Business leaders say there is a lot to be gained from e-commerce,
but a report released this week reveals that many companies are
rushing onto the Web, leaving themselves vulnerable to mistakes.
The report, by market research firm International Data Corporation
(IDC) Canada, found the e-commerce market is set to grow from
C$21bn (£9.6bn) last year to C$242bn by 2005. Business-to-business
activity, as opposed to consumer purchasing, dominates the Canadian
Web scene, a trend that experts do not expect to change, said Phil
Cohen, programme manager of IDC's Canadian Internet economy
practice.
"In spite of recent losses, IDC sees e-business as alive and well
and growing strongly," he said. The report found all companies plan
to increase their e-commerce budgets, some by as much as 40%.
Connectivity levels among large businesses is virtually at 100%,
while levels among medium-sized businesses are set to hit 90% by
the end of the year, Cohen added.
Strangely, only half the companies surveyed said they were counting
on e-business to increase their revenue or drive down costs, said
Joe Greene, vice president of Internet and telecom at IDC. Ignoring
one of the most fundamental business rules means companies are not
planning properly, he added.
"We believe there are a still a significant number of companies
that are adopting e-business because that's what they perceive the
market wants," Greene said. "We think a lot of these companies are
going to make mistakes."
Also, few companies reported having a clear definition of
e-business (defined by many as simply meeting project deadlines).
IDC said that points to the relative youthfulness of e-commerce.
Outside of improving customer service - a priority across the board
- what motivates companies to start e-commerce projects in the
first place varies according to their size, IDC found.
"Medium-sized firms use e-business to improve customer
communication and to serve existing markets better," Cohen said.
Large companies, however, tended to see e-commerce more as a means
to cut operating costs and increase efficiency.
The report also found a growing divide between large and
medium-sized businesses in terms of "Web smarts", with the latter
showing more speed and knowledge, said Cohen. For instance, smaller
firms were quicker to get their solutions to market despite lacking
the resources found at larger companies.
Also, when they identified problems in their e-business strategy,
medium-sized firms tended to fix them within six months. Just under
half of large companies reported lag times of more than six months,
with some waiting as long as 24 months, said Cohen.
The report, entitled Using The Internet To Explore And Improve
Business Opportunities, contained the results of a poll conducted
earlier this year by IDC.