Business sales via the Internet will rise from $43 billion to $1.3 trillion in the next three years, according to PricewaterhouseCoopers` (PWC) latest e-business technology forecast.
The report`s findings were presented in Sandton yesterday by Bill Bound, PWC`s European e-business leader, PWC`s Management Consulting Services.
Generated from PWC`s Silicon Valley-based technology centre, the report reveals that organisations which fail to understand that e-business is more than just technology, but rather that it influences fundamental business strategies, will not survive in today`s business environment.
The analysis covers today`s e-business landscape; the trends which will shape the way companies do business and case studies of leading enterprises which have had varied levels of e-business success. E-business, as defined by Bound, is "improving business performance through connectivity".
Bound identified three key business issues surrounding e-business - supporting technologies, enabling technologies and business trends - and suggested that the growth in the e-business market will accelerate three major current business trends: industry transformation and convergence, value chain integration and customer relationship management.
As Bound commented to business leaders: "The industry is such that if you want to do it, you can do it, regardless of the business size. Be agile, not fragile."
Key e-business trends and predictions highlighted in the report include:
Customer service will migrate to the Web, but growth will be limited by consumer bandwidth limitations.
Customer relationship management and customer retention will grow in emphasis as organisations balance consumer privacy with the use of customer information to improve service and speed of delivery.
The rise of "infomediaries": One of the major impacts of e-business is to "disintermediate" the traditional involvement of certain intermediaries in business transactions. New participants called infomediaries are emerging to capture customer information and develop detailed profiles for use by selected third-party vendors. Unlike traditional intermediaries, they add value to exchanges between producers and consumers by managing information as opposed to inventory.
Currency does not go digital: Payment card transactions will remain the dominant payment type throughout the next one to three years, with some growth expected in the use of electronic cheques. Smart card digital cash systems will continue to find niche applications in the food, entertainment, education and transportation markets.
As more potential participants access the Web, the use of negotiated pricing mechanisms will grow. The special-purpose technology available today to implement negotiated and auction pricing will be integrated into enterprise and specialty Web sites.
Enterprise resource planning (ERP) will become more user-accessible; the user base for e-business ERP will grow through the use of new, easier-to-use "appliances" like personal digital assistants, smart phones and in-vehicle devices.
Trusted third-party certification services (certificate authorities) will emerge around the world to meet the authorisation requirements for electronic transactions as governments and businesses invest in more secure infrastructure for payment systems.
The extensible markup language (XML), a standard for a data description language that can be used to exchange data between different applications, will play a crucial role in e-business application development during the next one to three years. XML is set to become the Esperanto of data exchange, the language which bridges the gap between previously incompatible systems.
In a similar survey conducted in Europe, the global analyst company found that only 11% of businesses interviewed have fully developed e-business solutions, while 50% are at the first stage of e-business development.
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