What spending slowdown? It's full e-speed ahead

You may think that because of the current talk of capital spending slowdowns and the Internet stock crash, you may get some sort of breather in rolling out major e-business applications.

Not so. IDC is undertaking an e-business adoption study in 27 countries, and preliminary results indicate that companies are implementing e-business with a vengeance.

There are also signs that IT departments won't be able to handle the workload.

Think of it this way: This year, companies around the world will spend more on IT to support e-business than they did in five years of preparing for Y2k. That's more than US$300 billion.

The gap between e-business expectations and IT reality seem to be the most pronounced in the following areas:

Web site integration. You can't have e-business with Web sites that don't talk with the rest of the business. Yet fewer than one in five companies have any significant integration with back-end systems like order processing, customer support or ERP.

Mobile support. Although more than 50 percent of Internet users will be mobile by 2003, less than 10 percent of Web sites have made any accommodation for mobile devices or users.

Localization. The Web's multinational character seems to be eluding most companies. While about one in four have content tailored for specific countries, less than 10 percent can handle any kind of local currency. Localization of Web sites is considered one of the most difficult aspects of running an e-commerce site, behind finding and retaining IT talent, and internal resistance to change.

Meanwhile, companies expect their online sales revenues to double this year and to represent double-digit percentages of total revenues in the US. Almost 60 percent of US companies - and virtually all companies with more than 1,000 employees - have Web sites today. By the end of the year, half of all companies with Web sites will have e-commerce sites.

The good news is that business managers and IT professionals, at least according to the IDC study, have similar priorities for their Web sites: security, privacy and performance. They also agree that business unit managers are calling the shots when it comes to developing e-business initiatives, while IT is calling the shots on specifying technical solutions.

The bad news is that neither business unit managers nor IT professionals seem able to see the forest for the trees. Responses can vary so widely, even among similar companies in the same industry, that there seems to be no master blueprint behind the general migration to e-business. Early adopters in one area can be market laggards in another. This is a messy revolution.

Here's my short list of worries for IT managers:

Talent. It's on everyone's list as the No. 1 factor governing the speed with which companies can deploy e-business applications.

Outsourcing. This is the shortcut to the talent. More than 50 percent of companies host their Web sites internally; almost 25 percent outsource everything, including design and integration.

Mobile users. Within 18 months, there will be more mobile devices than PCs accessing the Internet. So there's not much time to prepare.

Last, you'll need some way to deal with prioritization. As business unit demands escalate for more mission-critical, must-have e-business applications, IT departments will need some way to garner enterprise support on their project priorities. IT will need its own marketing department just to keep from getting blindsided, bashed and badmouthed by business units that suddenly find themselves behind competitors because they thought e-business went away with the dot-coms.

John Gantz is a senior vice president at International Data Corp. in Framingham, Massachusetts. Contact him at jgantz@idc.com.

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