Challenges Encountered by SMEs When Adopting an E-

Challenges Encountered by SMEs When Adopting an E-Business Strategy

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Challenges Encountered by SMEs When Adopting an E-Business Strategy

The aim of this study was to evaluate the problems that small and medium enterprises face when adopting e-business. The study also presents solutions to the problems encountered by SMEs during the adoption of E-business. In order to meet these objectives, the researcher employed a qualitative case-study research design where participants were recruited from three categories of firms: that had fully embraced e-commerce, those in the process of embracing the technology, and SMEs that had not adopted the technology. It emerged that SMEs encounter a wide range of challenges during the adoption of an e-business strategy. The key challenges include: high initial set-up cost, lack of e-business knowledge, security concerns, undeveloped infrastructures, and the lack of the understanding of the environment that the business is operating in. Other minor challenges reported in this study include language barrier and the lack of trust from potential customers over the involved SMEs. Based on the findings made in this study and the data published in secondary sources, these problems can be overcome through a prior assessment of the cost that will be required to adopt the strategy by experts, seeking financial support, enhancing security in the internet through the common technology of encryption, as well as the use of passwords and user name. The problem of lacking an understanding of the environment that the business is operating in can be solved by training top management officials in SMEs on how to meet their specific organizational needs. This study recommends further investigation in this area on a regular basis in an effort to establish specific problems faced by SMEs during the adoption of e-business and propose possible solutions for the problems identified because technology is changing at an unprecedented pace. That is, challenges identified together with the solutions proposed in this study may be out-dated, hence inapplicable in the near future.

E-business, also known as e-commerce is defined as the process of purchasing and selling goods and services through the use of computer network (Datta, 2011, pp.3). VanHoose (2011, pp.5) define e-commerce as the selling and buying of information and the use of internet enabled technology such as electronic mail and intranet to exchange information inside and outside an organization. According to Datta (2011, pp.4), the use of internet has become a fundamental part of all business activities.

Weill and Vitale (2013, pp. 17) maintain that the internet has been a critical component of the system that is driving the modern economy through the creation of new opportunities for individuals, companies, and countries internationally. The advancement of e-commerce as a technology employed in business is the outcome of such initiatives driven by the internet. The use of internet has formed a global platform for exchanging goods and services and in carrying out other important operations within organizations (Gatautis, 2015, pp.389; Beckinsale, Ram, and Theodorakopoulos, 2011, pp.212).

In their studies Beynon-Davies (2010, pp.18) and Oliveira and Martins (2010, pp.1339) found that e-commerce presents a pool of business opportunities. Currently, internet platforms are utilized by small and large organizations to inform potential customers about their products, convince current customer to continue consuming their products, ordering products, and offering customer service support to assist buyers and sellers get into contact. According to Gunasekaran, Rai, and Griffin (2011, pp.5492), E-commerce is a major drive for economic growth in the developed countries. Additionally, E-commerce is presenting a huge opportunity to businesses operating in the developed countries to access more market internationally and minimize transaction cost.