New report highlights the state of e-business in the UK
British business is set to fully embrace the internet revolution
over the next two to three years, according to a landmark survey
of almost 1000 UK companies published today by the Confederation
of British Industry and KPMG Consulting.
According to the report, The Quiet Revolution (published
with the support of the London Business School), 76% of companies
currently generate less than 5% of their turnover from e-business.
But this trend is set to change dramatically with 58% expecting
to derive at least 10% of their revenue directly from e-business
within the next two to three years.
The report also shows that 93% of UK companies have already
addressed e-business in their corporate strategy in some way.
Forty-one per cent of firms are finding that e-business is already
having a real impact on all aspects of the organisation with
only 17% reporting a limited impact. Ninety-nine percent expect
e-business to have some impact in the next two to three years.
Above all, The Quiet Revolution dispels the notion that
the Internet revolution has ground to a halt. The rise and fall
of the dotcoms may have dominated the first wave but the second
is now being led by traditional organisations across the UK
of all sizes in every sector, with all companies expected to
step up their e-business activity over the next two to three
years.
The survey identifies three distinct groups of companies:
The e-pioneers:
21% of companies are forging ahead in the most complex, business
transforming aspects of e-business, including customer relationship
management and integrated supply chain management.
The e-followers:
43% of companies have fully grasped the e-business basics
and are creating websites and exploiting the internet for marketing
and knowledge sharing. This group have yet to put e-business
at the heart of all their business activities.
The e-laggards:
36% of businesses have yet to evolve their e-business activities
beyond email and related IT, but are, in the main, gearing up
to do so in the near future.
e-pioneering across industry sectors
E-pioneers can be found in all industry sectors but the front
runners are in telecoms/utilities and retail, both with 47%,
financial services (31%), and professional services and transportation
(20%). Only 6% of companies in the telecom / utilities sector
are classified as e-laggards.
A third of companies in each industry sector are e-followers
with the exception of retail. The retail sector seems to have
an 'all or nothing' approach with 47% e-pioneers and 40% e-laggards.
Interestingly, manufacturing has the lowest number of e-pioneers
at 13% and the highest number of e-laggards at 41% despite the
significant potential that internet technologies have to transform
this particular sector.
e-business is nation-wide
Although there are differences in the rate of e-business take-up,
the survey does not support a sectoral or geographical digital
divide. More than 50% of companies of all sizes and 45% of companies
in all regions are involved in at least the basics of e-business.
'E' is at the heart of business
A striking characteristic of the e-pioneers that are leading
the second wave is the integration of e-business technology
at the heart of every business. The report clearly shows that
the days of the separate e-business unit are numbered with 32%
of companies now appointing an individual with Board level responsibility
for e-business.
'E' is not easy
The survey revealed a diverse range of concerns as potential
barriers to the integration of e-business:
- Integration of new e-business technologies with legacy IT
systems
- Lack of co-operation from customers and suppliers
- Lack of internal internet culture or awareness of the potential
benefits
- Internet security
- Costs of technology
- Constraints of technology
Commenting on the survey, CBI Director-General Digby Jones
said:
"Today, in the world of business the three Es have been added
to the three Rs. Continued business success will undoubtedly
be the prize for the e-pioneers. But the e-laggards and the
e-followers must not be left behind. Business and government
must work closely together to harness the pioneering spirit
of all UK businesses."
Alan Buckle, Chief Executive Officer of KPMG Consulting, commented:
"The first wave of e-business is emphatically over, but the
rags-to-riches-to-rags stories of the dot.com entrepreneurs
that have dominated the headlines have disguised what has really
been going on. A quiet revolution has begun inside British business
- imaginative companies in all areas of the economy have been
embracing Internet technology - not simply to create attractive
web sites, but to revolutionise the whole way they relate to
their customers, suppliers and employees.
"In the heady days of the first wave, there were companies that
adopted a wait-and-see strategy, and frankly it has paid off
for some of them - though by no means for all. In the second
wave, over the next couple of years, I do see the danger of
a digital divide developing. However, it won't be a divide based
on geography or on size of company, but between businesses that
embrace web-based technologies to transform themselves and their
markets, and those that don't see it or who get their strategies
wrong. For many of the latter, there won't be a second chance."
27 February, 2001
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