- Survey of real benefits
eBusiness as usual seems to be the
catch-cry of leading eBusinesses in the United States - despite the
eBusinesses running in 9 industry
groups were surveyed by InternetWeek to compare whether eBusiness had changed
significantly since 2000. "Bricks and Mortar" companies with annual
revenues of over US$1billion were included as well as larger Internet-only
Although the statistics lack specific
detail and cannot therefore be applied to your situation, they go beyond the
"spin" of press releases or "white papers" to provide a more
accurate picture of what is going on.
Also - we believe that the benefits of
using the Internet for eCommerce and eBusiness are likely to be understated
because the companies involved in the survey have probably been using EDI or the
Internet for several years - so the improvements and changes are largely
MARGINAL i.e. the companies surveyed were unlikely to be comparing improvements
as a result of moving from paper-based systems to Internet-based systems.
(Note: The percentage improvements for
individual companies changing from paper-based to Internet-based are likely to
be closer to those presented on our "eBusiness
|Survey Results and
1. Business growth is healthy due to
- 60% said of companies said that
their Internet Revenues had grown by 20% in the last year. 34% said more
than 60% growth
- 48% said that their Customer Base
had expanded less than 10% in the last year - 32% said it had expanded by
10-20% due to the Internet.
These numbers might not sound dramatic -
but consider this - if you had a 1/3 chance of increasing your revenue in a new
market niche by 60% in 12 months, would you be interested?
- or -
If you had a 1/3 chance of expanding
your existing customer base by 15% in 12 months would you be interested? (15%
cumulative is doubling roughly every 5 years).
The average expected Internet revenue
growth was for 2001 was 32% - that's 32% on top of existing figures! Would those
numbers improve your bottom line?
2. eBusiness is not mainstream -
The Internet affects less than 10% of
business activities for over half of the respondents. Even so, these relative
small percentages are of a very large pie - the companies in the survey are have
annual gross revenues of over US$1b each.
Also, when comparing percentage
changes between years and the rates of spending on eBusiness,
it is not going to be long (2002?) before 20% of business will be directly
affected by the Internet for 50% of the companies - not 10%. (The
average % of Purchase Orders and Sales Orders made via the Internet increased
from 9% to 16% of transactions over the last 12 months - a 50% increase.)
3. Integration of the Internet with in-house systems is only 80%.
Given that the survey covers large companies - presumably with huge
transaction rates - we find it surprising that there are not more companies
automating their in-house Sales Orders and Purchase Orders processing. Complexity, cost, and legacy systems
"drag" may be the reasons for the 20% that have not automated.
4. Cost savings are steady rather
We believe that the savings are
MARGINAL savings - i.e. the companies surveyed were unlikely to be comparing
improvements as a result of moving from paper-based systems to Internet-based
systems, they were comparing last years Internet systems with this years
Internet systems. Irrespective of whether the figures are marginal or not, what
is it worth to your company to reduce a significant portion of your overheads
by10-20% - in ONE year.
|Area for Savings
|Fulfillment and Delivery
5. The Manufacturing Sector gets
above average benefits in Customer related benefits.
We deal with
manufacturing software for complex and unique products, so the results for Manufacturers
were of particular interest. We were
pleasantly surprised to see these statistics:
|Cost Reduction in Customer Management
|Expanded Customer Base
There are no clear reasons for these
significant improvements on the overall averages (Well, we think 50% is pretty
It may be that Manufacturing is more
complex than other industry sectors and that automation benefits are greater
because the marginal costs of additional information are reduced.
For example the positive impact
of the following practices may be disproportionate because what was
relatively complex when compared with other industries prior to Internet
integration, is now straightforward:
- Vendor-managed inventories -
suppliers keep close track of customer inventories and replenish as
- Evaluated receipts settlements
- the automatic payment of invoices assuming that the
transactions being automatically paid meet a pre-defined set of criteria.
| XML - What's involved?
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