Information Sheets > Delay, not an Option

British companies must shoulder much of the blame for the slow development of e-commerce in the UK. But companies can catch up quickly if they ask themselves the right questions.

More rapid adoption of Internet technologies is not the only reason why American businesses have led their European counterparts in e-commerce. They held a number of other advantages too. Consumer purchasing patterns are different in the US, with a much larger percentage of sales carried out by mail order. Customers are much more inclined to purchase remotely.

Also, the ethos of risk taking - of being first - is not so prevalent within the UK. To compound matters, some early adopters were sold a software package, told "that's e-commerce" and expected to get on with it. The lack of clarity around what e-commerce involves has not done the UK any favours.

UK companies must share some of the blame. Responsibility for e-commerce has often been turned over to the IT department. Apart from having their hands full with the millennium bug and the Euro, technologists cannot be expected to readily understand marketing and other business realities.

E-commerce impacts on every aspect of a business, with the IT department having a relatively minor role in creating effective e-commerce applications. Forget about the technology. It works.

Concentrate on identifying your business objectives and don't get side-tracked by wizzy applications. Be pragmatic and focus on the basics - why should my business enter into e-commerce.

Don't just look for cost reductions. Say you already have 5 people taking order entries, but expect to take 20% of orders electronically. Reducing the pay-roll may offset set-up costs, but it might be better to focus that employee on adding-value to your most important customers.

Businesses should also take account of benefits such as increased margins, improved service levels, new market opportunities, reduced debtor days and improved cashflow. Businesses should seek to identify the market opportunity by determining whether e-commerce is an opportunity to enter new markets, build stronger relationships, or start a completely new business.

80% of customers typically generate only 20% of profit for SMEs. Having taken account of the £35 cost of raising invoices and purchase orders, the business must decide whether to concentrate on obtaining new customers, making that 80% more profitable or adding value to the select 20%.

It is then necessary to establish what proposition will attract and retain users and encourage them to return. Some added value tools are cost effective on the web and nowhere else. Identifying, at an early stage, what internal measures need to be taken to translate interest into action, close the sale and add value to orders is essential.

Organisations must remember that e-commerce permits easy cross-selling of products and services, so self-imposed boundaries based around vertical lines of business can be removed.

It is necessary to establish if the brand carries enough weight to stand alone or would be better served in a community of interest such as a portal or "shopping mall" like Barclays Sq.

Calculate how trusted your brand is and also work out where the market you wish to reach is. Would going offshore, using the Channel Islands, say, to host transactions and handle distribution create a competitive advantage?

The on-line marketplace is relatively undeveloped, but its potential is huge. Approximately 10 million UK residents already have access to the Internet. Delay is not an option. It is vital to launch your e-commerce activity as quickly as possible. The market is changing so fast that delay would necessitate a complete re-examination of the issues.