Limitations of the Internet and ICTs

Limitations of the Internet and ICTs

As discussed above, the Internet and ICTs provide numerous benefits to individuals and organizations. However, there are also limitations and barriers in utilizing the Internet and ICTs. Turban et al. (2008) classified barriers to e-commerce as either technological or nontechnological.

Technological Limitations
• Lack of universal standards for quality, security, and reliability
• The telecommunications bandwidth is insufficient, especially for m-commerce
• Software development tools are still evolving
• It is difficult to integrate Internet and e-commerce software with some existing (especially legacy) applications and databases
• Special web servers are needed in addition to the network servers, which add to the cost of ecommerce
• Internet accessibility is still expensive and/or inconvenient
• Order fulfilment of large-scale B2C requires special automated warehouses

Non-technological Limitations
• Security and privacy concerns deter customers from buying
• Lack of trust in e-commerce and in unknown sellers hinders buying
• People do not yet sufficiently trust paperless, faceless transactions
• Many legal and public policy issues, including taxation, have not yet been resolved or are not clear
• National and international government regulations sometimes get in the way
• It is difficult to measure some of the benefits of e-commerce, such as online advertising. Mature measurement methodologies are not yet available
• Some customers like to feel and touch products. Also, customers are resistant to the change from
shopping at a brick-and-mortar store to a virtual store
• In many cases, the number of sellers and buyers that are needed for profitable e-commerce operations is insufficient
• Online fraud is increasing
• It is difficult to obtain venture capital due to the failure of many dot-coms


One of the most concerned technological barriers is a lack of global standards for quality, security, and reliability (Turban et al., 2008; Van Toorn, Bunker, Yee, & Smith, 2006). The lack of standards in technology and its applications eventually increases the cost of system integration for effective and efficient management in distribution, operation and communication worldwide. Large hospitality corporations have invested to transform their systems into a total netware system; however, small and medium-sized tourism enterprises (SMEs) struggle to integrate the systems due to a shortage of financial sources. Consequently, SMEs are at a competitive disadvantage and find it increasingly difficult to maintain their position in the marketplace.

Payment security and privacy concerns are one of the major nontechnological barriers that prevent consumers from completing transactions online (Buhalis & Law, 2008). Business organizations must therefore pay more attention to protect themselves and their customers from osses due to cyber-crimes, such as auction fraud, vacation fraud, gaming fraud, spamming, identity theft and hacking booking details (e.g., credit card numbers and card-verification codes) (Buhalis & Law, 2008; Mills, Ismail, Werner, & Hackshaw, 2002).

Additionally, the recent surge of Internet usage and availability has caused overwhelming volumes of information, some of which is inaccurate or misleading (Jun, Vogt, & MacKay, in press; Susskind, Bonn, & Dev, 2003). For this reason, the Internet has lead to a decrease in the efficient search for information (Allen & Shoard, 2005; Farhoomand & Drury, 2002; Lurie, 2004). From the consumer perspective, the increasing number of alternatives or attributes in a choice set increases uncertainties and risks in consumer choices (Bettman, Luce, & Payne, 1998; Lurie, 2004) and entails higher transaction costs, such as search costs for identifying alternatives, learning costs associated with familiarizing oneself with alternatives, and activity costs involved in motivating a change (Jun et al., in press; Schweitzer, 1994).

Using ICTs as a stand-alone initiative is inadequate and has to be coupled with a redesign of processes, structures and management control systems. ICTs can support business success when rational and innovative planning and management is exercised constantly and consistently. Corporations should be able to respond to current and future challenges, by having the resources and expertise to design new processes from scratch, in a timely fashion. As a result of the rapid ICT developments, corporations need to convert their operations from business functions to business processes, as well as re-conceive their distribution channels strategy, and
even more importantly, their corporate values and culture (Tapscott, 1996). Perhaps the greatest challenge organisations face is to identify and train managers who will be effective and innovative users of ICTs and would lead technology based-decision making. Intellect therefore becomes a critical asset, while continuous education and training are instrumental for the innovative use of ICTs and the competitiveness of tourism organisations.