Overview & Comments

Background

• This study was commissioned by the Australian Business Foundation to examine the opportunities and the threats posed by e-commerce to business capability in rural and regional Australia. The study provides a snapshot into rural Australia to determine the reality of the implications of electronic commerce for rural non-farm businesses.
• The study was undertaken against the backdrop of current literature where substantial changes to businesses as a result of e-commerce technologies are predicted. The real experiences of businesses as illustrated in this study, provide a new account of the impact of e-commerce and its significance for rural Australia.
• This report is a starting point that looks at the e-commerce experiences of a small number of non-farm rural businesses. The Australian Business Foundation offers it as an invitation for others to tell their stories, so we can build up a richer picture of the way e-commerce technologies are influencing business life in rural Australia.

What We Learnt

E-commerce technologies are changing the business realities of non-farm rural businesses, but this change is incremental rather than revolutionary.

The predicted threats and the anticipated boon from the uptake of e-commerce technologies have been overstated for rural businesses.

Rural non-farm businesses are cautious and experimental in their approach to e-commerce technologies. These businesses are taking small steps and limited investments to learn and to test the possibilities and benefits that on-line tools can bring to their businesses.

Rural businesses are enthusiastically adopting the simplest, lowest cost applications with the most immediate benefits. E-commerce technologies are providing significant cost and time savings for rural businesses in mail, banking, information retrieval, document transfer and other administrative and support functions.

The businesses that have adopted e-commerce tools have also seen improvements in the quality and efficiency of their business processes.

E-commerce tools allow rural businesses to change, enhance and tailor their products to better meet customer needs and to differentiate them from their competitors.

Businesses in rural towns are using e-commerce tools to add value to their products and services. This allows them to better meet customer needs and to distinguish themselves by expanding and customising their offerings.

E-commerce technologies are allowing these businesses to strengthen business alliances and capitalise on their products through the use of:

•  relationship marketing
• on-line information and advice
• databases and tracking systems

For example, some firms tailor offers to customers based on their interests, provide online after-sales services or add to their product range by alliances with other firms.

For rural businesses with niche or specialist activities or with information-rich goods or services, e-commerce technologies are creating new opportunities to compete and prosper in wider markets.

Rural businesses are experimenting with e-commerce tools to test their worth or to pre-empt potential future threats or external pressures.

Some businesses in rural towns appear to be getting the best of both worlds with a 'clicks and mortar' business strategy. This response is designed both to forestall on-line threats and to marry local knowledge, existing customer relationships and the value of personal contact with the judicious use of on-line technologies.

The cautious approach to e-commerce technologies by some rural businesses reflects both natural reticence to the adoption of any innovation and some rural-specific factors, such as barriers to learning about e-commerce applications and the difficulties in locating business-oriented IT skills in rural areas.

For rural customers and suppliers, personal contact and the 'touch and feel' factor in their buying decisions are an important part of doing business that cannot be replaced with e-commerce tools.

E-commerce in rural businesses is being driven by innovators, who are open to experimentation where it clearly enhances their business strategy or operations.

Many of the e-commerce pioneers identified by this study were innovators, well disposed to using e-commerce tools. These managers were particularly entrepreneurial, with an intrinsic interest in 'learning by doing.'

Those businesses that are developing e-commerce beyond simple cost-saving applications tend to be at a critical stage or 'trigger' point in the life of their business, e.g. developing a new product or responding to government regulations.

Alternatively, these businesses can see that e-commerce readily contributes to achieving current business objectives. For them, e-commerce complements their existing business strategy and offers new opportunities to enhance and add value to the products and services on offer.

Related Knowledge

• Rural Pioneers Online (Opinion)
  Mon Jun 16 2003 | Narelle Kennedy, Chief Executive, Australian Business Foundation

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