E-business on the indigenous Caribbean - Essay Example

The common view of electronic business (E-Business) revolves around the launch and crash of the dotcoms, or the web hawking of consumer goods to the masses. It goes without saying that this outlook does not lend to its palatability within the Caribbean. In the region, troubled national economies and timid, struggling businesses simply have no will for highly volatile new ventures regardless of the potential payoff. However, these decisions are based on perceptions which do not do justice to the potential of E-Business.

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Beyond retail and web content, E-business is a new generation of concepts and practices used to increase the profit maximization capability of an organization. It is a tool which has been proven to lower the bottom line in the entire spectrum of business, while broadening the product horizon and enabling flexibility. This paper puts forward the idea that The Caribbean must align itself to dive into the electronic era, not because it is fashionable or the next level, but because it increases profits, improves productivity and guards against the increasingly carnivorous stance of modern international commerce.

It is argued that Caribbean business must make significant synergistic investments, must be willing facilitators order to realize their potential. This paper also purports the responsibility of business in the political arena as well as the commercial one. The lobbying of E-business legislation is a necessary component of the corporate strategy in order to open up the industry from a provider standpoint. Along with the promise is the threat of eventual obsolesce of Caribbean commerce as a whole if businesses cling to the momentum of traditional thought. Definition: What is E-business ?

One of the first to use the phrase E-business was IBM, when, in October, 1997, it launched a thematic campaign built around the term. Since then, the term has become a much touted buzzword which has not been analytically defined until recently. An initial definition, as cited from the Techtarget Whitepapers is “the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners. ”

This characterization encompasses the perception widely held about E-business, that it is internet communication centered and retail transaction oriented. Dr.Anitesh Barua of The University of Texas defines E-business as the “digitization of value chains and business process,” with the end result of “helping traditional organizations create new values and each previously unattained heights of operational and financial excellence.

” This newer, more accepted definition places no limits on the medium and is applicable to business as a whole. Conversely, E-business should not be confused with computer usage. Word processing and secretarial duties performed on a PC are not consistent with the definition. E-business is an integrating tool that affects the business itself.

Although computers have permeated Caribbean society and business, they have not been taken to the next level of integration and utility that affects the business as a whole. An E-business entity can by entirely independent from the internet. It can be as simple as the connection and computerization of several inventory locations in order to provide management with decision making tools; or as complex the entire business model of an organization, organic within every aspect of the business. The level of implementation is indicated like every other facet of business, by profit maximization.

This paper discusses on the spectre of E-business on the indigenous Caribbean small to medium size company against the background of societal influence and regional governance. The nature of E-business in the Caribbean and the current acceptance climate with respect to organizations within the region are examined. It will also look at the practical obstacles that business faces and the benefits realized once they are overcome. The paper was authored through the lens of empirical research in E-business in the Caribbean and throughout the world.

The preponderance or research citing external to the Caribbean is unavoidable, as the puerile E-business environment of the region had little experiential information or academic studies from which to draw. It is obvious how the electronic tools of the information age are implicitly beneficial to society in a holistic sense. Inexpensive, instant communication, powerful productivity devices, lowest cost, higher quality consumer products are just a few of the benefits we experience daily. However, the Caribbean has lagged behind in the implementation of this technology to the benefit of its indigenous business.

Globastat, a research company, company uses intelligence appraisal data (such as the CIA and the World Bank) to compile country comparative statistics. When looking at a country comparison, The Caribbean penetration rate of television, large appliances and basic utilities averages one fifth that of developed countries. The per capita domestic product of Caribbean nations hovers between forty-five and fifteen percent of developed countries. This is above the world average. However, when compared to these indicators internet access and computer proliferation in the Caribbean averages only one fiftieth, (two percent) of developed countries.

This is conformed by The International Telecommunications Union statistics. There is clearly a larger relative gap between the utilization of computers and connections in the region and that of developed countries. A study conducted by Nortel Networks, concluded that the underutilized potential for E-business in the Caribbean has matured with recent developments. The market has moved on to the “second wave” of E-business, where emerging technologies have made the size of the business a null criteria. Facilities and infrastructure for smaller organization is less expensive per employee than large firms.

To paraphrase the Nortel Whitepaper, “small/medium businesses can compete globally with major corporations. Well beyond transactions alone, today’s E-business is about much more than E-commerce. It is about marketing and competitive positioning. [Caribbean] companies are gaining major advantages over those slow to incorporate the next wave of technology. ” Studies done by Educational Institutions such as the Haas School of Business, Berkeley and Okalahoma State University support this conclusion in similar markets, and further emphasize that small businesses can accomplish a return on investment up to five times that of larger companies.

An empirical investigation done by Konana, Winston and Yin of The University of Texas states realized revenue increases averaging twenty-five percent for firms with turnover of less than one million US Dollars. Caribbean Corporate Reluctance: Why we never seem to be quite ready. The previous section of this report may not have raised the skeptics’ eyebrows. This is due to three main reasons, reluctance, immersion and the digital divide. The reluctance can be attributed to “last year’s dot-com implosion and this year’s global economic downturn”, according to Strategy Analytics a leading international research and consulting firm.

Oleg Ji?? tner, a consultant for E-gateway writes “In addition, confusion over the reasons for, and the return on investment from E-business have added to corporate reluctance. ” Immersion is a tendency that is not unique to, but especially prevalent in the developing world. A manager immersed in a society where a specific change is not being made will simply not make that change. On senior levels, boards tend not to approve funding for E-business if no competitor or other benchmark has done so. The majority of managers have learned to trust and abode by intuition, especially if leaning toward the conservative.

Caribbean businesses have faced great difficulty making the decision to venture into E-business due in no small part to the points above. The term ‘digital divide’ as defined by Village Research describes the impression that the world can be divided into people who do and people who don’t have access to – and the capability to use – modern information technology. The digital divide is also purported to exist between the educated and the uneducated, between economic classes, and, globally, between the more and less industrially developed nations.

Although the digital divide does affect a wide cross section of society, it is not a given. In the business world, studies are showing that the divide is more perception than reality, specifically in western hemisphere. In the Caribbean, the perception of a digital divide is felt to be a major point of resistance in the implementation of E-business. There is a common misconception the companies in the region do not have the expertise or foundation to develop the capability for E-business.

A recent report by The United Stated Commerce Department points to education as the greatest factors on the divide is the general education level of the populace and physical access to the technology. The drastic drop in computer prices has made the digital divide the digital door crease (PC Magazine. ) The cost factor and the now ubiquitous presence of computer retailers, schools, internet providers and service companies in the Caribbean precipitated the very foundation the region was lacking.

This surge in the consumer computer market, created a large base of users and the registration in A multitude of international, enterprise level companies operate in the region. Organizations such as The Bank of Nova Scotia, Heineken and Nestle must conform to strict corporate information technology requirements. Neil & Massey Illunimat and CommNett are examples of indigenous companies which have developed the capability to supply world class consultation and support capability.

Referencing the national directory will produce several other organizations of similar capability. The digital divide the Caribbean overcome by The Internet’s commercial appeal and the international corporate climate. However, the perception still exists among small to medium sized businesses that E-business computerization is beyond us and the initial technological hurdles are insurmountable. Looking at the level of education, service and computer penetration in the Caribbean, the digital divide has become and illusion.