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    April 2013
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    Why Canadians Are Not Leaders in E-Commerce

    Gerald Trites, FCA, CPA

    In a report of the Boston Consulting Group in 2012, it was reported that, in the area of e-commerce, Canada is a player but not a leader. And yet we are among the largest users of e-commerce in the world. This apparent paradox bears further examination.

    In early 2013, ePath Consulting did just that by conducting a survey of 69 e-Business managers in various companies of different sizes from across the country to look into their approach, strategically and managerially, to e-Commerce. They identified some interesting findings.

    Almost all (95%) of the managers indicated that they have responsibility for e-Business strategy, while 90% indicated responsibility for e-business marketing, with the next level down being technology management. Since the overwhelming majority of the managers are charged with strategy, one would hope that the matter of e-business strategy would attain some degree of importance in the organizations.

    Many of those managers, however, expressed some frustrations with their executive groups, saying they tend to be traditional in their thinking, are very risk adverse and focus too heavily on ROI of possible e-Business projects. While the emphasis on ROI is understandable, nevertheless, ROI is famously difficult to estimate in new and untried market initiatives, particularly where technology is involved. The costs are relatively obvious in most cases, but the economic benefits tend to be difficult to project.

    The difficulty with ROI creates a higher risk for new initiatives, which brings us to a major complaint that many people have about Canadian business – it is very risk adverse. They are quite content to be followers rather than leaders, and let others work out the kinks in a new paradigm before launching into it themselves. They also find that the traditional “bricks” part of the business gets most of the strategic attention in their organizations.

    There is no lack of talent among those surveyed. While many of them stated that they learned their job on the job (which means they have experience), nevertheless 32% of them hold MBA degrees, and a number more have some designation or training in e-Business and or e-Commerce. Interestingly, some of them noted that they don’t believe that business education is keeping pace with developments in the world of e-Business. They pointed out that they have difficulty sourcing the talent they need, and many resort to consultants or outside contractors to get the job done.

    A majority of the respondents indicated that their e-business functions are only loosely integrated with the bricks end of the business. This varies with the size of the business, with the larger ones being even more loosely integrated.

    As numerous other studies have found, innovation is an issue in Canadian business. There is just not a positive attitude to innovation in many companies, and in this survey, over 62% indicated that they do not have a program with regard to innovation. Of course, that’s key to the area of e-business, and probably explains much of the paradox.

    The results of the survey can be found at http://ebusinessconsultants.ca/2013/04/2013-ebusiness-canada-survey-report/.

    The MONEY® Network