The forecast is e-business

Business sales via the Internet will rise from US $43 billion to US$1.3 trillion in the next 3 years finds PricewaterhouseCoopers` latest e-business technology forecast.

Richard MacKinnon-Little, partner at PricewaterhouseCoopers` Management Consulting Services, says, " Although the statistics about sales, costs and applications of e-business in this report are staggering, it is more about the imperative need for enterprises to re-think and implement complete e-business strategies."

The report, generated from its Silicon Valley-based technology centre, 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 comprehensive analysis covers today`s electronic 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.

MacKinnon-Little says, "The Web`s rapidly expanding portfolio of customer-facing processes and technologies means South African businesses can now become part of a truly global market.

While CEOs and senior executives realise their businesses are being transformed by the Web and Internet-based commerce, they are unclear about the most effective way of moving from where they are today to becoming an e-business.

Technology is at the crux of this transformation - the best corporate leaders of tomorrow will be those who have effectively harnessed the potential of this technology."

Key e-business trends and predictions highlighted in the report, which offers in-depth analysis and predictions in e-business platforms and applications, its integration with enterprise systems, payment technologies and e-business infrastructure, include:

• Customer service moves to the web: Software tools integrating video with call centres will mature, although bandwidth limitations on the consumer side will limit explosive growth. Examples include the ability of a customer service representative to send personalised content to the customer`s browser or take the customer on a "guided tour" through a sequence of Web pages, and eventually two-way video interaction with customer service representatives.

• Balancing knowing the customer with customer privacy: Customer relationship management and customer retention will grow in emphasis as a host of technologies emerge to help organisations balance consumer privacy with the use of customer information to improve service and speed of delivery. Successful e-businesses will continue to organise and leverage information and knowledge about customers to create competitive advantage.

• The Rise of `Infomediaries`: One of the major impacts of e-business is to "disintermediate" the traditional involvement of certain intermediaries in business transactions. Human agents, such as insurance or travel agents, previously were used by the seller (such as an insurance company or airline) as a distribution channel, and helped customers navigate through a sea of complex options. Now, with the cost-effective accessibility of information on the Web, customers can collect important data and often purchase products or services without human assistance.

Still, 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-based digital cash systems will continue to find niche applications in the food, entertainment, education and transportation markets.

• More negotiated prices on the Web: 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, which fully integrates a company`s supply chain and interface to the customer, will grow through the use of new, easier-to-use "appliances" like personal digital assistants, smart phones and in-vehicle devices.

• "Certificate Authorities" will ensure security standards are met: Trusted third-party certification services (known as "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.

• Common Language Bolsters Business-to-Business Applications: 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 will become the Esperanto of data exchange, the language which bridges the gap between previously incompatible systems. By simplifying data exchange, XML will allow more applications and data models to communicate with one another, standardising processes and saving companies from having to build translators between different applications.

The report shows how the early adoption of e-business technologies has become a key strategic advantage and describes how the value of those technologies is related directly to how well they can foster closer business-to-business and business-to-consumer relationships.