Internet - SMEs fail to adopt e-commerce

Despite the raft of e-commerce products on the market, many small and medium-sized companies are concerned about security and complaint handling when doing business on the Internet, according to a survey by mid-tier firm Kingston Smith.

The findings will come as a blow to accountancy software companies such as Sage and Access Accounts, which have released e-commerce products aimed at the SME software market in the past few months.

In a survey of 300 owner-managed businesses, a lack of privacy for transactions was cited as the main disadvantage. This was followed by an inability to respond quickly to customer complaints.

When it comes to handling orders, 63% preferred to place orders and requests by telephone rather than online. But over half of those surveyed said they had a website and nearly a quarter predicted over 30% of sales would come from e-commerce by the end of next year.

The main attraction of Internet commerce was the improvement in customer service and the chance to reach more customers.

Michael Snyder, senior partner at Kingston Smith, said a lack of IT expertise was stopping many from embracing Internet technology. ‘It’s a fear of the unknown,’ he said.

Snyder added that, although small companies specialising in information services were ideally placed to deliver services over the Web, many would not see cost savings. ‘You need a vast number of transactions for it to deliver cost savings,’ he said.