E-Commerce Pilot Sees Strong Uptake By Manukau Businesses

A Manukau City Council Accelerating E-commerce pilot project aimed at upskilling Manukau businesses in e-commerce has been confirmed a success.

Starting in May 2003, and working with over 50 businesses, a pilot group of 27 were chosen to go through e-commerce business audits. Newly released results show 85% of pilot participants plan to adopt e-commerce strategies as a result of the pilot, with half already in the process of implementing strategies.

The pilot aimed to identify and overcome the major barriers to e-commerce for Manukau businesses with less than 25 staff. Less than half of the businesses had websites at the start of the pilot.

SmartManukau was a key driver behind the Accelerating E-commerce in Manukau Business project with Enterprising Manukau delivering it.

Mayor Sir Barry Curtis believes “the success of the pilot shows the real benefits of mentoring businesses about online and e-commerce channels. It is amazing what can be done to increase competitiveness and profitability through online channels.”

“But getting there takes serious handholding”, says Sir Barry. “Manukau City Council wants to help our businesses to be smarter - that is the drive behind the SmartManukau initiative.”

SmartManukau Project Manager Dr Hanna Frederick says that the vast majority of New Zealand businesses employ less than ten people. "They simply cannot afford to bring in teams of consultants to advise on e-business strategies. There are real hurdles in terms of knowledge, time and resource to get an understanding of how e-commerce can add value, and this is the area where we as a council can help“, said Ms Frederick.

Participating businesses varied greatly in their knowledge about online applications. At one end of the scale was a business that had been operating successfully for more than a decade but had never owned a computer. Their strategy was to develop a semi-automated invoicing system that could be emailed to their client base.

There were ‘bricks and mortar’ businesses that wanted to supplement existing physical retail channels with online channels. One such business needed help to develop an online presence and online just-in-time inventory management system to support their sales channels.

Eight of the participants were new web-based businesses, making the need to find innovative ways of targeting their customers via the web critical to their success. A new business called Menumade started from business concept and worked through to developing an online business as part of the pilot. Menumade’s site has just gone live, with a marketing push to commence shortly (www.menumade.co.nz).

The pilot programme was run as a free service aimed at integrating e-commerce into businesses and identifying cost-effective solutions for using e-commerce as a trading platform.

Enterprising Manukau coached and mentored businesses through e-business from no connectivity to full online trading. Facilitators helped businesses develop e-commerce strategies, and then establish budgets, milestones and timelines to complete implementation.

Through the course of the pilot, the major barriers for small and medium sized businesses (SMEs) to adopting e-commerce identified were: Confusing jargon: When faced with web hosting and development vendors talking in technical jargon, businesses felt disempowered and found it hard to make e-commerce decisions that were meaningful to them. Lack of skills: A lack of knowledge and skills within SMEs makes it hard to make decisions around the use of e-commerce. Overuse of technical jargon often contributes to this lack of knowledge and skills. Financial restraints: Most SMEs do not have a lot of surplus cash and e-commerce development is perceived to be expensive. Poor alignment with business objectives: Often there is little understanding of what a business wants out of e-commerce. Many don’t understand the benefits and impacts within the business of using databases, email, extranets, online ordering, and logistics programmes as part of business-to-business e-commerce strategies. Pressures of an additional channel of business: In smaller businesses, e-commerce put a major pressure on the business to manage new channels of business. Lack of neutral assistance: There is a perceived lack of assistance available that is neutral and understands the needs of SMEs.

The impetus for the pilot came from the SmartManukau Advisory Group, who in October 2002 recognised that SMEs had difficulty finding information on and understanding what IT systems were right for their businesses. The Advisory Group recommended Manukau City Council look into a vendor independent e-commerce service to take the jargon out of IT for small and medium sized businesses and give independent advice on appropriate systems and software.

Enterprising Manukau and SmartManukau are presenting recommendations on expanding the pilot and a draft project plan to Manukau City Council at its March 2004 Economic Development Committee meeting.

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