Lagging in the New Economy

FRAMINGHAM (05/01/2000) - If anyone needs proof of the role that big business hasn't played in the e-commerce revolution, a recent survey by PricewaterhouseCoopers LLP and The Conference Board might be enlightening. The research set out to determine how global businesses are measuring up as successful e-businesses.

These were heavy hitters, mind you--90 percent of the 80 companies surveyed have annual revenues of $1 billion or more, half with sales above $5 billion.

They comprise manufacturing, financial services, transportation, retail, energy and communications, and virtually all conduct business in international markets. So you might expect these beacons of global commerce to be leading the way in the new economy, right?

Not exactly. Consider the following: * 79 percent of the companies surveyed said that e-business accounts for less than 5 percent of revenues. * Only 28 percent are able to process transactions online; only 40 percent actually handle orders electronically. * 60 percent do not yet have extranets linking operations with key suppliers and financial partners. * Less than half have any quantitative or qualitative methods in place to assess e-business performance. * A quarter of the group has yet to move beyond basic web "brochureware" in implementing online business.

One of the biggest disconnects was between stated e-business needs and corresponding investment: Only 25 percent said they plan to invest significantly in improving online procurement, even though this was identified as a top priority.

While all respondents stated the importance of e-commerce, most still feel encumbered by major barriers to development--including costs of implementation, lack of proven benefits and industry standards, and more pressing corporate priorities, plus not being up to speed on key privacy, security, legal and intellectual property issues.

Not that the survey is all gloom. A majority said they were investing far more in e-business now than they were a year ago and devoting more senior management oversight to e-efforts. Nearly half of the participants have full-time e-business development units, another big increase over last year. That buy-in from corporate leadership has allowed CIOs to invest in new technology and e-marketing.

The future will be a major game of catch-up as global corporate battleships strive to turn themselves into e-business juggernauts. It's up to the CIO to become the captain of the corporate battleship. The stakes are too high in the new economy.

Joe Levy President and CEO IDG Communications Inc.

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