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Evaluating e-business’ potential

FOR the right businesses, e-commerce can deliver cost savings and generate extra revenue. But for some businesses, particularly at the small to medium enterprise level, e-commerce technology can be a costly mistake.

Through its consultations with local businesses hoping to jump on the e-commerce bandwagon, Perth new media company dotdashslash has recognised the need to provide a tool to help businesses recognise if e-commerce applications are the right fit for them.

The company has developed a free viability test on its website to help SMEs identify areas of their business that could benefit from the technology.

dotdashslash managing director Stuart Downie said a lot of clients were requesting e-commerce solutions without understanding why they needed it.

“What we were finding with our clients was that they were saying ‘we need to get into this e-commerce thing’ but they weren’t really sure why they had to adopt it,” he said.

“So we sat down with some of our clients and made up a template, or tool kit, to help them where they needed to focus their energies on e-commerce. We thought that would work quite well on our website for all companies to use.”

The test asks a series of questions about the enterprise and identifies areas where e-commerce could be applicable.

Although there were exceptions to the rule, Mr Downie said e-commerce was best suited to businesses that derived a significant amount of their revenue from transactions.

“I’d advise a business to look at adopting e-commerce tools if a large percentage of their revenue came from distribution, reselling or transaction work, such as travel agents,” he said.

The number of businesses using e-commerce processes in Australia has doubled in the past four years. The amount businesses have spent on the technology also has in-creased, from $61 million in 1997 to about $1.3 billion this year.

“This means that hundreds of companies are making significant capital investments every day,” Mr Downie said. “While proper use of e-commerce can streamline business operations, sometimes the financial commitment does not justify the return. We believe that, in some cases, companies have been too quick to jump on the technology train.”

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