IDC Finds that Small Businesses are Generating Revenue Through the Internet

NORTH SYDNEY- MAY 22, 2002 – According to recent IDC research there is a very strong association between stages of Internet usage and the contribution the Internet makes to revenues. Small business respondents were asked to rate the importance of the Internet as a source of company revenue, both directly and indirectly, on a 5-point scale ranging from 1, not important, to 5 very important ( over 20% of revenue).

 

Despite high expectations, the survey results show that not only have these businesses moved according to plan when it comes to going online and establishing a home page, but in majority of cases they have even gone further and fulfilled their own expectations in relation to generating revenues from the Internet, said Kourosh Ghassemi, IDC Small Business Senior Analyst.

Small businesses operate in a variety of markets, companies that are profiting from the Internet are more involved in professional services, telecommunication/media, banking/finance and manufacturing/resources sectors than their non-eCommerce enabled counterparts.

There is also a very close relationship between size of the companies and their level of eCommerce enablement and consequently their online revenue expectations. As companies increase in size they are more likely to sell online. The complexities associated with setting up an Internet based store have a direct impact on the relatively low number of small businesses that are currently able to sell their products and services over the Internet.

For a site to effectively support online sales transactions, the complexity extends far beyond enabling a Web site to accept orders. Back-end systems such as warehouse management, inventory and order entry applications need to be integrated into the Web site functionality. Business processes are also impacted, such as fulfilment and delivery,added Ghassemi.

To bring the small business customer along the path to eCommerce will require continued education and proof of concept by the service providers and developers. The benefits must be clear, small businesses will react positively to initiatives based on proven, low cost technologies, which offer short term returns. It is clear however, that the technologies must be easily and progressively taken into businesses, as managers are unlikely to welcome a significant diversion from their core activities.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and eBusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts local and worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organisations, eBusiness companies and the financial community. Additional information can be found at www.idc.com.au