European survey reveals rift over e-commerce benefits

One of the main promises of eCommerce has been the ability for companies to provide a service that will generate income in a secure, economical and efficient manner.

However, a recent European survey involving 200 eCommerce managers from leading companies in vertical markets indicated that the industry is divided over eCommerce benefits. The study was a PeopleSoft initiative and was conducted by Datamonitor.

"The results of the survey - which set out to investigate whether or not eCommerce was a revenue earning tool - showed that a staggering 68% declared that eCommerce could only be a cost-saving exercise, indicating that many organisations may not be using internet technology as a strategic tool for business development," comments Jan Coetzee, MD of PeopleSoft South Africa

Major segments of the European market are not ready to embrace this technology and Coetzee offers the following explanation: "The focus of investment for many companies is still on achieving cost efficiency in internal and supply chain operations. Many organisations need to be convinced of the benefits and should understand that eCommerce is a compelling opportunity for organisations to develop their on-line sales and distribution channels as well as pursue the development of complementary on-line streams."

While trends show that eCommerce is taking a back seat as far as cost-efficiency is concerned, research also showed that a large portion of organisations were inclined to mistrust the security of the internet in terms of dealing with large business transactions.

Coetzee explains that while 59% indicated that they would use the Internet to conduct large volume transactions and payments, a notable 49% would not. "For the IT industry this result indicates that the security of the technology needs to be improved and that the marketplace needs to be educated about its efficacy. It also questions a tendency in the industry to assume that a high take-up rate of this technology will automatically develop, delivering a firm reminder to the industry that some aspects of the technology are still considered to be unproven."

"The truth is, industries that are most at ease with large volume payments have experience in the processes of EDI. Those without this familiarity will need to be persuaded that the business benefits of transacting between business partners online will far outweigh the risks," he adds.

With only 59% of Europe`s largest companies feeling comfortable using the Internet there is concern for vendors selling into the B2B space and Coetzee maintains that those industries that are most at ease with large volume payments have experience in the processes of EDI. "Those without that familiarity will need to be persuaded that the perceived risk of transacting between business partners online will be far outweighed by business benefit."

It is critical for the long-term success of B2B eCommerce that leading companies from ALL industries bring their trading liquidity to the Internet business community. "The IT community needs to educate organisations about the potential of eCommerce to encourage them to use it and to take technology more seriously if they wish to maintain their competitive advantage. PeopleSoft is well positioned and determined to demonstrate such return on investment opportunity," concludes Coetzee.