South African companies remain paralysed when it comes to e-business strategies and operations; a fact that PricewaterhouseCoopers (PwC) Management Consulting Services says could lead to many of them losing considerable market share.
A survey conducted by the PwC division and Callisto Media Systems has revealed a serious lack of understanding among 270 South African companies (including 50 IT firms and 120 listed organisations) about the advantages of e-business as a strategic business tool.
[VIDEO]The idea, says PwC management consulting services associate director, Spiro Georgopoulos, was to focus on companies across a variety of industries. "I don`t mean to be harsh, but the overall appearance is that South African companies have a very unsophisticated view of the opportunities and strategic advantages to be gained through e-business implementation."
A key factor, he says, was that the confusion in industry as to the difference between e-commerce and e-business. Zunaid Juma, consultant in corporate strategy at PwC, agrees. "E-commerce is the marketing, selling and buying of products and services by using the Internet or Internet technology - few people consider the total value chain in e-business."
The issues hindering e-business implementation are currently almost the same as they were a year ago - e-business initiatives are being treated as a technology issue, rather than a business issue. Many companies choose to allow the IT department to drive e-business implementation, and most CEOs still do not understand the implications or appreciate the benefits of using the Internet to communicate directly with suppliers and other business partners and optimise the value chain.
[VIDEO]Some 70% of South African companies surveyed view e-business as simply trading online, while 47% still view the Internet as merely an information tool. In addition, 94% still use traditional methods, such as faxes and telephones, to communicate with suppliers.
The survey indicates that local companies view e-business as a tool with which to share company information and as a means to "keep up with the Jones`s", rather than an enabler for business transformation to compete successfully in the new economy.
[VIDEO]"This is alarming, since 70% of the survey respondents indicated that their companies had developed e-business strategies. The problem is that most see e-business as having a Web site to provide company information. This is a fatal oversight," Georgopoulos says. "Most CEOs couldn`t articulate the finer points of their company`s e-business strategy."
The survey also found that most companies` plans are long-term, over 18 months or more. In addition, very few companies have considered the possibility of collaboration, and though they have high expectations for the effects of e-business, none so far have experienced any changes.
One positive finding is the exponential rate at which South African businesses are getting connected. The number of corporate users in 1999 was close to a million, up from around 300 000 in 1997, while home users have trebled to around 600 000 in 1999 from 200 000 in 1997.
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