One-third of Irish businesses do not consider the Internet to be central to their business strategy, although most believe that it will become important to commerce in the future, according to a new survey.
Of 622 small and medium-sized enterprises (SMEs) with websites, only 46 per cent believe they are getting value for money, and a further 24 per cent say they are not getting any value from an online presence, the survey conducted by the department of accountancy and finance at NUI, Galway has found.
The study's key finding was that small firms tend to rush into establishing an online presence. "Rather than developing a clear business strategy for their website, businesses rushed off to create a site `because it seemed a good thing to do'," according to Dr William Golden, who conducted the survey with colleague Mr Michael Griffin.
Almost four out of five respondents (79 per cent) said they created a site to "gain an innovative image", and the majority indicated they went online to advertise to a wider market.
Dr Golden believes most SMEs are not interested in selling directly online because only 28 per cent regard the provision of electronic commerce by internet service providers (ISPs) as important. He concludes if these companies were to relaunch their sites they would focus more on the business potential than the technology, and incorporate the website as part of their core strategy.
Nearly three-quarters of those surveyed said they intend to redesign their Web pages in the coming year, although only 47 per cent have taken the initial steps towards this redesign.
The survey drew a 50 per cent response from 1,245 SMEs, defined as businesses with fewer than 50 employees. It found that 40 per cent believe the Internet is redefining the way they do business, and 24 per cent say a permanent loss of their site would have a major impact on their operations.
More than a quarter of those surveyed said they spent more than £2,000 on the initial design of their websites, and correspondingly have more hits to the site. However, the trend indicates that increased spending and the resultant number of hits does not necessarily imply higher turnover from Internet activity. More than one-fifth (22 per cent) of SMEs said they spent less than £250 on the initial set up of their Internet presence.
Thirteen per cent of firms said they were generating more than £250 a month directly from their website, while 28 per cent were generating no sales revenue. A further 47 per cent could not estimate what turnover their site was generating. The firms generating highest revenues tended to have specific targets for their sites, a lengthy online presence and occasional promotions or special offers to entice people back to the site.
One of the key findings was that no single sector emerged as performing more strongly than others in terms of Internet turnover or number of hits being received. Recent reports have indicated the financial, brokerage and insurance sectors have most to gain from electronic commerce.
There is obvious awareness about the Internet's potential, as 80 per cent cited access to new markets as the biggest driver behind their decision to go online. The target audience for 86 per cent of those surveyed was potential customers, while existing customers were targeted by 66 per cent. Pressure exerted by competitors who had established Web pages prompted 47 per cent of firms to go online, while 51 per cent saw the Internet as a low cost means of marketing.
The survey also found that, despite 42 per cent of websites being designed in-house, those that generated more weekly hits and a higher monthly turnover were designed by Internet companies and marketing firms. Nearly threequarters of those surveyed host their Web pages on ISP servers, and 37 per cent do not shop around for their ISP. These were found to be the SMEs who felt their sites did not meet intended objectives or generate value for money.
