The Role of Government n E-Busness Adopton Customs … have brought in an edict that you will have to talk to them electronically by the end of September (2003) or you don’t export … To ship our goods overseas we have to talk to Customs, the Australian Customs Service electronically or we won’t be able to ship. We have got to do that by the end of September.
Another respondent provided the following comment:
Australian Customs Service are putting in this new cargo tracking system which is why we have had to spend another $40,000 to work with this one, and we have to do it, it is compul- sory, and we have to have it in by November this year. But part of this system is they have an online function of looking after a cargo status, so it is a cargo tracking system.
Yet another respondent’s comment on the impending change in gaining Customs clearance follows:
We use a package called Trident — the Trident system interfaces directly with Customs in what is called an Exit One package. Now that’s about to undergo a very, very significant change, and the actual way in which Customs handles the export of wines is about to undergo a fundamental change … We came out of that with the instruction from Customs to apply for a digital certificate, so we need to get these processes in place.
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has been shown to have sufficient interval characteristics for the computation of means not to be invalid: “arithmetic means seem to closely reflect group attitudes towards the stimuli”
(Hofacker, 1984). Therefore the response means illustrated differences in responses by winery size when the nonparametric tests for ordinal data showed a significant difference by size existed. Response differences by winery size for the factor statements were investigated using the Kruskal-Wallis K Independent Sample test. This test is appropriate for an ordinal scale and makes no assumptions about the underlying distribution of the data, which in this case was not normally distributed. Summary findings related to the role of government influence are now reported.
Survey Finding 1: Government Influences E-Mail.and.Use.of.Government.Web.Sites
The survey data analysis revealed that e-government activity influenced e-mail and external Web site use but had negligible direct impact on the operation or content of Web sites operated by the wineries. This is not particularly surprising when the purposes of the different e-busi- ness process types are considered, and is part of the wider finding that factors influencing e-business adoption do not impact in the same way across the various e-business process domains. Some specific government related results are detailed next.
With regard to e-mail use, three quarters of the wineries use e-mail to communicate with government agencies and departments, but small wineries, when compared with the larger wineries, find less convenience from using e-mail with government organisations. Turning to use of external Web sites, the most common type accessed by wineries are the specific wine industry Web sites, some of which are operated by Australian Government authorities (e.g., the Australian Wine and Brandy Corporation is the Australian government authority responsible for the promotion and regulation of Australian wine and brandy). Almost 90%
of wineries, regardless of their size, use the Internet to access these sites. The next most common type of Web sites accessed by wineries is government sites connected with legisla- tion and regulation compliance. In this case however, usage differs significantly by winery size: for example, 72% of small wineries compared with 100% of very large wineries (χ2(3) Table 1. Winery size categories, population, and response numbers
Response Winery.
Size
Annual.
Tonnage.
Range
Population.
in.2003 Population
% Number %.of.
Population %.of.Total.
Response
Small 20-249 801 75.7% 120 15.0% 60.6%
Medium 250-999 150 14.2% 35 23.3% 17.7%
Large 1000-
9999 88 8.3% 31 35.2% 15.7%
Very
Large 10000
and over 26 2.5% 12 46.2% 6.1%
The Role of Government n E-Busness Adopton
= 11.88, p < .01, N = 155). For exporting wineries, usage of online compliance processes differed significantly by winery size. For example, approximately 45% of the small and medium wineries used the online compliance process for wine export approvals compared with approximately 75% of the large and very large wineries, a significant difference in usage level (χ2(3) = 15.92, p < .01, N = 76). The same type of pattern was observed for wineries using the Web to process customs clearances, with only about 15% of small and medium wineries using this option, except that in this case the usage levels of very large wineries, at 64%, was markedly higher than that of the large wineries at 30%. The differ- ence by winery size for online custom compliance is significant (χ2(3) = 15.79, p < .01, N
= 31). Note: the uptake of online compliance for export customs declarations has changed considerably since the export component of Australia’s Integrated Cargo System went live in late 2004. Online transaction processing for export declarations is now close to 100%;
see Table 2 for details.
Analysis of survey responses indicated B2G related e-business is increasing, with clear evidence that most respondents are finding compliance with government regulations easier due to the functionality and utility of e-government Web sites. Respondents also anticipated that their e-business activities in the next 12 to 18 months will be dominated by increasing use in the areas of B2B and B2G rather than the area of B2C. Overall there was a perception that the role of e-government on e-business adoption by wineries in general is significant, and is in fact a stronger and more influential factor than that of the direct relative advantage delivered by e-business to the wineries themselves.
Survey.Finding.2:.Network.Infrastructure...
Limitations.Acts.as.Major.Barrier
Empirical evidence from the census survey revealed that the limitations of available net- work speeds and network connection costs are two common barriers to further e-business adoption by Australian wineries, with close to 50% of respondents citing these two issues as barriers. These barriers apply to wineries regardless of organisation size. Telstra is the only network carrier with physical lines into all regional and remote sites. The quality of the lines away from major cities and regional centres provides only limited support for e-business activity. For example, ADSL broadband connections are only available within approximately three and a half kilometres of an ADSL enabled exchange (Telstra, 2004), and many wineries are located outside this range. As one interview respondent made clear, inferior Internet access in regional areas is also accompanied by higher costs: regional busi- nesses pay more to get less.
The following example illustrates the problem in terms of e-commerce costs. A very large, privately owned winery with offices in all Australian states uses online processes for compli- ance where possible. However, the main production centre is located near a major regional town situated further than three kilometres from the nearest Telstra exchange, with broadband access not available. The standard Internet connection at their regional production site has an annual cost of $11,000 and is 130 times slower than the speed of a similar Internet connec- tion at their city office which has an annual cost of $2,000. The winery spends an additional
$90,000 a year to upgrade their Internet connection speed at the regional winery location to
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acceptable speeds, and Telstra has required up-front contributions of approximately $100,000 for infrastructure upgrades. The winery has little choice other than to make these investments in order to get sufficient speed for transaction processing across the Web.
The winery research confirmed that improvements in network infrastructure quality and low- ering associated e-commerce costs are needed in order to reduce the most common barriers facing Australian organisations in the adoption of e-business processes. The current limited penetration of broadband access in Australia acts as a serious inhibitor for growth of e-business adoption, particularly for SMEs and many regional organisations who find the cost burden of upgrading their own telecommunication infrastructure to ensure an acceptable Internet access speed is too high for the resulting level of benefit. The various levels of government recognise their responsibility for improvements in network infrastructure. For example, the Australian Federal Government has developed a national strategy for improving broadband access across the country in partnership with state and territory governments. Objectives include the development of a coordinated approach to future network development in order to reduce price and location barriers, and in particular to provide affordable broadband services in regional Australia (OIE, 2004b). The Victorian State Government has gone further, by agreeing to combine with Telstra to establish a high-speed fibre optic network across Victoria to connect all schools, police offices, and government offices at a total cost of over $120 million (Barker, 2005). Once implemented, this high speed Internet access will advantage e-business operations in Victoria in comparison with the other states.
Mandating.Adoption.Ensures...
E-Government.Success
An interesting point to note from the interview comments provided previously is the aware- ness of the lack of choice with regard to compliance with the changes stemming from the government’s power to regulate and to control the means by which compliance with regulation occurs. The wineries were not choosing to adopt online transactions for export clearance compliance — they simply had no choice in the matter. Nor were the respondents anticipating much in the way of direct benefit for themselves — instead they were acting in response to a directive they could not ignore because the directive came from a stakeholder with a much higher degree of power than themselves. It is reasonable to assume that all Australian exporting organisations, not just wineries, will have been conscious of their lack of choice in deciding whether or not to adopt the online process for ICS.
So how successful has the Australian Government been in forcing Australian exporters to process their export declarations via online transaction processing using digital signatures as evidence of identity? The answer is they have been extremely successful. In a correspondence from the Federal Minister for Justice and Customs (C. Ellison, personal communication, August 1, 2005), less than 1% of all export declarations have been lodged since ICS went live in September 2004 using the alternative manual paper system. The manual system is designed with disincentives: extra costs are attached and it is only available at a limited number of locations. The monthly breakdown of export declarations processed between
The Role of Government n E-Busness Adopton
September 2004 and July 2005 between the electronic and manual alternatives is shown in Table 1.
The Australian government has gone to great lengths to support exporting clients during the rollout of ICS by conducting training sessions in capital cities and large regional centres;
providing online guides; and by providing an electronic simulation of ICS for new clients in order to build familiarity with the system. Broadband access is not required for the Web- based system to operate with full functionality, and clients in remote regions of Australia have successfully adopted the online system.
The example of successful ICS adoption by Australian organisations illustrates the point that organisations sometimes adopt e-business processes because of stakeholder pressure. It is not relative advantage or ease of use driving the adoption decision. The decision to adopt is forced because a more powerful member of the stakeholder group, one with sufficient power to mandate change, dictates how the process will be managed. The role of relation- ship management between stakeholders in the context of e-government projects and uneven stakeholder power is examined further in work by Chan, Pan, and Tan (2003).
The development and adoption of the ICS by the Australian government is an example of e-government designed for the benefit of government and the nations’ citizens as a whole, with a particular focus on increasing security levels. The Australian government has chosen to introduce online compliance with online evidence of identity (EOI) via digital certificates and provision of online security via public key infrastructure (PKI) in order to reap benefits of better government rather than for benefit to the exporters and importers. The need for online EOI has forced all participating users of the online system to purchase digital cer- tificates. In turn many organisations will, for the very first time, have overcome any hurdle Table 2. Monthly export lodgment numbers by type for export component of ICS
Lodgements of export declarations in Australia
Month Manual Electronc Total % Manual of Total
Sep-0 0 , , .%
Oct-0 , 0,0 , .%
Nov-0 , , 0.%
Dec-0 0, 0, 0.%
Jan-0 00 , , 0.0%
Feb-0 00, 0,0 0.%
Mar-0 0,0 0, 0.%
Apr-0 0, 0, 0.%
May-0 0 , , 0.%
Jun-0 0, 0, 0.%
Jul-0 , , 0.%
Totals ,0 ,0, ,0, 0.%
0 Roberts & Toleman
which the lack of online evidence of identity had previously presented. It is possible that the introduction of the ICS within Australia may pave the way for increased adoption of other online transaction processes which require digital certificates for EOI purposes, although at this stage, this is merely speculation.
Figure 2. Modified set of influential factors for e-business adoption, based on DOI theory (Source: Rogers, 1995), with additions shown in italics
Innovation.Characteristics.
1) perception of relative advantage over alternatives; (+) 2) perception of compatibility with existing values, experiences and needs; (+)
3) perception of complexity; (-)
4) the degree to which the innovation can be tried on a limited and experimental basis; (+)
5) the degree to which the results of the innovation can be observed. (+)
6) the degree to which the number of adopters increases the benefit for at least one innovation adopter (+)
Organisation.characteristics.
1) Attitude towards change of individual leader (+) 2) Internal characteristics of organisation’s structure
Centralization (-) Interconnectedness (+) Complexity (+) Organisational slack (+) Formalization (-) Size (+)
3) System openness – the degree to which members of the system are linked to others external to the system (+)
External Environment Characteristics 1) Influence of supply chain stakeholders, can be either a positive or negative influence depending on market type and market position (+) or (-)
2) e-Government services and compliance processes (+) (optional and/or mandatory)
The Role of Government n E-Busness Adopton