waseem dawar

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Contents

ABSTRACT

KEYWORDS

1. INTRODUCTION

1.2. Trading online

1.3. PURPOSE

1.4 CONTRIBUTIONS2. RATIONAL AND SIGNIFICANCE3. LITRATURE RIEVEW

3.1. The level of B-to-B e-commerce penetration: a process based approach

3.2. The transfer payment system using TPS (Transfer processing system)

3.3. Importance of SMEs

3.4. The integration between its business partners through EDI (electronic data interchange)

3.5. The business impacts of B-to-B e-commerce

3.6. Penetration of e-commerce

3.7. Understanding of e-commerce issues in SMEs

4. THEORETICAL FRAMEWORK

5. OBJECTIVE OF THE STUDY

5.1. The impact of e-commerce on business activity6. HYPOTHESIS

7. METHODOLOGY

8. CONCLUSION

9. REFRENCES


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Acknowledgement

This project is a great learning for us. Practice like this contributes very much in reducingdistance between bookish and practical world.

We have been able to accomplish our project successfully with the blessing of Almighty ALLAH

who created this world for search of knowledge and bestowed us to complete this task. We

invoke peace for Holy Prophet (P.B.U.H.) the most perfect and exalted among and never born on

the surface of sky and earth. The greatest social reformer who is forever the torch of guidance

and knowledge for humanity as a whole.

We are thankful to our esteemed teacher HAFIZ MUSHTAQ AHMED Who guided us very

well throughout the course of METHOD IN BUSINESS RESEARCH and really made this

course fruitful for us.


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Waseem iqbal

MBA III (z)

01-220092-038

Research proposal

Impact of electronic commerce on small and medium enterprises

promotion

ABSTRACT

This study depends on e-commerce by using an integrative and subsystem-based approach to

assess the level of electronic commerce penetration in small and medium-sized enterprises.

Results show that most SMEs are still at a very early stage of e-commerce adoption. As,firms in

the top adopted quickly moving into e-collaboration activities with suppliers and customers. The

results also reveal that e-commerce initiatives are strongly and significantly linked to positive

business impacts and that once managers have experienced benefits from e-commerce initiatives,

they continue to engage into additional e-commerce initiatives.

KEYWORDS

Electronic commerce adoption, small and medium-sized enterprises, enterprise promotion.

1. INTRODUCTION

In the era of IT development from the last 10 to 15 years in Pakistan, the use of internet has

become the backbone of business activities which transformed the traditional ways of transaction

E-Commerce is like Any Other Business, developing a business over the Internet requires many

of the same major activities as starting any other business. You should do some basic business

planning. After all, you need a product. You may need funding to get your business going. You


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need customers. You need to market products to your customers. You need strong customer

service. You need to manage purchases by customers, finances, staff and other resources.

Electronic commerce is said as E-Commerce as it is the platform for doing business over the

communication channel i.e. selling and buying movable and unmovable assets through electronic

media, Internet is playing a great role in assisting and easy transactions for the e commerce

activities. The latest communication gadgets like the cell phone also allow the users to access

internet and transact online in terms of buying, selling, paying utility bills etc. Latest market

study shows that the use of E-Commerce services is growing day by day, since the internet users

are increasing in huge numbers in the developing countries like India, China, Indonesia, Brazil

etc.

The main aim of these services is to have hassle free business transaction without the interaction

of human and this is getting promotion by the animation and graphics. By using better graphicsthe seller can display the product so well that, it is very easy to select and place order for the

potential buyers. The biggest advantage of the online business is that a buyer need not interact in

person with the seller and vice versa. Thus saving the precious time and physical infrastructure

cost of the stakeholders

1.2. Trading online

Trading online enables businesses to reach much wider audiences while cutting the costs of

traditional retailing methods. For example, an e-taller does not have to spend so much on an

expensive High Street presence. Although the outlay on developing a good website is substantial

the potential benefits can be enormous. One group of businesses that have been particularly

successful as a result of the development of the web is specialist suppliers of items such as

paintings, photographs, confectionery, and other items. An individual working from home can

now advertise and sell their produce worldwide.

Few subsystems mainly use in the category of e-commerce in Pakistan:

TPS (transaction processing system). Mainly by bankers.

CRM (customer relation management). Mainly by govt.

SMS (supplier management system). Mainly by company suppliers.

EDI (electronic data interchange). Mainly by web sites.


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1.3. PURPOSE:

SMEs access to finance

Activities like operation; which includes online transactions, money transfer and receiving have

been identified in many business surveys as the most important factor determining the survival

and growth of SMEs in both developing and developed countries. Despite the importance of

SMEs to the economies of both developing and developed countries, they have traditionally had

problems in operations. Commercial banks and investors have been reluctant to service SMEs for

a number of reasons, including the following:

Information unevenness arising from SMEs lack of accounting records, inadequate

financial statements or business plans makes it difficult for creditors and investors to

assess the creditworthiness of potential SME proposals;

High administrative/transaction costs of lending or investing small amounts do not make

SME financing a profitable business;

SMEs are regarded by creditors and investors as high-risk borrowers because of

insufficient assets and low capitalization, weakness to market fluctuations and high

mortality rates.

Access to technology

In a liberalized and open economy, SMEs increasingly depends on the ability to incorporate new

technology and management practices.

Linkages

Inter firm linkages can be a remarkable source of technology diffusion in SMEs through e-

commerce. There are many types of linkages-backward, forward, R&D and overflow effects.

The most profitable are the backward linkages between large and small enterprises.

ICT and e-commerce

Information and communication technologies (ICTs) have an impact not only on every single

branch of industry but also on every service in an economy. ICTs have the potential to alter

economic activity. They can be used to replace traditional means of communication.


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1.4 CONTRIBUTIONS

As in every field we targeted the group of peoples and area. In this study the main focused

groups are

Bankers

Businesses related to transactions

Customers using online purchasing

These all contributed their existence and show very important part in this study.

2. RATIONAL AND SIGNIFICANCE:

E-commerce represents roughly 80% of total e-commerce and continues to grow (The

Economist, 2004). Large manufacturers have been leading e-commerce initiatives in all industry

sectors (US Department of Commerce, 2002), SMEs appear to lag behind their larger

counterparts (Drew, 2003), leaving little choice to their smaller business partners to follow. In

addition, considerable efforts have been made by the governmental agencies to accelerate e-

commerce penetration among SMEs(OECD, 2002; Europe Action Plan, 2002) as these firms

continue to play a major economic role in all industrialized countries (Stevenson and Lundstrm,2001; The European Commission, 2003).Our collective understanding of e-commerce issues in

SMEs remains slim (Kendall et al., 2001; Jeffcoate et al.,2002) and is even slimmer in the case

of B-to-B e-commerce (Gebrauer and Shaw, 2002).According to Magill et al. (2001), e-

commerce covers more than buying and selling and includes any activity for an organization to

function effectively.

In December 2005 the Central Board of Revenue, the tax authority, started allowing electronic

filing of sales tax and federal excise returns by registered private and public companies. At that

time, it said that it expected about 1,500 large taxpayers out of 22,000 to use the facility.

Government efforts to promote the IT sector include the establishment of the (Information

Technology and Telecommunications Division in July 2000), various incentives, and the

commitment of resources for education and infrastructure building. The Ministry of Science and


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Technology launched the National Information Technology Policy (in August 2000). It was

developed by a team that included working groups on the following: human-resource

development; IT in government and databases; IT market development and support; IT fiscal

issues; telecoms, convergence and deregulation; cyber law, legislation and intellectual-property

rights; IT research and development; Internet development; software export; e-commerce; and

incentives for IT investment.

Total spending (by the government and private sector) on information, communications and

technology in Pakistan was US$10bn (during 2005/06). Various e-commerce projects and

initiatives were underway in the public and private sectors in August 2006. The government said

in May 2004 that it has planned new IT and e-commerce projects worth well over PRs4.5bn up

to 2007, and by then it aims to produce 100,000 graduates a year in IT studies from the seven

new IT universities it has already set up.

Pakistan is part of the 15-member Asia Pacific Council for the Facilitation of Procedures and

Practices for Administration, Commerce and Transport. The council aims to support the United

Nations Centre for the Facilitation of Procedures and Practices for Administration, Commerce

and Transport. Pakistan is a member of the Asia Pacific Council for Trade Facilitation and

Electronic Business, a non-governmental organization that promotes trade facilitation, electronic

business policies and activities in the AsiaPacific region.

3. LITRATURE RIEVEW

3.1. The level of B-to-B e-commerce penetration: a process based approach

According to Magill et al. (2001), e-commerce covers more than buying and selling and includes

any activity for an organization to function effectively. In a manufacturing context, any activity

covers a wide range of activities from five generic functional areas: product development,

engineering and design; procurement and purchasing; production and operations; sales,

marketing and after-sales service; and distribution and logistics. To each of the five functional

areas are associated specific business processes. We therefore propose to measure the level of e-


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commerce penetration at its locus of impact by assessing the use of electronic means to conduct

business processes across the whole spectrum of business. This process oriented approach builds

on previous work in research in IT penetration (Kauffman and Weill, 1989)

3.2. The transfer payment system using TPS (Transfer processing system)

The transactions between the buyers and sellers mainly use the mode of TPS through which they

transfer money more safely and fast. Mainly in Pakistan TPS mode is using for transfer of money

and think as a safe mode of transfer payment.

3.3. Importance of SMEs

According to Lall, divergence and marginalization are strong features in the industrial scene. But

industrial development is not a zero-sum game: it is possible for all countries to gain fromincreased production and trade. Successful industrialization requires countries to link to the

global economy and leverage the resources that it offers in order to improve endogenous

capabilities and competitiveness. This linking needs strong initiatives, not just passive opening

up, and it is essentially up to the countries to build the capabilities needed. Thus, policies and

programmers to enhance competitiveness must centre on building productive capacities at the

enterprise level within the country.

3.4. The integration between its business partners through EDI (electronic data

interchange)

The electronic integration between their business partners (suppliers, sub contractors,

distributors, customers, etc.) can be traced back for a few decades with the use of EDI systems

(Gebauer and Shaw, 2002). More recently, this electronic integration became stronger with

Internet-based applications which offer similar benefits derived from EDI systems but without

the substantial investments associated with these systems. Hybrid e-commerce solutions such as

Internet-EDI (Chan and Swatman, 2004) are now common among different firms. B-to-B e-

commerce relies not only on the Internet but also on private networks and also implies

exchanging and sharing information within the firm itself or with external stakeholders (Daniel

et al., 2002, p.254). Hence, we will retain here the broad and integrative definition of ecommerce

to include all electronic means (Internet, intranet, extranet and private and public networks).


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3.5. The business impacts of B-to-B e-commerce

Potential benefits derived from e-commerce are well documented in the literature. They include

reduction of transaction costs (Saloner and Spence, 2001) and gains in accuracy and speed

(Verhoest, 1999; Lefebvre and Lefebvre, 2000). Internet-based systems are considered as anenabling technology (Porter, 2001) from which strategic benefits can be derived. For SMEs, the

Internet represents a rather inexpensive way to reach new markets and new customers and

provides global access and is said to level the playing field. However, the impacts of e-

commerce may turn against some SMEs: by reducing barriers to entry, new foreign competitors

may now be selected by large manufacturers or squeeze the margin of local SMEs (Drew, 2003).

Further, large firms may exert more power over their smaller business partners when they

operate on electronic market places. In other words, B-to-B e-commerce increases the pace of

competition and the level of competitive rivalry and its impacts at the firm level remains elusive.

This warrants further investigation.

3.6. Penetration of e-commerce

The relationships between the level of e-commerce penetration and its business impacts are

contingent upon several factors: firm size, level of internationalization and the relationships with

business partners. Size, even among SMEs, matters. Larger SMEs overcome more easily

technological and non-technological barriers to implement e-commerce as they have more accessto capital knowledge and skills (Drew, 2003). SMEs involved in import and export activities are

more exposed to the e-commerce initiatives from their foreign suppliers and customers and could

more adequately harness the potential of these initiatives (Kraemer et al., 2002). The level of

dependency of SMEs towards a few customers (Teo et al., 2003) may also accelerate the level of

adoption of e-commerce initiatives at the detriment of the willingness of SMEs. The same may

be true of the supplier side.

3.7. Understanding of e-commerce issues in SMEs

This line of inquiry seems to be particularly relevant for several reasons. First, B-to-B e-

commerce represents roughly 80% of total e-commerce and continues to grow (The Economist,

2004). Second, SMEs appear to lag behind their larger counterparts (Drew, 2003) and are

pressured to fully grasp the potential of e-commerce. In fact, large manufacturers have been


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leading e-commerce initiatives in all industry sectors (US Department of Commerce, 2002),

leaving little choice to their smaller business partners to follow. In addition, considerable efforts

have been made by the governmental agencies to accelerate e-commerce penetration among

SMEs (OECD, 2002; eEurope Action Plan, 2002) as these firms continue to play a major

economic role in all industrialized countries (Stevenson and Lundstrm, 2001; The European

Commission, 2003). Third, our collective understanding of e-commerce issues in SMEs remains

slim (Kendall et al., 2001; Jeffcoate et al., 2002) and is even slimmer in the case of B-to-B e-

commerce (Gebrauer and Shaw, 2002).

4. THEORETICAL FRAMEWORK

According to my research the independent variableis the e-commerce,moderating variable is

subsystems and different levels of e-commerce penetration usage in Pakistan and the

dependent variable is the SMEs promotion.

The main variable is SMEs and its promotion is either positive or negative due to the use of e-

commerce, and the subsystems and level of e-commerce penetration have the contingent effect

between SME promotion and e-commerce.

As the usage of electronic commerce in global countries is too much and most of the businesses

are connected through it, also that in Pakistan some e-commerce subsystems are use now in the

big firms and the different levels like B2B, B2C etc, and the penetration of it towards the SMEs

is required.

For SMEs promotion we must have the proper authority whose duty is to check and balance on

the e-commerce activities so that people tend to move towards this trend as it is cheaper and time

effective.


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Structural diagram of different variables.

5. OBJECTIVE OF THE STUDY

All too frequently, technology promises more substantial benefits than it can deliver and

information technologies are no exception (Coates, 1992). Can benefits at the business level be

derived from e-commerce? This paper seeks to find answers to these questions but different from

other studies as following objectives:

I. To measure the level of e-commerce usage by examining which business processes are

performed in an electronically mediated environment;

II. To analyze the future behavior of the firms with respect to e-commerce is conditioned by

their actual experience;

III.To assess the strength of the relationships between the level of B-to-B e-commerce

penetration and its impacts and benefits at the firm level;

IV.To determine relationships between e-commerce penetration and its impacts upon

internal and external factors such as firm size, degree of internationalization and the

relationships with business partners;

Subsystems

(Moderating variable)

E-commerce

(Independent variable)Different levels of penetration

(Moderating variable)

SMEs promotion

(Dependent variable)


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Main problems faced in Pakistan due to which this research is conducted, as e-commerce in

SMEs in Pakistan is not successful as in other countries due to many problems if these problems

are solved then e-commerce will boost in Pakistan also, these problems are as follows;

Credit card faults. Mistrust of items delivery or the delivery of original quality.

Major Price differences.

Trend of bargaining no fix prices.

Education problems.

Frauds and scams.

As Pakistan is one of the developing countries. Due to many reasons it can take better steps for

going forward in electronic purchasing and selling if these problems are over come.

5.1. The impact of e-commerce on business activity. (The times 100)

Selling through websites is the fastest growing method of trading worldwide. There are two main

forms of e-commerce:

Business to business (B2B) trading where companies trade and exchange information

using the World Wide Web.

Business to consumer (B2C) trading where companies deal directly with customers

through web pages, and orderings carried out online.

There are many different types of products and services that are traded on line including books,

CDs, cars, holidays, and insurance.

In response to e-tailing and e-trading, most businesses have now set up their own websites.

6. HYPOTHESIS

The main questions being hypothesis in this study are as follows:

H1: How we can use the e-commerce activities for the betterment of SMEs.


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H2: To solve the problems of e-commerce and motivate the Pakistani culture towards

the use of e-commerce activities.

H3: In order to have the stability towards the use of internet and to encourage the small

enterprises towards e-commerce.

7. METHODOLOGY

I. Sample

A survey based primary data and also secondary data is to be used to examine the relationship

among independent, moderating and dependent variables. The survey is done from the different

peoples having their own small industries, friends working there, colleagues and software

engineers. These all guide me to understand the causes and the impact of e-commerce on

different enterprises.

II. Instrument

Mainly internet and bookish knowledge and friends views and comments are added in the

preparation of this paper.

Owners/Executives and accountant of different firms like Karachi tea situated in

Nankari Bazar in Rawalpindi.

Soft ware engineers done his education from abroad.

And from internet, different surveys conducted in Pakistan.

III. Procedure

After data collection, the appropriate data analytic techniques including persons correlation and

multivariate analysis is carried out keeping in view the objective of this study.


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8. Conclusion:

This study suggests strongly that e-commerce penetration among manufacturing SMEs is an

evaluative, dynamic ad rather coherent process. Past behavior reinforces future behavior and

organizational learning appears to be the essential ingredient to benefit from the impacts of e-commerce.

After detailed analyzing and studying of the effects and benefits of incorporating an e-commerce

solution to an existing business, it is clear that an e-commerce solution will benefit the business

in every aspect.


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REFERENCES

Sir Mushtaq Ahmed

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Jeffcoate, J., Chappell, C. and Feindt, S., 2002. Best Practice in SME Adoption of E-commerce. Benchmarking, Vol. 9, No. 2, pp. 122-132.

International Journal of Electronic Commerce, Vol. 6, No. 4, pp. 7-17.

http://www.europa.eu.int/informationsociety/eeurope/actionplan .

Chan, C. and Swatman P.M.C., 2004. B2B E-Commerce Stages of Growth: The Strategic

Imperatives. Proceedings of the37th Hawaii International Conference on Systems

Sciences. Hawaii: IEEE.

Coates, V.T. The future of Information Technology 1992. The Annals of the American

Academy, Vol. 522, pp. 45-56

Couper, M.P., 2000. Usability Evaluation of Computer-Assisted Survey Instruments.

Social Science Computer Review, Vol. 18, No. 4, pp. 384-396.

Daniel, E., Wilson, H. and Myers, A., 2002. Adoption of E-Commerce by SMEs in the

UK, Towards a Stage Model. International Small Business Journal, Vol. 20, No. 3, pp.

253-270.

Dillman, D.A., 2000. Mail and Internet Surveys: The Tailored Design. New York: John

Wiley.

Drew, S., 2003. Strategic Uses of E-commerce by SMEs in the East of England.

European Management Journal, Vol.21, No. 1, pp. 79.

Elia, E., Lefebvre, L.A. and Lefebvre, . 2004. Typology of B-to-B E-Commerce

Initiatives and Related Benefits in Manufacturing SMEs. Proceedings of the 37th Hawaii

International Conference on Systems Sciences. Hawaii: IEEE.

eEurope Action Plan, 2002. An Information Society for All, Action Plan 2002 and 2005.

Gebauer, J. and Shaw M.J., 2002. Introduction to the Special Section: Business-to-

Business Electronic Commerce.
http://www.thetimes100.co.uk/http://www.thetimes100.co.uk/http://www.thetimes100.co.uk/http://www.europa.eu.int/informationsociety/eeurope/actionplanhttp://www.europa.eu.int/informationsociety/eeurope/actionplanhttp://www.europa.eu.int/informationsociety/eeurope/actionplanhttp://www.thetimes100.co.uk/

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