Services firms scout for customers online

Professional and technical services firms accounted for almost a quarter of SMEs that derived a large proportion of deals from the internet, according to a new report.

The Communications Report 2008-9 [PDF], released by the Australian Communications and Media Authority overnight, highlighted the importance of the internet channel to small and medium businesses (SMEs).

SMEs accounted for approximately 99 percent of all Australian businesses. About 56 percent were estimated to have a website as at April last year.

Citing Australian Bureau of Statistics figures, the ACMA report said that 15 percent of businesses generated more than half of their total sales from the internet.

Telecommunications companies dominated the 15 percent. But 22 percent of businesses relying heavily on the internet channel were also classified as being from the "professional, scientific or technical services" industries.

A further third of Australian businesses derived between 10 and 50 percent of sales from the internet. Over half, however, achieved less than 10 percent of sales online.

Importantly, the report showed that some of the barriers to introducing e-commerce such as security risks and customer engagement concerns were dipping, if only slightly.

The number of small to medium businesses concerned about the risk of people hacking into their business computer systems via an e-commerce function fell from 46 percent to 43 percent.

There was also a five percent drop in the number of businesses reporting lack of technical expertise and knowledge in the business as a reason not to do e-commerce.

"A small proportion of SMEs also identified concerns associated with the lack of personal engagement with customers and perceived customer reluctance to adopt e-commerce," the report said.

Use of technology

The report also found that usage levels for many technologies by SMEs remained "relatively stable" over the reporting period.

The main growth was in internet-enabled 3G mobile phones, for which usage was up 10 percent over the year.

About one in five small to medium businesses used voice over IP and 17 percent had a BlackBerry or other mobile email, highlighting potential growth areas for SME adoption.