Caution over e-biz doom and gloom

A Waikato University study, which shows transactional e-business activity in New Zealand slowing, isn't necessarily bad news according to DeloitteTouche Tohmatsu partner Alasdair MacLeod.

A Waikato University study, which shows transactional e-business activity in New Zealand slowing, isn’t necessarily bad news according to DeloitteTouche Tohmatsu partner Alasdair MacLeod (pictured right).

The survey of New Zealand companies found transactional e-business activity slowed slightly in 2002 compared to 2001.

MacLeod says he can’t help feeling that some of the doom and gloom is due to a definition problem with the term e-business. E-business has come about by osmosis rather than revolution and organisations think of it as a normal part of business rather than e-business.

“I think that the survey does show continuous overall growth in e-business. There are a significant number of businesses that are transacting in a way that they weren’t two or three years ago.”

Companies with websites were asked to estimate the proportions of their total business activities that were conducted via websites in three areas: online products, online purchases and web sales. The 2001 results showed that the scale of current activities is low for both online purchases and web sales (approximately 5.5% of total purchases/sales). By 2002 these proportions had decreased to 4.7% for online purchases and 5.1% for web sales. These results are interesting as companies were optimistically estimating growth of nearly 17% and 14% respectively for these activities in 2001. By 2002 the estimates of future growth for these activities has been trimmed to 11%.

For companies with websites the top two inhibitors of 2001 and 2002 were low customer use of e-commerce, and the high costs of computing and network technology. They considered improving the telecommunications infrastructure, consumer access to the internet and improving security as the most important issues for 2002.

In the survey companies without websites perceived the lack of readiness for e-business by other key players such as partners, customers and suppliers as a major difficulty. They considered improved security, telecommunications infrastructure and e-business training as the most important factors for 2002.

About half of the organisations surveyed were involved in electronic financial transactions on a monthly, weekly or daily basis. This included 303 companies conducting daily electronic transactions. Similarly, half of the organisations were purchasing supplies online and doing market research online on a monthly, weekly or daily basis. Electronic links to partners via an extranet were reported by a third of the companies and 107 of these companies use these links on a daily basis. After-sales service was provided online by 30% of organisations, while 26% are coordinating delivery electronically.

About one in five companies were doing B2C and B2B sales in 2002. Most websites were providing lists of products and services (94%) and company data (68%), but transaction capabilities were much lower (one in five websites were capable of secure transactions and one in seven websites are receiving payments online). Only 58 companies reported links to an electronic trading hub in 2002, indicating that current levels of involvement in electronic marketplaces are low.

In 2002 staff recruitment online increased by 9.8% although this was still primarily a monthly or yearly activity. A third of the companies are recruiting electronically.

Waikato University management school surveyed senior executives in 2001 and 2002. In 2001, a total of 1229 replies (20.9% response rate) were received and in 2002 a total of 1057 (19.2% response rate) were received.

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