Resellers have a tremendous opportunity to sell Internet applications to small and medium enterprises, says the president of Cisco Systems Canada and the co-chair of the Canadian e-Business Initiative.

Interviewed in the middle of an Ottawa conference this week on e-commerce strategies for the

future, Terry Walsh said value-added resellers must play a big role with government to pull more SMEs online.

“”A lot of SME’s don’t have an IT staff,”” he pointed out. “”That lends itself to a VAR business which can bring turnkey solutions.

“”It’s a natural fit for VARs.””

Last week CeBI released a report showing e-business adoption among Canadian SMEs is growing slowly across business size and sectors.

While overall our small and mid-sized companies outperformed their international counterparts, adoption is uneven. In particular, medium-sized companies lag far behind in installing advanced Web-related solutions.

Only 56 per cent of medium and 37 per cent of small companies do any purchasing online.

In addition, according to one business magazine survey, Canadian business has slipped from first to 11th in the adoption of Internet solutions.

For Walsh and the members of CeBI’s advisory board – 29 heads or vice-presidents of corporations or government departments – this is important because Canada’s economy depends so much on SMEs.

He agreed smaller companies are afraid of IT failures, but noted that CeBI’s research shows that companies using Internet solutions reported an average seven per cent drop in operating costs and an average revenue increase of 9.5 per cent.

Th CeBI is calling for governments, the private sector and universities to come up with a strategy encouraging e-business adoption by these companies.

University of Toronto e-commerce marketing professor Tim Richardson agrees the problem is serious, and argues resellers should be doing more.

Most SMEs think having a Web site is only for selling products, he said in an interview, failing to see the advantages of using it as an information tool to draw customers into stores, save money on marketing material and attract suppliers.

VARs “”should be providing software and hardware that allows SMEs to integrate more of the supply-side of their business with the retail.””

“”They have to be able to explain things in terms which the customer can understand, and that requires a more intimate knowledge of what those businesses are doing,”” he said.

It’s not that only big companies can take advantage of the Internet, Walsh said. “”I deal with my dry cleaners on the Internet. They collect at my house, then it’s delivered by them and I pay online.””

“”Government needs to clearly identify this as something of national importance,”” he said, “”and have it on the national agenda.””

“”When you compare the results today with two years ago, we really haven’t moved the needle on the gauge. That’s why we think a more co-ordinated approach is needed, which starts with the government setting some goals around which we can all rally.””

Ironically for Walsh, one CeBI study shows SMEs don’t trust IT vendors to give them the right products or advice.

Asked about that, Walsh replied, “”The research shows what the research shows.””

But research director Ron McClean said it’s another reason why VARs can lead in selling to small and mid-sized companies.

The conference winds up Thursday.

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