Contradictory ecommerce reports from IDC, Yankee Group, Andersen Consulting and Cranfield School of Management can be held responsible for confusing anyone interested in online business.
Add to that prime minister Tony Blair's appointment of an eCzar amid dire warnings about Britain losing out in the wired world, supported by a doom-laden speech from an MIT professor, and it?s hardly surprising eUK looks as though it doesn't know what it?s doing.
It is clear that the world of ecommerce is proving difficult for businesses to understand, and conflicting views don?t help decision takers. What they need is a sense that observers have a firm grip on reality, and today that is difficult to discern. But if one picks through the threads of what has been said, trends emerge.
IDC has updated its eEurope forecasts from 1998. Last year, IDC hammered home the 'European is lagging' story but provided encouragement in the form of a detailed case study from Cisco that showed how it is making significant expense management cost savings using Internet-based technologies.
This year IDC chairman Patrick McGovern reported that going through 2003, Europe would account for a third of all users and that Internet-based trading would rocket, with the UK being the third largest ebusiness spender by 2002 at $47.6 billion, a rise of 141 per cent from 1998.
The cheerleaders were Tom Koogle, CEO of Yahoo! who declared he sees no end to growth for his business, and Scott McNealy, who provided entertainment value by referring to 'low-hanging eyeballs' and taking the odd pop at Microsoft.
The only cold water poured on IDC's predictions and other upbeat views was by professor Lester Thurow, professor of management and economics at MIT. He suggested that cultural differences in attitudes to risk combined with a lack of well educated people, was holding up European ecommerce acceptance.
Out with the old
Surprisingly, Andersen Consulting produced a report that was bullish. Last year, Andersen's saw Europe at a crossroads, a sentiment that fairly reflected the mood of the 1998 conference.
This year, Andersen reported that two thirds of respondents to its annual ecommerce survey understand the strategic importance of ecommerce. Citing high-profile case studies like TotalFina and the Irish Government, the clear message was that eEurope is ready to go, but it has to act quickly and be prepared to throw out traditional management handbooks.
In the middle of this, Tony Blair appointed Alex Allan as eCzar, but was disturbed to note that less than 10 per cent of UK businesses have IT representation at board level and that only 20 per cent have developed an ecommerce strategy.
Blair wants to see eUK as a leader, not a follower, and pledged a lighter touch to regulation. But almost immediately, criticism followed. An IDC conference attendee, Paul Robinson from the States of Jersey treasury, slammed Blair's statement as 'too little too late', citing political interests as a limiting factor.
Earlier, Alistair O'Reilly, managing director of Access Accounts, was equally critical, saying that Blair failed to make the point that for many, ecommerce appears to be an expensive, exclusive club.
Then Cranfield School of Management stepped in with more warnings. In a report on how business should proceed, it warns decision takers not to react to ecommerce in a kneejerk manner.
Dr Liz Daniel said, "We just say that the business objectives of the service should be understood and how these fit with the existing business. Companies should not just 'do' ecommerce because it?s the latest fashion."
Cranfield School also said that businesses should look for return on investment (ROI) and not abandon tried-and-tested business models. But this flies in the face of all the evidence seen to date about successful ecommerce. As most observers agree, potential double-digit success does not sit comfortably with any of the traditional methods of assessing ROI.
Gloom and doom
Finally, Yankee Group came out with a gloomy report that supported the Blair government findings and paints a completely different European picture to that seen by IDC and Andersen.
According to Yankee, only 21 per cent believe the Web is important to their overall business strategy, nearly a quarter said it was not very important, and 11 per cent said it was not important at all.
Graham Finnie, associate consultant for the Yankee Group, said: "Most companies are at the brochure stage of Web development, giving just basic corporate marketing information to customers." He added that this shortsightedness is indicated by the fact that 43 per cent have no plans to support online transactions.
Regardless of which source one chooses to select, all show examples of outstanding success. In the UK for instance, Lastminute.com and Freeserve are widely recognised as leaders that saw a market opportunity and successfully grasped the ecommerce nettle.
But just as in the USA, the headline-grabbing names are few and far between. Even today, in any presentation about the value of ecommerce, one can guarantee the same names will crop up - Amazon.com, FedEx, E*trade, Yahoo, eBay, Dell and Charles Schwab.
There is no lack of innovation and no lack of willingness by large companies and Internet start-ups to 'have a go', and where successful, these become the case studies of tomorrow.
The real concern lies in three areas. First, there are few public examples of success in mid-range businesses, maybe because they have yet to achieve the double-digit growth that grabs the headlines.
This is important because mid-range companies account for a significant amount of wealth generated. Reported success may change as the messages about extended supply chains run through the Internet are carried to this level of business. Initiatives in European motor manufacturers like BMW and Daimler-Benz may well lead the way.
Second, there is a clear difference in management opinion about how business should proceed in creating ecommerce strategies. Cranfield School's view is diametrically opposed to that presented by Andersen.
The Andersen view is in line with ideas about cannibalising the business so that ecommerce units compete with the main business to see which works best. In the US there are numerous examples like Barnes & Noble and Levis. In Europe, one would be hard pressed to find a CEO willing to own up to such a strategy. Andersen's acknowledge that formulating ecommerce strategies is high risk.
But the degree to which business takes risks is partially cultural, and it?s here that some rethinking is appropriate. As Thurow pointed out, failure is not seen as a dead end in America, but a potential learning experience. This is supported by the old saw about the road sweeper who turns to the Rolls Royce owner and says, "Gee fella, how d'ya get there?"
In the UK, such an approach is almost unthinkable. CIO's in the US are only too keen to talk about their successes and failures and give praise and criticism in equal measure. But in the UK, suspicion clouds a company's ability to let the world know when things go well.
In the UK, being second best is a cultural given, but that is changing as it is everywhere in Europe. France, long seen as insular and unyielding to innovation, has some of the most advanced ecommerce-led call centres in the world. In Germany, Andersen believes attitudes have changed but that overall, German businesses are concerned about technology issues and expect the euro to be an initiator of change.
IT vendors continue to throw Fear, Uncertainty and Doubt (FUD) at prospective buyers as a prime reason for getting into ecommerce, but some nation states are responding to FUD with surprisingly good results.
The Scandinavian countries have few natural resources and realise their service economies are threatened by ecommerce. They have responded with some of the most innovative ideas in Europe.
Jersey saw itself in a similar position and has created an advanced telecommunications infrastructure with an ecommerce strategy that's years ahead of the UK. Ireland has responded to the wealth that PC makers like Dell have brought, and actively woos those with ideas around IT and ecommerce.
It seems therefore that cultural specific factors are the key to understanding how ecommerce is working in Europe. As Andersen partner Rosemary O'Mahoney said, "The technology is fine. It?s no longer a concern and is developing quickly enough for businesses to be confident they can achieve what they want. What's required is fresh thinking that doesn't look backwards for guidance."
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