All entries for Thursday 06 August 2009

August 06, 2009

UK business: eCommerce Champs, eBusiness Chumps. Why?

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UK enterprises are leaders in eCommerce but laggards in eBusiness. That’s the finding of the latest European Commission Digital Competitiveness report.

UK businesses rank as number 1 in Europe for the percentage of enterprises selling online, number 2 for the percentage of turnover generated through eCommerce and number 3 for the percentage of enterprises purchasing online. A very healthy picture.

Contrast that with the performance in eBusiness. UK businesses are 24th out of 27 for the percentage using applications to integrate internal business processes and 27th – worst in Europe – for the percentage of businesses sharing information electronically in their supply chains. Even on the UK’s best measure for eBusiness – the percentage of companies using analytical CRM – the UK is only 16th. This puts the UK on a par with countries such as Hungary, Poland, and Romania, and behind countries such as Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, and Latvia.

So why the huge disparity between the performance for eCommerce and the performance for eBusiness? Unfortunately the report does not provide all the answers. It is, no doubt, a combination of factors but my own experience tends to suggest that most businesses still think of IT in terms of “point” solutions – CRM, stock control, website, etc – to solve an immediate problem, rather than an opportunity to take a more holistic, more strategic view of how IT can benefit the business as a whole (whilst, of course, still solving the problem at hand). IT investments tend to be very tactical and made in isolation with the inevitable consequence that they are not integrated with each other, or, more importantly, with the underlying business processes.

When approached correctly, IT investments can be an exceptionally effective catalyst to improving business productivity and performance. But this requires taking a little time to think and plan holistically, often by creating a 3-5 year IT “roadmap”. The roadmap will guide your IT investments, ensuring that they are coherent and consistent, enabling you to take advantage of the often transformational benefits on offer.

Continuing to invest in IT “piecemeal” is not an option. If we do, the UK will remain an eBusiness laggard firmly at the bottom of the heap, and the competitiveness of UK companies will inevitably suffer even further.

If you agree, or if you have another explanation of the disparity between the UK’s eCommerce and eBusiness performance, please let me know.

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