
andfinallyyour Finances
Howfinanciallystableisyour
business?
Feedback:Itisnecessarythatyouhave
accesstofinancialresourcestomakeyour
initialinvestment,butyoualsoneedtobe
Whatinvestmentresourcesdoyouhave abletogeneratesufficientrevenueto
sustainyoureCommerceactivitiesinthe
available?
yearsahead.Alotwilldependonyour
businesscontinuingtothriveandgrow.It
Areyouawareofthetotallikely
isimportantthateCommercecancontribute
financialcost(investment+recurrent
togrowthofrevenue(andprofits)whilst
costs)ofeCommerce?
notimposingaheavyburdenonyourcash
Haveyouweighedthecostsagainstthe floworthreateningyourfinancialstability.
Ideally,thefinancialbenefitswillneedto
benefits?
exceedthefinancialcostssignificantly.
Afteranalysingyourownsituation,youmaydecidenottoadoptwebbased
eCommerceandinsteadconcentrateonotheraspectsofbusinessdevelopmentor
makebetteruseofcheapercommunicationtechnologiessuchasmobilephonesor
youmaydecidetomakeuseoffacilitiesprovidedbyothers(Internetcafsor
telecentres)ratherthaninvestyourownresourcesinnewICTs.
Carefulanalysisofthefactorsoutlinedwillhelpyouunderstandyourownstrengths
andweaknessesforeCommerce.IfyoudoconsiderwebbasedeCommercetobean
essentialpartofyourbusinessplan,thentakeastepbystepapproachthatavoidsthe
pitfalls.Youcantakenoteofthefollowingtips.
C2.TenTipsForeCommerce
Tip1:Asoundandstablecommercialpropositionisacrucialfirststep.Getting
carriedawaybyalltheeCommercehypecouldcausealossofcontroloverthe
eCommerceventure.
Tip2:Yourtargetmarketshouldshapeyourbusinessplanning.Remember,your
eCommerceplanscannotbeseparatedfromyourbusinessplans.Aswithbusiness
plans,then:a)youshouldensurethatstaff,customersandsuppliershavetheirsay,
andb)youravailableresourceswillalsoinfluenceyourplan makesurethecosts
canbejustifiedbythebenefits.
Tip3:Flexibilityallthroughtheventureisveryimportantfortheventuretomeet
withsuccess. Whichmeansyousimplycannotkeepwaitingfortechnologytocatch
up.Theventurehastobetreatedasanongoingprocess.
Tip4:Often,thewholeventureiscontrolledbyanITspecialist,notsalespeople.
Onceawebsitegoeslive,themarketingteamisofutmostimportance.That'swhen
thepublicwillfloodthesiteandnoamountofsoftwaretechnologywillcomein
19
handy.Soanexcellentrapportwiththemarketingandsalesteamsetsaparta
successfuleCommerceventure.
Tip5:Vendorswillonlydelivertheexacttechnologyorapplicationyouwantwhen
youproperlycommunicateittothem.Alackofunderstandingbetweentheuserand
vendorcancausehugelossesininvestmentandaflaggingmoraleattheendofthe
day.Athoroughknowledgeof thetechnologyyouneedandeffectivecommunication
withyourvendorscouldavoidbigheadaches.
Tip6:Consideringtheoutsourcingoptionisquitenaturalandnecessaryattimes,so
alwaysknowwhatyouneedtooutsource.Gaugeyourinhousetalenttoseeifyou
meettherequirement.Thereareplentyofcasesofcompanies,withouttheadequate
knowhow,havingapproachedconsultantswhovanishwhenthey'reinneedof
ongoingsupport(whentheprojectgoeslive).Stayingincontrolisabsolutely
necessary.Ideally,theITpeopleshouldhandletheoutsourcingcontractsandnotthe
businessdepartment.
Tip7:Neverunderestimatethescaleonwhichyoursitehastooperate.Thelosses
willbeHerculeanifasitethatcannotsupportcustomerscomestoagrindinghalt.In
spiteofknowingtheimportanceofascalablesystem,manyeCommerceventuresare
notpreparedfora,say,100%trafficincrease.eBusinesssitesneedtoscalerapidlyin
ordertorespondtothechangesinmarketandanincreasingnumberofhits.
Tip8:Getasmuchadviceontechnicalarchitectureaspossiblebeforeyougolive.
Keepatabonyourexpensesasmostofthetimesthebudgetseemstobeexhausted
muchbeforeacertainleveloffunctionalityisevenreached.Itshouldnotoccurthat
thebusinessplatformsareupandrunningwhiletheITdevelopmentsidehas
staggeredintothebackground.BusinessontheInternetmayseemextremelyeasyto
beginbutafterthatitisverydifficulttocontinueifthenecessarytechnologyis
absent.
Tip9:MorethanhalfofalleBusinessideasfailtobreakeven.Athorough
understandingofthekeybusinessissuesisveryimportant,asisagoodrelationship
betweenthoseresponsiblefortechnologyandthoseresponsibleforfinance.ITstaff
needtousethelanguageofthebusinessaseCommercemakeslinksbetweenITand
businesscloserthanever.TheapproachtowardsaneBusinesssolutionshouldnotbe
likethattowardsaproject.Agoodplanningapproachandsoundmethodologies
shoulddothetrick.
Tip10:ManyeBusinessesforgetplanningaboutsecuritymeasuresfromtheinitial
cycle.Thisisagravemistake.Mostcompaniesbringinthesecurityissueintheend,
moreasapanicresponse,aftertheyhaveexperiencedamishap.Thereareanumber
ofthingsthataffectsecurityattheinfrastructurelevelitself.Sogettingthingstothe
rightplacesattherighttimefromthestartisimportant.
20
C3.WhatKindOfeCommerce?
ForthosewhowanttogetintoeCommerce,thefollowingchartisaguidetowhichof
theeCommercestepswouldbemostappropriate
Table2.StepstoeCommerceWhatKindofeCommerce?
Stepsto
eCommerce
Market
Drivers
Benefits
Costs
Overall
Impact
Step6:Web
Integration
Requirementsof
maincustomers
andsuppliers.
Mergingonline
andoffline
processes.
Reductionsin
operatingcosts.
Better
relationshipswith
customersand
suppliers.
Financialcostsof
investmentin
technology,
systemsand
servicesarevery
high.
Veryhighcosts,
butpotentialhigh
benefits.
Primarilydriven
byrequirements
of
customers.
Speedand
convenience,but
onlya
requirementif
offline
transactionsnot
processed
effectively.
Highcostsof
Relativelylow
investmentin
benefits,buthigh
necessarysystems costs.
andsecure
network
requirements.
Requirementsof
customers
suppliers,
collaboratorsand
support
agencies.
Betterbusiness
communications.
Bettermarketing.
Betterknowledge
ofmarketand
customers.
Moderatecostsof
investmentin
webbased
technologiesand
networkaccess.
Relativelyhigh
benefitswith
relatively
moderatecosts.
Requirementsof
customersand
themarketplace.
Bettermarketing.
Betterbranding.
Easilyupdated,
wellpresented
materials.
Moderate
investmentcosts.
Moderatebenefits
andrelatively
moderatecosts.
Requirementsof
customers,
suppliers,
collaborators,
supportagencies
andemployees.
Considerably
improved
business
communications.
Moderate
investmentcosts.
Highbenefitsand
moderatecosts.
Requirementsof
customers
suppliers,
collaborators
supportagencies
andemployees.
Considerably
improved
business
communications.
Lowinvestment
costs.
Potentiallyhigh
benefitsand
relativelylow
costs.
Step5:Web
Transacting
Step4:Web
Interacting
Step3:Web
Publishing
Step2:Email
Messaging
Step1:Simple
Messaging
21
C4.eCommerceFacilitators
AwiderangeoffacilitatingorganisationscanofferyoudifferenttypesofeCommerce
support.Thissupportmayrangefrombusinessadvicetowebdevelopmentormarket
access.DifferentfacilitatorscanplaydifferentrolesdependingonyoureCommerce
requirements.
WhenseekingouteCommerceassistanceyoushouldtrytochooseafacilitating
organisationthatisactivelyinvolvedwithyourtargetmarketandintunewithyour
businessrequirementsaswellasyourtechnicalrequirements.
ForMSEsindevelopingcountries,facilitatingorganisationsfallintoseveral
categories.Asfollows:
a)SectorBasedAgents/Brokers&Resellers
Theseofferwebbasedmarketingactivitiesandtendtobecommissionbased.They
areabletoacceptandplaceordersandtheyareskilledatinformationbrokering,
logisticsandsupplychainmanagement.TheymayalsoofferInternettransactions
andelectronicbanking.
b)eCommerceTradingHubsorPortals
Thesearealsocommissionbasedbutoffersolelywebbasedmarketingactivities.
Theyareabletoacceptandplaceorders,andwillbemorelikelytoofferInternet
transactionsandelectronicbanking.
c)IndustryOrganisations&BusinessAssociations
Theseareusuallymembershipbased(requiringpaymentofsubscriptions).They
probablywillnothavedetailedexpertiseineCommerce,butcanoftenprovidemarket
coordinationandinformationbrokeringservices.
d)FairTradeOrganisations
Theyprovidemarketoutletsbasedonfairtradeprinciples.Mostofferwebbased
servicesandmarketing,andsomeofferafulltransactionbasedeCommerceservice.
e)NGOs/BusinessSupportOrganisations(includingTelecentres)
Providersofadvice,trainingandsomemarketingassistance.Theyarenotlikelyto
havespecificexpertiseineCommerce,butmaybeabletoofferadviceandassistance.
f)ISPs/ITConsultants
Theycanofferaccesstonetworks,webdevelopmentservicesandpossibly
eCommerceadviceandstrategyplanning.
22
AssummarisedinTable3,youshouldconsiderthestrengthsandweaknessesofany
organisationthatyouconsiderforsupport whetherornottheorganisationcanmeet
yourownneedsparticularlyforfeepayingservices.
Table3.eCommerceFacilitatorsStrengthsandWeaknesses
Facilitating
Organisation
PossibleStrengths
PossibleWeaknesses
SectorBased
Agents/Brokers
Goodmarketproximity,
marketexperienceand
knowledge.
Marketaccess.
Tendtocreatedependency
relationshipswithsuppliers
andtieinproducerstosole
purchasingagreements.
Likelylowreturns.
Resellers
Quickroutetomarket.
Moreflexibilityfor
producersinthemarket.
Lesssecurityinthemarket.
Pricesensitive.
Onlypurchaseandresell.
eCommerce
TradingHubsor
Portals
Widermarketaccess.
Lackofpersonalmarket
relationshipsandcontacts.
Industry
Organisations
Abletoadvocateonbehalf
ofproducers.
Limitedaccesstomarket.
Lackofmarketproximity.
FairTrade
Organisations
Assistancewithquality
controlandproduct/service
development.
Specialassistancetowomen
producers.
Betterreturns.
Tendtolosemarketshareto
commercialimportersor
agents.
Narrowmarketthatmight
beseasonal(highdemandat
Xmas,forexample).
NGOsand
BusinessSupport
Organisations
Possiblesourcesoffinance
orsubsidy.
Localaccesstoresources.
Mayhavelittlemarket
access,knowledgeor
proximity.
ISPs
ITConsultants
Abletoofferlocaltechnical Mayhavetechnical
support
expertise,butprobablylittle
knowledgeofthemarket
withinwhichyouare
operating.
23
D.eCommerceBestPracticeGuides
Theguidesprovidedinthissectionprovidedirectadviceonpracticalissuesthatmay
arisewhenyourimplementeCommerceinyourenterprise.
AdviceSheet1:GettingConnectedAndMakingAStart
Gettingconnected:ConnectingtotheInternetisafairlysimpleprocess.Youwill
needacomputer:newpersonalcomputersmightrangeinpricefromaroundUS$300
toaroundUS$1500dependinguponthetypeofcomputer,thesoftwareinstalled,
whereonebuysthecomputerandthewarrantygiven.Somecomputingoutletsin
developingcountriesalsosellsecondhandreconditionedcomputersthatcouldrange
inpricebetweenUS$100andUS$300.
Computerscanoftenbepurchasedusinghirepurchase(payingbyinstalments).
Deferredpaymentanddiscountsforcashareavailable.Somecharitableorganisations
andNGOsoffercomputersasgiftstoschoolsandenterprisesthatcannotaffordthe
purchaseprice.
Youwillalsoneedatelephonelineandamodem. Acomputeryoubuymayormay
nothaveamodemfitted.Thusyoushouldalwaysaskwhetherthisisavailable.You
willalsoneedInternetbrowsersoftwarewhichmaywellhavebeenpreloadedinto
yourcomputerwhenyoupurchasedit,butmakesurewhenpurchasingyourcomputer
youaskifithasthissoftware.
Finallyyouwillneedtolinkyourcomputerwithalocal InternetServiceProvider
(ISP) thatwillprovideyouwithaccesstotheInternet(andmayalsoprovideemail,
webspace,etc). TherearenumerousISPsinmostdevelopingcountriesmostly
locatedinandaroundurbancentres.MostISPsprovide24houraccessthrougha
dedicateddialupnumberandwillchargeamonthlyfee.Makesureyoushoparound
foranISP.
StartingtousetheInternet:
Takeacourseormakeuseof(recent)guides.
Startusingemailtocommunicateandcheckyouremaileveryday.
Investigatelocalbusinesswebsitesandwebsitesofcompaniesinyour
businesssector
Usewebsearchfacilitiesandinvestigateanybusinessportalsthatcaterfor
yourbusinesssector.
Ifyoudonothaveyourowncomputerandconnection,makeuseof InternetCafs.
Mostofthesearelocatedincitiesortownswhereanyindividualwhocannotaffordto
ownaPC,butneedstousetheInternet,canhaveaccess.Typicalchargeswillbeless
thanUS$1perhour.Moredetailsconcerningthepossiblecostsassociatedwith
developingwebbasedeCommercearecontainedinAdviceSheet9.
24
AdviceSheet2:UsingElectronicMail(Email)
Electronicmail(email)istheexchangeofmessagesbetweencomputersoffering
considerableadvantagesoverletterpostand,increasingly,overfaxcommunication.
Itprovidesthecheapest,quickestandmostreliablewaytoexchangebusiness
informationwithcustomers,suppliers,etc.whoarealsoconnectedtoemail.
EmailingrequiresacomputerwithInternetaccess.Furthermoreyouneedsomeclient
emailsoftwaresuchasMicrosoftOutlookorLotusNotes.Theeasiestwaytouse
emailistogotoawebsitethatoffersfreeemailfacilities,suchasYahooorHotmail.
EmailsarrivealmostinstantlyviatheInternet.Youcansend'attachments'withyour
email thesemaybecomputerfilesofanykind(documents,photos,soundclips,or
evenvideoclips).
Someadvantagesofemailforbusinessare:
Itallowsavarietyofinformationtobesentnotjustmessages,butalsoother
typesofcomputerdatafileincludingformalbusinesscorrespondenceand
brochures.
Messagescaneasilyberecorded,tokeeparecordofcorrespondence.
Messagescaneasilybeorganised,e.g.,bybuildingupanaddressbook.
Messagescanbeprotectedfromoutsideview.
Messagescaneasilybesenttomultiplerecipients(suchasallofyour
customers).
Servicescanbeaccessedbytheentrepreneurwhilstonthemoveandaway
fromtheoffice.
Themainbarrierstousingemailatpresentare:
Theinvestmentcosts(thetotalcostofcomputer/modemownership).
Therunningcosts(networkaccess).
Therelativelyfewbusinessesindevelopingcountriesabletosendandreceive
emails(althoughthenumberisgrowingrapidly).
Inordertouseemail,enterprisesneedaccesstoanInternetlinkedcomputer.
AsdescribedinAdviceSheet1,owningthisissomewhatcostlybutemailservices
canalsobeaccessedfromsharedfacilitiessuchasInternetcafsandtelecentres.
Ifyouareanexporteroryouareregularlycommunicatingwithemaillinked
customers,suppliersandotherbusinesscontactswithintheregionorworldwide(such
asinthetouristsector),thenemailisbyfarthecheapestandquickestmeansof
communication.Itwillincreasinglybeanessentialtoolforyourexportbusiness.
25
AdviceSheet3:eCommerceSkills
WhenadoptingeCommerce,basicbusinessskillsremainunchangedwhatwemight
call thebusinessfundamentals.Theycanbesummarisedasfollows:
Awellthoughtoutbusinessplanandmarketingplan.
Theabilitytomakeyourselfknownandnetworkeffectively.
Thecapacitytoproducetherightproduct/serviceattherightpriceintheright
placeattherighttime.
Knowledgeofyourcustomersandtheabilitytomeettheirexpectations.
Theabilitytopayyourbillsandgetpaidontime.
Thecapacitytobeflexibleyetalsoplanforthefuture.
eCommercecanhelptosupportthesefundamentalskillsforexample,bycapturing
customerinformationandmakingiteasiertosegmentyourmarketormarketdirectly
toyourcustomerspossiblyusingemailorwebbasedmethods.eCommercewillalso
openupyourbusinesstonewskillsandideasincludingthefollowing:
Databasemanagement. Youcancollectinformationonwebsitevisitors
usuallycustomersorpotentialcustomers.Informationcanbeusedtotarget
marketingeffortsandimprovecustomerserviceaswellasforecastfuture
trendsincustomerbehaviour.
Improvingbusinessprocesses. Thisisawayofanalysingthedifferenttasks
withinanenterprisetoidentifybetterwaysofachievinggreaterefficiencies.
RestructuringyourbusinesswhilstmakinguseofeCommercemayassistyour
longtermsurvivalandgrowth.
Knowledgemanagement. Moreeffectivemanagementofinformationand
knowledgewithinyourbusinesscanbringbenefits.eCommercewillhelpyou
toimproveyourskillsinthisarea.
TheInternetwillalsohelpyoudowebbasedmarketresearch. Byconducting
investigationintomarkettrendsandcustomerrequirements,enterprisescandevelop
innovativestrategiestocompete.TheInternetcanbeusedtolearnmoreabout
customers,industries,productsandservices,andmarkettrends.Asjustnoted,you
canalsocollectinformationfromthepeoplewhovisityourwebsite,helpingyouto
planforthefuture.
TheInternetalsohasspecificresourcesthatwillassistmarketresearchinrelationto
productdevelopment,businessplanning,eBusinessdevelopmentandmarketing.
ThesecanbeaccessedviaanumberofthewebsiteslistedinSectionE2.
ForthosefurtherupalongtheeCommercesteps,theInternetmayalsohelpyouwith
moreadvancedskillssuchasEnterpriseResourcePlanning(ERP)andMaterials
RequirementsPlanning(MRP). Both useICTstoautomatecorebusinessfunctions.
MRPissimilartoERPbutissubstantiallycheapertoinstallandismoresuitablefor
MSEs.Itrequirescomputerisationofmanyaspectsofthebusinessincluding
accounts,inventory,andpurchasing.Benefitsfocusonreducedinventorycosts,
betterstockcontrol,orderingandorderfulfilment.
26
AdviceSheet4:WebDevelopment
Websitescanbestaticordynamic.Dynamicwebsitescreatepagesinresponseto
visitorrequests.Forexample,theamazon.comwebsitebuildsitspagesaccordingto
thetypesofbooksthatinterestspecificvisitorsfrominformationstoredinadatabase
adatabasedrivenwebsite. AsimplestaticwebsitecanbedesignedusingHTML
codeinstructionsplusimagefilessuchas
JPEGsorGIFs.Itwilltypicallylinkahome
pagetootherpagescontaininginformationon
theenterprise(seediagram).Thewebsite
mayincludeashoppingcartwherecustomers
canpurchaseproducts onlinewiththeircredit
cardorwhereofflinepaymentmethodsare
outlined.Tocreateadynamicinformation
drivenwebsite,adatabaseisintegratedinto
thesiteandinformationcanbedisplayed
whensomeonerequestsit.Theadvantageisthatthedatabasecanbeupdatedand
changedregularly.Thedatabaseservingthewebsitemayconsistofclient
information,suchasaccountdetailsandsaleshistoryandcanbestoredonstandard
softwarepackagessuchasMicrosoftAccess.
Updatingyourwebsite. Toupdateadynamicwebsiteyouhavethreeoptions:
Agreeanannualfeewithyourwebdeveloperforasetnumberofchanges.
Maketherequiredchangesyourself requiringspecificskills.
Buildanupdatefacilityintoyourwebsitedesign.
Thepreferred(andcheapest)optionisforanemployeeusingausernameand
password tobeabletoadd,modifyordeleteinformationonthewebsiteusingthe
webbrowser.
BasicWebDesignTips:
Pagesmustdisplayordownloadquickly.Ifyourwebsitedownloadstoo
slowlythecustomermaygiveupandtryacompetitor'swebsite.
Images(photographsandgraphics)needmoretimetodownloadthantext,so
useasmallnumberofimages,repeatthesamefewillustrationsorlogo
throughoutthesite,orinstallabuttononthewebpage,toallowthecustomer
toaccessatextonlyversion.
Shortparagraphsandsentencesarethenormwhenwritingfortheweb.
Customersneedtolocateinformationeasily.Visitorstowebsitestendtoscan
pagesratherthanreadtheentiretext,sosignposttheinformationwithclear
headings.
Informationonthesiteneedstobeorganisedandeasytofind.Linksand
buttons,whichtakethevisitortodifferentplacesonthesite,shouldbe
labelled.Mostimportantitemsshouldbeaccessiblewithminimalclicking.
Somebuttonsneedtobeonallpages,suchas:Home,Sitemap,ContactUs
andSearch.Importantinformationshouldbeeasilynavigable.
Websitesalsorequiretailoringforyourcustomers.Customerswanttobuy
productsthataredescribedin theirownlanguage,pricedintheirlocal
currency,andsupportedbypeopletheycancommunicatewith.
27
AdviceSheet5:OnlinePromotion
TheInternetprovidesanadditional(andcomplementary)meansofmarketingyour
productsandbuildingyourenterpriseprofile.YoushouldconsideruseoftheInternet
alongsideothermedialiketelephone(suchasahelpline),radio,andprint.Awebsite
willnotprovideasolutiontoallyourmarketingproblemsbutitmaybecomeas
necessaryasotherformsofmediaparticularlyifyourcompetitorsalsohave
websites.
Tobeeffective,websitesneedtoattracttherightcustomers.Ahighproportionof
peoplewhovisitawebsitefinditthroughasearchengineordirectory.Theseservices
presentimportantmarketingopportunities.SearchenginesgeneratelistsofURLs
(webaddresses)inresponsetoparticularqueriesenteredbythepotentialcustomer.
Thesitesmostlikelytobevisitedarethoseatthetopofthelist.Webpages,
therefore,needtobedesignedsothattheyarelocatedhighonlistsproducedin
responsetorelevantkeywords.Yourwebpresencecanparticularlyassistinthe
followingtwoways:
Branding:Customerstendtostickwithtriedandtrustedbrandsratherthanrisk
buyinganunknownbrand. Anonlinebrandwillbeanextensionofyouroffline
brand.Yourwebsiteneedstointegrateyourbrandintothecustomerexperienceof
visitingthesite.Thebrand(e.g.,amazon.com)shouldbeassociatedwithaneasyto
usewebsitethatoffershighvalueintermsofinformationandservices,hasa
trustworthyreputation,andisvisuallyappealing.
Personalisation:Customerinformation(names,addressesandregistrationdetails)
canbeusedtotrackpreferencesandtailorthecontentsofyourwebsitetosuit
individualtastes.Forexample,yoursitecansuggestproductsthataparticular
customermightbeinterestedin,basedonhisorherpurchasinghistoryorthepages
theyhavealreadyviewed.
Themostusefulmethodsofdirectpromotiontocustomersare:
Emailmarketing:Emailislikelytobethemostcosteffectivewaytomarketyour
business.Youshouldaddasignaturefiletoallemails.Thisisthesameasusing
headedpaperorattachingabusinesscard.Mostemailsoftwareenablesthistobe
doneeasily.
Testimonials:Thesearegenuinecommentsthatsatisfiedcustomershavemadeabout
yourproductsorservices.Effectiveuseoftestimonialsbuildscredibilityandmakes
customersfeelmoresecureespeciallyforonlinepurchasing.Effectivetestimonials
willbeunedited,genuine,freelygiven,usedwiththeauthor'spermissionand
accompaniedbytheauthor'snameandlocation.
Otheronlinemarketingmethodsinclude:
Viralmarketingusingyouremailcontactlisttospreadyourdetailsthrough
yourcontactslistsbygivinganincentivetopassonthemessage.
Banneradsadvertsthatappearonwebpages.
Reciprocallinkslinkstoothersitesthatprovideaneasywayforacustomer
totravelfromarelatedsitetoyourwebsite,andviceversa.
28
AdviceSheet6:NetworkingAndCommunitiesOnTheInternet
Bynetworkingwemeanconnectingcomputersinordertoshareinformation.A
networkallowsasmallenterprisetosharehardware(printeroraphoneline)and
software(anaccountspackageoremail).Thenetworkmaybeextendedinternallyto
includelocalofficesthroughan intranetorexternallytokeycustomersandsuppliers
formingan extranet.
NetworkingasmallenterprisewouldinvolvelinkingPCs,printers,faxmachine,
scannersandphoneconnections.AcommonlanguageorprotocolknownasTCP/IP
allowscomputers,softwareandotherhardwaredevicestocommunicatewitheach
other.(SMTPandPOP commonlyusedfortransmittingandreceivingemailsare
partoftheTCP/IPprotocol).Theseprotocolsallowdifferentsystemstosharedata
andcommunicatewitheachotherregardlessofthetypeofoperatingsystemor
computerused.
ForlargernetworksyouwillneednetworkingsoftwaresuchasMicrosoftNTor
NovellNetWare.ThissoftwarewillsetuponeofyourPCstoactasthemainserver
thatwillholdtheenterprisedatabaseandactasthecentralpointsending(toaprinter,
forexample)andreceivingdata/information.
KeyBenefitsofNetworking:
Informationissharedquicklyandefficiently.
Hardwaredevices(e.g.,printers)arebetterutilisedbysharingwithother
colleagues.
Accesstoinformationsuchasstockandaccountscanbeobtainedanytimeof
dayfromanylocation.
Suppliersandcustomerscanbeincludedinthenetworkandefficiencies
achievedasaresult.
Communicationwithintheenterpriseimprovesoverall.
BettercommunicationcanalsobefacilitatedthroughnetworkingovertheInternetand
web.Forexample,onlinecommunitiescanopenupinteractionbetweenenterprises
andcustomersandboostothermarketingefforts.Networkingavenuesinclude:
eNewsletters:Theyallowenterprisestosendregular,targetedstoriesand
messagestopeoplewhohaveinvitedthemtodosoaformofadvertising.
Emaildiscussionforums:Peoplecansubscribeandthensendemailsthatwill
beautomaticallyforwardedtoallothersubscribers.Peopleseeking
informationcanpostemailstotheforum,andthosewhoareabletogive
advicereply.Thesearegoodforaccessingtechnicaladviceandfor
stimulatingnewideas.
Bulletinboards:Theseallowsubscribers'emailstobepostedinacentral
location.Unlikeemaildiscussionforums,subscribersdonotreceiveany
emailstheyhavetovisitthebulletinboardtoseewhatpeoplearesaying.
Thesecanbeusedinonlineauctionsandforaccessinginvitationstotender.
29
AdviceSheet7:ContractingOutWebServices
Thedecisionwhethertobuyexternalwebservicesortodevelopyourwebsitein
housewilldependpartlyuponbudgetaryconstraints.Aswellasthenecessary
financialresources(seeAdviceSheet9)youshouldalsomakesurethatyouhavethe
experienceandknowhowtodothejobandaclearunderstandingofyourbusiness
goalsandstrategy.
Wheninvolvinganoutsidefirmorindividual,itwillbenecessarytoinformthemof
yourrequirements.Thiswillalsoprovideausefulchecklistforfuturereferencewhen
theprojectisupandrunning.Also,payattentiontothebackupserviceonoffer,
togetherwithcontractualtermsandconditionsofyourpotentialwebsitedeveloper.
Thecoreingredientforanywebsiteiscontent.Thepresentationandcontentshould
beworkedoutbetweenyouandyourdevelopertakingintoaccounttheneedsof
yourcustomers.Thedevelopershouldhaveaclearunderstandingofyour
requirements.Youcouldusethefollowingchecklistfortoprovidethenecessary
informationforawebsitedeveloper:
Adescriptionofthebusinesssectorandashortoutlineconcerningany
importantissuesspecifictoyourindustry.
ClarityonhowimportanttheInternetwillbetotheenterprise'sfuture.
Theobjectivesforthesite.Theseshouldbeconciseandrealistic.
Thetargetaudienceforthesite.
Whoisgoingtodevelopthecontent?
Willawriter/contenteditorberequiredtodevelopandstructurecontent?
Whatwillthecustomertobeabletodoonthesite?Willthewebsitefacilitate
onlinetransactions,replyforms,searchqueries,etc?
Willyourenterpriserequiremailinglistsandbulletinboards?
Whatwillbethetimeframeforconstructionofthewebsite?
Howwillwebcontentbeupdated?
Youwillalsoneedtoconsiderwhoisgoingtohostthesitewebsitehosting.Aweb
hostprovidesthenecessaryhardwareandsoftwaretostoreyourwebsiteandallows
accessviatelephoneorotherconnections.Allwebsitesrequirehostingthattypically
includes:aoneofffeetoahostingcompanyplusanannualsubscriptionand(if
required)creditcardauthorisationcosts.Thesepaymentsmaybedependentonthe
expectednumberofvisitors(traffic)tothesite.Whenchoosingahost,reliabilityis
asimportantasspeed.Downtime timewhenyourwebsiteisnotaccessibledueto
maintenanceorsomesystemfailureofthehostcanbeexpensiveforasmall
enterprise.
Somewebsitedesigncompaniesofferturnkeysolutionsallinonepackages.
TheseareusefulforenterpriseswithnoICTbackground.Theyeliminatetheneedto
findspecialistssupplyingdifferentInternetservices.Thereareincreasinglylowcost
orinsomecasesfreepackagedsoftwaresolutionsonoffer.
30
AdviceSheet8:OrderFulfilmentAndLogistics
OrderorservicedeliverytendstobeanareaofweaknessformanyeCommerce
venturesdepending,asitdoes,ontheexistingtransportandsupplyinfrastructure
(the'bricks'ratherthanthe'clicks').Poordeliverydamagescustomerloyaltyandthe
enterprisereputationifnothandledwell.eCommercethereforeneedsgoodlogistics:
gettingthecorrectgoodstotherightplaceattherighttime,intherightconditionwith
theminimumofcost.
Someproductsorservicesaredeliveredmoreeasilythanothers.Books,CDs,etcare
oftenboughtonlinebecausetheyareeasytoshipthroughthepostorviacouriers.
Whenacustomerbuysonlinetheytendtoexpectabetterstandardofservice.Totry
toplanagoodstandardforyourorderfulfilment,askyourselfthefollowing
questions:
Howareyougoingtodistributethegoodsorservicestoyourcustomer?
Whatarethedeliveryoptionsandtheirassociatedcosts?
Howcanyouimproveyourresponseanddeliverytimes?
Howdependentareyouontheabilityofothersinyoursupplychainto
respondtocustomerneeds?
Doyouhaveastrategyforcustomerdissatisfactionorreturns?
Areyouawareofyourownlimitationsandthoseofyoursupplychain?
TheuseoftheInternetwillbemoreimportantifyouareconductingB2B
eCommerce.Astradebetweenbusinessesincreasinglymovesonline,sothe
processesandservicesthatsupportthistrade,suchaslogisticsanddocument
management,alsomoveonline.InvolvementinB2BeCommercecanhelpsmall
enterprisesmaximisebothinternalandexternalefficiencies(e.g.,fillingexcess
transportcapacity). Electronicnetworksmayalsoopenupnewwaysofmanagingthe
supplychain(e.g.,cuttingdownonpaperworkandspeedingupcommunications),
allowingstreamliningofbusinessoperations,reducingcostsandimproving
efficiency.
SomeTipsforImprovedOrderFulfilment:
Keepthecustomerinformedprobablyviaemail.Thisisvitallyimportant
andmayinclude:confirmingthesale,theexpecteddeliverydateandfollow
upstocheckdeliveryhasbeencompleted.Effectivecommunicationwillhelp
establisharelationshipoftrustwithyourcustomers.WitheCommerce,many
ofthesefunctionscanbeautomatedusingofftheshelfsoftware.
Establishpersonalcontactbytelephoneorinpersoniflocal.Thisis
especiallyimportantwhencustomershaveproblemsorcomplaints.Ifyou
haveatelephonenumberforcustomerstocall,thisshouldprovidehuman
interactionratherthanrecordedmessages.
31
AdviceSheet9:CostsOfWebBasedeCommerce
Thebasiccostcomponents(outlinedinAdviceSheet1)forwebbasedeCommerce
includeacomputer(PCorsimilar),aninternal/externalmodemplusanInternet
connectionviaalandline:Asuitablecomputershouldincludethenecessarysoftware
packagesthatmaybeofftheshelforfreesoftwareoptions.
Typically,an Internetconnectioncanbeachievedinanumberofways:
MostpopulararedialupInternetservices(recommendedforlightusers)using
normaltelephonelinesthroughanISPviaamodem.Themodemisusuallyinternally
placedinthecomputer.Yourlocallandlineproviderwillchargeforeveryminute
youareconnected. ThereisalsoanannualchargefordialupInternetservices
perhapsUS$2030permonth.Inadditionasetupfeeof,say,US$2550maybe
charged,especiallyforthoseclientswithoutinternalmodems.
Insomeareasitisalsopossibletoconnecttobroadband.Broadbandoffershigh
speed,24hourInternetaccessanddoesnotblockyourtelephonelinesduringuse.
Thiscomesatahighcost,thoughthecostisfallingquitefast.Typicalcostsmightbe
US$300annuallyforthelowestbandwidth(64kbps)uptoUS$2500andmoreper
yearforthehighbandwidths(1Mbpsandabove).Inadditionaninstallationfeeof
anywherefromUS$100200maybecharged.
OtherOptionsandAdditionalCosts:
Forenterprisesthatcannotaffordtheirowncomputeranddialupconnection,cost
savingoptionsincludeamonthly/annualmembershipwithalocalInternet
caf/telecentre.
Additionalcostsforwebdevelopmentmayinclude:websitedomainregistration
(registrationofthenameofyourwebsite),hostinganddesign,andsearchengine
subscriptions.ForfulleCommerce,othercostsmayincludeshoppingcartfacilities
anddatabasesusedtostoreandmanipulatecustomerorsalesinformation.
Registrationofadomain(whichcanoftenbedoneviaoverseasdomainregistration
sites)mightcostUS$2030peryear.Hostingandmaintainingthewebsitewill
dependonthecomplexityofthewebsite.Asimplewebsiterequiresatleast1550
megabytes(MB)ofstoragecapacity,andcouldcostbetweenUS$60andUS$200per
year.
Websitedesigncostsvaryenormously,butatypicalpricecouldbeUS$510perpage
forasimplewebsitewithfewgraphics.Thecostofafullwebsitecouldrangefrom
US$50toUS$1000forarelativelysimplewebsite.However,thepriceisnotfixed
itdependsonthedesignerandcomplexityofthesiterequired.Thustohaveawebsite
upandrunningmightrequireaninitialcostofanywherebetweenUS$100and
US$1000withhosting,maintenanceandothersubsequentcostslikewisebetween
US$100andUS$1000peryear.Updatingcostsshouldbetakenintoaccountatthe
designanddevelopmentstage.Itispossibleeithertotrainastaffmembertolook
afterthewebsiteortosignacontractwiththewebdevelopmentcompany.
32
AdviceSheet10:SomeLegal/RegulatoryIssues
TheInternetpresentsnewlegal/regulatorychallenges.Theglobalnatureofelectronic
communicationsrequiresaglobalviewofthelegalimplications.Legalissuesand
riskswillbecomemoresevereasyouclimbtheeCommerceladder.Amarketingtype
websitewillofferfewerchallengesthanafullyinteractiveeCommerceportal.Of
criticalimportanceisthelocationandnatureofthetargetaudienceandthelawsthat
arelikelytoapplyintheuser'scountry.
Someofthekeyissuesarespecifiedbelow.Thesewillneedinvestigatingfurtherin
relationtospecificlocalrequirementsandconcerns.
Termsandconditionsofuse:Theseshouldbelegallyincorporatedintothe
relationshipbetweenthewebsiteandtheuser.Electroniccontractshavelegal
validity.Acceptanceofacontractshouldberecordedinanacceptablemannergiving
thetimeanddateofeachcustomer'sacceptance(payment,ofcourse,maybemade
offlineintheusualmanner).Itispossibleforusersto'click'acceptanceoftermsand
conditionsofusewhentheyenterawebsiteormakeapurchase.
Intellectualpropertyrights(IPRs):Theeasewithwhichelectroniccontentcanbe
copiedandreproducedraisesissuesaboutwhoownsmaterialonawebsite.Youmay
needtoclarifythisparticularlywhenusingoutsidedevelopersorallinone
packages.
Hyperlinking:Thisencouragesuserstomovetoandfromotherwebsites.Inall
casestheconsentofathirdpartywebsiteownershouldbeobtained,oritmaybe
possibletoexaminethetermsandconditionsoftheothersiteyouwishtolinktoin
ordertofindoutwhattheirpolicyonhyperlinkingis.
Dataprotection:Adatabaseofcustomers,subscribersormembersconstitutesa
significantenterpriseassetthatshouldbeprotected.Intheabsenceofaframeworkof
lawcoveringtheseissues,itisuptotheenterprisetoensurethatitsowndatais
protected.
Consumerprotection:Thereisagrowingbodyoflawthatoffersprotectionto
consumersintheirdaytodaytransactionsandrequiresthedisclosureofcertain
informationtoconsumers.Inpracticalterms,websiteoperatorsshouldensurethatthe
fundamentalingredientsofacontract(e.g.,offerandacceptance)areappropriately
dealtwithontheirwebsites.Certainpriorinformationsuchastheidentityofthe
supplier,priceofthegoods,deliverycosts,deliveryarrangementsandcoolingoff
periodsshouldalsobeprovidedonscreenpriortothesubmissionofanonlineorder.
Overseasjurisdictions:Smallenterprisesarenotinapositiontoobtainlegaladvice
onallthejurisdictionsinwhichtheirwebsiteisaccessible.Insofarasitispossible
therefore,websiteoperatorsshouldseektoensurethatthelawsandjurisdictionof
theircountryofestablishmentapply tothewebsite.Therefore,youshouldcheckthe
rulesofthecountrywhereyourwebsiteishosted.
33
AdviceSheet11:WebSecurity
ProtectinginformationfromunauthorisedaccessisacriticalInternetissue.Itisalso
thecasethatthecollection,storageanddistributionofinformationviatheInternetis
increasinglygovernedbylegalregulation.
Thefollowingpointsareanexplanationofsomebasicsecuritymeasuresthatcanbe
installedinyourcomputerorbuiltintoyourwebsite:
Authentication:Acommonsecuritymeasurethatrequeststheusertologinwith
authorisationdetailsbeforeallowingaccesstorestrictedareasofawebsite.These
detailsusuallyincludeausernameandapassword.
Emailsecurity:Itispossibletoprotectyouremailmessagesfromsnoopers,and
ensurethatemailconversationsremainprivate.Onemethodis'publickey
encryption'.Thistechnologytransmitsemailmessagesinacodeorcipher,and
decodesthemattheotherend,makingitpossibleonlyfortherecipienttoreadthem.
Anencryptionfacilityshouldbeavailableaspartofyouremailsoftware(e.g.,onMS
OutlookExpress).
Firewalls:Thesearesecuritysystemsthatprotecttheinformationcontainedinyour
computersystemfromoutsidehackers.Firewallsareparticularlyusefulfor
protectingabusinessnetworkthatsendsandreceivesemails,transfersdataoverthe
Internetorconnectswithoutsidecomputers.
Digitalcertificates:Adigitalcertificateisconfirmationbyarespectedthirdparty
thattheclientcompanyislegitimateandcanguaranteesecurityofafinancial
transaction.Whenacustomergoesonlineanddecidestobuysomethingtheweb
browsercheckstoseeifawebsitehasadigitalcertificate.Iftherequired
confirmationisdetected,thevendor'ssiteserverisacceptedandthevisitorisableto
shopwithpeaceofmind.
Digitalsignatures:Acombinationofservicesthatallowsyoutoelectronicallysigna
documentandaffordstherecipienttheopportunitytoauthenticatethesignature.
Anothersecurityproblemisviruses.Computervirusesarepassedfromcomputerto
computerviaInternetdownloads,emailattachments,shareddisks,andsharedfiles.
Cautionshouldbeexercisedwhenexchanginginformationbetweencomputersand
downloadingfromtheInternet.Wellknownsuppliersofantivirussoftwareinclude
SymantecorMcAfee.
Moreadvancedsecuritymeasuresbecomenecessarywhentransactionsareconducted
overtheInternetsuchasthroughtheuseofcreditcards:Theseincludepublickey
infrastructure(PKI)andSecureSocketsLayer(SSL).Thesearemethodsof
encryptionwherebytherecipientofacipheredmessageunlocksthecodebyapplying
amathematicalkeytoit.Inadditiontostandardauthenticationprocedures,SSLuses
encryptioncodingtolockinclientinformationandistheindustrystandardwhere
onlinecreditcardtransactionsoccur.
34
AdviceSheet12:OpenSourceSoftware
Opensourcetypicallymeansthatthesoftwarecode(theunderlyingcomputing
instructions)can beread,redistributedandmodified,independentofthepeoplethat
createdit.Akeybenefitoftheopensourcesystemisitspotentialabilitytoreduce
softwarecostsasitisusuallyfreetoobtainandsavesonlicencecosts.Italsoallows
youtoupgradeyourbusinesssoftwareatyourownpace,ratherthanhavingtokeep
uptodatewithcommercialsoftwareupgrades.
Theboundariesbetweenopensourceandproprietarysoftware(suchasMicrosoft)are
becomingmuddied,asproprietarysoftwareadoptssomeopensourcestandardsand
oftenfreelypublishesitsownformats.Thechoicebetweenopensourceand
proprietarysystemscomesdowntowhatisrightforyourbusiness:youmaywantto
lookatwhatotherbusinessesinyourfieldusebutthereareanumberofeCommerce
relatedopensourceproductsnowavailable.
Potentialbenefitsofopensourceincludethefollowing:
Youcangetsomeopensourcesoftwarefreebydownloadingitfromthe
Internet.
Evenifyoupurchasetailoredpackagesfromthirdpartiestheinitialpricecan
bemuchcheaperthanforproprietarysoftware.
Therearenocopyrightcosts youarefreetocopyanddistributeopensource
softwaretoadditionalusers.
Potentialcosts:
Forcommercialuse,opensourcesoftwaremayneedmoreskillwhenitcomes
toinstallationandmanagementthanproprietaryproducts.Alsoifapartofan
opensourcesystemletsyoudown,itcanbehardtoknowwheretoturnfor
help.
Opensourcemaysaveonsomeinitialcostsbutformanybusinesscosts
relatedtoeCommercegatheringdata,trainingstaff,changingthewayyou
work ithasnocostadvantage.
Theinstalledbaseofmostopensourcesoftwareissmallerthanfordominant
proprietarypackages,soitcanbeharder(ormorecostly)toobtainsupportand
training.
Otherfactorsdependontheparticularsoftware.Forexample,choosingopensource
maymeanyouarenottiedtoaparticularsoftwareproducer,butitmaytieyouinto
oneparticularlocalsupportfirm.Opensourcemightprovidegreater reliability,
attentiontosecurity,andcapacityforcustomisationtoyoureCommerceneeds.Orit
mightnot italldependsonwhichparticularopensourceandwhichparticular
proprietarysoftwareyouarecomparing.
Overall,opensourceisausefuloptionthatyoushouldconsiderwhenimplementing
eCommerce.Butyoushouldgatherinformationandlocalopinionsaboutitfirst.
35
E.UnderstandingMoreAbouteCommerce
E1.Glossary/Jargonbuster
Browser
Abrowserissoftwarethatallowsyourcomputertoaccessanddisplaywebpages.
E.g.,MicrosoftInternetExplorerorNetscapeBrowser.
Communications
Everynetworkrequiressomewaytotransportinformationfromonepointtothenext
thatconnectionmaybephysicalsuchas'twistedpair'or'coaxial'cable,orwireless
suchasmobile,microwave,radioorsatellite.Thecapacityofaconnectiontocarry
dataiscalleditsbandwidth.
Domainnames(e.g.,www.amazon.com)
AdomainnameistheaddressatwhichawebsiteislocatedontheInternet.Each
websitehasauniquedomainname,whichmustberegistered.Anexampleis.com,
themostgloballyrecognised,andthemostsuitableifwishingtotradeabroad.
Digital
Describesthewayinwhichdataistransmittedas1s/0sbycomputersandmodern
phonelinesandmobilephones.Contrastswiththeold'analogue'methodof
transmission.
Directory
Acollectionofcomputerfilesstoredinoneplace.
EDI
ElectronicDataInterchange:computertocomputerexchangeofelectronic
documentsforbusiness.
Email
Thetransferofmessagesbetweencomputers.
File
Whenworkisdoneonacomputerandthenstoredonadisk,theresultisacalleda
file.
GSM
GlobalSystemforMobilecommunications:adigitalphonenetworkstandard.
HomePage
ThefirstpageyouseewhenyouconnecttoawebsiteontheInternet.
HTML
HyperTextMarkupLanguage:acomputerlanguageusedtocreatewebpages.
Hyperlink
AconnectionlinkingonewebpagetoanotherwebpageviatheInternet.
36
ICT
InformationandCommunicationTechnology:electronicmeansofhandlingdigital
datasuchascomputersandtheInternet.
Internet
Worldwidecommunicationsystem anetworkofnetworks thatconnects
computersandallowsthemtoexchangedata.
ISP
InternetServiceProvider:acompanythatprovidesyouwithaccesstotheInternet.
Modem
Modulator/demodulator:adevicethatallowscomputersignalstobetransmittedover
traditional('analogue')phonelines.
Network
Computersjoinedtogethersothattheycancommunicatewitheachother.Alocal
areanetwork(LAN)coversasinglebuildingawideareanetwork(WAN)coversa
broaderarea,typicallylinkingcomputersindifferenttownsorcountries.
Protocol
Inanetwork,informationissentorpasseddowntheconnectionfromone
devicetoanotherin'packets'orblocksofinformation.Thiswholeprocessofsending
blocksofinformationinpacketsiscontrolledbynetworkprotocols(e.g.,TCP/IP).
SearchEngines
Searchenginesaretoolsthatenablepeopletosearchtheweb'spagesforspecific
informationorwebsites.'Google'isamongthemostpopular.
Software
Theinstructionsthatmakeacomputerwork.Aparticularsetofinstructionsthat
performsafunctioniscalledaprogram.Ifofferedforgeneralsale,thisisproprietary
softwareif producedforasingle,specificcustomer,thisiscustomsoftware.
Traffic
Thenumberofvisitorsawebsitereceivesisknownasitstraffic.
WebDirectories
Directoriesperformasimilartasktosearchenginesinthattheyhuntforinformation
onwebsites.AmongthemostwellknowndirectoriesisYahoo.
WorldWideWeb(WWW)
Acollectionoflinkeddocuments(pages)connectedviatheInternet.Thepagescan
holdwords,pictures,soundandvideo.
Websites
Collectionsofpagescreatedandmaintainedbyacompany,organisation,or
individual.ThesitesarefoundviatheInternetandsoareaccessiblefromany
Internetlinkedcomputerintheworld.
37
E2.FurtherInformationWebBasedSources
AselectionofonlineinformationabouteCommerceforenterprisedevelopmentfrom
globalsourcesislistedhere:
http://www.agriwatch.com/ Exampleofan(Indian)informationportalandagriculture
eMarketplace.Thesiteoffersthelatestnewsandmarketupdates,researchreportsand
directoryenquiries.
http://www.catgen.org/ CatGenisfreeB2BandB2CeCommercecataloguesoftware
offeredbytheNGOPEOPLinkforMSEs.MSEscanchoosetoopendifferentaccounts.
ServicescostbetweenUS$10andUS$50.Thereisanemailhelplineaswellaslanguage
optionsandexamplesofcataloguesbyMSEsindevelopingcountries.Seealso:
http://www.peoplink.org/
http://www.ecomlink.org/ Ecomlinkisaknowledgemanagementgatewaysupporting
enterprisesindevelopingcountriesintheestablishmentofeCommerceandeBusiness.
http://www.ecomm4dev.org/ eCommerceforDevelopmentwebsiteonwhichthishandbook
canbefound.
http://www.ecommerceguide.com/ AneCommercefocusedsourceforindependent,upto
dateinformationoneCommerce.Therearedailynewsfeeds,editorials,productdescriptions,
casestudies,discussionforumsoneCommerce,andlotsmore.
http://www.g77tin.org/ TheTradeInformationNetworkportalisaSouthSouthinitiative
byChambersofCommerceintheG77States.Itprovidesbusinessinformationon133
countriesandpublishesoffersforeCommercetrainingandservicesaswellasservingasa
databaseforB2BcontactsbetweenSMEsindevelopingcountries.Youcandownload
eCommercetrainingmaterialfromthesite.
http://www.itab.net/ FocusesonITusageinSouthernAfricanbusinessbutreachesoutto
otherAfricanandAsianregions.
http://www.line56.com/ Line56isasourceforglobalinformationoneCommerce
technologyandstrategy.YoucanfindinformationoneverypartofeCommerceand
eBusiness,includingcompanyprofiles.
http://www.nfib.com/page/pg_20040527449633.html USNationalFederationof
IndependentBusinesspageofguidesoneCommerce.
http://www.smetoolkit.org/ TheSMEToolkitfromtheInternationalFinanceCorporation
includesaTechnologysectionwithpointersoneCommerce.
http://r0.unctad.org/ecommerce/ UNCTADreportsandpolicyanalysisoneCommerce.
http://webmonkey.wired.com/webmonkey/ebusiness/ WebMonkeyoffersconcrete
proceduredescriptions("howto"listings)withpracticalhintsfortheestablishmentofyour
owneBusinesswebsite.
38

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