Small and Medium Enterprises (SMEs) are incubators for the growth of innovation and of employment. They not only play an important role in the United States where they account for 99% of all business establishments, and have generated 9.8 Million jobs between 1993 and 2009, but also contribute a chunk of profit to the global economy. In spite of this, SMEs face umpteen challenges like non-availability of suitable technologies, small production capacities, non-availability of skilled labour at affordable costs, and inability to compete with the marketing muscle of larger organizations.
On the other hand, SMEs are the biggest beneficiaries in the following ways:
• They now have opportunities to overcome geographical barriers.
• Wherever they can eliminate middlemen, they can cash in on reduced business costs and incremental profit margins.
• They are able to create added value by producing innovative products and flexibly adapting to new markets and products.
Businesses are now adopting eCommerce due to citeable reasons such as increasing levels of competition, incessant pressure from partners/suppliers, etc. There seems to be an observed growth in adopting this mode of trade which is reflected by an increase in SME confidence with regards to eCommerce benefits. New age adoption drivers such as direct/ indirect marketing, strategic relationship building ventures, ability to reach new markets, improved after- sales service capabilities, reduction in communication costs, and improved lead time and sales, have only nurtured this confidence.
A recent research report states that ‘the potential to grow international transactions as an additional revenue stream is driving SMEs to extend or upgrade their eCommerce services to enable easier cross-border transactions.’ As a note, although eCommerce is turning effective for SMEs, it may not be a blanket solution for all SMEs.
Now, to determine whether or not an SME is ready to initiate eCommerce, there are few criteria that need to be considered under strict priority, as these may not be applicable to all.
| Internal Criteria |
| Financial resources |
| Organizational culture |
| Skilled IT personnel |
| Appetite for risk |
| Management support |
| Organizational related: • Business model • Impact on the operations • Integration with enterprise systems • Key performance metrics • Change management initiatives |
| Technology related: • Solutions available in the market and their assessment parameters • Procedure for handling payments • Privacy and security features |
| Legal related: • Contracts (new or revised) with various parties in the ecosystem • Rules and regulations applicable |
| External Criteria |
| Infrastructure for conducting business |
| Government policies and incentives |
The next step is to choose the appropriate eCommerce solution. Businesses need to look into the following:
• The solution should be sophisticated enough to monitor customer activity on the site and take action based on the customer behaviour
• The solution should be technically and architecturally sound so as to provide the business managers with tools such as categorization of products, development of promotions and campaigns, targeted email campaigns etc.
• The product catalogue should be able to handle different kinds of products as well the peaks and troughs in demand.
• The solution should be strong and flexible in order to integrate with other enterprise systems in order to deliver a dynamic buying experience.
• The site should not only be able to capture historical and behavioural data but also support a compelling and personal search experience.
Considering that many SMEs will not have an in-house capacity to coordinate eCommerce projects, they would do well to look for a trusted partner who can expertly guide them through key imperatives for the organization and external criteria while investing in an eCommerce platform.