UK and German Businesses See 'Looking Good' As Key Benefit Of E-Business

The development of a progressive image is seen as the main benefit of e-business, according to UK and German businesses, more so than improved customer relations or reductions in overheads.

This is one of the key findings in a new piece of research, commissioned by BT Ignite Solutions, the e-business and communications solutions unit of BT Ignite, on how companies assess the impact of e-business within their organisation.

71 per cent of respondents in the UK and 65 per cent in Germany stated that e-business investments had given their company a more progressive image. However, when asked about tangible financial benefits, only 30 per cent in the UK and 39 per cent in Germany agreed that e-business projects had created a measurable reduction in their company's overheads.

Moreover, about two-thirds of respondents (63%) in the UK and 68 per cent in Germany stated that it is very difficult to demonstrate the impact of e-business spending on the bottom line.

Danny Garvey, director of marketing, BT Ignite Solutions, said: "This research clearly indicates that businesses in the UK and Germany are not thinking strategically enough about why they are investing in e-business technology. Using Internet-enabled technology can result in quantifiable benefits in terms of increased revenues, reduced overheads, greater efficiency and happier customers. It is crucial that businesses are guided by defined strategies and measurable goals rather than simply the feel good factor - which is not sustainable in the long-term."

One likely reason for the trend could be that e-business initiatives have been implemented as a 'knee-jerk' reaction to market pressures. Only half of respondents in the UK and Germany say their organisations develop business plans before executing e-business programmes.

This suggests that only half of these businesses have targets against which they can benchmark progress. In both countries, more than a quarter of respondents agreed that their e-business strategy was instigated owing to short-term commercial pressures.

By putting pressure on scarce resources to produce changes which are visible in the short term, some companies risk making badly informed decisions and perhaps jeopardising the long term success of projects - all for the sake of short term gains in share price and competitive positioning.

The research, however, also highlights the positive attributes of businesses that have engaged an external supplier, such as a management consultancy or IT services firm, to deliver their e-business project. Almost three-quarters (72 per cent) of businesses in the UK and Germany that have used an external supplier have a clear vision of where their e-business strategy will be in two years time, as opposed to only just over half (54%) of the businesses that have adopted a D.I.Y. approach.

This gap is also reflected in relationships with customers - two-thirds of businesses using external expertise agree that e-business has led to a measurable improvement in customer relations; only half of D.I.Y. businesses could also claim this benefit.

Other findings of the research highlight the fact that German organisations tend to take a more considered, longer-term view of their e-business strategies.

• 74 per cent of German businesses are looking to strengthen customer relationships through e-business whereas only 58 per cent of UK businesses agree
• 25 per cent in German businesses strongly agree that their company usually has time to evaluate all possible options before commissioning an e-business project versus only nine per cent in the UK
• Three-quarters of German businesses have a clear vision of where their e-business strategy will be in two years time, whereas only just over half of UK businesses concur
• Almost half of the UK and German businesses interviewed view the huge European skills shortage as the biggest barrier to the successful use of e-business technology in their organisation.

Technical details

About the Research

This research was carried out by MORI (Market & Opinion Research International) on behalf of BT Ignite Solutions to gain an insight into the e-business activities of large companies in Germany and the UK.

A total of 200 telephone interviews (100 in each country) were conducted amongst directors and senior managers with strategic responsibility for e-business in organisations with more than 250 employees planning or implementing e-business projects.

Interviews were undertaken between 29 November 2000 and 4 January 2001. Quotas were set by broad industry sector in each country, according to their distribution in the population of businesses with more than 250 employees.

A whitepaper detailing the findings of the research is available free of charge at www.btignitesolutions.com

About BT Ignite Solutions

BT Ignite Solutions is the e-business and communications solutions unit within BT Ignite. The business provides solutions to help its clients to optimise customer value in an IP enabled world. Providing consultancy, e-business, e-CRM and network-centric applications, BT Ignite Solutions delivers and manages solutions on behalf of many of the world's largest and most respected organisations. With current annual run rate revenues of more than 1631.4 billion, BT Ignite Solutions is the largest provider of managed and outsourced network and IT solutions in the UK. It has more than 27,000 customers ranging from mid-sized companies to multi-national organisations in 92 countries across the globe. For more information, visit: www.btignitesolutions.com