Preliminary Insights into M-commerce Adoption in Ghana

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Information Development

DOI: 10.1177/0266666907084761 2007; 23; 253 Information Development

Raymond A. Boadi, Richard Boateng, Robert Hinson and Robert A. Opoku Preliminary Insights into M-commerce Adoption in Ghana

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PRELIMINARY INSIGHTS INTO M-COMMERCE ADOPTION

Information Development (ISSN 0266-6669) Copyright © 2007 SAGE Publications. Vol. 23, No. 4, DOI: 10.1177/0266666907084761 253

and Gyires, 2003). Kumar (2004) has also examined global trends in 21st century mobile communications, whilst Kini and Thanarithiporn (2004) have also examined adoption issues and value space between e-commerce and m-commerce. Vrechopoulos et al. (2003) also hypothesize, in a paper on the role of consumer behaviour research in mobile commerce that, “mobile commerce promises to change the way certain businesses-to-consumer (B2C) activities are conducted”.

Conceptual/theoretical and empirical investigations in respect of m-commerce have largely focused on Europe and North America. Recently, contributions to the m-commerce literatures have also been made from Asian perspectives (Leem, Suh and Kim, 2004; Kini and Thanarithporn, 2004; Wu and Wang, 2005; Snowden and Spafford, 2006). Wu and Wang (2005) and Snowden and Spafford (2006) investigated m-commerce adoption factors using technology adoption models, including technology acceptance model and diffusion of innovation theory. They concluded that perception of usefulness and compatibility play a critical role in facilitating adoption. However, contributions to global m-commerce debates from African perspectives have been rather parsimonious, and this study is one attempt to rectify this imbalance. Given the mobile phone explosion in West Africa and the importance of agriculture to several West African economies, this study seeks to examine the m-commerce practices of rural fi sherman and farmers in Ghana. Ghana has been cited as the most progressive ICT country in West Africa (African Business Magazine, 2005). Hence, we considered Ghana as a good site for preliminary m-commerce investigations in the sub-region.

The paper is set out as follows: we start out by examining trends in mobile commerce research. We then delineate the paper’s study objectives and present the mobile context in Ghana before going on to focus respectively on an m-commerce theoretical model, the methodology adopted for the study, presentation and discussion of fi ndings, conclusions, limitations of the study, and future research directions.

Preliminary Insights into M-commerce Adoption in Ghana

The adoption of m-commerce by fishermen and farmers in rural Ghana has brought benefi ts in terms of better information fl ows, enhanced marketing activities, operational effi ciencies and cost savings.

Raymond A. Boadi, Richard Boateng, Robert Hinson and Robert A. Opoku

TRENDS IN MOBILE COMMERCE RESEARCH

The m-commerce phenomena has been argued to share commonalities with electronic commerce (e-commerce): it has been considered as being ‘mobile e-commerce’ (Siau, Sheng and Nah, 2004), ‘wireless e-commerce’ (Frolick and Chen, 2004) or ‘e-commerce for users on the move’ (Kalakota and Robinson, 2002). M-commerce, as a new channel/medium for commerce, presents unique features such as ubiquity, personalization, fl exibility, and localization, which are not available in traditional e-commerce, and therefore offers opportunities for diverse functionalities and applications, and also provides customers with added value and benefi ts (Siau, Sheng and Nah, 2004). We examine the added value and benefi ts of m-commerce in this paper.

In spite of the multitudinous benefi ts of mobile commerce and its obvious explosion in several parts of the world, most intellectual investigations carried out on mobile telephony use and m-commerce have focused on developed economies. Scholars have focused on various aspects of mobile phone usage and mobile commerce. Themes such as service quality (Seth, Gupta and Momaya, 2007), implications of m-commerce for markets and marketing (Mylonakis, 2004; Nysveen and Pederson, 2005), and the need for a nuanced approach to m-commerce research (Yuan and Zhang, 2003; Lembke 2002) constitute some of the focal points of mobile commerce research. M-commerce research has also been focused on m-commerce defi nitional issues (Dholakia and Dholakia, 2004); model and theory development (Wu and Wang, 2005) and security concerns in the conduct of m-commerce (Tan, Wen




254 Information Development (ISSN 0266-6669) Copyright © 2007 SAGE Publications. Vol. 23, No. 4, DOI: 10.1177/0266666907084761

OBJECTIVES OF THE STUDY

The purpose of this paper is to assess the impact that the use of mobile communication devices is having on selected rural businesses in Ghana. This study aims at contributing to our knowledge of how rural business people in a developing country context are taking advantage of mobile phones in the conduct of their farming and fi shing businesses. In particular, our interest is on how mobile commerce is being used to enhance the business activities of small scale entrepreneurs. The following objectives guided the conduct of the study:

• ascertainment of the investment costs of m-commerce

• ascertainment of m-commerce adoption and practices of farmers and fi shermen in a selected rural district of Ghana.

The study was supported by resources provided by the University of Ghana Business School and the Lulea University of Technology, Sweden.

M-COMMERCE THEORETICAL MODEL

M-commerce scholars have employed the technology acceptance model (TAM) (sometimes alongside other theoretical approaches), to investigate the factors which drive the acceptance of m-commerce by customers and/or investigate the value of m-commerce to customers (Wu and Wang, 2005; and Snowden and Spafford, 2006). TAM has been used by both academics and practitioners as a means of predicting the measure of a system’s success, whether or not that system is used (Morris and Dillion, 1997). According to TAM, the acceptance level of any technology is fundamentally affected by the user’s perception of ease of use and usefulness. TAM propounds, with empirical evidence, that increasing the perceived ease of use (PEOU) of a technology will increase its perceived usefulness (PU), and translate into an increased behaviour intention (BI), thereby resulting in a higher margin of technology acceptance (TA) (Wu and Wang, 2005). The theory, formulated by Davis (1989) from the Theory of Reasoned Action (TRA) (Ajzen and Fishbein, 1980), has also been related with other user-acceptance research areas, including the diffusion of innovation (DOI) (Rogers, 1995), and theory of planned behaviour (TPB) (Ajzen, 1991) (Wu and Wang, 2005; Snowden and Spafford, 2006).

M-commerce, as earlier explained, presents unique features such as ubiquity, personalization, fl exibility, and localization, which are not available in traditional e-commerce, and which therefore also provide cus-tomers with added values and benefi ts. With regards to PEOU, its been argued that the lack of profi ciency with computers compared to the relative ease of use or familiarity associated with mobile phones, may offer signifi cant cost savings for customers (Ropers, 2001). Mobile phones require minimal input and effort from the user, as compared to computers, and this adds to their PEOU (Jonker, 2003). As of 2005, there were about 5.2 personal computer owners per 1,000 Ghanaian inhabitants, as compared to 130 mobile phone subscribers per 1,000 (International Telecommunication Union, 2007). The starting price of a complete mobile package, which includes access and transaction costs and a USD 30 second-hand mobile phone, is approximately USD 60, while a second-hand ‘Internet ready’ computer costs USD 200–300. Hence, in addition to the relative ease of use or familiarity, cost-effi ciency is a major consideration, especially in developing countries. Customers can readily perform and engage in simple transactions without investing in more expensive or complex machines.

On the other hand, Wu and Wang (2005) and Snowden and Spafford (2006), in using TAM to investigate the m-commerce adoption factors, concluded that PU tends to have more signifi cant infl uence on the intention to adopt than does PEOU. They emphasize that under-standing the benefi ts or value of m-commerce, especi-ally on the part of the fi rm’s top management, relatively increases the intention to adopt. With regard to PU of m-commerce, it has been argued that the rapid rate of acceptance of m-commerce stems from the increased convenience – anytime and anywhere access to information at the point of need –and the related operational effi ciency – fl exibility, personalization and localization – associated with such convenience (Tang and Veijalainen, 2001; Siau, Lim and Shen, 2001). Keen and Mackintosh (2001) also emphasize convenience in arguing that, the value proposition of mobility is offering the customer a choice. Anckar and D’Incau (2002) present a framework which makes a distinction between value-adding features of m-commerce – wireless value and mobile value. The wireless value is the value offered by the wireless Internet technology. This includes convenience and ease of use, as compared to other technologies like





computers. The mobile value is the value emerging from the actual mobile use of a device. This includes fl exibility, convenience, and ubiquity. The authors argue that in order to understand the strategic implications of the value created by m-commerce, one has to identify contextual settings or situations in which m-commerce is applied. The strategic use of m-commerce is realized where time is critical, spontaneous needs and decisions are required, effi ciency – increasing productivity while mobile – is necessary, and mobility is essential (Anckar and D’Incau, 2002).

In building on Anckar and D’Incau (2002)’s research, Siau, Sheng and Nah (2004) studied the values of m-commerce to customers, using a qualitative means-ends approach. The study identifi ed that maximizing customer satisfaction with mobile commerce requires maximizing convenience, maximizing efficiency, ensuring privacy, ensuring product/service quality, and minimizing cost. With regards to the level of m-commerce usage in Ghana, and for the purposes of this study, we can identify three areas from the above literature review where m-commerce value can be accrued: cost, convenience, and communication. This also relates to the 3Cs used by Kalakota and Whinston (2002) to examine the direct impact of IT – m-commerce in this context – on business performance.

Cost refers to the cost savings and operational effi -ciencies, which a customer or fi rm may accrue from m-commerce adoption. In using TAM to study the value of m-commerce to customers, Wu and Wang (2005) considered cost-benefi t as having a signifi cant

infl uence on perceived usefulness and ease of use. M-commerce should be able to generate rents which exceed the cost of adoption – equipment costs, access costs, and transaction fees (Constantinides, 2002).

Convenience refers to ‘anytime and anywhere’ access to information at the point of need. Customers and businesses become no longer constrained by time and location, and therefore gain the opportunity to manage or use time effectively and increase their productivity.

Communication refers to improving information quality and relationships. Improving marketplace information has the potential of reducing the costs of searching products, services, sellers, and buyers, and the costs in timeliness of decisions related to negotiating, accepting contractual terms, and fulfi lling contracts. Timely access to information can facilitate closer market relationships, and in effect, relatively tie trading partners, customers and suppliers to firms. Thus, timely access to information facilitates yielding several strategic benefits including improved satisfaction, loyalty and retention of customers and trading partners, improved reputation and improved decision-making, especially in time-critical situations.

Consequently, cost, convenience, and communica-tion, present an interrelated value offering or set of benefi ts to the customers and/or businesses adopting m-commerce. With regards to this study, we suggest that, by adopting m-commerce, the small farmer or fi sherman stands to benefi t from this interrelated value offering (see Figure 1).

Figure 1. M-commerce theoretical model.





UNDERSTANDING THE MOBILE CONTEXT IN GHANA

Based on previous works (Loebbecke, 2001; Schleuter and Shaw, 1997), Barnes (2002) developed an m-commerce value chain framework which details a chain of value-adding activities, terminating with the customer. The framework consists of six core processes in two main areas:

(a) infrastructure and services: mobile transport, mobile services and delivery support, mobile interface and applications

(b) content: content creation, content packaging, market making.

This framework depicts the type of content and level of infrastructure and services, available to the customer. For a given market context, the type of m-commerce content and level of infrastructure and services, determine the functionalities available, and therefore the relative value customers may derive from m-commerce. Considering Ghana as our given context, we therefore analyze the Ghanaian m-commerce market using the above framework.

Infrastructure and Services

Mobile transport refers to the network providers in-volved in the communication – the transportation, transmission, and switching for voice and data. Ghana has four major mobile network providers, providing services and support in mobile communication as well as Internet services. They are One Touch, provided by Ghana Telecom (GT); MTN, provided by Scancom Ghana Limited; tiGO (formerly Buzz GSM), provided by Millicom Ltd; and Kasapa, provided by Kasapa Limited.

Scancom Ghana Limited (MTN) is the leading mobile and wireless communication service provider, with a subscriber base of 2,585,467 at the end of 2006. Millicom Ghana Limited (tiGO) has 1,546,721 subscribers, while Ghana Telecom (One Touch) has 877,106 subscribers, and Kasapa Telecom (Kasapa) has 200,104 (Communication Telecommunication Organization News, 27 February 2007). These network operators have concentrated their services in major towns and cities, where there is a relatively huge market demand for their services (Frempong and Stark, 2005). In terms of mobile services and delivery support, the Short Message Service (SMS), or text messaging, is a major application used in delivering services, including

SMS banking and ‘text and win’ promotions. There are no unique mobile interfaces and applications such as browsers and mobile operating systems designed for any of the networks. The few service models are developed to use the basic SMS functionalities. The standards for connecting to the Internet are Wireless Application Protocol (WAP) and General Packet Radio Service (GPRS) for MTN, tiGO, and One Touch, and Internet CDMA (Code-Division Multiple Access) for Kasapa.

Content

Content creation refers to the creation of digital mat-erial such as audio, video and textual information. Telephone and SMS banking are provided by banks like SG-SSB (member of the Société Générale Group), and Amalgamated Bank. These banks offer customers the functionality of receiving alerts on transaction records and balances, and managing their accounts over the phone. Through SMS, www.tradenet.biz enables Ghanaian farmers and traders to receive market infor-mation, and make trade negotiations with other African farmers and traders. SMS has also been adopted as a mobile payment system – payment by premium SMS. For example, Rakes Company, a recruitment agency, allows its job seekers to make payments by sending an SMS from their mobile number to a particular number assigned to them by MTN. The cost of the SMS text message equals the payment for the service required from the company. Though numbers of SMS related services have been developed, there is no major Ghanaian mobile web portal. Web 4 U Ghana, a local web solutions developer, has begun to offer the service of optimizing Ghanaian websites for WAP browsing, after identifying that there are relatively few WAP optimized Ghanaian websites. The focus on SMS-related service models is refl ective of the scarcity of the requisite m-commerce-business skills and knowledge within the country. Relatively few curricula in local IT institutions like the Ghana Telecom University College (www.gtuc.edu.gh), are particularly focused on the development and deployment of mobile technologies – even in those situations they are focused on the mobile infrastructure and not on content creation or mobile marketing.

Despite the focus of SMS-related services, previous studies have emphasized that a majority of Ghanaian mobile subscribers in major towns send a small num-ber of SMSs per week. A study by McKemey et al.





(2003) conducted in 2003 indicated that, only 3 percent of their study sample sent SMSs within a 3-month period, while a study by Frempong and Stark (2005) showed that, almost 54 percent of the sample in major towns sent 1–4 SMSs per week, and 11 percent sent 10–14 SMSs per week. These studies argue that the low usage of the SMS facility may be due to relatively high illiteracy rates. The total literacy rate for the population aged 15 years and above, based on 2003 estimates, is 74.8 percent (United States. Central Intel-ligence Agency, 2006). As a result, the basic function of the mobile phone for audio communication tends to be the mobile functionality, most patronized by Ghanaians of diverse economic and literacy status.

METHODOLOGY

Overarching Research Approach

We followed the qualitative (interpretative) approach in this study. Our motivation stemmed from the fact that this approach is characterized by fl exibility, and the fact that our research objectives emphasized the description and measurement of a market phenom-enon (mobile commerce) at a point in time. We were primarily interested in gaining preliminary insights into mobile commerce adoption in two agricultural Ghanaian fi rms. We also chose a qualitative research design because it afforded us the opportunity to collect rich in-depth data about our subjects’ attitudes, premonitions, beliefs, and perceptions, all of which may strongly infl uence their observable market behaviours. We believed that a qualitative approach suited our study very well because the purpose of this approach is to seek deep knowledge.

Interview Approach

We conducted 29 in-depth interviews because we were digging for preliminary insights into what people in our various subject categories believed about mobile commerce. We interviewed personnel from two subject categories; a mobile phone telephony provider, and m-commerce users working in rural Ghana. The fi rst sets of interviews were used to gain understanding of the initial investment costs of mobile commerce adoption in Ghana. This entailed 2 interviews with marketing and operations personnel in MTN, Ghana’s mobile telephony leader in this regard. We believed that, for the subject under investigation, marketing and operations personnel would have the most relevant

experience in commenting on m-commerce issues. In these interviews, we sought uninhibited and detailed comments about the m-commerce phenomenon, and to have our respondents communicate as much detail as possible, about their knowledge of the phenomenon.

We realized from our second set of interviews that, there are organized groups of farmers and fi shermen in various parts of the country. We then selected a fi shing community in the Central Region and a farming community in the Eastern Region, where some form of m-commerce have been adopted. We got leads on the choice of fi shing and farming communities from the Ministry of Agriculture. In each community, we identifi ed a company which had adopted m-commerce, through the help of the cooperative association of farming or fi shing in the community. Within the two selected companies, interviews were done with the marketing personnel, management personnel, and farming/fi shing personnel. A total of 13 interviews were done with the fi shing company and 12 interviews with the farming company. A total of 2 interviews were also done with the fi shing cooperative association in the community, where the fi shing company was located. We sought to unearth varied views on the usefulness of m-commerce to various levels of operation, in order to provide organization-wide recommendations on how m-commerce can be more benefi cially incorporated into their operations.

We taped our interviews and transcribed the audio record later, in order not to miss any vital aspects of our interaction. Questions asked of the mobile telephony provider had basically to do with what it costs to invest in m-commerce in Ghana. In respect of the farmers and fi shermen, we sought to ascertain what benefi ts potentially accrue to their businesses in terms of cost reduction, improvement in communication fl ows, and improvements in the convenience with which they work.

For the sake of confi dentiality the fi rms studied are referred to as Farming Delight Company Limited and Fishermen Delight Company Limited.

INVESTING IN M-COMMERCE IN GHANA: FINDINGS FROM INTERVIEW WITH MARKETING PERSONNEL AT MTN

In assessing the benefi ts derived from m-commerce adoption, we sought to understand the investments that go into the use of an m-commerce system. We observed that the basic costs or investment incurred in





the adoption of the m-commerce system, include the costs outlined in Table 1.

Table 1 provides details of the charges and fees that go into the acquisition, installation, and maintenance of the equipment needed for adopting m-commerce. In Ghana, the costs involved depend basically on the type of device (mobile phone or PDA) selected, and the mobile network operator connected to. All four mobile network operators have different charges for the various products, services, and support they provide. In our analysis therefore, average values were used in most calculations. To determine the average cost of m-commerce adoption to a user, we considered two hypothetical scenarios. In the fi rst scenario, we look at customer A, who decides to buy a new expensive LG mobile phone, and connect to MTN’s post-paid service. In Scenario 2, customer B selects a second-hand Motorola phone and connects to tiGO (Buzz GSM) prepaid services. We assume that in this case, both customer A and customer B used 75 units of call credit in the fi rst month. We present the start-up cost and subsequent months in Table 2.

It has been argued that equipment costs (cost of phone), access cost (deposit, connection fee and line rent), and transaction fees (call cost), tend to be the three important component costs which m-commerce adopters incur in their adoption or transition from wired electronic commerce to mobile commerce (Constantinides, 2002). These costs could make m-commerce more expensive to adopt, as compared to traditional commerce or e-commerce (Wu and Wang, 2005).

Table 2 shows that the initial investments in the adoption of m-commerce in our hypothetical scenarios range between USD 58.50 (for prepaid service and Motorola phone) and USD 626.47 (for post-paid service and LG phone). The initial minimum investment for the post-paid service is USD 154.67 (deposit and connection fee), plus the cost of the customer’s mobile phone (USD 440.00). Running costs after the initial investment would amount to USD 31.80 (line rent, call charges for 30 days, and subscription).

In the case of the prepaid service, the operators do not charge a deposit fee or connection fee and the ‘line rental charge’ is a one-time cost described as the SIM card cost, USD 21.00. The initial minimum investment for the prepaid service is thus the SIM card cost (USD 21.00) plus the cost of the customer’s mobile phone (USD 30.00). Running costs after the initial investment would amount to USD 7.50 (call charges for 30 days).

As compared to the prepaid services, post-paid services, which are usually targeted at business users, include value-added services such as free voicemail, relatively cheaper international calls, and free Internet browsing on mobile phones.

Hence, we can deduce that the customers may be spending a monthly minimum of USD 7.50 and maximum of USD 31.80. This relates to an earlier study by Frempong and Stark (2005), which found that 63.1 percent of sampled mobile subscribers in major towns in Ghana, spent more than USD 5.50 monthly on mobile services. With regards to this study, the net monthly average income of an average fi sherman (canoe fi sherman) with no employees is about USD 200, while that of a fi sherman with a minimum of four employees and two fi shing boats ranges between USD 600 and USD 2000 (in a bumper harvest). We can suppose that, though fi shermen in rural Ghana may not be excessively wealthy, the initial costs of m-commerce

Item Frequency of cost

Cost of mobile device Fixed (one time cost)

Connection fee Fixed (one time cost)

Line rental charges Monthly

Service charges Monthly

Pre-paid cards 30–60 days

Post-paid Monthly

Subscription fee Monthly

Bank charges Quarterly

Table 1. M-commerce adoption cost.

Cost (USD)

Item Post-paid service Prepaid service

Phone 440.00 30.00

Deposit 100 0.00

Connection fee 54.67 0.00

Line Rent 19.5021.00 (*sim card cost)

Call /month 0.14 × 75 0.10 × 75

Subscription 1.80 Free

Service Free Free

Total 626.47 58.50

Table 2. Initial setup investment analysis.





Mobilephone model

Cost of newphone price

(USD)

Cost of second- hand phone

(USD)

Motorola T-900 75–120 30–45

Nokia 1100, 1600 & 2100 60–110 30–70

Sony Ericsson K750 140–200 85–110

Table 3. Mobiles phones used in Farming Delight.

adoption, especially with pre-paid services, are within their economic means.

CASE A: FARMING DELIGHT COMPANY LIMITED. FINDINGS FROM INTERVIEWS

Farming Delight is a commercial farming entity. They cultivate cereals and vegetables as well as poultry. The focus of the poultry section is the raising of day-old chicks and eggs for sale. Activities in this company are quite organized and well structured. They have four different sections, Administration and Finance, Sales & Marketing, Crop Operations, and Poultry Operations. Each of these sections is headed by a manager, with a managing director as the head of the company. The crops and poultry operations are managed by farmers who have been employed by the fi rm. The fi rm has a total of 41 employees including 28 farmers. The fi rm is located about 240km from the nearest urban district where the major market centre is located. A total of 12 interviews were conducted with the marketing manager, nine farming employees, and two buyers of the fi rm’s produce. All of the employees interviewed owned mobile phones. All the mobile phones were on prepaid service subscriptions. The mobile phones used by the employees interviewed are listed in Table 3.

Costs

At Farming Delight, cost savings in all aspect of their operations are strictly enforced. One of the farmers recounted challenges before m-commerce adoption, stating that

For nearly fi ve years we have not witnessed any appreciable increase in returns. Yields have some-times gone up but by the time the customers arrive from the city, about half of the harvest had gone bad.

Another farmer emphasized location and mobility constraints, stating that

It is also not easy to leave the farms and travel to the cities to sell, which means deserting the farm for three to four days.

Cost was the major priority in the decision to adopt m-commerce for the sales and marketing operations of the company. The top management had confi dence that adopting m-commerce could potentially reduce their operational costs and losses. The areas where the

introduction of m-commerce has succeeded in cutting down costs included fuel, advertising, and travel allowances, for sales and marketing staff. The sales and marketing staff previously used to travel an average of 240 km daily, to take orders and visit prospective customers. The monthly risk and travelling allowance was about fi ve times the total maintenance cost of the mobile service per sales representative. Instead of the daily routine visits by sales representatives to their customers, customer visitation is now once per week. Urgent customer concerns arising on non-visiting days are discussed on the mobile phone.

Management confidence in the potential of m-commerce relates to findings from a Snowden and Spafford (2006) study, which emphasized that understanding the benefi ts or value of m-commerce, especially on the part of the fi rm’s top management, relatively increases the intention to adopt. With in-creased intention to adopt, management would be rela-tively more keen to allocate resources for m-commerce adoption. The cost factor is a major determinant in assessing business performance, which also has a direct infl uence on the economic growth of an estab-lishment. The cost savings achieved in sales and mar-keting activities seem to indicate that, m-commerce is relatively reducing the fi rm’s operational costs.

Convenience and Communication

Convenience on the part of the company, as well as of customers and others who do business with it, is a priority of the fi rm’s management. Currently, sales representatives are able to contact their customers and take orders or customer concerns from their homes at any time. SMS messages are sent out by marketing officers to customers and sections of the general public.

The marketing manager, when asked about how the use of mobile phones has benefi ted their business, stated





Indeed it’s not only that the mobile phones have enabled us to reach the bigger buyers, but it has also enabled us to have more market options. Now we are able to monitor prices daily from all the major markets, and then contact buyers in the areas where prices are higher. There are a lot of prospective buyers who want to come to buy but the problem is that, they fi rst need to get information about what we have harvested (tomatoes, carrot, pepper, garden eggs, okra, etc) and the quantity, so that they don’t travel all this long distance only to arrive here to fi nd little or nothing to buy. The added advantage with the mobile phone is that, we can call and negotiate even from our farms.

The above comment points out how the convenience associated with m-commerce is also improving communication – improving information quality and relationships between the fi rm and its trading partners and customers. By introducing m-commerce, relationships between the company and their business partners (customers, banks and network operators) have been steadily improving. Through the utilization of SMS or text messaging, internal communication between employees of the fi rm has improved, and decision making within the fi rm is now much faster. Additionally, customers can also place or modify orders via the medium of mobile telephony. Communications in the company keep improving, and the company is on the verge of installing Internet and intranet facilities, to further extend effi cient communication throughout the fi rm’s value chain constituents.

We identifi ed that m-commerce is improving access to the information required for business transactions. The ability for customers to access harvest or stock information, and place or modify orders via the medium of mobile telephony, refl ects the fact that they are being empowered to make informed purchase decisions. There are also benefi ts of not being constrained by time and location, but being able to address customer concerns anytime and anywhere at the point of need. This amounts to managing time effectively for business and improving productivity. Keen and Mackintosh (2001) note that perhaps the key value proposition of the fl exibility and ubiquity associated with m-commerce is the creation of choice, or the new freedom it offers customers. This also contributes to the interrelated benefi ts of reducing the costs of searching for products, services, sellers, and buyers, and the costs in timeliness

of decisions related to negotiating, accepting transaction terms, and fulfi lling transactions. In using SMS for direct marketing and information provision, the fi rm is creating more contact points with its customers, which can provide opportunities for enhancing customer relationships (Frolick and Chen, 2004). The caveat with that is knowing how to manage such an information ‘push’, to avoid spamming and information overload on the customer. This could strain customer relationships. Notwithstanding, Farming Delight tends to be on the path of facilitating closer market relationships, which may improve customer satisfaction and tie customers to the fi rm.

However, the earlier comments by the farmers on ‘harvest going bad’ and ‘deserting the farm’ point out other potential business, technical, and human resource constraints, which the fi rm faces. Though m-commerce can increase the timeliness of business activities, the failure to address other critical resource constraints could eventually affect the whole business value chain, and therefore also affect the fi rm’s value offering or products to the customer or to its target market. M-commerce cannot and should not be aimed at entirely replacing the fi rm’s business value chain; it can support the business processes and activities by enhancing the effi ciency of delivering them.

CASE B: FISHERMEN DELIGHT COMPANY LIMITED. FINDINGS FROM INTERVIEWS

Fishermen Delight Company Limited is a fishing company that has adopted m-commerce. Their major business partners include cold-store proprietors who buy and preserve fi sh, small fi shmongers, banks, and mobile network operators. The fi shing is done several kilometres from the coast (deep sea fi shing) using motorized canoes and small fi shing trawlers. The road linking the fi rm to the major market centre is about 35 kilometers, and has only 25 kilometers tarred and in need of rehabilitation. The fi rm has 16 employees which include 13 fi shermen, 2 operational staff, and the manager. The manager is known as the ‘Chef’ – an experienced fi sherman who employs other fi shermen to handle his motorized canoes and fi shing trawlers. A total of 13 interviews were conducted with the manager or ‘Chef’, one operational staff, eight fi shermen, and three buyers of the fi rm’s catch. Two members of the fi shermen cooperative association in the community which the firm belongs to, were also interviewed. The manager owns two mobile phones – one is used





by fi shermen who go for the fi shing and the other is used by the manager to communicate with fi shermen, potential buyers, and other trading partners. All the mobile phones were on prepaid service subscriptions. However, fi ve of the employees interviewed owned mobile phones, which had been acquired personally. They often use their mobile phones to communicate with the manager, alongside the other mobile phone provided by the manager for fishing. The mobile phones used by the employees interviewed are listed in Table 4.

Costs

Fishermen Delight furnishes their fishermen with mobile devices to enable them to supply the operational team, on shore, with regular updates on the progress of each fi shing expedition. The fi shermen working for Fishermen Delight usually spend between 18 hours and 3 days at sea. Regular communication is maintained between Fishing Delight and its employees at sea until they return to shore. Mobile communication has led to an elimination of waste arising from rotten catches, which customers refuse to buy after fi shermen are delayed at sea. With the information they receive from the men at sea, the fi rm’s operational team contacts potential buyers and existing customers, and initiates negotiations to sell the catch. The information also enables Fishermen Delight to apply innovative pricing techniques, which appropriately match fi sh demand to fi sh supply.

By improving effi ciency in operations and other business processes, the fi rm accrues cost savings in effective stock management. M-commerce also en-ables the delivery of time-sensitive information which enhances decision making in transactions. This use of timely information by the operational team reduces the cost of searching for customers and buyers, and making informed decisions related to negotiating, ac-cepting transaction terms, and fulfi lling transactions.

Convenience and Communications

Convenience, as earlier discussed, refers to the relative ‘anytime and anywhere’ access to information at the point of need. The manager of the fi rm or the ‘Chef’ refl ects that

Now, when my people are far on the sea, I am able to get information on the volume of the catch, and also get information about the prices in the city.

I can quickly arrange and discuss with buyers without they coming over here.

Additionally, one of the buyers of the fi rm’s catch states

I have been in this business for over 15 years. I travelled several kilometres from Accra to these areas and back, sometimes about twice a week, on these terrible roads, sometimes carrying huge sums of money on me. The introduction of the mobile scheme has brought a big relief to me. I now stay at home and my goods are brought to me. As soon as I get the information, I call my bank and the money is paid to the fi shermen.

The above comments demonstrate the application of m-commerce in contextual settings where time is critical, and where timely delivery and use of infor-mation is essential. In these situations, the ‘always-on connectivity of the medium’ offers the fl exibility and convenience in making informed-business decisions, which have a potential strategic value to the firm (Anckar and D’Incau, 2002). This strategic value stems from the interrelated benefi ts of improved customer/buyer satisfaction and relationships.

Finally, the chairman of the fi shing cooperative association in the community also comments on the impact of m-commerce on the local fi shing industry, by stating

The advent of the mobile phone has brought a new ‘life’ into the fi shing industry in our district. The net income of the fi rms has more than tripled over the past few years. This is due to the fact that, they have now cut off a lot of the ‘middlemen’, and could sell the proceeds directly on the big markets by reaching competitive buyers with the aid of their mobile devices. This has enabled them to expand their businesses by acquiring new fi shing inputs and also employing more people.

In the traditional commerce model, interaction between sellers and buyers has mostly been by formal face-to-face meetings. This form of interaction

Mobilephone model

Cost of newphone price

(USD)

Cost of second- hand phone (USD)

Nokia 1100 & 1600 60–100 30–60

Siemens C35 80–110 35–65

Table 4. Mobile phones used in Fishing Delight.





normally takes place only when the buyer visits the seller to buy, or the seller follows up on the buyer to collect payment of produce previously purchased. The frequency of such interactions is rather low, ranging between once per week and once within a month. This has not encouraged the relationship between these partners, and in situations where credit buyers have failed to turn up on agreed dates, the relationship has even suffered. During the off-season, interaction is virtually cut off.

In the m-commerce environment however, a new business model seems to have developed, and the buyer-seller interaction for Fishermen Delight has tremendously improved. In this model, Fishermen Delight uses m-commerce to manage transactional negotiations between their buyers, their banks, and the fi rm, to facilitate their business operation. The fi shermen call or send SMS messages to the buyers about their catch and the value. After the price is negotiated, the fi sh is delivered. The buyers make payments directly through the banks. The money transfer is sometimes done through telephone bank-ing. Fishermen Delight is also able to check its balance through telephone banking. The use of mobile devices has further enabled Fishermen Delight to easily keep in touch with its trading partners. Messages are sent amongst value chain partners to say ‘hello’ in situations where no business transactions are involved. This has aided in facilitating closer relationships between the fi rm and its buyers. It has also generated other strategic benefi ts including promoting trust and confi dence, which are vital components in business transactions among trading partners.

On the other hand, we also identifi ed that storage constraints – the lack of trawlers which have onboard storage systems or mobile storage systems for the catch – tend to be a contributory factor to the value of m-commerce to the fi rm. However, with increasing demand and potential delays, m-commerce may just be able to establish sale transactions, but not to offer time-liness in transporting the catch to the shore. Though this is a question of resource availability, there would be the need to address these storage constraints, and establish the necessary logistics to support the fi rm’s operations.

CONCLUDING THOUGHTS

This study is an attempt to provoke some discussion on the adoption of m-commerce, and the impact of use

of mobile communication devices on rural businesses. This study is expected to contribute to the development of a conceptual framework and research propositions to address some issues in e-commerce adoption. By using the 3Cs model for examining the direct impact of IT on business performance (Kalakota and Whinston, 2002), this paper has sought to investigate the impact or value of m-commerce to fi shermen and farmers in rural Ghana. We identifi ed three major themes – cost, convenience, and communication, as the value being obtained by these rural businesses.

M-commerce is relatively redefi ning the business processes of these rural businesses. Disintermediation occurred as these fi rms gained opportunities of avoid-ing intermediaries or bypassing of ‘middlemen’, and trading directly with buyers in the marketplace. In addition to avoiding costs in selling through inter-mediaries, these fi rms have gained the opportunity of becoming more visible, deepening their business relationships, and forming closer ties with buyers. For example, through better understanding of the buyers’ needs and collaboration with the other institutions like the bank, Fishermen Delight tends to be relatively customizing or differentiating their service for their target buyers. Farming Delight, on the other hand, has gained the ability to monitor prices and directly con-tact buyers in areas where prices are higher, thereby increasing the fi rm’s market options.

This disintermediation role of m-commerce relates to fi ndings by previous studies. Dholakia and Kshetri (2002) document case examples of Bangladeshi far-mers, Ivoirian farmers, and Indian fi shermen using m-commerce to eliminate or reduce the role of inter-mediaries in their business value chain. They use m-commerce to obtain and monitor timely information about product prices, which inform their sales and marketing decisions and pricing strategies. In China, Friesen (2002) has reported on how the government completely bypasses retailers to sell lottery tickets directly to consumers’ handsets.

In effect, disintermediation relatively leads to per-sonalization, which tends to open opportunities for offering competitive pricing and other value-added services for their buyers. Product differentiation coupled with the timeliness and openness associated with this means of communication and information exchange, would yield further strategic benefi ts such as improved satisfaction, promoting trust, improved reputation, and business continuity. These benefi ts can therefore relatively become sources of competitive





advantage for m-commerce adopters in the marketplace. However, it is important to note that, m-commerce cannot entirely replace the business value chain of an agricultural entrepreneurial firm. M-commerce acts as an enhancer of value delivery for the farming and fi shing enterprise. Better information fl ows are facilitated, marketing activities can be enhanced, operational effi ciencies are gained, and the cost of the business can be cut down.

The case studies have, however, shown that m-commerce adoption is facilitated by:

• management’s perception of the usefulness of m-commerce

• increasing affordabil ity of investing in m-commerce; in Ghana these costs are progres-sively becoming lower and lower

• a better understanding of the roles of m-commerce as a key information and disintermediation tool

• a closer examination of cultural nuances and how these relate to technology adoption.

M-commerce is a key tool in enhancing interpersonal communication. In respect of interpersonal commu-nication, degree of individualism (Hofstede, 1985) is key. Individualism refers to the degree to which people prefer to act as individuals rather than group members. Ghana is one of the many countries with low degrees of individualism. Thus, Ghanaians feel more comfort-able with others and want to be connected to them. In order to be comfortable with others, cultures with a rich interpersonal communication consider face-to-face interaction to be essential, as it consists of greater intensity of socializing, more verbal communication, and greater time of communication. Consequently, in a context like Ghana, social relationships and networks become critical resources to facilitate the diffusion of an innovation. If a technology is able to integrate itself into the social relationships, it is more likely to gain social acceptance and adoption.

LIMITATIONS OF THE STUDY

The context of this is study is Ghana, and the sample is limited to only farmers and fi shermen, in two spe-cifi c fi rms or cooperatives in specifi c locations. Age, gender, experience and voluntariness are signifi cant moderators of acceptance (Venkatesh et al., 2003). The study’s limitations include the fact that these factors were not considered.

FUTURE RESEARCH DIRECTIONS

Our research is not in any way exhaustive. Due to the fact that m-commerce is such a fast and evolving industry, the possibilities for future research are end-less. Further research can consider the different con-ditions, which can infl uence the adoption or otherwise of m-commerce. Also, an extension of the study to other locations, other groups of occupations, and other developing countries, is needed in order to draw fi rm conclusions. It is evident that, as of now, very little research has been carried out on the role m-commerce can play in addressing social and economic problems in areas such as health, poverty alleviation, and eco-nomic growth. It will therefore be very interesting to undertake further research in these areas.

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Abstract

Utilizing case studies of farmers and fishermen in Ghana, we investigated the mobile commerce (m-commerce) idiosyncrasies of two rural businesses. We specifically examined the investment cost associated with m-commerce, and the m-commerce adoption practices of farmers and fishermen in selected rural districts in Ghana. We adopted a qualitative research approach and conducted in-depth interviews with management and operational personnel, in our target respondent firms. We found that m-commerce facilitates cost reduction for farmers and fishermen, and affords them opportunities for deepening internal and external business relationships. M-commerce also facilitates the delivery of time-sensitive information, which enhances decision-making in transactions. Whilst m-commerce clearly enhances various value delivery propositions for the farming and fi shing companies we profi led, it cannot entirely replace their business value chains. The originality of this study lies in the fact that, it is one of the few scholarly investigations focusing on m-commerce from the perspective of a sub-Saharan country.

Keywords: mobile commerce; m-commerce; tech-nology acceptance; rural business; farmers; fi shermen; Ghana

Raymond A. Boadi is IT Officer, IT Services, Hampshire County Council, Room 400, EII Court, The Castle, Winchester, Hampshire SO23 8US, United Kingdom. Tel: +44 1962 847015. E-mail: [email protected]

Richard Boateng is ICT PhD Researcher, Development Informatics Group, IDPM, SED, University of Manchester, Arthur Lewis Building, Manchester M13 9PL, United Kingdom. Tel: + 44 7900 692962. E-mail: [email protected]

Robert Hinson is Senior Lecturer, Department of Marketing, University of Ghana Business School, PO Box LG 78, Legon-Accra, Ghana. Tel: ++ 233 21 500159 Ext. 6247. Cell: ++233 244 266 988. Fax: ++ 233 21 515171. E-mail: [email protected]

Robert Ankomah Opoku PhD, is Assistant Professor of Marketing, Department of Management and Marketing, College of Industrial Management, King Fahd University of Petroleum & Minerals, PO Box 5005, Dhahran 31261, Saudi Arabia. Tel: +966 3 860 7519 (Offi ce). E-mail: [email protected].

MORE ON E-RECORDS IN AFRICA

Diffusion of ICTs and E-commerce adoption in manufacturing SMEs in Kenya

Migiro, S. O. South African Journal of Libraries and Information Science, vol. 72, no. 1, pp. 35–44. 2006.

The Internet’s World Wide Web has become the prime driver of modern E-commerce. The World Wide Web and the Internet together with other ICT enabling technologies offer a platform in the way organizations arrange their business processes, address their marketplaces, and partner with other enterprises. The object-ives of this paper are to map ICT diffusion and adoption of e-commerce by manufacturing SMEs in Kenya and identify specifi c barriers to the exploitation of these drivers. The investigation adopts a descriptive survey research design in which random sampling techniques are used. The data was analysed using descriptive statistics. Results reveal that high cost, limited funds and lack of technical know-how are barriers in the diffusion of ICTs among the manufacturing SMEs. (Author abstract)

(Selected by the Editor from Library and Information Science Abstracts)



Preliminary Insights into M-commerce Adoption in Ghana

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