“Analysing the conceptual logistical framework that derives from Electronic Commerce adoption, in the development of the remote areas”

 

Nikolaos Karanassios[1], Alexandros  Alexandrakis[2], Jacques Guenot[3], Steve Poluha[4], Ioannis Chamalis[5]

 

Abstract

 

E—Business is considered to create the universal village as an instrument of bringing at the desktop every participating enterprise, no matter where it is in the world. After some preliminary research in the remote parts of Serres, there is an indication of shortcomings connected with logistics of both provision and distribution. Several ways of confrontation of the difficulties are then proposed.

 

Keywords: Logistics, E-commerce, E-business, buyer, distribution

 

1.    Introduction

E-business is an expanding alternative to traditional ways of completing commercial transactions in all possible combinations among the participants; businesses consumers, bankers, transporters, advertisers, fiscal authorities and other kinds of intermediaries, as well as intangible service providers.

The evolution of the Internet, especially the philosophy on which it is based, end to end connection, permits the adoption of the idea that, in the global economy and information flow, even remote areas have the same chance to compete. Under this presumption the buyer’s end does not care where the supplier’s end is. It is enough that the buyer gets enough information about the commodities or services from a reliable source to be convinced to place an order.

Presuming that the reliability of information published is convincing, terms of competition are not equal, when the supplier is producing commodities or providing services in less developed areas. One of the shortcomings is directly connected with the logistics facilities the supplier uses, either as an organizational component of his firm, or as a characteristic of his business environment, resulting from territorial infrastructure and functions.

Remote areas are called so, not just because of their distance from the administration centers, tending to be population and thus consumer centers as well, but in the sense of transportation facilities. As an example, we may call an island remote, even when it is just a few miles away from the capital, if there is no port or airport, or if there is, without any regular transportation.

Remote areas are also less developed; otherwise they may easily be called “far” instead. Local development may be correctly measured by the pro capita annual revenue, whatever it’s source. This index is relative to other local economies. Whenever a local economy enjoys higher citizen standards, either consumes natural resources in order to create wealth or exploits the combination of business environment variables with intrinsic organizational once.

After the first step, which is transportation, considered as external business environment, the internal organizational variable step follows. Whatever the level of organization of the firm, environmental restrictions limit the firm’s competitive advantage in terms of organization, if the business environment does not adapt to global competition requirements.

Buyers, either end consumers or businesses, expect their supplier to be prompt when they place an order, to deliver just in time, to trust payment and quality (quantity as well) of the commodities or services ordered. They do not accept any excuse at all, either natural calamity or people activity (or strike). They have alternatives and they use them in order to continue their route to their own objectives.

Suppliers get the money after they convince the buyers that they will provide them with the satisfaction they promise. It is their responsibility, whatever the difficulties, to satisfy the buyer in spite of all involved occurrences. When they fail to do so, clients find other suppliers.

Producers of commodities and service providers, namely suppliers, know that very well and they do not take more responsibilities that they can bare. E-business is addressed to the liberty of Internet, so suppliers do not have the chance either to negotiate the terms of a transaction or take into consideration any particular circumstances of individual conditions. The overall business system has to be fine-tuned to a general offer, which on one hand has to be attractive for the potential client wherever he resides and with a guaranteed result on the other.

To their own concern, suppliers may organize their production and stocking system in the most sophisticated way, in order to meet the requirements of a global demand, never mind the location of their productive premises. This is not adequate to meet the expectances of the buyers. Local infrastructure, ranging from “hard” (roads, ports and the alike) to transportation systems and their organization have to be as regular as to bring the ordered items in time, at the promised quality and quantity, in the promised shape together with all other promised, commonly expected or even insinuated, accompanying services.

The firms operating in remote areas do not have typical facilities of this kind, but current technology, together with successful examples brought to light, represent a vast amount of techniques to combine both in an enterprise, as well as a public level, in order to bypass the geographical dead ends and exploit the opportunities.

 

2.    Components of E-business

Venturing in E-business forces the involved enterprises to review their commercial functions. Traditional delivery puts, in many ways, the customer with the producer or seller on the established distribution chain, together with the establishment of commercial transactions themselves.

The critical factors of E-business may be viewed as a sequence of preliminary actions, leading to the decision whether to venture in e-business or not, preparatory actions, leading to a business plan and functional actions, leading to executive plans.

Preliminary actions include market survey and evaluation, feasibility evaluation, strategic orientation and the description of the potential reactions of the competitors.

Preparatory actions involve the preparation of the business plan as well as all the necessary negotiations with bankers, transporters, lawyers, suppliers of all kinds, service providers, technology transfer operators, key persons, insurance agencies, financial operators, fiscal authorities and advertisers.

Executive plans are well-documented timetables describing who does what, at what cost, under what terms of payment, with what penalties for failure after a clear description of deliverables.

It is proposed to isolate the most dangerous, in terms of potential failure, components of e-business, so that conclusions about the importance of the discussed matters become evident.

2.1.    Promotion

E-business has always been the expected “value added” of Internet. Hypertext and the ability to add pictures and lately videos in the pages of World Wide Web, as well as applets with attractive effects, have taken www pages to the top of advertising media.

The ever-expanding number of pages generated the need for search engines and portals. Traditional promotion is used to advertise portals. It can be said that WWW is rather a cost effective advertisement with multiple capabilities assimilating television, than a revolution, as it has been initially thought of.

Since WWW advertisement can be created in-house, many enterprises have created their own pages, while Internet Providers started to undertake site creation, based mainly on their ability to use HTML and Java.

The question often posed by the entrepreneurs and advertisers alike is connected with the target group to contact through Internet advertisement.

Shops in cities tend to concentrate in specific parts and streets, according to the merchandises they sell, so potential clients have the opportunity to visit most of them without wandering about the city in search of competitors. Search engines and portals assimilate the market by gathering site names and presenting them by category of goods or services they advertise.

It is vital for E-businesses to advertise to their target group in order to diminish the cost per contact, so marketers invent all possible tricks, ranging from competitions with a prize up to direct e-mail.

There is still a drawback in both advertisement and other promotional tools for E-business, so that it can be said that their market is not yet mature to a level to create credibility and trust under some kind of standards.

Traditional advertisement has to follow certain rules under the responsibility of both advertised enterprises and the advertisers. Those rules are law enforced in all western countries, protecting the potential consumer from fraud.

The size and history of advertised firms create a felling of trust to potential clients the same way the size and luxury of shop windows in a commercial street; This kind of standards do not appear in promotion through the web. Other kind of standards does not seem to be proposed. Hackers and the publicity hacking get from the media, make potential consumers to suspect whatever appears in web pages.

Human networks are widely used as a promotional tool in order to deviate trust from the electronic systems to individuals.

On the other hand, legal regulation of web advertisement and promotion would severely damage Internet freedom and equal terms of information diffusion.

2.2.    Order

E-mail facilities incorporation into web pages that advertise companies and their products created the first ideas about E-business. The shopping basket common procedure of E-commerce imitates the super-market shopping.

The shopping basket of an electronic shop is virtual, so is the exposition of merchandises. The buyer has to decide whether to trust the images and the corresponding promises of both the virtual shelves and the enterprise behind them. The buyer does not have the opportunity to either feel or compare it with other similar products, in any other term but the price. Similarly, the buyers cannot be sure that they will get what exactly they have ordered.

A question is often raised about the security of the contents of the e-mail, since the system administrator of the mail server can have access to the files containing email and even change them. There are several security techniques, but even when they are used, potential consumers do not know anything about them or the level of security they provide to the users.

Another question about on-line ordering is whether the supplier is able to use multiple copies of the ordering e-mail, with variations of the original order and thus send goods to the buyer that he never ordered.

It is much easier when the ordered item is new software or a newer version. The supplier, usually, gives a taste of the look and feel of the software package of a non fully operating trial version. It is not rare to download the software and buy only the license to use it.

When e-business concerns tele-work, for example on-line legal or medical assistance, consulting or similar services, the agreement between the service provider and receiver is a totally different procedure than ordering. In such cases both sides negotiate, either through a routine of options or in a liberal form, what will be the expected deliverable, in what timetable and at what price and terms of payment.

The orders received show the level of success of both overall e-business and the promotion campaign. The commercial transaction between the buyer and the supplier does not end with ordering. It is an open question until a one-time-buyer becomes a customer.

2.3.    Delivery

Global economy is supposed to bring equal opportunities to every individual as a consumer and every enterprise up to the same level of competition, after the abolition of the various forms of commercial barriers. Nevertheless, enterprises have to deliver their products to their clients from the place their production takes place to the residence of the client.

Several organizational factors have to be taken into consideration when E-business is being planned. The most important are cited, under the hypothesis that potential clients may place orders from practically anywhere in the world, expecting a home delivery.

2.3.1.    Transportation

Preparing E-business transportation changes from a well-experienced distribution chain in a determined geographical area to a global and complicated transportation system. The distribution chain does not exist any more, when either client-to-business or business-to-business orders may arrive from any place in the world.

Under this business environment, the enterprise must prepare a transportation plan, which should include the most important subjects, from packaging requirements to different transporters agreements for every possible destination.

2.3.2.    Delivery time

When a customer goes to the shop of a retailer he is able to collect the items meeting his requirements, move to the cashier and take them away. There is no delivery time.

When an enterprise reaches an agreement with a supplier, delivery time is one of the most important parts of the agreement, some times even more than price.

In E-business, the buyers base their decision on an overall evaluation, in which delivery time plays a significant role. Picturing an offer with long or uncertain delivery time discourages the web page viewer to place an order. Firms wishing to succeed in e-commerce have to be prepared to send their goods to even impossible or exotic destinations by calculating the delivery time to each one of them after an assessment of the available transporters.

Calculating the expected delivery time is not enough for e-commerce success. Firms have to keep their promises about the delivery time by dispatching in due time and inspecting the transporter’s route to their client, taking all necessary actions to avoid delays.

Delivery has to be done in a well-determined time because buyers expect the ordered items to be received in proper time, as they have their own plans. If the buyer is a firm, either will expect to feed-in it’s production system or fill-in the shelves of the shop with up-to-date merchandises. When goods arrive earlier than expected, warehousing capacity disorder may be created, when they arrive later than expected, the production plans cannot be respected, shop shelves may remain empty, merchandises may become out of fashion or obsolete.

2.3.3.    Accompanying documents

Forwarding of goods is not just a matter of moving them from the supplier to the client and securing the time it takes. According to their destination, the type of transporter, the nature of the goods, their volume and value, different documents have to be issued, most of them by the selling firm.

For this global variety of destinations, different check-lists have to be prepared because of the different fiscal and legal obligations of the different countries, different customs office procedures and even international money transfer restrictions require different documents and in some cases, even a special permission.

2.3.4.    Delivery verification

The selling firm wants usually to know that the person or firm that has ordered them receives the items forwarded. This is not just a way of guaranteeing the imbursement, because in many cases clients pay when they place their order.

Delivery verification, under another point of view, would prevent possible fraud by the transporter, but even this is very uncommon, especially with well-established transporters who safeguard their reputation, using their own verification system.

The selling firms frequently use verification of receipt as an organizational tool, which discriminates complete deliveries from the pending ones, so the effectiveness of the transporter can be evaluated, delivery time estimation may be refined and necessary actions may be taken in order to keep the promised delivery time.

2.3.5.    Insurance

Insurance of forwarded items is not necessarily a matter of risk management. E-commerce is usually based on items with relatively small value, so the risk to lose either a part or all of the item’s value is consequently small either. Insurance is generally used as a convincing claim of delivery integrity, thus as a promotional tool.

Insurance costs, on the other hand, do not really affect the overall price that the purchaser has to pay. 

2.3.6.    Guarantee

The buyer decides to pay the cost of an item (or a service) expecting to get satisfaction out of it. Guaranteeing satisfaction as much as possible means to convince more buyers and therefore getting orders. The limits of a guarantee are quite visible. There is one more factor to take into consideration. Disputes over satisfactory product or service may always appear between the selling and buying parties, so there must be an impartial evaluator of the degree in which a product or service corresponds to what was explicitly ordered.

2.3.7.    Rejections

For various reasons clients order items and by the time they receive them they have changed their minds. Questions arise about rejections forecast, as they represent not just the cost of the items, but also all additional costs of freight, insurance, administrative costs and depreciations.

It is also questionable whether the seller will bear the return freight, concede the item to the transporter, ask the transporter to destroy it or direct it to others. All cases are possible, so a mix of such decisions is a part of e-commerce plan.

2.4.    Payment

Payment concerns transfer of money, so it is imperative to maximize security.

In many cases payment takes effect at the same time with ordering.

In other cases, a down payment is required with the order, while remittance is connected with the acceptance, not just receipt, of the ordered items.

Payment may also be done on delivery; either to the transporter, or to another involved body (usually a bank) after the verification of acceptance.

The use of credit cards is widespread, although there is still a lot of mistrust about the use of plastic money over the Internet.

2.5.    After Sale Service

A sales procedure is not complete with payment. In addition to the continuation of supporting the sold items, usually through a help-desk or technical assistance and in some cases maintenance, there are also other after sale services to consider.

The better after sale services are provided to the clients the better a new generation of items are prepared.

 

3.    Prerequisites

Venturing in any kind of business means undertaking the risk to loose the capital, which is necessarily invested in tangible and intangible assets, as the means to obtain profits.

The most popular technique to diminish the risks is business planning. The most accurately the business plan is prepared, the less risky the investment becomes.

E-business represents a fast way to respond to the market demand, so the products or services, as marketable subjects, are directly connected to innovation. Defining innovation as a new way of doing business, little precedence exists and it is almost impossible to use statistics with some level of confidence. Logical sequences and procedures testing gain importance over experience.

Some of the most important components of planning e-business are cited.

3.1.    Production

Goods or services have to be produced before they are offered. Production has to be planned in accordance with the availability of technology and know-how and has to take into serious consideration the weakness in predicting the level of demand.

In most cases subcontracting agreements are the most essential part of the business plan.

3.2.    Provisions

While demand is almost unpredictable, production and stock levels are uncertain and the production flow is undetermined, provisions management takes a dominant position in terms of importance.

This becomes more decisive when the production system is using subcontracting as an expansion buffer, because there are no predetermined lots. The provision system becomes complicated to plan and control while provisions transportation equally affects the ability to follow a reverse provision system, which is following the evolution of orders.

3.3.    Design

Products design has to be specific for e-commerce use. Web page spectators are not able to put hands on the product and feel it, they can just see it and presume its real “look and feel”. Even if 3D animation is included in the web page, the product remains an image, which has to be convincing to the page browsers.

Packaging design has to take into deep consideration the distance that the product has to travel until it reaches the hands of the buyer and the possibility to change various transporters during its route.

3.4.    Planning

The uppermost enterprise function is always planning, but when e-business comes in question, planning is one of the last procedures. It is only possible to make feasible plans, when control is gained over transportation matters of all input, like raw material, parts or finished products from subcontractors, packaging material, technology and know-how, design, innovation and patent use.

Controlling such a complicated system means to find alternative ways of implementation that bypass local inconveniences when they appear and be prepared to resolve such kind of problems.

3.5.    Strategy

E-business is an attractive action field for established and would be enterprises, because of the vast publicity of successful initiatives.

Basing strategic plans on previous success is a totally wrong approach. The activity of the sector evolution is rather driving to an exhausted opportunities framework than an innovating competition ground.

Investing in activities that appear appealing because there seems to be an apparent competitive advantage, does not apply in ventures of e-business, as long as they can be considered new. The competitive advantage, if any, is in most cases rather connected to innovation than typical market assessment. The classic matrices of strategic decision-making do not apply in E-business, as long as they are considered a break-through.

Strategic decisions for such kind of business should be based on organizational parameters, such as speed of reaction, resistance to changes, level of multicultural work environment adaptation, degree of abilities to compile complexity and systematic innovation creativity.

 

4.    Remote areas character

Areas having an economic development level below the average of the geographic unit in which they belong, may be easily called remote. When such an area is also accessible with difficulties, then it becomes distant, in spite of the physical distance from nearby places with a higher degree of evolution.

There may be availability of connection facilities, but if there is no traffic of persons and or goods, even then an area may be called remote, because it is away from economic activities. When there is no economic activity or its level is much lower than neighboring areas, then other development parameters are also low, take culture as an example.

In a few words, the level of flow of wealth is the one that makes an area remote and not just the difficulty to reach it.

4.1.    General

Calling an area remote or exotic takes one more consideration other than the difficulty to get there; this is the standard of living and consequently the ability of the inhabitants to create local wealth.

Local wealth is created by either investments or the retention of a part of the passing-through values. Investments produce either goods or services, which are exported to other places or substitute the imported ones. Exporting commerce plays the same role, since it brings back values, in the form of currency, from other places. Accumulation of commercial revenues and the respective knowledge of the market is the usual first step for investments exploiting either natural resources or other characteristics, such as available labour at favourable conditions, incentives, fiscal facilities etc.

4.2.    Intellectual resources scarcity

Initial capital and market knowledge are very important but not adequate for successful local investments or even the appeal of foreign ones. Other factors play crucial roles and have an increasing importance to all the involved parties in an investment, such as subsidizing authorities, banks, shareholders, subcontractors, consultants, partners and even major suppliers and clients.

One of the most critical factors for an investment decision is the availability of local skills and intellect. This is what makes the difference of the level of development between the most and the less developed areas. Areas with a higher level of development already have the necessary intellectual capital which is able to create local skills and reproduce itself, meaning that higher education institutions located in the most developed areas gather the most successful scientists and the best performing students and some of them climb up the academic ladder.

Remote areas suffer from shortage of intellectual capital. Even when locals reach high academic or just scientific standards, they leave because of much better opportunities in either academic or financially rewarding terms, or both. Firms, on the other hand, tend to remunerate skilful employees according to the living costs of the location of their work and not after a cost / benefit analysis which takes into consideration even demand and supply intensity. They practically motivate them to move into more developed areas, usually big cities.

This creates a vicious circle of skills scarcity, which affects the performance and development of the academia, in terms of intellectual level of personnel that is unable to reach a critical mass, being unable to produce enough skilled graduates and use researching and consulting abilities to the benefit of the local enterprises at the same time. Consequently, less developed academia is unable to bring in enough students with ambitions, strong will to learn, high devotion to their goals and ready to follow a demanding study program.

Academia reputation is earned step by step and goes hand in hand with the evolution of local industry. The more academia is being used by local enterprises the better they perform in terms of increment of skills availability in all ends; graduates, academic personnel and infrastructures. The more academia concerns about the prospective needs of local industry, getting involved deeper and deeper in the productive system, the better performs.

E-business contains e-consulting and e-learning but these tools may damage local skills availability, create a deterioration of local academia and harm the local intellectual resources, if they are improperly used.  The correct use of these tools is not a dogma; it is a perpetual procedure of reaching agreements between the academia and local investors as well as extroversion of the academia itself after acknowledging that a closed academic domain is not academia at all.

4.3.    Transport constraints

Local development strongly depends on the ability to plan the flow of goods at both directions, provisions and sales, as well as of persons, either carrying incoming know-how or as sales persons.

The ability to plan improves as more transportation alternatives appear. If there is only one road or only one transport enterprise, it is not the enterprise to produce any plan but whoever has the authority to control either the road or the transporter. The local enterprise simply adapts to the plans, if any, or just the circumstances of availability of transportation facilities. Take for example the Aegean islands under cabotage, where trucks can only be carried by a limited number of shipping companies, with a limited capacity. It is the same when a place has only access to railway transportation, or when only one road transporter operates.

Transportation planning, under this point of view, is also heavily depending on availability, when it is subject to climatic conditions. Islands and highlands alike are limited by weather conditions.

Even when the climatic incidence does not create planning difficulties and even when there are alternatives for the selection of the transporter, if a certain destination has no traffic, no matter how far it is, becomes very distant, unless covered by proprietary transportation means.

Availability of third party Logistic facilities is also a determinant of transportation planning ability, as well as ability to follow the plans.

The degree of isolation, in respect of some or all of the above conditions, makes an area remote.

4.4.    Support restriction

Supporting organizations that are supposed to promote development of remote areas are evaluated by their successful operations in terms of the number of enterprises supported, number of jobs created, sales volume augment and local financial support obtained. Supporting organizations are evaluated equally, no matter the initial degree of development of the area they operate in and cover.

Both national and European supporting organizations ended up with a concentration in highly developed areas, since it is much easier to be viable and successful. Financial authorities controlling those organizations, from their point of view, act as investors seeking a fast and high return on their investment and prefer reporting achievements than goals realization.

Supporting organizations represent only the tools of implementation of development policies, especially when they promote cohesion. SMEs base their activities mainly on the common use of expertise, since they are not able to pay the cost of in-house functions, such as accountants and tax consultants, engineers, designers, advertisers and trainers to name a few. The local availability of this kind of consulting with as many as possible alternative choices, represent the level of favourable environment. Lack of local consulting with an acceptable degree of effectiveness, monopolies created by the national or international organizations or even private consulting firms, prevent enterprises to use their facilities because entrepreneurs have a feeling of conceding the control of their business to improper hands. Whatever the kind of monopoly, instead of leading all enterprises to their services, drives them away, directing monopolizing consultants to shortage of clients.

The existence and operation of Logistic enterprises in a determined area is also a common facility to be used in order to diminish ill effects of isolation.

 

5.    Options in Remote areas

The business environment in remote areas seems to be unfavourable for E-business, because of the difficulties in logistics. On the other hand, remote areas represent the proper strategic environment, because of their social structure and values, the need for development and familiarity with bypassing discouraging circumstances.

Strategic parameters are strongly recommending remote areas enterprises to exploit the dynamics of small societies through E-business. Obstacles and problems regarding operative parameters, mainly connected with Logistics, can be resolved with a profound preparation and a careful selection of one or more options.

5.1.    Merge and/or subcontract

Merging with Logistics enterprises is an alternative to proprietary logistics, which gives the opportunity to share responsibility of prompt delivery.

Subcontracting the logistics function to a specialized enterprise is also a valid option, since the producer can treat all transportations as if it were one. The logistics company is the one that has to plan and execute the task of prompt delivery, with all related paperwork.

5.2.    Centralized Warehousing

Transportation time estimation uncertainty of remote areas, together with the additional costs of transportation between production location and transportation nodes, may be faced with a centralized warehouse near the nodes, as a redistribution buffer.

They can refill the buffer using logistical computations using the most sophisticated tools of self-adjusting stock limits.

5.3.    Dispersed Warehousing

The market of E-commerce is universal but still the flow of goods follows the economic rules of expected demand. For example, it is not probable to have big sales to small populations with low income and you cannot expect orders from places with restricted use of Internet or even with foreign currency prohibitions.

Under this point of view, warehouses nearing the markets with the higher sales, respond better to delivery time and may be chosen, in spite of additional costs.

5.4.    Use of Distributors

Using distributors is risky, because buyers become the distributors clients and the producer is gradually falling to the role of the distributor’s subcontractor.

5.5.    Use of Agents

When the buyers are enterprises, familiar to the usage of agents for their provisions, agents may be used for the transportation organization and load tracking.

5.6.    Use of Logistics specialized companies

Agreements with logistic enterprises resolve the problems of transportation and warehousing. It is their job to determine the stock limits and places, calculate the estimated delivery time, take responsibility for delays and defects given to transportation and track the route of travelling goods.

In such cases, agreements with only one logistics enterprise has the danger to be unable to cover in due time all destinations and depend on the accuracy of its services.

6.    Research results

The idea of using Internet for E-business as an instrument of remote areas development started in 1994, when the European Business and Innovation Centre of Serres participated in a Telematics European project.

Already in 1996 the little or no success it was evident and created the necessity of isolating the reasons appeared.

The limited number of enterprises of Serres permitted to use “participative observation” together with the traditional survey of questionnaires. Surveyed enterprises are 84, covering all activities, from food processing to electronics.

The survey has been executed in three phases. In all of them, the questions have been asked to top management or owners while visiting their establishments. Questions have been explained in detail and answers have been verified using practical examples of their procedures. The visiting questioners were familiar with both the visited enterprise and the manager or owner has always been their personal acquaintance.

The first survey took place from November 1997 to January 1998.

The second survey took place from October to December 1999.

The third survey took place from February to March 2001.

Although there has been a great expansion of the use of Internet and recently E-commerce has been widely advertised by the public authorities, there has been no significant change in the enterprise aptitude, as seen in the previous surveys.

In all three surveys there was no change in the behaviour of the entrepreneurs towards confidentiality of the volumes of sales, systems of provisions, distribution chains, control systems and future plans. They also tended to show that they are preparing E-business, while this did not verify in all but one (out of 80) cases, when Internet Providers have been crosschecked. Throughout verifying questions, all of the entrepreneurs have been found in contradictions about their E-business preparation or strategy.

The vast majority, or even the total (if “why not” may be taken as an affirmative answer) wishes to have a web page as a promotional tool, while they all expect orders in the traditional way, which is fax in only 23% and, either telephone or during a personal contact, all the rest.

The major logistical concern is load tracking, even when the enterprises send or receive goods using private transportation means and in respect of E-Business is trust of either the provenience of the order or the payment.

6.1.    Conception Level

Throughout the surveys there has been a gradual change of top managerial generations; the newest managing generation is mainly composed by persons with a higher education degree (73%), with an average age of 47 years old.

The radical change of top management (86%) did not have any effect on the conceptual level of the functions of E-business. The change of the number has not been significant, since 3 of the initially surveyed companies do not work any more, while 2 have been split and one has moved operations to Thessaloniki.

Without having any substantial data about the conceptual level during the first and second surveys, comparing notes of the answers on similar questions and their verification, as recorded after the “participative observation” the entrepreneurs, although they are not the same, have all (except 4 cases) a great difficulty to comprehend the functions of E-business, while they all consider this kind of operations appealing, without any exception.

There is a general confusion between Internet promotion and E-business.

6.2.    Preparation Level

On a regional level, there have been developed two E-business facilities. One is an initiative of the Chamber of Commerce, which started as Internet use promotion activity, in the form of a common action with the European Business and Innovation Centre and now is an E-Commerce node and the other is a product of E-Commerce administration Software, created and commercialised by a local S/W house.

Use of Internet by local enterprises is quite widespread, as much as information retrieving is concerned; covering 58% verified cases out of 95% of positive answers (the rest was contradictory) of the surveyed companies, average in E-mail use, covering 40% of verified cases out of 90% of positive answers (they have an e-mail address but they do not check it) and insignificant in respect of other uses of Internet with only casual use of only 3 companies.

The vast majority, 85%, has a Web page, but with a very slow rate of updating, with an average of 16 months.

In conclusion, it may be stated that the preparation degree is elevated in terms of technology but very low in terms of exploitation and knowledge.

6.3.    Adaptation Level

Remote area enterprises are far behind in adaptation to the needs of E-business. Enterprise systems plan and control all business functions, namely: promotion and sales, production and quality, provisions and dispatches, transactions monitoring and reporting, cash flow forecasting and credit policy issuing, debts and credits balance, client orders handling and servicing, personnel recruitment and administration, legal compliance and licence obtaining, under an estimation of market rules, competition reactions, risks and strategic positions.

This chaotic framework, because of its complicated occurrences, accumulates additional complications when E-business comes to question. Assessment of local enterprises brought to light the most significant adaptation weaknesses: accounting systems and logistics.

Accounting systems, either proprietary or shared, monitoring transactions and safeguarding legal and fiscal obligations, discourage entrepreneurs, as the entire sample revealed, because of the rigidity of the fiscal system. What has been deducted from the interviews is that all of the local entrepreneurs have experienced aggravation by the fiscal authorities whenever they have undertaken business initiatives that weren’t explicitly prescribed by the fiscal law. E-business, operating in a global environment, appears to the entrepreneurs as a certain route to implications with the authorities.

Logistics, for all of the local interviewed enterprises, seems to be ignored. Logistic enterprises do not provide their facilities in remote areas, unless after the initiative of the local enterprises, while they only operate in densely populated places, while local enterprises are trying to satisfy their logistics maters with either proprietary transportation organisation and means, or proprietary organisation and public means, like railway or truck companies, Post Office or Courier facilities and similar combinations.

Adaptation level seems to be at the lowest point, because the most critical factors are external to the enterprises, while enterprises have little or no knowledge at all of the available instruments.

 

7.    Proposed actions

As a result of the observation of the local enterprises, there has been evident that they need information about all aspects of E-business. The availability of logistical facilities seems to be the major success factor.

The social partners, like public authorities, either national or local, the entrepreneur’s organisations, like Chambers of Commerce, Engineering, Economics and others, Associations and non profit organisations, have all to undertake the tasks of preparation of the remote area key operators. If preparation is limited to information dissemination, then expectations for a change may well be predicted as minimal, based on the past experience. Hands-on paradigms have to be organised, minimising risks and testing co-operation. Subsidies have to be driven to shared logistical facilities, so that both the costs and the time of provision and delivery come to equal terms with businesses located in densely populated areas.

Enterprises have to plan their gradual adaptation to E-business, starting with the facilitation of their key persons in getting involved in the preparatory actions, such as participation in virtual and case study driven training, negotiations with potential service providers, compilation of subsidy claims and open discussion forums.

Service providers, such as Accountants, ISPs, transporters and consultants, have to adapt themselves to the requirements of E-business, so that they will be able to assist the evolution of remote area enterprises, increasing their significance in the same time, through the organisations they all belong.

 

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