ITWALES.COM - e-Professor Tony Davies

Posted: Fri, March 15, 2002

ITW Interview: The e-Professor on e-Commerce in Wales

Matt Pearce

In 1993, Tony Davies became the world's first Chair in EDI (Electronic Data Interchange), and gained the title of Professor of e-Commerce. Director of the unique e-Commerce Innovation Centre (eCIC) in Cardiff since 1987, he has become one of the world's most significant and respected e-commerce strategists, and his team has been responsible for much of the research informing e-commerce initiatives across Wales - and the globe.

Who better to question about the current state of e-commerce in Wales? In a launch edition special, we speak to Wales' Professor of e-Commerce to find out how electronic trading really is progressing in Welsh business.

Professor Tony Davies, Director, e-Commerce Innovation Centre, Cardiff

1. About Ecic

Some people might be surprised to learn that Wales has an e-Commerce Innovation Centre. Even more would be surprised to learn that it has a reputation as a world leader in e-commerce strategy and innovation. But since its beginnings in 1987 as a research centre, eCIC has always been internationally-oriented, focusing on the development of worldwide standards, and on Professor Davies' work with the UN on EDI (Electronic Data Interchange).

"EDI came about many years ago when very large shipping companies wanted to link their own IT systems to customs and customers," explains Professor Davies. "The UN began to develop a standard for international trade clearance, and that's what I did my PhD on. I was sent to the UN as head of the UK delegation at the International Standards Committee for CEFACT - the standard for EDI."

"We now meet every other month in some European city and twice a year we meet internationally to develop these standards. At the same time we are developing XML DTTs in conjunction with OASIS, which is made up of all the large software houses (Microsoft, Oracle, et cetera)."

As a result of Professor Davies' international projects, eCIC have become the world experts in developing EDI standards that are now applied to health, defence, banking, and a host of other sectors. What's more, the team regularly undertake strategic studies for governments around the world:

"I was advisor to the Taiwanese Government, we've advised the Basque Government, we're now working for the Canadian Government," said Professor Davies. "These are all national strategies, not the nitty-gritty implementation of e-commerce. We're proud of our international reputation."

eCIC, then, is an extraordinary asset for Wales. Leading strategies for e-commerce implementation are being developed in our country and put into practice in a variety of others. That Wales has it's own Professor of e-Commerce is of significance in itself. "BT said it would be great to have such a professorship, and we see you as the man we'd like," Professor Davies recounted. "I was particularly proud of the fact that it was a world's first, and it was in Wales."

So how does a Professor of e-Commerce approach this global role? Is it a case of theory and prediction, or of simple problem solving?

"I'm not a theorist at all," confessed Professor Davies. " I am very practical, I'm hands-on, and predicting anything to do with e-commerce is absolute rubbish. You cannot do it. The technology is changing at a considerable pace."
"What I try to do, like any good researcher, is to look at the evidence and get as broad-based input as I possibly can."

The approach obviously works. eCIC continues to take a leading role in the development of international standards in all of the major industries. And the good news is, its e-commerce strategies are available to Welsh companies first.

eCIC's aim on a local basis is to "encourage, inspire and assist Welsh companies to trade more efficiently through e-commerce," Professor Davies told us. "What we do in Wales is more on the practical e-commerce implementation, and helping SMEs not only to implement successfully, but also to measure the benefits so that we can use them as exemplars."
"We also act as missionaries. We go around Wales telling people about these case studies in the hope of inspiring more people to trade electronically."

2. The issue

According to the DTI, in terms of adopting ICT for business purposes, Wales is second from bottom in the ranking of UK regions. Yet we have Objective 1 and Objective 2 funding, a development agency committed to improving the way we conduct business, and a supposedly dynamic, young Government. 'What's going wrong?' we asked Professor Davies.

"The first problem is that there is very little co-ordination of e-commerce projects in Wales," he comments. "We are finding of the universities, some local economic development agencies, the WDA and so on, that everyone tends to do their own thing. Very often the projects are based upon the spirit of 'oh, let's jump on the e-commerce bandwagon,' other than recognising the real needs. And very often these organisations don't really have e-commerce expertise themselves."

So apart from a lack of real resources to roll-out e-commerce practices, it seems that there is a problem with the way the resources that are available are delivered.

"Co-ordinating would lead to better targeting the resources where they're really needed and also assisting other projects by spreading out the expertise," says Professor Davies.

Confidence

Other barriers to implementing e-commerce in Wales include "a lack of confidence and a lack of awareness." "Only 7 or 8 per cent of companies in Objective One trade internationally," Professor Davies points out. "That's pathetic."

"We tried an e-commerce strategy with a company that sold special plants in their nursery and a shop in Carmarthen. They are now selling to Iceland, New Zealand, America - they've almost doubled their workforce."
"Imagine if every company in Wales could double its workforce. This would be one of the most prosperous nations in the world. That's what we should be aiming for."
Again, it is this lack of vision on the part of public bodies that prevents real advancement. "The commitment by organisations in Wales is nowhere near the sort of dream that I have," Professor Davies believes. "I don't think they understand the real potential of e-commerce."

But, according to Professor Davies, Wales does have the potential to fully exploit e-commerce. "We have proved it, we've done it with many companies. Wales is a small nation, we should be able to get our act together, but that's not happening yet. Considering the rate of change in other countries, if we continue to drag our feet, then the picture's looking very bleak for Wales."

The global picture

It's this rate of change in other countries that poses Wales' biggest threat, and presents Wales' biggest opportunity. The competition is increasing, and rapidly. "There's a huge programme going on now to help under-developed countries to trade more efficiently through e-commerce, and they are going to catch up fast," explains Professor Davies.
"There are 5.7 billion people on the planet. Only about one billion have access to telecommunications. That's taken about 150 years. The next billion will have access to telecommunications in the next five years. Those people are going to be thirsting for new knowledge. They're going to have new ideas. They're going to expand into their own market and the international market and become competitors."
"If we don't catch up very soon, we are going to find that we are competing against more and more people who are learning quicker than us. But on the other hand, we could also say that the international marketplace is also opening up and providing us with far greater opportunities. We need to have that big picture in our minds. We are far too focused in our own little worlds."

3. The advice

Give your site a strategy

On a more practical level, Professor Davies is convinced that there are simple rules for implementing e-commerce effectively that are not being heeded by SMEs. His advice to SMEs approaching e-commerce is simple: "approach it in the right way."

"90 per cent of websites are rubbish, and they do more harm to the company than good," says Professor Davies. "SMEs are not in a position to maximise benefits from e-commerce because their own business strategy isn't a good one. That's the most important thing - to have a sound business strategy."
"e-Commerce isn't anything magic. You can't go into a badly-operated company and wave the e-commerce wand and suddenly everything happens."

This is bourne out by eCIC case studies. "We had one company in Narberth whose website cost Ł40,000 and which was turning over Ł1,000 a month," Professor Davies told itwales.com. "We went down and gave them one day's advice and then they were turning over about Ł20,000 a month from the website."

The key is to identify the business function: whether you want your site to improve your marketing, your invoicing or your delivery of services. What's also important is hiring the right kind of company to design your site:

"You have people with e-commerce knowledge, and then you've got the graphic designers or the cowboys. Some graphic designers have learned a lot about e-commerce and are applying their skills to e-commerce. But we do have too many cowboys who will design a website with no real strategy in terms of the business."

"A website can be a very pretty thing, but it can do absolutely nothing for you."

The test of a website's worth? "When you ask companies why they have a website, they cannot give you an answer. That just shows that they've got a site for the wrong reasons. You shouldn't implement anything unless there's a business reason and it's tied directly to a business function."

Work with trading partners

What's equally as important as having a purposeful site is being aware that a website for consumers is not the be-all of e-commerce. "People talk a lot about business and the consumer and websites," comments Professor Davies, "but the truth is that about 92 per cent of e-commerce transactions are within business-to-business activities, not business-to-consumer. That's the engine room of industry. It's business-to-business that drives business-to-consumer."

It's e-procurement that leads to the most business, stresses Professor Davies, and the key to developing an effective e-procurement service is to work closely with your business customers:

"When you're in the business-to-business scenario, you cannot implement e-commerce on your own, you have to do it with another trading partner. Therefore, developing a business concept with another partner, you're either the dominant partner, helping the smaller company, or - in most cases as far as Welsh companies are concerned - you are not the dominant partner, you are a small supplier."

"In that case, you have to deal with your main customer very carefully indeed. They may have their own e-commerce strategy, you might be rocking the boat a bit whereas you could be helping them a great deal. It takes a lot of time, tact and diplomacy to get things right."
"Although e-commerce is seen as the electronic way of trading, there is a very human touch that must be involved in it at the first stage."

eCIC Initiatives

Luckily, e-commerce solutions are available to Welsh SMEs via initiatives run by eCIC. Amongst a range of case studies and projects, eCIC will be involved in the following projects in the near future:

Opportunity Wales is a Ł21 million project targeting Objective 1 areas that is based on trials undertaken by eCIC. An army of accredited advisors will be trained at the Innovation Centre so that there will be more people available to provide high-level assistance to companies across Wales. "This will improve the quality of advice to SMEs," comments Professor Davies.

The e-Commerce Centre of Excellence for Wales has been developed through the Opportunity Wales programme to undertake research in all areas of SME-related e-Commerce, and to deliver the expertise of eCIC to other regions of Wales. The centre has offices in Milford, Bangor University and Colwyn Bay, and is centrally managed by eCIC.

Finally, eCIC are also pioneering a unique e-Trading Accreditation Scheme for SMEs.

"Over the years we've been helping SMEs to trade electronically, and then, when they become proficient, they say, 'I wish we could be recognised for our knowledge or our skill in electronic trading'," Professor Davies told itwales.com.
"What we've done is to develop an e-trader accreditation scheme as a recognition to companies who have achieved a minimum amount of skill in electronic trading. It will prove particularly helpful when these businesses approach larger companies with their CVs."
The accreditation is run on an automatic system. SMEs are able to download the accreditation questionnaire from the eCIC website, and then perform certain operations. Once the application is accepted, eCIC will e-mail the accreditation logo to the company with the HTML code required so that they can upload it to their website to show they have been accredited. The company can then e-mail their logo to eCIC, who will add it to the company listing.
"It was developed for the good of local companies, to give them early recognition on an international scale," commented Professor Davies. A useful commendation, since, as Professor Davies stresses:
"e-Commerce is not going to go away. It's going to keep on growing, and in a couple of years' time we won't call it e-commerce. It will just be commerce." For more information on the activities of the e-Commerce Innovation Centre, visit:
http://www.ecommerce.ac.uk

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