Firms to spend big on e-commerce: survey

Many New Zealand organisations plan to spend half a million dollars or more on electronic commerce in the next two years, according to a recent survey by accountancy firm Price Waterhouse. While a number of firms were unsure as to their likely expenditure, 55% said that spending was likely to be up to $500,000, with 10% expecting to exceed $500,000.

Many New Zealand organisations plan to spend half a million dollars or more on electronic commerce in the next two years, according to a recent survey by accountancy firm Price Waterhouse.

The survey of 300 public and private sector organisations drew 105 responses.

The survey found that local organisations expect to spend a significant amount of money on electronic commerce through to 2000. While a number were unsure as to their likely expenditure, 55% said that spending was likely to be up to $500,000, with 10% expecting to exceed $500,000.

The cost of connecting to back-end systems was identified as potentially the most costly component. Price Waterhouse suggests that this may be related to the current lack of message and data exchange standards. As a result, many interfaces may need to be developed with message translation in mind due to disparate systems.

The survey report reads: "Companies may need to modify back-office applications to align data with their trading partners. EDI [electronic data interface] systems addressed this requirement with the implementation of ANSI [American National Standards Institute] X12 and EDIFACT [EDI for administration, commerce and trade] standard messages. As more companies begin to use the Internet as their transport mechanism for conducting business electronically in new ways, data integration issues are expanding.

"Furthermore, transporting traditional EDI over the Internet does not make it interactive — a requirement for new customer prospecting, customer service and other applications. Traditional EDI with Web access enables small companies to exchange EC documents with a larger population of organisations, using standard messages and translation software. The browser becomes a dumb terminal connected to older EDI systems at the other end. Many back-end systems are still store-and-forward messaging systems with batch processing. Therefore, the real-time on-screen bid conformations associated with interactive Web systems are not possible.

"High-end transaction-enabled Web server software is already available and adaptable to most existing presentation, database, transaction processing, order entry and payment systems. Unfortunately, message and data exchange standards have not yet been established and many of the available e-commerce offerings are not compatible."

The three main obstacles to Internet-based e-commerce in New Zealand were identified as: adoption of standards; lack of available expertise and resources; and public perceptions of electronic commerce on the Internet not being favourable.

Marketing/advertising and customer service are expected to exceed information technology in the use of electronic commerce within the next two years, according to the organisations surveyed.

Approximately 30% of organisations surveyed expected up to 10% of their revenue to be attributed to Internet-based e-commerce over the next two years. Twenty five percent expected less than 1% and a further 30% were not revenue-oriented for their electronic commerce initiatives.

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