Most companies across major industries worldwide see the Internet transforming their industry role. This is one of the findings of a global survey conducted by the European Economist Intelligence Unit in conjunction with KPMG International earlier this year.
Keith Fairhurst, KPMG SA partner of systems integration, announced the survey`s findings and commented on the foreseeable impact of e-business in South African industry at a press conference in Johannesburg today.
[VIDEO]The survey, "The e-business value chain: Winning strategies in seven global industries," examines the effect of the Internet and e-business on the automotive/manufacturing, chemicals, communications, consumer markets, electronics, financial services and pharmaceuticals industries. Respondents hailed from Europe, North America, Asia and Africa.
Some 30% of senior corporate executives interviewed in these sectors say e-business will change the definition of their core business. The majority of companies in the KPMG study, which surveyed 331 senior corporate executives, see the Internet having a profound effect on the role they play in their industries - with nearly one-third expecting to see e-business changing their core businesses.
Fairhurst believes most South African companies are well geared to take advantage of the opportunities presented by the rise of the Internet and e-business, due to the prevailing culture of early adoption of technology, and a keen sense of innovation. His only word of caution is for companies to avoid being swept up in the hype surrounding e-business, in their aim to find pragmatic value.
[VIDEO]"The dramatic changes occurring across these industries are posing a real threat of diminishing market share for those companies that may be unable to adapt quickly," adds Fairhurst.
Most companies were found to have an e-business strategy and active involvement by senior management in formulating e-business strategies. However, the KPMG analysis also disclosed that senior management involvement is probably inadequate at more than 40% of the companies surveyed - suggesting that it may take longer for those companies to implement their e-business plans.
All of the industries surveyed are placing more emphasis on business-to-business (B2B) than business-to-consumer (B2C), and expect to shift the balance of their investments toward B2B initiatives. In addition, 48% believe that online exchanges will be very important for their own supply chains in the next 18 months, up from 19% today.
In the next year-and-a-half, the executives surveyed expect dramatic improvement in the Web or Internet-based features that they offer suppliers and partners. Today, only 11% of those interviewed report that their suppliers can access their inventory systems. In 18 months, 46% say their firms will grant access. Electronic bill payment capabilities to suppliers are expected to increase to 44% in the next 18 months, up from 12%.
Respondents expect their e-business revenue contribution to increase from an average of 7% today to 22% in 18 months. While communications and financial services firms today enjoy the greatest percentage of online sales, the largest growth will come from the electronics industry, which is projected to increase from 9% today to 33% in 18 months.
The survey will be officially released early next year.
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