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Business can’t ignore the ‘e’ factor

THE influence of e-commerce is far more pervasive than many of us realise, and more than some of us would like to acknowledge.

E-commerce has extended into virtually every aspect of modern business operations, to the point that ignoring or underestimating the value of e-commerce could erode a company’s competitive-ness, according to online business experts spoken to by WA Business News. 

Small Business Development Corporation managing director George Etrelezis said that, while e-commerce attracted plenty of interest, it was not necessarily well understood.

“We often get asked what e-commerce is. It is simply the prac-tice of doing business electronically,” Mr Etrelezis said.

“We have now started to seg-ment that to include business to business and we see big benefits there, business to consumer, business to government, consumer to government, and a new area – business to employee.”

Internet Business Corporation managing director Richard Keeves agrees that e-commerce is a broad area and said companies needed to have a clear understanding of how and what they wanted to do in a virtual environment.

“There are different views about what e-commerce really is. Many people think it is simply the processing of payments online,” Mr Keeves said.

“However, if you accept that commerce is the buying and selling of goods and services, then e-commerce is much more than just payment processing.

“Many naive sellers seem to think that the ‘e’ in e-commerce also stands for ‘easy’.

“Websites can automate many processes and provide buyers with effective self-service, but because the web is interactive, sellers often find they need employ more resources to give effective customer service.”

And while e-commerce strategies need some planning to implement, this does necessarily require large infrastructure costs and therefore should not preclude small businesses from accessing the benefits, according to Mr Etrelezis.

“You don’t have to be a large business to take advantage of it. It is a business issue first and a technical issue second,” he said.

“A lot of it can be done by simple applications and you don’t need sophisticated hardware and requirements.”

The bottom-line benefits derived from e-commerce include speeding up business transactions, reducing handling costs, receiving up-to-date alerts on business opp-ortunities, and improving response time, Mr Etrelezis said.

“You can download a tender sheet, fill it out and transmit it, and you can do that overnight,” he said.

“That is particularly important for businesses in WA.”

Mr Etrelezis said that, while e-commerce may not be a necessity for some businesses, it would become more important to do so.

“I think that with time they will be competitively disadvantaged as they are not picking up the time and cost savings,” he said.

“Some big firms are now dictating that unless you are enabled for online systems they won’t do business with you.”

Online payment systems have become a prevalent aspect of e-commerce, and according to High-way 1 Internet Solutions business manager Vince Costello, businesses need to adopt secure software.

“There is a basic level which is a form-to-email function. It’s a simple order form that does not have any security details,” Mr Costello said. 

“The details in the form get sent to an email address. There next level has a PGP (pretty good privacy) function and what that does is it fully encrypts the data.

“The end user needs a user name and password to convert the information.

“Then there are online credit card facilities and there are a number of suppliers of those. They are secure sites and you will see a lock on the bottom of the screen.”

He said companies operating at the basic level ran the risk of losing customer information to potential hackers.

“Anyone smart enough could add an email address and get those details sent directly to them,” Mr Costello said.

Mr Etrelezis said businesses should consider both security and their business capabilities when addressing their online strategy.

 “What about returning goods? You have to watch the logistics and make sure the costs will not outweigh the actual electronic sale,” he said.

Mr Keeves recommended businesses marry their online presence with their business plan.

“There are really only three ways to build a business,” he said.

“Get your existing customers to buy more, get your existing customers to buy more often and to get new customers.

“A good business plan includes strategies for all three, and the website is usually only part of the solution.”

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