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Chapter 1 Introduction to e-business and e-commerce 35

New Customers – ‘We now send more items abroad.’ the design have raised confidence levels in visitors
The better performance of the site in search engines and this has led to increased sales. But perhaps
has led to an increase in orders from new customers more significantly, the professional image of the site
and from abroad. The company now has regular was a good boost to confidence for potential busi-
sales to Canada, Australia, New Zealand and various ness partners in the emerging business-to-business
European states. 60% of orders are from new division that started to trade as North Star Contracts.
customers – not bad for a business that initially set
up on the premise of a niche market for UK-based Question
cadet forces.
Adding value to the brand – ‘New corporate clients Discuss the new opportunities and risks that need to
could look at our Web site and see we weren’t fly-by- be managed by North West Supplies with the
night and that we meant business.’ Improvements to increased importance of its online channel to market.

E-business risks and barriers to business adoption

Opportunities have to be balanced against the risks of introducing e-business services which
vary from strategic risks to practical risks. One of the main strategic risks is making the
wrong decision about e-business investments. In every business sector, some companies
have taken advantage of e-business and gained a competitive advantage. But others have
invested in e-business without achieving the hoped-for returns, either because the execution
of the plan was flawed, or simply because the planned approaches used for their market were
inappropriate. The impact of the Internet and technology varies by industry. As Andy Grove,
Chairman of Intel, one of the early adopters of e-business has noted, every organization
needs to ask whether, for them:
The Internet is a typhoon force, a ten times force, or is it a bit of wind? Or is it a force that
fundamentally alters our business? (Grove, 1996)
This statement still seems to encapsulate how managers must respond to different digital
technologies; the impact will vary through time from minor for some companies to signifi-
cant for others, and an appropriate response is required.
As well as the strategic risks, there are also many practical risks to manage which, if
ignored, can lead to bad customer experiences and bad news stories which lead to damage to
the reputation of the company. In the section on e-business opportunities, we reviewed the
concept of soft lock-in; however, if the customer experience of a service is very bad, they will
stop using it, and switch to other online options. Examples of poor online customer experi-
ence which you will certainly be familiar with include:
Web sites that fail because of a spike in visitor traffic after a peak-hour TV advertising
campaign.
Hackers penetrating the security of the system and stealing credit card details.
A company e-mails customers without receiving their permission, so annoying customers
and potentially breaking privacy and data protection laws.
Problems with fulfilment of goods ordered online, meaning customer orders go missing
or are delayed and the customer never returns.
E-mail customer-service enquiries from the web site don’t reach the right person and
are ignored.
The perception of these risks may have limited adoption of e-business in many organizations
which is suggested by the data in Figure 1.10. This is particularly the case for small and
medium enterprises (SMEs). We study adoption levels and drivers in this type of business
further in Chapter 4.