UK firms close to achieving e-commerce critical mass

22 May 2002
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23 May 2002 | David Arminas

UK private-sector firms are close to reaping bigger benefits from e-business, according a survey commissioned by the Confederation of British Industry (CBI).

Around 16 per cent of UK firms have achieved fully automated and integrated business processes, including linking their online sales and purchasing into main invoicing and order systems.

It found a further quarter of firms have partially automated their business processes.

Another third are transacting online but are not yet integrated with processes such as invoicing and purchasing.

Clare Losty, e-business counsel for the CBI, said the result was very encouraging for greater use of e-business.

It should lead to a knock-on effect by the suppliers operating within the supply chains of the 16 per cent of companies that are fully integrated.

"Because these suppliers and firms depend on each other, there will be a take-off point, probably when integration reaches around 25 per cent.

"This was the case for mobile phones, which reached 28 per cent use by the public and then rocketed from there," she said.

But she warned that a lack of standards for e-solutions, such as computer language XML and product standardisation, remained a barrier.

At the time of the first survey in December 2000, 38 per cent of firms had a separate e-business group. This is now only 16 per cent, suggesting that e-business is becoming more integrated as a normal business practice rather that a stand-alone aspect, the survey noted.

The survey also found that the main reason for embarking on e-business ventures has changed from customer-related market expansion to improvements in internal processes for cost reductions.

The Reality Bites survey, commissioned by KPMG Consulting, also found that nearly 80 per cent of companies are making less than 5 per cent of the purchases online.


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