UK companies abandon stand-alone e-business initiatives

These are the results of a survey of 812 organisations in the UK released this week by the Confederation of British Industry (CBI) and KPMG Consulting.

The survey found that 87% of UK companies are using e-business technologies to improve efficiency. In the past, the CBI notes that traditional "old economy" companies followed dot.coms by expecting the internet to expand markets and create commercial opportunities.

The report, called "Reality Bites", shows that intranets, followed by electronic payment systems, are now two of the most commonly cited applications of internet technology, instead of the customer-facing e-business initiatives.

Encouragingly many survey respondents expect e-business technology to transform companies and markets within the next two to three years. Only 15% say they currently reap substantial financial benefits from e-business initiatives. More than 40% expect to in future.

In addition, 90% of companies surveyed believe e-business will eventually reduce costs by 10% or more. The percentage of companies making more than 5% of purchases online is expected to triple by 2005 from 20% to 60%.

Some of the biggest benefits are likely to be experienced by customers. The survey found that 83% of firms believe e-business initiatives will improve the quality of customer service by 2005. Moreover, the number of companies expecting revenue per customer to increase is four times greater than the number of those expecting it to drop.

It was also noticeable that in 64% of companies, corporate boards and heads of business operations were now accountable for e-business initiatives, compared with just 16% where the IT director remains in charge.

Only 16% of firms now have stand-alone e-business operations, compared with 38% of companies in 2001.