4.2.1.3: Limitations of e-business system

Introduction

The limitations of e-business can be classified as technological and non-technological. The major limitations are summarized in below.

"The top ten barriers toe-business in the United States by declining order of their importance are security, trust and risk, lack of qualified personnel, lack of business models, culture, user authentication and lack of public key infrastructure, organization, fraud, slow navigation on the Internet, and legal issues." [6] In global e-business, organization, B2B interfaces, culture, international trading barriers, and lack of standards were on the top of the barriers list.

Although these limitations, e-business is expanding rapidly. "For example, the number of the United States people who buy and sell stocks electronically increased from 300,000 at the beginning of 1996 to over 25 million by the spring of 2002." [3] "In Korea, about 51 percent of all stock market transaction took place over the Internet in the spring of 2002 (versus 2 percent in 1998)." [4] "According to IDC Research (2000), the number of online brokerage customers worldwide will reach 122.3 million in 2004, compared with 76.7 million in 2002." [5] As both technology improves and experience accumulates, the cost benefit ratio of e-business will increase, as a result, greater rates of e-business adoption.

Technical Limitations of Electronic Commerce

  • Lack of sufficient systemˇ¦s standards, reliability, security and communication protocols
  • Not enough telecommunication bandwidth
  • "The software development tools are still evolving and changing rapidly" [2]
  • Integrating the Internet and electronic commerce software with current databases and applications difficultly
  • Additional cost to request special Web servers and other infrastructures, in addition to the network servers
  • Possible problems of interoperability, that means some e-business software or applications does not fit with some hardware, or is incompatible with some operating systems or other components
Non-Technical Limitations

> Cost and justification (35% of the respondents)
The cost of in house developing an e-business can be very high, and mistakes due to not enough experience, may result in delays. Outsourcing is one of the good ideas, but where and how to do it is not a simple work. Furthermore, to justify the system needs to deal with some intangible benefits which are hard to quantify.

> Security and Privacy (17% of the respondents)
These issues are especially important in the B2C area, and security concerns are not important from a technical standpoint. Privacy measures are constantly improving too. The customers know these issues as very important and therefore the e-business industry has a very difficult and long task of convincing customers that online transactions and privacy are, in fact, fairly secure.

> Lack of trust and user resistance (4%)
"Customers do not trust an unknown faceless seller, paperless transactions, and electronic money. So switching from a physical to a virtual store may be difficult." [2]

> Other limiting factors are
  • Lack of feel and touch online
  • Many complicated legal issues
  • Rapidly changing and evolving e-business
  • Lack of support services
  • Insufficiently large enough number of sellers and buyers
  • Breakdown of human relationships
  • Inconvenient and expensive accessibility to the Internet


References