One In Four Businesses Using Internet For On-Line Sales

Friday, 03 September 2010 12:58

Written by Noel Cotter

ISME, the Irish Small & Medium Enterprises Association, has called on the Government to get serious about the “Smart Economy” before we become the "laughing stock" of the developed world.

While an ISME survey of ICT usage in SMEs confirmed the increased use of technology, including the internet and e-mail, the reality is that a major opportunity is being missed, with only 28% of enterprises using the net for on-line selling, due to inadequate broadband infrastructure.

The survey confirms the vital role played by ICT in improving business performance, with almost 100% SME web site penetration and e-mail now the main form of business communication with a dramatic increase in the use of social networking sites for business.

The response of the 800 plus companies to the survey, confirm;
* Only one in four companies (28%) use the internet for on-line selling.
* 98% of companies use the internet for business purposes, with 83% of companies having their own web-site.
* The average cost of set-up of a web site was €4k, with an average maintenance of €900.
* The main purpose for using the internet is banking (88%), communications (84%), sourcing suppliers (70%) and marketing (58%).
* 39% of companies reported that the internet has reduced their business costs.
* From those who responded, 71% have generated additional business from new customers, with 47% increasing business with existing customers.
* 26% of companies have a social networking site presence, with the majority (88%) of these on Facebook and 55% using Linkedin.
* Companies who do not have a website indicated a lack of in-house expertise (30%) and costs (20%), as their main concerns.

While there is an increasing appreciation of the contribution of ICT to the development of their businesses, SME owner managers continue to use ICT more for information and communication purposes than for online selling. The main reasons for lack of on-line selling are the availability, standard and cost of broadband and, to a lesser extent, the lack of expertise within the company.

Commenting on the survey results, ISME Chief Executive, Mark Fielding, outlined, “ICT and all forms of digital media have become essential tools for business and will have a critical role to play in enhancing competitiveness and increasing employment. The lack of adequate broadband is a major obstacle for businesses wishing to sell on-line. The Government must act on the broadband issue to ensure that Irish SMEs are able to use the technology as a sales and marketing tool, essential in today’s climate”.

“In just a few short years the business environment and the nature of transacting business has been transformed. It is imperative that, as part of the Government’s Smart Economy agenda, the role and usage of ICT in SMEs is exploited to its fullest and companies are in a position to avail of the most up to date technology at the most convenient cost. Training and investment initiatives, together with improving the Country’s broadband network, are essential components in ensuring that SMEs can compete in the global market”.