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36 Part 1 Introduction

A DTI (2002) study evaluated some of the barriers to B2B e-commerce
Debate 1.2
(Figure 1.12) which remain valid today. You can see that reasons of cost
Limited SME adoption of e-business were the most important factors. This suggests the importance of man-
‘Adoption of e-business by established agers assessing e-business to develop a cost–benefit analysis that considers
SMEs is generally less than that in both the initial investment costs and the ongoing costs that form the total
larger businesses. This is principally a
cost of ownership (TCO) against the value created from the tangible and
consequence of the negative attitude of
intangible benefits. The difficulties in implementation which we will
managing directors and CEOs to the
business benefits of information and review later in this book such as the lack of the right resources or difficulty
communication technology.’ in integrating systems are also indicated by the figure.
Total cost of Evaluating an organization’s e-business capabilities
ownership (TCO)
TCO refers to the total
cost for a company Assessment of an organization’s existing e-business capabilities is a starting point for the
operating a computer future development of their e-business strategy. We will see in Chapter 5 how different forms
system or other
investment. This includes of stage models can be used to assess e-business capability. An example of a basic stage
not only the purchase or model reviewing capabilities for sell-side and buy-side e-commerce is shown in Figure 1.13.
leasing cost, but also the
cost of all the services This shows how companies will introduce more complex technologies and extend the range
needed to maintain the of processes which are e-business-enabled. More detailed explanation and coverage of stage
system and support the
end-user. models is given in Chapter 5.
Stage models
Used to review how
advanced a company is Set-up cost 32
in its use of information
and communications Running costs 19
technology (ICT) to
support different Lack of time/resources 12
processes.
Lack of skills (staff) 10
Reluctance of staff 7
Lack of knowledge 6
Difficulty intergrating IT systems 5
Not relevant to business 4
Lack of technology 3
Lack of board interest 3
Difficulty of changing processes 3
No benefits 2
Lack of skills (supplier/customer) 2
Security/protection concerns 1
Poor reliability 1
Reluctance of suppliers 1
Insufficient government guidance 1
Current bandwidth restrictions 1
Base: All businesses with access to the Internet, weighted by number of employees

Figure 1.12 Barriers to development of online technologies
Source: DTI (2002)