Cost-benefit Analysis Of Adopting E-commerce By Small And Medium Enterprises In Kenya

The advent of Internet-based electronic commerce offers considerable opportunities for firms to expand their customer base,enter new product markets and rationalize their business.With how significant e-commerce has been to most developed countries,it it therefore imperative for a developing country to harness the benefit of e-commerce while considering the cost involved in adopting it.As such,the study examines the cost-benefit analysis of adopting e-commerce by small and medium enterprises in Kenya.Key research questions asks include;what are advantages and disadvantages of using SMEs in adopting E-Commerce in Kenya,what are the benefits of adopting E-Commerce by SMEs in Kenya,what are the various factors that deter SMEs from absorbing E-Commerce,what are the perception that SMEs have towards ICT as a tool of the trade,and how can SMEs in Kenya determine the relationship between business efficiency and adoption of e-commerce.The therefore specifically seeks evaluate the advantages and disadvantages of using SMEs in adopting E-Commerce in Kenya.The study further ascertains the benefits of adopting E-Commerce by SMEs in Kenya.Another objective identifies the various factors that deter SMEs from absorbing E-Commerce.The perception that SMEs have towards ICT as a tool of the trade is also key to the study and finally,the study determines the relationship between business efficiency and adoption of e-commerce by SMEs in Kenya.The significance of this study is to establish a strong theoretical foundation that provide some level of knowledge to other researchers.The paper applies a crosssectional survey as the research design to provide the best approach to the inquest.The target population are SMEs with definite formal premises or structures at Bungoma County.The questionnaire contains data from business SME workers and managers,allowing for further statistical analysis.The factor analysis statistical method was used to determine the combination of most appealing to SME's managers or owners.The descriptive and inferential statistics method was also used involving frequency tables,percentages,rank-ordering,and mean score frequency tables used for arraying data obtained to facilitate working out rates to address the Study's objective.The results show that SMEs in Kenya,are sole proprietorships and are mostly operated by young people with at least a secondary level of Education.The findings further indicate that of the four factors considered,skills and IT knowledge levels of business owners and staff accounted for the greater adoption of e-commerce by formal SMEs in Bungoma County.The hypotheses of the study however,concludes that there is a relationship between e-commerce and cost of ICT.It also found that efficiency has a positive relationship with e-commerce adoption.A rising on the study findings,the researcher recommends that the government enact legislation to regulate Kenya's ICT industry to reduce ICT application costs.The management of formal SMEs should also ensure that their employees are trained on ICT aspects.The study discovered how e-commerce could impact the economy,and therefore recommends that further recommends that a broad research study on how e-commerce influence the growth of Kenyan economy should be embarked on.