The Benefits of Information and Communication Technology (ICT) in Indonesia

1	Project Overview
This research describes the utilization of information and communication technology (ICT) to empower the Small and Medium Enterprises (SMEs) in Indonesia.  The focus will be put on the websites used by the SMEs to support their activities.  These websites are the ones used by the SMEs to display their products, share information and even trade online.  Upon conducting the research, the pre-selected SMEs and other site owners that has used ICT facilities will be interviewed to gather specific information.  To complete this research, some related data will also be included to give better understanding about the ICT condition in Indonesia.

2	ICT in Indonesia: An Overview
By January 1st, 2002, the population of Indonesia has reached an estimated number of 207.5 million people, with its annual growth rate at 1.35 percent.  Indonesia has the average income per capita of US$ 712.2, with its total of poor citizen numbering at 38.7 million people, or 18.6 percent of its population.  The Gross Domestic Product (GDP) of Indonesia has reached US$ 172.9 billion, with three percent of growth every year.  Indonesia’s personal computer market sits at 5 PCs per 100 households, whereas in the rural areas the estimated availability is only at 1 PC/village.

2.1	Small and Medium Enterprise (SME)
Based on the research from Biro Pusat Statistik (Central Bureau of Statistics), it is proven that the Small and Medium Enterprise (SME) in Indonesia had an excellent resistance during the dire monetary crisis a few years back.  The research concluded that 64 percent of the SMEs were not affected by the crisis, another 31 percent still operated albeit in a limited way, while only four percent of them got totally halted in their business activities.  These days, the estimated total number of SMEs in Indonesia amounts to 40 million units, which in turn absorbs around 76.5 million workers.  In fact, the amount of SMEs in Indonesia covers 99 percent of the total sum of national entrepreneurs, at the same time pervading 99 percent of total sum of national workforce, and continuing to contribute to 58.2 percent of the Gross Domestic Product.  Considering the huge potential of SME position in Indonesia, the Government of Indonesia undoubtedly has allocated 42,300 billion rupiahs worth of credit fund in its 2003 budget for SME.  This is quite an increase, considering the 23 percent rise from the previous year’s 34,200 billion rupiahs.  Currently the credit for SMEs forms 50.6 percent of the total banking credit expansion value in Indonesia.  

2.2	SME and IT
The research done in 2001 by Partnership for Economic Growth (PEG) – USAID covering 417 SMEs in eight cities in Indonesia had concluded the following facts:
•	84.7 percent of SMEs that perform export activities use computers to support their activities.  
•	61 percent of those SMEs claimed to have approximately 1 to 5 computers, while other 15.1 percent said that they employ 6 to 10 computers.
•	60 percent of those SMEs use computers for managerial activities and collect data from the Internet, 21 percent only use them for administrative and marketing activities, and 4.1 percent only for business correspondence [writing conventional letters/snail mail, not e-mail].

Furthermore, based on the research conducted by CastleAsia in January 2001 that covered 227 SMEs in 12 Indonesian cities, it is concluded that:
•	About 150 SMEs use the Internet, 98 percent of them have Internet access at the office whereas the rest 2 percent use the Internet at ‘warung Internet’ or warnet (telecenter/Internet kiosk).
•	About 100 SMEs use the Internet for the purpose of communicating with buyers from other cities/foreign countries.  
•	50 percent Internet respondents use e-mail more than 20 hours per month, while yet another 25 percent use e-mail more than 40 hours per month.
•	93 percent Internet respondents use dial-up system, 15 percent of them has benefited from e-banking, and 38 percent of them have their own websites as a promotion tool.

According to a research conducted particularly in Jabotabek (Jakarta and its three nearby cities; Bogor, Tangerang, Bekasi) by Business Intelligence Report (BIRO), which was published on the book titled “Prospect of Small and Medium Enterprises in Indonesia”, about 60 percent respondents are familiar enough with doing correspondence by e-mail and prepared to carry out online transactions.  The research covered 420 SMEs located in the Jabotabek area, 80 percent of which has investment worth under US$ 1 million and 72.5 percent of which has the turnover rate at under US$ 1 million.  It is also stated that 127 companies or around 30 percent SME respondents has already designed and used websites to support their promotion activities.
  
2.3	Telecommunication
With the telecommunication’s deregulation being implemented in Indonesia, there will be at least two international gateway facility operators (companies that provide international calls) in Indonesia.  They are Telkom and Indosat, both are the two biggest telecommunications companies in Indonesia.  Apart from them, there are also nine cellular mobile telephone system operators, more than 101 paging companies and 2 fixed line operators.  The country has an installed capacity of 7,882,000 units, with 7,825,152 fixed phone lines subscribed as the end of March 2003.  Telephone line charges are at an average of US$1-$1.5 per hour (currency at Rp 8500 per US$1)
As of year-end 2002, the number of cellular users has reached 11,300,674 from 6,222,600 by the end of December 2001 and 3,669,300 in 2000.  The Short Messaging Service (SMS) contribution is quite significant to cellular operators’ income, which reached 13 percent in 2002, and 20 percent by March 2003.  Various cellular services are becoming more common to mobile phone users as GPRS and WAP technologies are being offered at affordable rates.  

2.4	IT and Internet Penetration

	1999	2000	2001	2002	2003	
Internet subscriber (thousand)	256	400	581	667	800	
Internet user (thousand)	1,000	1,900	4,200	4,500	7,550	
.ID domain name registered	4,679	8,918	12,413	15,947	16,800	
Peak of Internet Traffic (MBps)	2.05	3.07	40.96	245,760	620,595	
Operating ISP	35	63	82	90	90	
*) estimation until the end of 2003	

Internet Service Providers (ISPs) in the country today with the major providers offer 56K service at an average rate of $0.40 per hour.  ADSL, wireless, cable and satellite Internet facilities are now being offered as well.  Based on IDC data, in 2001 Indonesia spent US$ 769 million in IT hardware, US$ 63 million in software, US$ 75 million in IT services.  It is estimated a total of US$ 907 million of IT spending in 2001.  There is approximately 2.3 million PCs in the country.  Most of these PCs, about 1.9 million of them, are used in business and government.  Only about 251,000 PCs are used in Indonesian households.  In the area of education, more than 60,000 institutions currently use only about 58,000 PCs.  

2.5	Education and IT
Nowadays, there are no exact number found on Internet penetration in educational sector.  Nevertheless, many parties had several programs in increasing IT (Information and Technology) usage at school.  For example, Direktorat Menengah Kejuruan (Directorate of Vocational School) from the Department of Education implements a developmental program called “Wide Area Network (WAN) Kota” (City Wide Area Network) in 11 Indonesian big cities.  This program is aimed at connecting various schools in those cities together by using the Internet.  There are also other similar activities, such as Jaringan Informasi Sekolah (Schools Information Network) which is provided by practitioners in education, and Program Sekolah 2000 (School Program 2000), provided by Indonesian Internet Service Provider Association.

2.6	Law & Regulation
Issues	Status	
Electronic Information and Transaction	Drafted by University of Indonesia (UI) and Padjajaran University.  Had already conferred to Ministerial of Communication and Information.  Will be soon presented to the President.
	
Telecommunication industry	Telecommunication Act (UU 36/1999)
	
Broadcasting licensing and content regulation	Broadcasting Act (UU 32/2002)
	
ICT industry 	Presidential Decree (INPRES 6/2001)
	
Telecommunication Services	Ministerial Decree on Telecommunication Services (KEPMENHUB 21/2001)
	
Internet Telephony Services	Ministerial Decree on Telecommunication Services (KEPMENHUB 23/2002)
	
Digital Crime Act	Drafted by ICT Watch and Law Faculty of University of Indonesia
	
Intellectual property rights	Intellectual Property Right Act (UU 19/2002)
	
Consumer protection	Consumer Protection Act (UU 8/1999)
	
National strategy of e-Government Development	Presidential Decree (INPRES 3/2003)
	
Reference of Local Government Website Development	Drafted by Ministerial of Communication and Information

2.7	E-Government
Nowadays around 45 percent of local governments in Indonesia, ranging from regencies, cities, and provinces, have already owned their own Internet sites, which act as a basic tool for starting e-government.  Unfortunately, only 27 percent performed well, performing daily updates and responding to the incoming e-mail.  The President has issued Instruksi Presiden (Inpres) no.3/2003 (Presidential Decree) on National Strategy for Developing e-Government.  Furthermore, the Department of Information and Communication is currently composing a Reference for Developing Local Government Site.
  
2.8	Indonesia Internet Review.
Introduction: The Bigger Picture
At first, the Indonesian Internet Service Provider Association or Asosiasi Penyelenggara Jasa Internet Indonesia (APJII) was highly optimistic that the customer growth of Internet Service Providers (ISPs) could increase to 72.12 percent throughout 2002, from 581 customers in 2001 to one million in the next year.  Unfortunately, the optimism had failed in reality.  Confronted with the result of current research conducted by AC Nielsen Indonesia, APJII had to give up to the fact that customer growth only increased 7 percent throughout 2002.  Still according to AC Nielsen, the amount of residential access user (household) in fact has declined 6 percent, from 13 percent in 2000 to 7 percent in 2002.  This is partly caused by the telephone penetration rate in Indonesia, which is still low, only 3 to 4 percent from total population.  This is quite a significant obstacle.  Other obstacle which slightly dominant is the telephone tariff rate, which is quite expensive.  
If in 2000 the warung Internet (warnet/internet kiosk) was the most favorable place for 50 percent Internet’s user, then in 2004 the estimated amount will increase to 64 percent.  The increasing number appears as the effect of the declining numbers of residential access users, which dropped to 7 percent this year, down from 13 percent in 2000.  The declining trend is followed by office access user category, which falls from 42 percent in 2000 to 18 percent this year.

The Indonesia Mailing-list User Behavior*
In the end of 2001, Onno was evaluating http://groups.yahoo.com.  He managed to review 30.000+ mailing lists out of 45.000+ mailing lists.  Out of those mailing lists, only 1278 have more than 100 subscribers.  Following is the data:

Total subscribers	465,749	
Pornographic	59,871 (12.9%)	
Social Functions	89,372 (19.2%)	
Religious	56,035 (12.0%)	
Politics	32,388 (7.0%)	
Knowledge	83,648 (18.0%)	
Hobby	48,342 (10.4%)	
Business	96,093 (20,6%)	

Message Distribution in 2001	1,635,395	
Pornographic	42,590 (2.6%)	
Social Functions	376,604 (23.0%)	
Religious	194,714 (11.9%)	
Politics	187,588 (11.5%)	
Knowledge	291,396 (17.8%)	
Hobby	236,023 (14.4%)	
Business	306,480 (18,7%)	

Subscriber Activeness	Average Messages / Subscriber / Month	
Pornographic	0.71	
Social Functions	4.21	
Religious	3.47	
Politics	5.79	
Knowledge	3.48	
Hobby	4.88	
Business	3.20	

Total consumed bandwidth	1,732 Kbps	
Social Functions	237 Kbps (13.7%)	
Religious	149 Kbps (8.6%)	
Politics	113 Kbps (6.6%)	
Knowledge	270 Kbps (15.6%)	
Hobby	103 Kbps (6.0%)	
Business	153 Kbps (8.8%)	
 
*Digital Review of Indonesia by Onno W Purbo, November 2002

High-Tech Crimes and Impact to e-Commerce
Surprisingly, Indonesia is the second paradise in the world, after Ukraine, for cyberfraud agents.  A Texas-based security company, ClearCommerce (ClearCommerce.com), claims this fact in 2002.  The company added that around 20 percent of Indonesia-originated credit card transactions on the Internet are cyberfraud.  The research, which began from mid 2000 until end of 2001, surveyed 1,137 merchants, six million transactions, and 40 thousand customers.  Besides cyberfraud, other criminal activities often found on the Internet are phony trading (offering non-existent items) via chatroom and site hacking.  Most of those cyberfraud agents perform their action from the warnet.  
According to MarkPlus research in 2000, which concerned 1,100 people from five big cities in Indonesia (Jakarta, Bandung, Yogyakarta, Surabaya and Medan), 90 percent of total respondents have never done or been unwilling to do online transactions.  When asked why, the answers followed: They simply do not trust transaction online (15.1 percent) and they do not feel safe or thought that the risk is too high (13.6 percent).  That means 25.85 percent, or around 284 out of 1,100 respondents surveyed, turned out to be reluctant on doing online transactions because they are much worried about the safety factor when doing transaction via the Internet.  

3	Case Studies
To complete this research, below are several examples of e-commerce and Internet application in Indonesia that are specifically built to empower small and medium enterprises.  The interviews to the sites owner are conducted from June 25 to July 3, 2003.  

3.1	Case Study 1: NAFEDVE.com
NAFEDVE.com was initiated and owned by National Agency for Export Development, an agency part of the Department of Industry and Trade, Republic of Indonesia.  It was originally built to advance the SMEs’ capability to enter the global market.  One of the initiators was Mr.  Rahayubudi, Director of Centre for Export Information and Training.  He realized that the Internet is the cheapest and the best way to compete in global marketplace.
Based on consideration that the SMEs’ IT literacy in Indonesia is still low, NAFEDVE.com combines the usage of IT and conventional ways, including physical visits, to serve its members.  
Although it was originally intended for the SMEs, the website also asked several big industries to join.  The reason was simple: It needed something to attract the foreign market, and it regards big industries as  eye catchers to the visitors.

Aim and objective
1.	As a “virtual exhibition” center, it aims to be a key agent in fostering the capability of SMEs in Indonesia to compete in the global market.
2.	Help Indonesian SMEs’ to promote their products globally.
3.	Facilitate information-sharing on entrepreneurship for all the members
4.	Promote the benefit of ICT to the SMEs

Cost and funding bodies
(Note: Since this is a government body, not all information—especially financial aspect— is readily available.  It will take prolonged time to go through official procedures in order to get the information.)

NAFEDVE.com is solely owned and maintained by National Agency for Export Development (NAFED), a Government of Indonesia agency under the Department of Industry and Trade.  The website’s daily activities are run by the Centre for Export Information and Training, a division inside NAFED.  
In practice, NAFEDVE.com is supported by local offices of the Department of Industry and Trade. This way, they managed to reduce the operational cost to run their activities.  This is considered very important to reach SMEs in thousands of islands all across Indonesia.

Participants
The website currently has 86 members.  Most of them (98%) are small and medium enterprises, while the other two percent are considered large-scale industries.  

The membership composition is as follows:

Chemical Products	1	1 %	
Fashion Accessories	4	5 %	
Footwear	2	2%	
Furniture	26	30%	
Garments	5	6%	
Handicrafts	30	36%	
Household products	3	4%	
Leather and Products of Leather	1	1%	
Musical Instruments	1	1%	
Paper and Paper Products	1	1%	
Plastics Products	1	1%	
Stationery	2	2%	
Textile Products	7	8%	
Toys	2	2%	

Most of the members are considered as low information technology (IT)-literate.  For that reason, NAFEDVE.com combines both conventional technology for the “IT illiterate” SMEs and any advanced technology available for SMEs equipped with IT gadgets.  Through the location visit to the selected SMEs, NAFEDVE.com managed to introduce the importance of IT in order to win the tight competition in global market.  To overcome the limitation of their human resources, NAFEDVE.com often asked the local officials of the Department of Industry and Trade to help introducing NAFEDVE.com activities.
Eighty percent of the members are located in Jakarta, the capital city of Indonesia.  It is considered reasonable since Jakarta has better IT infrastructure than other places in Indonesia.  In addition, with their human resources and fund limitations, NAFEDVE.com started their effort with the SMEs near their office.

Technology
Inaweb, one of the leading web developer companies in Indonesia provides the technology used by NAFEDVE.com.  The website is running on Windows NT operating system, written in ASP language.
The program provided by Inaweb facilitates web administrators to conduct an advanced evaluation for their websites.  Besides the commonly used visitor counter, this site also records the visitor’s IP and how long those visitors spend their time exploring the website.  It means that the web administrator can assess whether their website design or contents are attractive or not.  Based on that evaluation, NAFEDVE.com will be able to make necessary improvements in order to attract more visitors.
To get in touch with the members, NAFEDVE.com uses any possible way to overcome the communication infrastructure problem.  In some areas, they even contact local officials of the Department of Industry and Trade to visit the SMEs that have no phone lines installed.

Services
1.	Provide a “virtual exhibition” center for members to display their product.  This facility is critical for majority of SMEs that don’t have financial ability and IT knowledge to promote their products online.  The assistance includes visiting the location and taking pictures of products using digital camera.
2.	Provide export-management training for members to promote their businesses, which is the core responsibility of NAFED, the owner of NAFEDVE.com
3.	Provide e-mail account for members to enable them to have correspondence with other parties abroad.
4.	Provide “Trade Leads”, a posting facility for buyers and members to display their products or needs.  Any inquiry posted in this facility will be delivered to the appropriate members.

Impact and Achievement:
	By using intensive approaches, NAFEDVE.com has succeeded in convincing SMEs to utilize ICT as a means to promote their businesses.  Some SMEs have even run their own websites, albeit in a somewhat elementary fashion.
In the beginning most members has never known ICT, let alone using it for business.  These members were contacted through NAFED-sponsored events (export-import training, exhibitions, and seminar).  They were later persuaded with the benefits of using the Internet in marketing their products.
To SMEs that do not have any means to access the Internet, NAFEDVE.com provides a telephone- and also mail-based information service.  Members can contact NAFEDVE.com site administrator via the telephone, fax, mail, or even go to the nearest Department of Industry and Trade office.  On the other hand, NAFEDVE.com can also use those means to contact the members.
Besides capital, another main difficulty for the SMEs to compete is their management capability.  Some members who didn’t perceive the importance of having product catalogs were persuaded to submit the photos of their products to NAFEDVE.com.  To those SMEs who do not have any camera or do not understand photography techniques, NAFEDVE.com usually sends its personnels to take pictures of their products using digital cameras.
Currently, NAFEDVE.com has started its cooperation with Japan’s agency JETRO to exchange information on commerce and to place banners in JETRO’s website.  

Lessons Learned
	NAFEDVE.com learned a lot from the failures of other websites and also from other technical hindrance they deal with on a day-to-day basis.  To overcome them they took several measures:
1.	Giving free and proactive service to the members, considering the facts that most SMEs have poor knowledge of ICT and have financial limitations.  By offering such service, it expects to attract a lot of SMEs in using ICT.
2.	At present Rahayubudi, the site administrator, is still not satisfied with NAFEDVE.com’s ability to disseminate information about Indonesian SMEs’ products.  The reason is simple: Even though NAFEDVE.com claims to be the center for Indonesian SME product marketing, it still does not have presence in search engines such as google.com.  
3.	Recognizing responsiveness as the key to customer satisfaction, NAFEDVE.com sends trade leads (requests from foreign buyers) only to the members who are considered ready to respond quickly.  

3.2	Case Study 2: sme-center.com
In the beginning, the embryo of sme-center.com was Center for Development of Small and Medium Enterprises (CD-SMEs), a part of an undertaking done by a group of individuals within the Indonesian Chamber of Commerce (KADIN) to increase the business capacity of SMEs in Indonesia.  Through Center for Development of Small and Medium Enterprises (CD-SMEs), KADIN has conducted management training programs for SMEs since the 1980s.  It has also sponsored joint facilities to further advance SME businesses, especially in the marketing area.  KADIN, for example, has set up collective marketing programs to reduce travel costs.  It also has advanced the competitiveness of Indonesian SMEs by increasing their available goods capacity.
Following the rise of ICT awareness in Indonesia, there was an effort in 1997 to utilize the technology to support such cause.  The initiative came from Firman Subagyo, currently the head of SME and Cooperative Development Department in KADIN.  In November 2001, the sme-center.com was launched.  It was meant to serve as a virtual marketplace and education facility for all its members.

Aim and Objective:
1.	To be the leading institution in empowering and developing small and medium enterprise in Indonesia.
2.	Establish a global market information network system interactively, easily, cheaply for SMEs.
3.	Assist SMEs in improving their business capabilities in the global market by applying Information Technology.
4.	Provide assistance to the members in promotion, business consultation, transactions, and post transaction activities.

Cost and Funding Bodies
Initiated by Mr.  Subagyo, KADIN, in cooperation with Bank Rakyat Indonesia (BRI), a leading state-owned bank that provides loans to SMEs, and PT Telekomunikasi Indonesia (TELKOM), the biggest telecommunication company in Indonesia,  agreed to implement new ways in empowering SMEs in Indonesia.  This project was based on experience and the result of research done by education institutions, that the improvement and empowerment of small and medium enterprises could not be done partially and sporadically.  So it was the reason why they built Center for the Development of Small and Medium Enterprises (CD-SMEs), to answer this challenge.
In performing its vision and mission, CD-SMEs has collaborated with BRI and TELKOM to set up telecenters designed specifically to advance SMEs capability through IT utilization.  Together they built 9 SME-Centers as pilot projects in 9 cities in Indonesia, that is Padang, Jakarta, Cirebon, Makassar, Yogyakarta, Jepara, Sidoarjo, Denpasar, and Balikpapan with www.sme-center served as the portal.  As a portal, sme-center.com plays a vital role in the whole CD-SMEs project.  It is a means of promotion that can reach broad potential market all over the world.  
The latest progress in the development of CD-SMEs, the Government of Republic of Korea has granted aid through technical assistance.  The assistance will be a program in ICT development for virtual training and establishment of 33 SME-Centers to improve ability and knowledge of SMEs in Indonesia, and also to their trading activities in global market.

Participants
The website currently has 1020 members across Indonesia.  Of those members, around 80 % were registering through SME-Centers and the rest were registering online from any other places.  Most of the members were initially IT-illiterate.  Through information distributed by SME-Centers, sme-center.com has now posses the largest members among other websites providing e-commerce in Indonesia.
The key factor to get its members is by using the SME-Centers spread in 9 cities.  These SME-Centers provide cheap alternative for SMEs with limited ability to use IT in order to enhance their business.  

Technology
At first, sme-center.com was developed simply as a means to exchange information among members and offer their products online, and also as a tool to promote the products it contain to other parties in the world that cooperate with KADIN.  The site uses Windows 2000 to support Java Script Program (JSP).  However, the website was continuously developed until it would finally be able to handle commercial transactions online (planned for August 2003).  For this end, sme-center.com owner felt it necessary to improve their network security by using security software built by a local company I-Trust (www.i-trustonline.com).
In the next step, starting July and scheduled to finish on August 2003, this site will use a “banking application system” that integrates payment transactions by using members’ account numbers.  The system, which is already tested, was provided by Internet Computer Technology Limited (Australia).  It is made to comply with the platform used by Bank Rakyat Indonesia (BRI).

Services
Until now, the website does not charge its members for the services and facilities it provided.  Members may use the website to get a free e-mail address, information about product demands and supplies, and also other educational information related to business and management.  
Members are given the opportunity to display their products, both virtually in sme-center.com and either physically in SME-Centers.  The SME-Centers in this case functions not only as telecenters and training centers, but also as exhibition centers for members’ products.

Impacts and Achievements
The presence of sme-center.com as an ICT media has encouraged many SMEs to use it as a way to promote their businesses.  Some members who finally joined the sme-center.com to promote their products have demonstrated an increase in their sales.
Seeing the increase in the number of sme-center.com members, some private companies have expressed their interest to develop such program.  This proved that CD-SMEs programs have a great potential in promoting small and medium businesses.  Just last year, the sme-center.com even received an award from IBM and the Department of Information and Communication, Republic of Indonesia for its efforts in utilizing ICT to advance SMEs in Indonesia.

Lessons Learned
1.	Considering the fact that most SMEs have financial limitation and low ICT literacy, one needs to approach them by providing telecenters as a way to introduce the benefits of using ICT in their businesses.
2.	It is necessary to give the right solution to SMEs, particularly on management and marketing problems.  This can be done by giving various training programs in telecenters and creating a collective marketing system.
3.	One thing the website has not opened its list of products and companies to public browsing, only to registered members and parties cooperate with KADIN, making it closed and unattractive to a wider market.

3.3	Case Study 3: BaliQualitySilver.com
(Note: This is a family business run in a very traditionally, simple management.  Because of that, the data shown might not be satisfying.  The reason this site included in this research is because their profile known as small company with high comprehension about benefit of IT utilization.  In 1996, where the Internet is still something very unpopular facility for most Indonesian people, they have managed to use the Internet to promote their products.)

Bali Quality Silver began as a home business that started utilizing the Internet in 1996.  It uses the website as a showroom to market their products, which are silverwares and handicrafts.  The sole initiator of this website was Made Kembar Kerepun, the founder of Bali Quality Silver, who foresaw that marketing via the Internet would rapidly grow in the future.  He believed that through the Internet, marketing products will be more efficient, effective, informative, reaching worldwide with an affordable cost.  Up to now, this family business has six running websites.

Aim and Objective:
1.	To introduce the company and its products worldwide.
2.	To seek foreign buyers for its silver products.
 
Cost and funding bodies:
The company spent initially around 50 million rupiahs to build its first website and the necessary infrastructures in 1996.  At that time, Bali Quality Silver started out with 2 units of Apple computers, a scanner, and a digital camera.  It also hired a freelance staff from Australia to translate the website contents into English.  

Technology
Satyawibawa, son of the business founder and initiator Made Kembar Kerepun, saw the family business as small in nature, so he set out to develop the website by himself.  With limited knowledge, Satyawibawa used the HTML language to write the program.

Service
Though Bali Quality Silver has used the Internet to display its products, so far it can only accept purchase orders by e-mail and fax.  The company cannot yet accept online payment via the Internet, as most banks in Bali are not ready to handle it.  Furthermore, it is considered too expensive and too complicated for a small company like it.  So, it decided to use any possible way, namely combining conventional payment with IT to make fast confirmation.  Currently Bali Quality Silver accepts payment through wire transfer to its bank account.  Once the buyers transferred the money, they are asked to send the bank transfer receipt via fax or e-mail.

Lessons Learned
Satyawibawa, the current site owner, said that the Bali Quality Silver website has made the company and its products more widely known than before, which helps them a lot in the marketing side of the business.  He found out that in e-business, one has to be always active, creative, innovative, and honest, not to mention responding quickly to incoming e-mails.

3.4	Comparative Analysis of Research Objects
Projects	Members	Year Started	Source of Funding	Services	Technology	
NAFEDVE.com	86	2003	Fully funded by government	1.	Free membership subscription including opportunity to display products and listing of company
2.	Posting products for sale and viewing products needed by buyers
3.	Information about inquiries, export-import procedures and trade events	Written in ASP running on Windows NT

Infrastructure and program provided by Inaweb	
sme-center.com	1020	2001	KADIN, PT TELKOM, BRI and other private sector	1.	Free membership subscription
2.	Provide education through virtual information
3.	Establish a cooperation for market matching in the global market	Running on Windows 2000 written in Java language (JSP)

Baliqualitysilver.com	-	1996	individual	1.  Products display
2.  inquiries through e-mail	Running on Windows NT written in HTML	

Appendix:  Top 20 Websites 
(Survey Internet Branding 2000 by Swa Magazine and MarkPlus&Co)
1.	Yahoo.com
2.	Hotmail.com
3.	Kompas.com
4.	Detik.com
5.	Mailcity.com
6.	Altavista.com
7.	MTVasia.com
8.	Astaga.com
9.	Lovemail.com
10.	Republika.co.id
11.	Microsoft.com
12.	Eudoramail.com
13.	Bluemontain.com
14.	Iklanbaris.com
15.	NBA.com
16.	USA.net
17.	Chipmail.com
18.	MP3.com
19.	Netaddess.com
20.	Playboy.com