Computerworld

Australian e-biz failure rate higher than global counterparts

Australian e-business projects will have a higher failure rate than the 75 per cent predicted by Gartner Group in a global survey, according to one of the research company's analysts.

"I am concerned that 85 per cent of organisations in the Asia Pacific region lack the management to successfully implement e-commerce," Joe Sweeney, a research director at Gartner Group, said.

Sweeney predicts more e-business projects in Australian companies will fall prey to poor planning and unrealistic expectations than those in other countries.

"E-business projects in Australia are either moving too quickly or too slowly due to internal politics," he said.

Additionally, Sweeney expects problems to arise because organisations have unrealistic perceptions of the benefits they can expect from e-commerce.

"The objectives themselves are poorly defined in many cases," Sweeney warned.

He added many companies overestimate the number of people who will visit the Web site and the resulting number of sales.

Sweeney also pointed out many companies expect to see a profit margin increase as soon as they are online, but the reality is that initially they are more likely to see their profit margins decrease.

"The biggest mistake many organisations are making is thinking an e-business project will be quick, easy and cheap to implement," Sweeney said.

"I see many Australian companies underestimating e-business budgets for the coming year." Sweeney also highlighted the fact companies should be aware of the need to provide 24x7 support once the online initiative is under way.

"If service goes down, the company's reputation is at risk," he said.