E-Ready or Not
Stabroek News
June 11, 2004
This is the first in a series of fortnightly columns by Chief Accountant for Demerara Distillers Ltd, Colin Thompson. Mr Thompson has been working with the DDL group for the past 7 1/2 years. He is also the Secretary of the Institute of Chartered Accountants of Guyana (ICAG) and a Director of Trust Company (Guyana) Limited.
The United Nations in its E-Commerce and Development Report 2003 placed the value of business transacted via the worldwide web at between US$1.4B and US$3.1B. The value of these transactions is expected to grow to US$12.8B by 2006.
While estimates vary on the value of electronic commerce (e-commerce), all analysts agree that it is significant and a trend that is expected to continue in an age of globalisation where borders and boundaries become less visible, where businesses and consumers constantly seek the best products and services; where improvements in transportation mean that items can be shipped to virtually any place in the world; and where some products and services can be supplied electronically.
Analysts agree that there is a positive correlation between information and communication technologies (ICT) and internet use and the potential for economic growth and increased productivity. Numerous research studies provide data on savings and growth realised by companies and even countries, post implementation of comprehensive ICT strategies.
The countries that are considered as having advanced the most in their ICT developments are those that implemented national strategies or ICT plans early on. For example the World Economic Forum's Global Information and Technology Report 2002 - 2003 identifies Singapore as starting as early as 1991 to develop a national ICT strategy, followed in 1993 by the United States and within five years by Canada, Japan and many European countries.
Just as the estimates of the value of e-commerce vary, so too does the opinion of analysts on the extent of the impact of e-commerce and ICT as a whole on smaller and less developed countries. They also differ on the approach that these countries should take in order to secure the benefits and possibilities offered through e-commerce.
There are compelling arguments for approaches centred on private sector leadership in developing countries and those for a government-led approach. The case for the former is summarised in the assertion that the development of the internet has occurred largely without government intervention. On the other hand the view that governments should take the key role is supported by the argument that there is a big gap between the basic conditions that existed in developed countries in the 1990s and those present in developing countries today. It is felt that to hasten the process there is the need for government support in fostering an environment where there is sufficient telecommunications infrastructure, legal and regulatory frameworks and the requisite human capacity.
The experience of many countries shows that implementation of a clearly documented and focused strategy for ICT and Internet development works. And that because of the pervasive nature of the subject such a strategy requires a fusion of the private sector and government involvement.
A combination of public and business interests must be met with the government providing that enabling environment and the private sector identifying and pursuing the opportunities that exist out there.
And those opportunities abound. E-commerce, though dominated by North America and Europe, is growing significantly in the rest of the world. In its Caribbean/Latin American Profile 2003 the Caribbean and Latin American Action reports that the value of business to business (B2B) e-commerce in the region is expected to grow to US$63.8B by 2005 from US$10.9B in 2001 pointing out that large numbers of developing countries are joining the large firms and developed countries that have been transacting business via the internet since the 1990s. Manufacturing, wholesale and retail sales and financial services are expected to experience the largest volume of transactions.
The opportunity exists, for example, for local manufacturers to pursue market development. With the small market in Guyana, an obvious way for local companies to experience significant growth is to develop alternative markets for their existing product offerings. A carefully managed e-business strategy can be one of the tools used to effectively aid in market development. We can move one step closer to realising some benefits by simply treating our websites as less peripheral to the business we transact.
The brochure type websites of the past must be replaced with interactive sites that present current information, enable transactions (placing orders, making applications, requesting information) and are supported by business systems that ensure that we are responsive to the needs of potential and existing customers.
In addition to transacting electronic sales another major opportunity that exists is in outsourcing. Outsourcing is by no means new, having its origins in the desire for companies to access low-cost labour for manufacturing. In the 1980s companies began outsourcing activities that they felt were not integral to their core and so began the outsourcing of data entry. Initially conducted at the client's site, advances in network technology and data storage led to outsourced jobs being conducted off site.
Today outsourcing has been revolutionised and ranges from basic data entry to more complex services such as medical transcription through to software development.
As an English speaking country with a high literacy rate Guyana can be positioned as one of the destinations for the expected 3.3 million service jobs expected to be outsourced by the US alone by 2015 as reported by Forrester Research. Decipher International Inc.'s medical transcription services, Atlantic Tele Center's call centre, and the Broadband Inc. Call Centre, expected to commence business shortly, are all examples of outsourcing at work.
Guyana is by no means e-ready, deficient in infrastructure and lacking payment systems to support online payment amongst other factors. However, it is important to recognise the opportunities that exist and to know that in the present circumstances we can realise some benefits by raising our awareness, maximising the use of the technology available and making demands for the technology and environment that is necessary.
(This writer is at present involved in a review of his company's website.)