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E-Transaction Media in the Mining Industry: A Western Australian Study

E-Transaction Media in the Mining Industry: A Western Australian Study. Dr. Simpson Poon, Director Murdoch University, Perth, Australia. The Mining Industry in Australia. A key sector in the economic landscape. In 1996, it generates $18,668 million. 4% of national GDP

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E-Transaction Media in the Mining Industry: A Western Australian Study

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  1. E-Transaction Media in the Mining Industry: A Western Australian Study Dr. Simpson Poon, Director Murdoch University, Perth, Australia

  2. The Mining Industry in Australia • A key sector in the economic landscape. • In 1996, it generates $18,668 million. • 4% of national GDP • Western Australia is the most important Mining State • 68% metallic mineral production and 45% of total mineral production (ABS, 1999)

  3. History of E-Commerce in the Mining Industry • Originally was only part of the IT infrastructure - usually proprietary inter-organisational systems. • In the 1980’s, EDI started to mature and large companies began to increase uptake of EDI (e.g. Broken Hill Petroleum) • Large companies started to get their smaller business partners to do so too.

  4. History of E-Commerce in the Mining Industry (cont’d) • By early 1990’s the ‘coerced’ method of EDI adoption was common, small businesses were often hinted:“ Do business with us using EDI or we find someone who will!” • Adoption often occurred as the ‘Hub-and-Spokes’ configuration with the large firm dictating what to use and how to use it.

  5. Since then… • EDI systems can be found in all large (and many medium-sized) mining firms. • Although a key technology for inter-firm exchange, adoption rate overall remains low. • Fairly expensive and unaffordable for small firms because of adoption costs and VAN subscription fees.

  6. Then came the Internet • The era of E-Commerce and Web-based applications. • Much cheaper and useable than EDI • Multi-purpose applications, not just transaction. • Affordable by the smallest firms and no longer in the hands of proprietary providers.

  7. Have this had an impact on the Mining Industry? • What happened since EDI? • Has the industry opened up to the Web? • If yes, how much? With whom? • What are the barriers? • What are their attitudes towards E-Commerce after the EDI experience?

  8. The Project • Conducted a survey study on: • the technology used for E-Commerce; • current enablers/barriers to adoption; • whether there is shift from VAN-based EDI to the Internet • As a preliminary study for further studies such as: • strategic alignment of business and IT strategy • quantification of E-Commerce investment

  9. Results - Demographics • 250 companies with HQ in Australia from a Mining Directory selected. • 71 responded (28.4% response rate). • Average firm size: 123 employees (small size firms in Mining terms). • Many have interstate operations, some have offshore interests.

  10. EDI vs. the Internet

  11. Enablers of E-Commerce • Low cost business solution • Easy to set up and access • Provide better services to customers • Can use for many purposes (unlike EDI) • Easy integration with existing technologies • The future way of doing business

  12. The results (Enablers)

  13. Barriers of E-Commerce • Internet is insecure • Unreliable data transmission (data losses) • New technology and therefore high risk • Already using other technologies so no need for Internet • No need for adopting E-Commerce • Our industry doesn’t use much E-Commerce

  14. The results (Barriers)

  15. Conclusions • There is a shift from traditional EDI to both Internet EDI and Web applications and it is happening among SMEs. • There is a very positive view on the enablers and less pessimism on the barriers (see the skewness of the histograms). • It is likely that Internet-based E-Commerce will have a better penetration compared to EDI given time.

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