E-Commerce Technology Adoption by SMEs in Botswana

Article excerpt

Abstract

Attracted by the prospective opportunities offered by the Internet for market and communication diversification, small and medium enterprises (SMEs) adopt information and communication technologies (ICT), hoping to better their performances. This study assessed the adoption of e-commerce by SMEs in Botswana. It aimed at finding out the factors that led to e-commerce adoption, the kinds of e-commerce technologies that were adopted and used, as well as the services provided with these technologies. It also identified the challenges faced by SMEs with regard to e-commerce use. A survey design was adopted in the form of a structured questionnaire, which was used to collect data from a sample of 145 SMEs. Analysis took the form of computation of means and frequency distributions. Findings revealed that the point of sale system was the most widely used e-commerce technology and the major reason for e-commerce technology adoption was competitive advantage. The main challenge faced by the firms in their use of e-commerce technologies was threat to security. The results clearly indicate the necessity to provide support to SMEs if they are to successfully adopt and use e-commerce. The results have implications not only for managers of SMEs but also for government bodies in developing countries such as Botswana.

Keywords: SMEs - Adoption - e-Commerce - Botswana - Challenges - Information and Communication Technologies (ICT)

Introduction

Small and medium scale enterprises (SMEs) are generally regarded as the cornerstone of both developed and developing economies. Most governments view them as major drivers of the economy and a source of employment opportunities. In Botswana, there is a growing awareness about the potential of e-commerce, with some SMEs already having an Internet presence, although most of these have been in the area of marketing and product promotion (Eyitayo & Molefe 2000). There is also increasing interest in the use of e-commerce shown by commercial entities, as they see it as a means to provide services for the local population. For instance, Barclays Bank of Botswana now has a Telephone Banking service; Standard Chartered Bank offers customers Internet access to their bank accounts so they can view their account details; the Savannah Guest House in Palapye accepts most major credit cards over the web to reserve rooms; Botswana Craft, an online purveyor of basketry and tapestry art, accepts orders for items over email and might soon introduce an internet shopping cart (Nyika 2007).

The adoption of e-commerce technologies is influenced by a number of factors. In terms of business enterprise the most significant of these factors is profit. Other factors, according to Kurnia (2006), include government initiatives, economic conditions, technology infrastructure, geographical conditions, socio-cultural conditions, public awareness and external influences.

A survey of the literature reveals there is evidence that ICTs will increasingly empower SMEs to participate in knowledge management by facilitating connectivity, thereby helping them to create and deliver products and services on a global scale. ICT adoption by SMEs has the potential to transform business operations by enabling rapid, reliable and efficient exchange of large amounts of information (Ongori 2009). SMEs generally stand to gain from ICTs in such areas as reduced transaction costs, information gathering and dissemination, inventory and quality control, and so on. Furthermore, as the world economy continues to move toward increased integration as a result of advances in ICT, and with the increasing reduction in trade barriers, some of the greatest opportunities for small businesses will derive from their ability to participate in regional and international markets.

SMEs appear to face significant and unique challenges in adopting new technologies however (Auger & Gallaugher, 1997), thus impeding them in a number of ways. …