Using the Internet for electronic business has become an area of action for the Australian government. This paper presents research results from two regional areas, which indicate that while most manufacturing SMEs use e-mail, very few are involved in electronic commerce activities. Major barriers are concern about security and privacy of transactions, cost of consultants, and lack of IT expertise of staff. Employing people with appropriate knowledge has been added to current training methods such as onthe-job training. Results from the two regional areas are found to be consistent. Comparisons between small and medium organisations highlight some differences.

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Although research indicates e-commerce offers viable and practical solutions for organizations to meet challenges of a predominantly changing environment, the few available studies related to SMEs in developing countries reveal a delay or failure of SMEs in adopting ICT and e-commerce technologies. The various factors identified as causes for the reticence can be broadly classified as Internal Barriers and External Barriers. This paper presents a model for barriers to adoption of ICT and e-commerce based on the results of an exploratory pilot study, survey and interviews of SME intermediary organization. It identifies support for SMEs in Sri Lanka with regard to ICT and e-commerce. It also determines a strong need for necessary support and discusses the availability of the support.

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