Ever since the dot-bomb implosion, a pall has hung over e-business. Part of the reason is that people mistake the stock market for the economy. And part of the reason is that the roller-coaster descent from euphoric highs created so much momentum that it carried the popular-sentiment pendulum way into negative territory. In some circles, things have gotten so bad that many are questioning the whole idea of e-business.
One segment of industry, though, suffers none of this malaise. This segment believes that e-business has proved its worth and forms an intrinsic part of future strategy. This segment cares little about dot-com foibles because it isn’t using a dot-com business model. This segment is comprised of companies currently using e-business in their day-to-day operations. These companies are happy with e-business, and they plan to do more of it in the future. For these companies, the reality of e-business value speaks much louder than the negative emotional cries of popular sentiment.
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This picture came into focus while analyzing the data from my company’s latest industry survey, Survey of e-Business and IT Practices. The survey provides the evidence to support the rosy claims of the previous paragraph.
It almost seems silly, but to start things off we must begin by saying that e-business is important to most companies today. Survey respondents are using e-business seriously, and they are trying to make it an established part of their business operations.
For example, 57 percent of survey respondents say that e-business is a necessary component of their overall IT strategies, and another 9 percent say that e-business is the driving force behind their IT strategies. So for two-thirds of industry, e-business is necessary or essential. To flesh out the picture: 30 percent of respondents say that e-business is experimental, and only 4 percent say that e-business has no role in IT strategy.
In addition, 62 percent of respondents have a group dedicated to promoting e-business within the company. For the companies doing e-business today, e-business is here to stay, and it’s an important part of their IT efforts.
Looking at the various e-business applications in use shows how companies are using e-business, their satisfaction with their experiences, and what they plan to do in the future. Table 1 shows the percentage of respondents using e-commerce, e-procurement, e-CRM (customer relationship management), e-SCM (supply-chain management), e-marketplaces, portals, and m-business (mobile or wireless e-business).
As you can see, industry penetration varies considerably by application. E-commerce, e-procurement, and portals are all well-established. E-CRM and e-SCM have serious followings but trail the first three. E-marketplaces and m-business are still niche applications.
We often assume that a successful technology is one used by nearly everybody. If we look at Table 1 with this assumption, we will be disappointed. We might be inclined to say, “E-commerce is the most-used e-business application and barely half of all companies are using it. Maybe e-commerce and this whole e-business thing aren’t such a big deal after all!” But this view imposes expectations on the reality of e-business usage and prevents us from seeing the message in Table 1.
Table 1: Use of E-Business Applications e-Commerce 52% e-Procurement 35% Portals 33% Customer Relationship Mgmt. 22% Supply Chain Management 17% e-Marketplaces 9% m-Business 7%
Table 1 shows that e-business is like any other technology — it is a tool right for some jobs and not for others, so companies match the tool to their needs. One consequence of this is that only rarely will a technology be used by all (or anywhere close to all) companies. So the fact that 52 percent of companies are using e-commerce shows that it really is a big deal. When you consider that e-commerce is appropriate primarily for companies that sell to consumers and a lot of companies don’t, 52 percent penetration is quite high. Similar arguments can be made for most of the e-business applications on the list.
Stepping back to take a global view of Table 1, the general message is that most e-business applications are being used by a sizable segment of industry. Now it makes sense to ask whether businesses are satisfied with their experience and how they intend to use these applications in the future.
Respondents were asked to rate their satisfaction with each application they’re using. Their answers are summarized in Table 2. An average rating greater than 3 is good, so you can see that e-business users are generally satisfied with their applications, the exceptions being m-business (whose users are dissatisfied) and e-marketplaces (whose users are neutral).
Table 2: Satisfaction (Avg. Rating) (1=Totally Disappointed, 5=Extremely Satisfied) e-Commerce 3.3 e-Procurement 3.8 Portals 3.5 CRM 3.5 SCM 4.0 e-Marketplaces 3.0 m-Business 2.7
The third piece of the puzzle is companies’ plans for e-business. Based on the satisfaction ratings in Table 2, we can expect today’s e-business users to have plans to continue, and even expand, their use of e-business. Table 3 shows that this is exactly what they intend to do.
In every case, a majority of current users plan to increase their use of the application. With the exception of m-business, every majority comes surprisingly close to unanimity. M-business is also the only application where some users plan to reduce their use in the future.
Table 3: Future Plans e-Cmrce e-Prcrmt Portls CRM SCM e-Mkts m-Biz Increase 91.7% 93.7% 85.7% 100% 87.5% 100.0% 66.7% Stay the Same 8.3% 6.3% 14.3% 0.0% 12.5% 0.0% 0.0% Decrease 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 33.3% Discontinue 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Dot-com mania encouraged many to think that dot-coms were where the e-business action was. The reality is that they were the sizzle, while the steak was regular old businesses taking advantage of e-business where it made sense. Regardless of whether a single dot-com survives, the future of e-business is bright, thanks to those regular old businesses.
Chris Pickering is president of Systems Development Inc., an IT research and consulting firm. He also is a senior consultant for the Cutter Consortium. His latest industry study, the Survey of E-Business and IT Practices, may be ordered from Cutter’s Web site. This column first appeared on Datamation.com, an internet.com site.