July 2001 volume 5, issue 2 

Recently, the Canadian Institute of Chartered Accountants commissioned an Ipsos-Reid study, in conjunction with Bell Canada, CIBC and bizSmart, to assess the e-business readiness of small and medium-sized businesses (SMEs) across Canada. A total of 800 random interviews were conducted among senior management of SMEs, defined as those with between 10 and 100 employees and revenues greater than $1 million. The key findings of the study are worthwhile summarizing, given that many of our clients own and manage small and medium size businesses.

Impact of the Internet
An overwhelming 77% believed that the Internet would have a positive impact on their business over the next two years. Despite this belief, few had developed a strategy for their Internet presence and fewer still had actually implemented an ebusiness plan. This indicates that SMEs have lots of room to grow to become e-enabled and while results suggest senior managers believe in the value of the Internet/E-commerce, most have yet to fully integrate this new technology into their enterprises. Although it is a real challenge for small business owners to implement an e-business solution, those who do not address this challenge face the prospect of being left behind.

Access to the World Wide Web
The majority of respondents, 54%, indicated that few employees have access to the web and 12% have no access. Given the usefulness of the Internet for research purposes, this suggests employers may be overlooking a useful research and information resource.

For those employers who do allow their employees access from their place of business, most report the primary purpose is to keep up to date, review competitors’ websites and search for information on products that can be purchased from the web. The Internet is being used to a much smaller degree for the actual conduct of business, such as actually making purchases, doing credit checks and looking up tax and accounting information.

Web-Site Incidence & Usage
A majority of SMEs have a web-site (58%) and of those who do not (42%), many indicated their intention to develop a site within three years. Those who have not yet developed a web presence cite the following problems: finding good advice on adapting business strategy to the new technology, identifying the best provider of web development services, and difficulty in finding the staff to manage the website.

For those who have established a web presence, the two primary reasons for doing so are to provide information about the company’s products and to communicate information about the company itself.

E-commerce - Incidence & Concerns
Of those who have a web-site, only 23% currently take orders through their site. A majority, (37%), of those who do not currently take orders expect they will be capable of doing so within one year and 18% expect to be ready within three years. However, 30% indicated they would never take orders online.

The chief concern is security, that is, that orders might be intercepted or manipulated; followed by concerns about privacy (customer concerns about how information will be used), and reliability (downtime).

Conclusions
Overall, the study results suggest that despite some concerns, SMEs either have, or will be developing, an Internet presence and e-business capabilities over the next few years. They recognize that more and more business will be done in an online environment. However, companies need information and support to become e-capable, particularly advice on adapting their business strategies for the Internet. Results also indicate that the advice needs to come from a trusted source. The results of the survey show that the source most trusted is accountants.

Jim Carroll, FCA, who is the author of some 28 books about e-commerce, agrees. “It is a tremendous challenge for any executive to figure out e-business and how they can leverage it. From my perspective , accountants, with their intense insight into systems, transactions, finance and people, are a logical choice for helping these companies leverage electronic technologies to their full advantage.”

For advice and assistance with your Internet and e-business strategies, or for the complete results of the survey, please contact your Wilkinson & Company LLP Client Services Partner.

R.G. (Rob) Deacon, CA•CBV, CFE, joined Wilkinson & Company LLP in 1990 after graduating with his Bachelor of Commerce from Queen’s University. He received his Chartered Accountant’s designation in 1993. In 2007, Rob received his CBV designation from the Institute of Chartered Business Valuators.