Small firms drag feet with internet

By IRENE CHAPPLE

They could be zooming down the information highway, but instead many New Zealand small businesses seem happy to trundle along a country road.

For some, the day-to-day grind of running the business leaves little time or inclination to research information technology.

A Waikato Management School study on e-business adoption, part of a wider study on the impact of information and communication technology, has shown small to medium-sized enterprises are slow to adopt e-commerce.

The numbers of firms with websites has increased 8.8 per cent in the past year to 63.4 per cent, the study shows.

Most sites provide lists of products and services, and 68 per cent have company data.

Yet only about 20 per cent of the sites can take orders, with only one in 12 taking payments online.

Preliminary results of research over the year's second quarter indicates a lack of knowledge, concerns about security, confusion and fear about wading into e-commerce.

Researcher Dr Stuart Locke says small businesses are reluctant to embrace IT for a variety of reasons.

"They know the terminology and they have a reasonable idea of what it might do.

"But they can't see where the value would come from, they're not sure how to analyse an addition to value and then they put up the barrier of time and say they don't know enough."

One firm bucking the national attitude is Queensberry & Co, which creates customised photo albums and sells them over the internet.

Director Stephen Baugh believes his company's success is largely due to its IT infrastructure.

Baugh joined his parents' business six years ago, and has transformed the Australasian distributor into a global entity.

Queensberry - which has produced albums to be given to the Queen, Pope John Paul II and Dame Kiri Te Kanawa among others - is growing about 50 per cent a year and now counts its turnover in millions.

It sells in seven countries, with commissions taken through free calling numbers, orders paid in the customer's currency and a product tracking system available through the company's intranet.

Baugh has also just implemented technology that allows a customer to make his or her own orders without staff assistance.

"It took us four years to get the infrastructure right," he says.

"At the beginning we had a big picture plan but as you do the next thing eyes become open to the possibilities.

"Every time we take the next step we'll be saying, 'What is the next step after that?' You've got to live it, to experience it."

Baugh is aiming to expand Queensberry by 50 to 70 per cent a year, focusing particularly on the United States, the company's third-biggest market behind Britain and Australia.

He says he is not surprised by Locke's research results.

"If you say [to a small business owner], 'Go out and make a website and sell to the world', and they don't know how to make today work, how are they possibly going to comprehend it?"

Locke agrees, and warns that this mindset is holding businesses back "huge amounts".

Both suggest the Government could do more to promote IT to small businesses, either financially or through a mentoring programme.

But BizInfo chief executive Alec Waugh says the support is there, just not being used.

Bizinfo, an advisory centre for small and medium businesses, is funded by Industry New Zealand and provides free conferences on e-commerce.

In May, a website devoted to e-commerce went live and has averaged 40 hits a day, with visitors staying about 16 minutes.

Waugh says the attitude of "We're too busy", or "We'll address that next week" needs to change.

"We've got to get the message out that it's not good enough."

But he believes change is occurring as companies such as Baugh's recognise the opportunities provided by solid IT structures.

"E-commerce is today and tomorrow's issue."

Biz info

NZ E-Commerce