Companies entering the e-commerce fray are salivating at the prospect of EuroLand's 300 million consumers using the single currency, with its associated price transparency and cross-border common means of settlement. And, since the euro will be the only means of exchange in Euroland from the end of 2001, it is an absolute certainty that it will be the main currency in which European B2C E-commerce will be conducted.
But there are qualifications, for the euro is currently weak, and the US dollar is king of the Internet. This will continue until the euro strengthens and the European Union addresses the barriers to B2B e-commerce that it has inherited: the lack of co-ordination and legislation to enable the handling of cross-border VAT, plus the law of contract; dispute resolution and retail price maintenance.
The EU is addressing these areas energetically. The European Selling Directive, coming into force this month, aims to give on-line customers the same protection as high street consumers in an attempt to increase consumer confidence in the Internet. Plans are underway to establish, by the end of this year, a network of national clearing houses to handle E-consumer disputes throughout the EU.
Among the laws restricting B2C e-commerce in Europe are two from Germany dating back to the 1930s. Rabattgesetz forbids stores from discounting products more than 3% below the manufacturer's suggested price, while Zugabe-verordnung prohibits retailers from granting bonuses to customers. Discounting and customer loyalty bonuses are, of course, the stuff of B2C e-commerce. Fortunately, these laws, and others that prevent countries from conforming to EU guidelines, should be repealed next year.
The euro cannot be ignored by IT - even the start-up needs to consider systems that can trade in euros, while maintaining VAT records in sterling. Meanwhile, companies with large existing IT system investments must understand applications, assess them and deploy them for Web-business, euro-enabled as required. The key is the framework used to take the enterprise through to the creation of new e-business strategies and applications; allowing for the transformation of existing applications, processes and skills into an e-business architecture.
IT departments need to evolve frameworks that will lead to a more nimble enterprise, without jeopardising existing operations and revenue streams, ready to react to the changing markets and customer preferences, including those initiated or enforced by the forces of the EMU and the euro. Those departments that neglect to do this, do so at their peril.
Roger Annett, solutions manager at Merant Consulting
This was first published in August 2000