e-Business now driving value for UK companies
More UK companies than ever are using e-business technology to transform their businesses but some are missing out and need to do more, according to a new report from CBI with the support of the Government.
e-Business is helping companies to drive up commercial and operational value and deliver benefits to their customers and employees.
The new report from the CBI ‘e-Value Matters’, sponsored by DTI, confirms that we have reached the "end of the beginning" in the story of e-business in the UK, with automation of existing processes evolving into the more fundamental transformation of business practices.
Over two-thirds of companies are now engaging with their customers online – 68 per cent compared with 50 per cent in 2002. Half of UK companies now fully integrate their business operations with remote access technologies and teleworking. This compares with just 10 per cent in 2002, when the CBI carried out its last e-business survey.
Companies now recognise the benefits these electronic processes bring to their employees. Ninety per cent see better internal communications, 83 per cent improved IT skills and 67 per cent a measurable increase in job satisfaction.
More companies than ever are managing electronic integration along the value chain, from suppliers through distribution to customers. Forty-five per cent of firms now transact online whether or not they have back office integration. And 16 per cent consider themselves to be 'fully networked' compared with 6 per cent in 2002.
There are positive signs of progress with the number of companies interacting electronically with their supply chain. Seventy-eight per cent of firms now make payments to their suppliers electronically, 58 per cent process orders over the Internet and 51 per cent schedule and track orders electronically.
John Cridland, CBI Deputy Director-General said:
“Britain used the power of steam to change the world two hundred years ago. A different power, e-business, is changing Britain today. We take it for granted we now buy, sell or book almost anything we want on the Internet.
"More of us are online on the move and use just one device to speak, email, text, work and even entertain. Words such as ‘blog’, ‘iPod’ and ‘Google' are a part of our everyday language just as these new technologies are part of everyday business.
"e-Business can help firms of all sizes and sectors maintain their competitive edge in a global market place. There are still new areas to develop but much will depend on the economic conditions being right and the availability of investment.
"Significantly, over 50 per cent of companies expect legislation to impact on their ability to integrate electronic processes over the next two to three years so the Government needs to ensure that regulation does not get in the way."
Speaking at the launch of the report, Industry and the Regions Minister Alun Michael said:
"Ten years ago mobile phones were a luxury and the internet was the preserve of geeks and technologically advanced academics. Today, a third of the world's population owns a mobile phone and 95 per cent of businesses can use the internet. We are now at a watershed in our e-business journey and business is at the point of transformation. We are now reaching a point when it is as strange for a company not to have a fully integrated e-business system as it was fifty years ago for it not to have a telephone and typewriter.
"This is not about technology for its own sake -it's about using it as a tool . If you can't use the medium and speak the language, no one will hear your message and buy your product or service, its as simple as that. I am struck by the speed with which many countries we didn't regard as competitors are now very ambitious and pressing UK hard as competitors.
Many of our companies are showing real drive and talent, but others need to lift their game."
The report also highlighted a number of other areas:
More companies are outsourcing business processes and are considering outsourcing their IT support.
Forty-one per cent of companies have changed, re-tendered or restructured their relationship with their IT service provider in the last year.
The main reason cited was cost (67 per cent). Poor service quality and inadequate support was also mentioned (50 per cent). Although 62 per cent of firms said they would consider using off-shore IT suppliers, 67 per cent wanted suppliers to have a UK base. Small firms in particular said they needed day-to-day support which was close at hand. Spending on IT delivered via globally sourced suppliers is predicted to exceed $50 billion by 2007, with global outsourcing of business processes set to exceed $125 billion this year – an increase of almost 10 per cent.
e-business has continued to move out of the IT department, up the corporate hierarchy and into the business mainstream. In companies with an enterprise-wide e-strategy 63 per cent of boards are now involved with e-business decision-making, as opposed to 41 per cent in 2002.
Security remains high on the list of companies' concerns, with 66 per cent
expecting it to affect integration of the supply chain over the next 2 to
3 years. Ninety-three per cent considered security measures were a significant
reason for implementing employee systems, second only to email filtering.
Usability of technology was the key concern when it comes to interacting
online with business partners and government (68 per cent).
Notes to Editors:
The new CBI/DTI report ' e-Value Matters' contains data from the 2005 e-business
survey, detailed commentary on the findings and a comprehensive set of
company case studies drawing out different approaches to e-business development.
Media copies of the report can be obtained from the CBI Press Office.
Source: CBI Website
