E-Commerce Adoption and Appropriation by SMEs in Sri Lanka

Abstract

Acceptance of the Internet has paved the way towards the development of virtual communities that keep increasing in the current information society making it imperative for business, especially the small and medium enterprises (SMEs) which form the backbone of any economy, to keep abreast with e-commerce and remain competitive. To stimulate and facilitate SME participation in business activities through the Internet, it is necessary, therefore, to provide clear guidance and direction with suitable models and frameworks specifically tailored for the purpose. This chapter highlights an attempt to develop a suitable framework for the e-transformation of SMEs in Sri Lanka. In the belief that new models and frameworks can help SMEs to equip themselves to better understand their current stage and identify the main barriers at each stage of the adoption process, this attempt starts with an initial exploratory study of 17 SMEs, followed by a regional survey involving 625 SMEs from various industry sectors, along with interviews with the SME intermediary organizations. The proposed model facilitates establishing the current stage of an SME with regard ICT and e-commerce sophistication using five stage variables. It also assists to determine current position with regard to barriers towards the adoption of e-commerce and helps determine the support necessary to overcome such identified barriers. The research detailed in this chapter establishes that barriers show variance when SMEs proceed to more advanced stages in the adoption process. Likewise, the necessary support required indicates a similar trend. Going further, the chapter proposes a model for adoption of e-commerce for SMEs in Sri Lanka and identifies the essential need for support while acknowledging available support. Finally, it proposes an initial framework to e-transform SMEs in developing countries