Impediments of e-business - a Dubai experience

The research reported in this paper explores the challenges of e-business (EB) faced by the Dubai companies in the contemporary times. A major objective of this research has been to identify the major obstacles on Dubai corporations’ way to success in the e-business arena. The findings from this research provide a good starting point in finding the solutions for the challenges identified. The major findings are categorised within the following areas: Lack of the awareness on EB; Organisational issues; Technical issues; and Website issues. Background Challenges faced by the companies involved in ebusiness are impeding the conduct of business and contributing to the low success rate of online businesses for the variety of reasons. According to Good & Schultz (2002) the mixture of customers from all over the world is an issue that requires skilled personnel that can deal with different cultures as different countries have different expectations and demands. Moreover the language of communication is also a challenge when dealing with different cultures; according to Good and Schultz (2002, p11) “receiving and sending similarly coded messages may cause problems. Sellers will have to be able to minimize language and cultural barriers, ensuring that messages and information are consistent, non-offensive, and culturally appropriate”. On the other hand, applying new technology in any environment normally creates challenges; it takes a long time and much effort to get people to adopt it. People are hesitant to change their working style and habits. This is particularly true for the experts in their fields (Hoffman & Novak, 1999; Tobias, 2002; Arnott & Bridgewater, 2002, p2). Getting managers to support the adoption of electronic business is a major challenge to be faced when deciding to go online (Poje, 1998). Furthermore, “Finding the right leadership and management team is getting harder to do in the dot com economy” (Chan & Pollard, 2003, p5). Lack of top management support and motivation is ranked as a high factor that can discontinue the adoption of an innovation within the organization (Peansupap & Walker, 2005). Legal issues present an impediment itself in some instances, as enforcing law in electronic business is arguable; creating international law is difficult (Papazafeiropoulou & Pouloudi, 2001; Torre & Moxon, 2001; Zekos, 2002). Moreover, according to Tan and Teo (1999) there are unanswered issues related to governance, rules and censorship methods controlling the flow and quality of information; this might hold back the diffusion. A government that avoids uncertainty may apply strict regulations and rules to protect the processes carried out in electronic business. These rules and regulations may have a negative impact that might reduce the growth and benefits of electronic businesses. For example “The advertising on websites in Europe is often quoted as the best example for an EB over-regulation, for example Denmark bans advertising to children, France bans advertising in English, and Germany bans comparative advertising” (Iyer et al., 2002, p11). It is difficult to determine the person’s legal identity or location in an online transaction; this challenges a broad range of law. In terms of collecting taxes “it is difficult to fulfil tax collection obligations from Internet transactions due to the absence of effective identification measures and the lack of verification controls” (Forgione, 2005, p2). “More laws need to be enacted or amended to define the legal boundaries of information probing” (Sheng et al., p6). However, governments appear hesitant to endorse laws as it could hinder the widespread of the Internet (Forgione, 2005). Some of the most essential challenges in electronic business is security and privacy, as without protecting privacy and providing transaction security within the business, it is very hard to carry out any activities online. These issues are of a particular concern when the user wants to use their credit card online (Warrington et al., 2000; Lejeune, 2001; Peeples, 2002; Totty, 2003). The lack of confidence in building this new economy because of privacy and security issues has led to some countries lagging behind (E.g. EU behind US and Australia) (Asfaw et al., 2001) and being hesitant in buying or selling activities (Peeples, 2002; Iyer, 2002). Therefore security and privacy are concerns that must be properly dealt with and tackled internationally to build confidence among the users of electronic business (Asfaw et al., 2001; Lee, 2001; Deeter-Schmelz et al., 2001; Papazafeiropoulou & Pouloudi, 2001; Brendon, 2002; Phan & Stata, 2002; Al-Mashari, 2002; Peeples, 2002; Totty, 2003). The more control is applied to reduce theft, the higher the Internet and Information Technology in Modern Organizations: Challenges & Answers 612 level of customer trust that is built in the business (Deeter-Schmelz et al., 2001, p4). Since the communication tool within e-business is the company’s website, the quality of the web site is an issue that could affect the success of the business in electronic business (Watson et al., 1999; Warrington et al., 2000; Schoenbachler & Gordon, 2002). Johnson and Whang (2002, p1) stated that “The web is having a significant impact on how firms interact with each other and their customers”. Website design, content, user friendliness and its effectiveness are addressed as major challenges facing electronic business. The website is a combination of business strategies, objectives and users’ needs and demands; therefore when designing the business website these elements must be borne in mind in order to create a powerful web site that achieves businesses and customers’ satisfaction (Cheng et al., 2001; Haapio, 2001; Sarel et al., 2002). The payment system is identified as another important issue/challenge in electronic business (Rahman & Raisinghani, 2000; Amor, 2000; Peffers & Ma, 2003). It is possible, however, that the expansion of electronic business is being held back as long as there is no adequate payment system. Therefore understanding the payment system is an important step that needs to be considered (Peffers & Ma, 2003, p3). The same authors are of the opinion that some buyers consider online payment as high risk since it is hard to get an indication of bad or good behaviour, in the absence of any direct or face-to-face interaction or observations to verify the seller. Another issue that has been raised as a significant challenge by Good & Schultz (2002) is the integration of electronic with personal relation packages or any existing information systems packages such as ERP (Johnson & Whang 2002; Anonymous, 2001) Supply Chain Management, Decision Supporting Systems etc (Schneider, 2003). Integrating Multi-channel is more demanding and seems to be more attractive to customers because it is trusted as a private and secure method of safeguarding customers’ information and transactions, provides a reliable and secure site, accurate delivery time and promises are fulfilled efficiently (Schoenbachler & Gordon, 2002). New online markets are regularly introduced to new competitors. This is still an issue that need to be managed as everyone is selling similar products to similar market (Lee, 2005). Competitors use intelligent agents to find out more about customers and other firms business strategies. This develop new threats to online businesses “Firms must be aware of these new threats and adopt pre-emptive, as well as reactive, defensive methods” (Sheng et al. 2005, p4) Backhous et al., (2005) argues that in the electronic marketplace, there are many different certificates used for authentication to provide secure transaction. These certificates have different policies and practices which lead to quality uncertainties. These variances make relying parties not certain on the trustworthy of these certificates. Methodology This research has been accomplished in two major phases. In the first phase a comprehensive literature review has been carried out, with the emphasis on challenges of electronic business in the world. In the second phase interviews with electronic business leaders in 5 large corporations in Dubai were carried out (for the anonymity reasons these companies are referred to as companies A, B, C, D, and E). These 5 companies were from diverse industries including: airline industry, electronics, recruitment, B2B marketplace operator, and e-solution provider. The goal of the second phase was to investigate challenges faced by e-business leaders in the Middle East environment, as well as to provide a basis for a proper analysis and to suggest possible solutions at a later stage. Thus, the main question for this research was: • What are the challenges of electronic business faced by the Dubai companies? Findings All of the participating companies have acknowledged the fact that it is taking a lot of the time, money and effort to overcome challenges they are facing on their way of adopting e-business as a business model. Despite all these efforts, most of the challenges are not overcome yet, and still present a big concern. The identified challenges are classified in the following four groups: lack of awareness of electronic business, organisational, technical, and web site issues. Lack of awareness on EB The level of awareness on EB in Dubai and the Middle East is still low as perceived by most of the interviewees. According to the interviewee at company C, many organizations as well as customers are still reluctant and feeling that it is still early to conduct online business. On the other hand, one of the concerns, as reported by company B, is that no matter how educated the customers are, they are still not able to do online transactions. Despite the realisation that EB is a new way of conducting business in the region, the problem is, according to the interviewee at company B, the lack of EB knowledge on the part of the decision makers. Another pro