Challenges Limiting SMEs from Adopting Electronic Commerce in Tanzania: A case study of Ilala Municipality Dar es salaam

The paper describes challenges of SMEs in the adoption of e-commerce technology in Tanzania. Dar es Salaam city-Ilala Municipal was chosen as case study, because SMEs found in Dar es Salaam are more likely to be using e-commerce since Dar es Salaam is among regions where most of SMEs connected to internet are found in Tanzania. The researcher collected data from 30 SMEs found in Ilala Municipality. The data collected were then subjected to analysis using Quantitative methods and content analysis. Frequency and percentage were used in data presentation, where questions on technical challenges, Technological challenges and management attitudes were answered. The results indicate that there are Technical, technological challenges and management reasons that limit SMEs from adopting e-commerce. Technical challenges include high equipment and Installation costs, lack of fund to employ computer experts, poor communication infrastructure which is able to support mainly e-mail, poor-security in network, authentication and certification issues, lack of relevant skills and expertise within the companies, absence of enabling infrastructure such as internet exchange and Technological challenges include infancy of technology, cost effective electronic commerce enabled software, lack of simple knowledge to operate and lack of fund to employ computer experts. On the part of management attitudes, there are lacks of awareness of the e-commerce technology, technophobia; management not committing enough resources to IT related issue. It was concluded that building any kind of electronic commerce system requires a strategy i.e. vision of the goal to achieve, a clear rational of the business value and a picture of the process to achieve such a goal and avoiding common pitfall. This strategy should include an understanding of the impact of e-commerce on SMEs, the potential for new business models and opportunities for competitive advantag