NEW YORK, NEW YORK, U.S.A., 1999 SEP 9 (NB) -- By Martin Stone, Newsbytes. European companies are flocking to e-commerce in dramatic numbers, according to a survey released today by New York-based Andersen Consulting, In what the study calls a striking change in the European e-commerce climate, the poll depicts a significant move to cyber-commerce over the past year, yet points to certain inhibiting factors, especially among executives loathe to move quickly into the final economic frontier.
Based on interviews last May with 350 senior European business executives and 60 of their American counterparts, the study, dubbed "eEurope Takes Off," shows Europeans taking up the e-commerce challenge in significant numbers, and in many cases reaping substantial rewards.
The findings stand in sharp contrast to a similar study a year ago.
Andersen declares the number of interviewees represents a reliable reading.
Steve Johnson, Andersen's co-director of the e-commerce program, told Newsbytes the European move into e-cyberspace is being spearheaded by the entry of several very large corporations. "I wouldn't describe it as a surge yet, but what's encouraging about it is that some significant European companies are taking first steps, and we see it as a positive sign, but not yet at the pace of what's going on here in North America."
The true story of e-commerce in Europe, says the report, is not confined to classic Internet start-up companies. Many European leaders in e-commerce are well-established organizations that have seen tempting opportunities and are beginning to capitalize on them.
Companies such as TotalFina, Cable & Wireless Communications are embedding online commerce into their corporate strategy with high-level executive support and commitment, the report notes.
Anderson says that in the past year, European businesses have increased their use of e-commerce significantly, and more expect to use it in the future. In a similar 1998 study, the pollsters found most companies reporting limited use, almost exclusively in sales and marketing.
Today, over a third are applying e-commerce to procurement, logistics, finance, and product development. Within five years, no fewer than 90 percent expect to use e-commerce in sales and marketing and 83 percent in procurement.
According to the survey, 64 percent see e-commerce offering a real competitive advantage in their marketplace today, compared to 51 percent a year ago, with those expressing a strong belief rising from 23 percent to 33 percent.
An increased number of Europeans agree strongly that they have plans for future use of e-commerce. Some 44 percent, compared to 31 percent in 1998, indicate concrete plans in place.
Until now, most e-commerce revenue, and thus its greatest economic impact, has been in the United States, where the e-commerce and information technology industries have accounted for a third of real economic growth over the past three years.
The US remains ahead for the moment, but Europe is steadily eroding the lead, the study suggests. By 2003, the online marketplace in Western Europe alone is expected to grow to $430 billion, and Europe is projected to have 170 million Internet users, a similar number to that forecast for the US.
"There have been some very positive and encouraging changes in European e-commerce since our study last year," observes Rosemary O'Mahony, Andersen's managing partner - technology for Europe, Middle East, Africa and India. "At that time, while we identified pockets of excellence in Europe such as mobile telephony and interactive digital TV, there was still a prevailing 'wait and see' attitude. Today, we see several examples of world-class European companies making e-commerce an integral part of their business strategy and asserting themselves as leaders in this new and challenging marketplace. Just as importantly, more companies are reporting that they have plans to do so," she said.
According to the study, Europe's changing e-commerce landscape is contributing to this growth. Telecommunications infrastructure is being revolutionized by digital, cable and satellite services and Europe's leadership in mobile technology and interactive digital television will deepen, providing high-speed connections via the Web to mobile phones and other devices, the report declares.
At the same time, Internet access costs continue to fall, driven by deregulation and competition, with more Europeans than ever going online.
The study highlights some of Europe's more notable e-commerce users, including TotalFina, which is reportedly transforming oil industry standards for customer service and resource planning. By giving its refinery customers direct access to service and delivery systems, the company has generated 20 to 30 percent reductions in the cost of order management for itself and its customers.
Italy's Lloyd 1885 insurance company has used the Internet to penetrate new markets. After only seven months online, 22 percent of the company's total sales are via the Internet.
In the UK, Cable & Wireless Communications is rolling out the most advanced commercial e-commerce infrastructure in Europe, bringing consumers telephony, multi-channel interactive TV and high-speed Internet access from a single connection. In doing so, C&W has transformed itself into an interactive gateway provider.
Migrosbank of Switzerland uses a combination of multimedia kiosks, specially recruited staff and Internet marketing to increase its market reach by 60 percent in little over a year while maintaining a competitive cost base, the poll says.
The study also highlights several progressive initiatives from European governments to establish an environment, such as telecommunications deregulation, in which e-commerce can flourish.
"While progress has been made, there are some clouds on the horizon," O'Mahony adds. "European executives still have some significant preoccupations that are inhibiting them from moving quickly enough.
Fortune will favor the brave, those who act now to build their capabilities."
Some 85 percent of Europeans believe their companies lack the skills required to exploit e-commerce successfully, a concern shared by 90 percent of US executives.
A full 83 percent of European and 85 percent of US executives say their organizations do not have the corporate culture necessary to make the changes required to compete in the new electronic economy.
Johnson agrees the largest impediment to European use of online marketing is the corporate attitude, which traditionally is more conservative than the American approach, "...contrasted with the enthusiastic entrepreneurism that's going on here in North America, which is a very different cultural perspective."
The study further notes that as European companies come to grips with e-commerce, their perspectives are changing. Although traditional preoccupations with privacy and security remain, 68 percent of European executives see security issues as a barrier to the growth of e-commerce, while 60 percent have similar concerns about privacy, managerial issues are now seen as even bigger concerns as European companies become increasingly engaged in e-commerce.
Johnson points to Germany and France as lagging behind other European countries in adopting an aggressive e-commerce strategy. "They seem to be most reluctant to move forward. In Germany there are relatively high telecommunications costs. The Nordic countries have emphasized the use of the Internet."
Further survey results are available at http://www.ac.com/news/news_home.html.clients.
Reported by Newsbytes.com, http://www.newsbytes.com (19990909/Media Contact: Steve Foley, 917-452-5151 /WIRES ONLINE, PC, BUSINESS/)
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