Australian company directors are finding the concept and application of e-commerce difficult to grasp and are unsure whether to view it as an opportunity or a threat, according to an Australian Institute of Company Directors and KPMG report.
The ambiguity of e-commerce has forced the majority of potential converts into a conservative stance for at least the next three years. Fifty-six per cent of Australian directors rated the current impact of e-commerce on their business as low or low-medium, according to KPMG's June boardroom report. Yet in three years time, 67 per cent of executives will consider it of high-medium or high importance.
Industry bodies, such as the National Office for the Information Economy (NOIE), expect that the fallout of this conservative and unsure approach could adversely affect Australia's standing in the electronic commerce arena.
"In the face of aggressive e-commerce take-up by US business, NOIE is concerned that Australian businesses should accelerate their investment in the necessary information technology and undertake the restructuring required to realise these opportunities. Failure to do so will expose Australian business to new competitive threats," warned Dr Paul Twomey, CEO of NOIE.
Outside of the rhetoric and in terms of real spending, 54 per cent of company executives said that the value of their investment in e-commerce over the next two years will be between $50,000 to $250,000. However, it is concerning that 23 per cent of companies stressed that they would not spend anything on e-commerce in the same period of time.
"Importantly, despite the expected impact of e-commerce on the Australian business environment over the next three years, the strategic focus on e-commerce initiatives has not yet been accompanied by a similar focus of business investment dollars," said John Harkness, KPMG's NSW chairman.
Yet even the relatively small investment in e-commerce to date has often been inspired by fear and competitive spirit rather than any real understanding or perceived benefits. This is illustrated by the limited vision of many executives, with 24 per cent of respondents defining e-commerce as simply internal and external communication and 31 per cent of respondents undertaking an e-commerce project merely in order to keep up with the competition.
And those that are most likely to be able to clarify the issues and educate the general populace on the real benefits of e-commerce - the IT industry - are struggling to embrace the concept themselves.
"We are doing a lot of reseller and merchant training," said Bruce Lin, manag-ing director at integrator Camtech. The organisation partners with about 70 resellers for its payment gateway product and Lin claimed that to get them up to speed with e-commerce integration takes almost two days.
"We have also found that the channel, in general, is still very much in the dark about e-commerce," Lin added. "Only the minority really knows what its doing."
He claimed most resellers and integrators understand how to build a Web site and create online shopping carts, but they lack the skills to orchestrate online payment and authentication capabilities at customer sites.
"Both customers and channel partners will gradually get up to speed once the business drivers become evident; however, I wouldn't expect there to be mass adoption for at least another two years," Lin said.
Yet the education process is not the only inhibitor to the adoption of e-commerce. There are issues of cost, technological savvy, perceived security risks and return-on-investment concerns.
"The key issues we're talking about here are the difficulties that people have always had - they don't have the technical expertise to implement their sites, the cost is too high, and so on . . . What we're trying to do is cover all these issues by developing simple and easy-to-use applications for the Web, which will not only make these products more successful, but also help their e-commerce adoption," explained Andrea Cartwright, group product manager for Multimedia Asia Pacific.
Yet e-commerce vendors appear to set their own agenda with Nick Pollock, managing director of Viewlocity, formerly Frontec, laying the blame for customer ignorance squarely at the feet of the vendors. "Most channel partners are going into e-commerce deals with their own vendor-driven agendas," he claimed.
"From our perspective, the vendors are devising e-commerce solutions that fit in with their product strategy rather than taking in the wider picture," he said.
And the wider picture is a total revitalisation of business practices and methodologies. "The e-commerce challenge for business leaders is to fundamentally rethink their operations. Re-engineered business processes, made possible through interconnected computing networks, present an opportunity to reduce input costs and improve integration with global markets," Harkness said.