IT MATTERS: E-Business is Definitely an E-Ticket Ride!
With the gloss totally off the economy, inquiring minds want to know what might happen next – and whether e-business is down and out.
Surprisingly, many organizations are not backing down despite having been slapped in the face by the e-economy. While e-tailing has definitely been ravaged, many companies are still integrating web-based tools throughout their businesses, from Boeing and General Electric to Staples.
Many, like Staples, are even continuing to sell online. After two years even amidst an economic downturn, Staples boosted annual online sales to $512 million last year without impinging on in-store sales. This is because the average yearly spending of small-business customers leaps from $600-$2,800 when they shop online according to the 26 March issue of Businessweek. Even if this number drops somewhat in a sagging economy, Staples expects that online customers will continue to outspend in-store customers.
Still, most companies are getting more cautious as they stay the course, and many have struggled with high upfront costs. The biggest issues appear to be overcoming cultural hurdles as business processes change. In addition, when it comes to B2B, the lowest common denominator in the supply chain structure dictates the constraints for firms. According to Jupiter Research, 50 percent of procurement agents expect to do less than 20 percent of their purchasing online for the next two years because their existing suppliers are not online yet. Because of these and other issues The Gartner Group forecasts that, instead of hitting $7.3 trillion by 2004, B2B will only hit about $6 trillion. B2B e-commerce is still going strong, but not as aggressively as before.
Nonetheless, many manufacturing giants, such as GE, are moving forward. In a January TV interview, John F. Welch, CEO of GE, left no doubt in the minds of his 340,000 employees that the firm will continue to emphasize new technology initiatives. Similarly, Ford Motor Company and Boeing continue efforts to widen the competitive gaps between themselves and other firms.
Noteworthy Technology Initiatives
Transactions on e-marketplaces continue to be high and are still expected to reach $2.8 trillion in 2004 according to AMR Research.
Businesses are still expected to pay $2.8 trillion in supplies over the Internet by 2004 (excluding e-marketplace purchases).
It is estimated that companies will spend $10.2 billion to store and share their employees knowledge over the Net by 2004 according to IDC.
Corporations will invest $12.2 billion by 2004 on linking customers, sales and marketing over the Internet.
|Got it already||Starting now||Considering||No plans yet|
|Capturing Worker Knowledge||15%||32%||27%||27%|
Source: Forrester Research, 2001
|Percentage of companies sticking to key e-biz expansion plans|
|Sales and Customer Service||87%|
|Supply Chain Management||84%|
|Group Trading Exchanges||94%|
Source: AMR Research, 2001
Forrester Research (no longer accessible)
About the Author(s)
Charla Griffy-Brown, PhD, is an associate professor of information systems at the Graziadio School of Business and Management. In 2004, Dr. Griffy-Brown received a research award from the International Association for the Management of Technology and was recognized as one of the most active and prolific researchers in the fields of technology management and innovation. A former researcher at the Foundation for Advanced Studies on International Development in Tokyo, she has also served as an associate professor at the Tokyo Institute of Technology. Dr. Griffy-Brown graduated from Harvard University, is a former Fulbright Scholar, and holds a PhD in technology management from Griffith University in Queensland, Australia. She has worked for NASA at the Kennedy Space Center and has taught innovation/technology management courses in Australia, Singapore, Indonesia, Malaysia, and Japan. She has also served as a consultant for the United Nation's Global Environmental Facility and the European Commission.