INTERNET COMMERCE: ASSURING SUCCESSFUL IMPLEMENTATION BY SMALL BUSINESS Pamela Hammers Specht

Abstract Electronic commerce (EC) is becoming more prevalent in small businesses. The newest type of EC is the emergence of Internet commerce. Problems with the implementation of Internet commerce, such as failure to bring in additional revenue, are being reported. The purpose of this study was to determine the significant aspects of successful implementation of Internet commerce in small firms. A thorough literature review was conducted, uncovering 63 pertinent articles. Most of the literature was anecdotal. Variables mentioned formed four categories. The four categories for successful Internet commerce are infrastructure support, marketing strategy, system design, and business process redesign. The study concludes with the development of a research model using these categories. Recommendations include first conducting qualitative research (e.g., case studies). 1. Introduction Electronic commerce (EC) is becoming more prevalent in small businesses. EC began with the introduction of point-of-sale (POS) in retail stores and grew with the use of Electronic Data Interchange (EDI). The newest type of EC is the emergence of Internet commerce. All sizes of firms are beginning to report problems with the implementation of Internet commerce, such as a failure to bring in additional revenue. The growth of the Internet, worldwide connectivity, and decreasing access cost create great potential for EC, but to fully exploit this potential, a firm must address strategic planning and technical challenges. The purpose of this study was to determine the significant aspects of successful implementation of Internet commerce in small firms. As more small businesses turn to Internet commerce, researchers and practitioners need to identify steps that should be taken to increase the chances for success. A thorough literature review was conducted, uncovering 63 pertinent articles. Articles were reviewed looking for the characteristics of a good electronic commerce endeavor, regardless of firm size. The study concludes with the development of a research model. The majority of the literature reviewed was anecdotal. What studies have been done have mostly been in medium to large firms. The model should be useful as a basis for small firm research. A large number of variables impacting the successful implementation of Internet commerce are identified in the literature. Variables mentioned formed four categories: 1. Infrastructure support 2. Marketing strategy 3. System and site design 4. Business process redesign Figure 1 (omitted) presents a research model based on the literature reviewed and reflecting these four categories. Table 1 Presents the literature sources for each category of variables impacting successful Internet commerce.

Table 1: Literature Sources for the Four Categories of Variables Impacting Successful Internet Commerce Category

Source

Infrastructure Support

Boynton, Carr, Davis, Engler, Ferranti et al., Frank, Hussein et al., Lipoff et al., McGarr, Piggott, Poje, Serjak, Srinivasan et al.

Marketing Strategy

Bartram et al., Comparelli, Corbin, Deese, Ghosh, Gooley, Gotcher, Graham, Greenberg, Honeycutt et al., Huber, Husein et al., Kraisner, Krapf, Lederer et al., Lipoff et al., Macleod, Martin, McConnell, Palmer, Radcliff, Rao et al., Rogoski, Salnoske, Shaw, Tabor, Wilder, Yoegel

System and Site Design

Boynton, Dos Santos et al., Foachim, Garcia-Sierra, Graham, Iacovou, Leebaert, Lepore, Lipoff et al., Magid, Poje, Robinson, Salnoske, Tabor, Tweney, Wilder

Business Process Redesign

Banker, Boynton, Frank, Groenfeldt, Mukhopadhyay, Poje, Vizard, Wagner, Ward et al.

2. Description of the Categories Infrastructure Support 1. Ability to support online EC inquiries Many firms have experienced large amounts of inquiries from individuals when a web page is created. In order to respond to inquiries, sales personnel are forced to spend time replying to often "ludicrous" requests for information. However, if consumers are not given a response, they may disregard the company. As one article discussed, once you lose an online customer, a window display cannot bring him/her back. Firms implementing Internet commerce should be prepared to deal with large volumes of information requests after going online. 2. Patience Many firms have not allowed enough time for their systems to mature and become beneficial. Individuals implementing Internet commerce should be prepared for setbacks and needing time to deal with the problems. 3. Interfaces with databases and legacy systems Customers want to check inventory, order status, etc. online. Successful sites have shown the ability for consumers to carry-out these activities. Therefore, success may hinge on the ability of consumers to access legacy system data. 4. Senior management support Internet commerce success requires the resources and support that top management can provide. The owner of a firm must be committed to Internet commerce.

Marketing Strategy 1. Identify target market Target markets need identification in any marketing effort and Internet commerce is not an exception. For example, different age groups respond differently to various designs used in web pages. Knowing who is targeted and what they positively respond to can increase an organization's chances for successful Internet commerce. 2. Use of web analysis tools to refine web sites Upon completion and integration of a web site, it is beneficial to track the who, when, and where regarding individuals surfing your site. The ability to use this information in adjusting the site to customer desires increases successful Internet commerce. 3. Prices Consumers have shown that they will not tolerate prices on the Internet that are the same or moderately less than traditional retailer prices. Low prices are key to Internet selling. 4. Customization of product Consumers have shown that they will purchase online when the product being ordered can be customized to their needs. System and Site Design 1. Integration with other computer systems in firm Interface of the Internet commerce system with other computer systems such as order entry, shipping, and receiving seems to enhance successful EC. 2. Consideration of standards When EC systems are designed, careful attention to standards is important. Without the use of standards, EC systems may not be able to communicate in the future. These standards are especially important in the global marketplace. Even if a company currently has no global partner, the chances for globalization for every company continues to increase. Business Process Redesign 1. Business process redesign Some authors have declared that Business Process Redesign (BPD) must accompany Internet commerce implementation, indicating that the two must coincide. Other authors indicate that Internet commerce can easily be laid on top of existing business processes. Research needs to identify when and if BPD is required for successful electronic commerce endeavors in small firms. 3. Conclusions Little is known about the factors for successful Internet commerce implementation, especially for small firms. This paper has presented a model reflecting success factors gleaned from the mostly anecdotal literature. Qualitative research (e.g., interviews, content analysis of company documents, e-mails, etc.) needs to be conducted and case studies developed. These studies will validate/refine the model so that hypotheses can be developed for empirical testing.

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