E-business market still developing, says KPMG

KPMG Consulting recently commissioned an e-business study in the UK to determine how business is being changed by e-business technologies. The resulting report, "The Quiet Revolution", demonstrated that the UK is upbeat about its engagement with e-business, with 93% of companies taking steps to address e-business in their corporate strategies.

In SA, KPMG Consulting says these findings can be closely mapped back to the local market in terms of e-business uptake and acceptance, as both markets follow similar trends and organisational culture. However, the most prominent local application of the research is that the local market can learn from it, and dismiss the hype around `e`.

The overall theme to emerge from the research was one of building momentum. Almost without exception, the thousand or so companies that responded to the survey expect to ramp up their e-business activities significantly within the next two to three years.

"While this might seem an obvious indication, this is in itself very promising, as the market, both international and local, has experienced a roller-coaster ride of the dot-com entrepreneurs. These rags-to-riches stories have disguised what is really happening in the e-business world," says Keith Fairhurst, partner of systems integration at KPMG Consulting.

Far from being deterred by tales of dot-com failure, 41% of companies reported that e-business was having a real impact on all aspects of the organisation, with a mere 17% expecting a limited impact. "It is encouraging to see that companies are starting to understand how e-enablement can fundamentally improve business processes within an organisation," says Fairhurst.

The report also highlighted that enhanced customer service across the board has been the most widely anticipated, and the most widely experienced, benefit of the Internet so far, with the potential to improve brand image and to access new markets being the next most important motivators.

Another striking trend to emerge, was how `e` is penetrating businesses at all levels and is no longer considered a subsidiary activity, to be left to IT experts. The finding indicated that 32% of respondents have appointed an individual with board-level responsibility that understands the business. Only 10% have allocated their e-business activities to a separate sister organisation or appointed someone outside their company to take responsibility for e-business.

The most frequently cited barrier to entry for e-business was the difficulty and cost of integrating existing IT systems with new technology and software applications.

"Furthermore, a lack of integration between technology and business objectives can place unnecessary pressure on an organisation. Nowadays executives are facing the dilemma of high degrees of uncertainty and rapid rates of change, which means employees within an organisation are faced with having to make high-risk decisions with low amounts of information," adds Fairhurst.

"In SA, the problem is intensified, due to concerns about a shortage of technical skills in the workforce. It is also clear the worries about Internet security still represent a significant factor on corporate e-transformation."

The report also highlighted how the second wave of e-business is, and will increasingly be, characterised by a steady and determined effort, across all kinds of businesses, to re-train staff, to re-design business processes and to embrace the opportunities of the networked world.

"All in all, The Quite Revolution presents a notably upbeat view of the future of engagement with e-business. The challenge now will be for companies to put their good intentions into practice. Forget the new economy froth typified by the launch of yet another flashy Web site. Companies should rather concentrate on how e-business is transforming customer management, supply-chains and core functions like human resources and finance," concludes Fairhurst.