@Re We Ready For E-Business?

Abstract

The rapid growth of electronic business has been evident since the very beginning of the last decade. Nevertheless, so far companies experience many problems related to the implementation of e-business. The majority of small and medium-sized compa-nies (SMEs) have neither the internal expertise nor financial resources to enable in-house development of e-business. Unfortunately, they often engage consultants without any clear idea of their intended e-business strategy and without due care as to effective engagement processes. This frequently leads to ineffective e-business development and a highly disaffected group of small entrepreneurs. This paper focuses on the analy-sis of the main problems faced by (SMEs) engaged in e-business and to show the sig-nificant gap between the intended strategies of SMEs and the actual e-business strat-egy implemented.

The questions addressed in the paper are:

1. Define the main problems and barriers in engaging in e-business faced by small and medium sized enterprises.

2. Define criteria for E-Business design.

3. Outline the characteristics that small and medium-sized enterprises should pos-sess in order to be effective in e-business.

1. Introduction

Throughout history, innovation and the adoption of new technologies have led to productivity improvements that generate stronger economic growth and higher living standards. The most important innovation in the world of information technology is the thing called (Internet). The Internet provides the technical infrastructure to enable an online presence, and gives the ability to provide present potential customers, prospects, and business partners with easy access to information about the available products and services from their home or office. This information sharing increases the ability to sell goods and services (Anita, 2000).

In business, technological innovation over the past century has focused on the de-sign and manufacturing processes that are used largely within individual firms. At the same time, the process of physically moving raw materials, components and products through a firm's value chain comprises a significant portion of the total cost of goods in many industries. Mechanized transportation, telecommunications networks and inte-grated information systems have significantly helped supply chain managers improve their ability to plan, order, monitor, and evaluate their processes. In particular, new in-formation technologies and e-business solutions have transformed supply chain opera-tions from mass production to mass customization.

2. THE IMPACT OF E-BUSINESS ON SUPPLY CHAIN OPERATIONS:

While improved supply chain management principles combined with new informa-tion technologies (e-business) may not have been given much macroeconomic attention in the past, its effective implementation can help firms reduce costs, increase revenues, boost efficiencies, and expand market opportunities. The evidence that these improve-ments have resulted in a reduced bullwhip effect (progressive increase in inventories looking backward through supply chain [William J., 2005]), lower inventory levels, re-duced logistical costs, and streamlined procurement processes has been found. These improvements, in turn, have helped to lower inflation, reduce economic volatility, strengthen productivity growth, and improve standards of living.(Basu and Siems 2004).

All these factors have led to the notion of "eBusiness on demand" which is the abil-ity to satisfy customers who want products and services that are customized dynami-cally and delivered in real time. It's the ability to provide employees, suppliers and part-ners with the information and insights necessary to do a better job and to do the job faster and cheaper. It's the ability to reconfigure a supply chain based on schedule or price or location -whatever makes sense at the time- because the core infrastructure has the flexibility to support integration with an ever-changing spectrum of suppliers. (IBM, e-business on demand, 2003).

Organizations operating as on demand businesses share four key characteristics:

* Responsiveness: The ability to sense changes in the environment and re-spond dynamically, whether to unpredictable fluctuations in supply or de-mand; emerging customer, partner, supplier or employee needs; or unex-pected moves by the competition.

* Variability: The ability