Examining the far-reaching impact of eCommerce from a benefits perspective – Part One
Tangible eCommerce benefits

Most Welsh SMEs will acknowledge that their expectations of eCommerce revolve around two main criteria – how it can help reduce costs (improve business efficiency) and how it can help generate additional sales (create additional revenue). In other words, these are the key explicit benefits that small businesses expect. Indeed, the State of the Nation Report 2002/2003, which benchmarked the existing utilisation of eCommerce by small to medium-sized enterprises in Wales, indicated that the top three drivers of eCommerce were to increase turnover, improve efficiency and to stay ahead of competitors.

Tangible benefits of eCommerce tend to be those that are commonly known, easy to recognise and identify, and are measurable in terms of the two criteria mentioned above. Here are a couple of examples to illustrate these points.

A telecommunications test equipment manufacturer made considerable cost savings by simply enabling its premier customer (comprising of 1,200 engineers), to download a manual (and software upgrade) from their Web site. Rather than printing and posting out 1,200 copies to account for each engineer, the cost incurred involved sending 12 paper manuals to each of the customer’s regional offices, and the associated cost of setting up the Web presence. This combined resulted in a saving of over £5,300!  

Burns Pet Nutrition (who distribute a proprietary range of small animal feed products) recently carried out some work looking at the potential cost savings of marketing their business through the Internet. The analysis showed the costs of promoting the company through their Web site (by using search engines and ensuring the site has the correct links established) is significantly lower (less than £2 per new customer) than that of traditional marketing and advertising (£30 per new customer).     

These simplistic examples represent tangible benefits which many SMEs associate with eCommerce. The following section aims to highlight and raise awareness of a few of the benefits of eCommerce that can be considered to be tangible but are not as commonly known.