E-business set to thrive, says PwC study

It's not only what you sell that's important, but what you learn about customers while you sell it. That's the message put forth in a new global study into the future of electronic business from professional services organisation PricewaterhouseCoopers.

The E-Business Technology Forecast, released this week, surveys the current state of online commerce applications and predicts the trends likely to shape the e-business landscape over the next three years.

PwC analysts warn that although companies big and small are eager to embrace the benefits e-business has to offer, an over abundance of options has left many confused and prone to adopt inadequate or "immature" technologies.

Focusing on the impact e-business will have on ERP (enterprise resource planning), EDI (electronic data interchange) and EAI (enterprise application integration) technologies, the study outlines how e-business applications can foster close business-to-business and business-to-customer relationships -- relationships which PwC analysts claim can translate into competitive advantages.

Key predictions of The E-Business Technology Forecast include:

* ERP applications will become easier to use following the introduction of PDAs (personal digital assistants), smart phones and other user-friendly appliances, allowing companies to align their supply chains more closely with customer needs.

* Digital currency is unlikely to enter widespread use in the near future. PwC analysts predict that payment cards are likely to remain the dominant means of carrying out online transactions for up to three more years -- although they also predict that smart cards will continue to develop niche applications in such areas as food, entertainment and transportation.

* Third-party certification services, or Certificate Authorities, will proliferate as a more secure infrastructure for online payments takes shape.

* Expect the Web to assume a larger role in customer service. According to the PwC report, the Web's capacity for interactive communication, as well as its ability to allow users "self-service" access to information, will radically alter the way in which companies approach customer support.

On the negative side, PwC analysts also point out that bandwidth limitations mean it will be quite some time before call centres are equipped with video capabilities.

* Data description language XML (eXtensible Markup Language) will play a crucial role in the spread of online commerce by enabling simple data exchange between different e-business applications. PwC predicts the gradual death of proprietary catalogue systems in favour of those that support XML.

* Just as e-business gradually eliminates the need for some intermediary positions, such as travel and insurance agents, by enabling companies to provide customers with important data directly over the Web, it will simultaneously give rise to a new intermediary role -- that of the "Infomediary".

The PwC report predicts that as e-business applications become widespread there will be a growing need for Infomediaries to serve as filters, capturing customer data and assembling profiles which vendors can use to their benefit.

The E-Business Technology Forecast defines the ultimate goal of e-business as "the seamless integration of front-office and back-office operations in the service of an organisation's global customers.

However, while the study asserts that using customer knowledge to gain an edge over one's competitors is central to online business success, analysts stress the importance of balancing corporate needs with the individual's right to privacy.

According to PwC, unless stronger legislation is introduced in the areas of data protection and online contracts, the corporate community's enthusiasm for e-business applications is likely to be held in check.

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