Dabbling in E-Commerce.

Survey finds many Canadian companies are still not putting e-commerce high on their list of priorities

More than 70% of Canadian companies do not consider electronic commerce to be a high business priority, according to a study released by Andersen Consulting. Even though 84% of senior business leaders interviewed agree that their companies will rely more on e-commerce within five years, few in Canada are readying to compete and thrive in the electronic economy.

Only 20% of the more than 250 major Canadian companies surveyed were identified as e-commerce "Leaders," while 41% were characterized as "Dabblers" and the remaining 39% demonstrated attitudes and behaviours associated with "Side-line Observers."

However, 90% of Canadian business leaders said their organization plans to spend more money on developing e-commerce capabilities in the next one to two years. And, companies that are already doing business on-line expect revenues from e-commerce to increase by nearly four times by 2001, according to the survey.

E-commerce is not only changing the way business is conducted, it is changing the fundamental economic assumptions on which business is based. Canadian executives must take action now to survive and succeed during this shift from an industrial economy to an electronic economy," says Rudy Puryear, global managing partner of e-commerce for Andersen.

The study found that the top five business priorities among Canadian senior executives are: improving customer service (78%); Y2K readiness (76%); increasing customer loyalty (68%); attracting new customers (65%) and cost reduction (62%). At 29%, exploiting the full potential of the Internet and developing e-commerce initiatives was ranked last in terms of the business priorities surveyed.

"E-commerce strategies can deliver strong results on four of the top five business priorities cited by Canadian business leaders," noted Puryear. "Winning in the e-economy requires more than creating Web sites and virtual channels, or automating customer service and building new skills. Organizations must continuously evaluate their entire business in the context of the e-economy."

The Andersen Consulting 1999 E-Commerce Survey of Canadian Business is the first in an annual series of reports designed to measure the evolution of e-commerce. The study, conducted by Northstar Research Partners, surveyed the opinions of business leaders from March to April 1999.

                       E-Commerce Revenue Projections
% of revenue from Current Next 1-2 years
1-9% of revenue     27          13
10-15%               7          13
20-29%               3          13
Over 30%             4          13
None                44           8
Don't know          15          31
Average            5.4        19.6
                   Attitudes to Future Use of E-Commerce
                                      TOTAL          293
In five years time I expect           Total Agree     84
that my company will be much          Agree Strongly  81
more reliant on e-commerce
E-Commerce will provide a new         Total Agree     80
channel for purchasing from suppliers Agree Strongly  74
E-Commerce will enhance our           Total Agree     77
relationship with our customers       Agree Strongly  73
Companies in my sector without        Total Agree     67
e-commerce will be at risk of         Agree Strongly  59
losing customers
E-commerce will create new revenue    Total Agree     61
sources for my company by enabling    Agree Strongly  55
the creation of new products/services
E-commerce will give the buyer        Total Agree     58
more choices at better prices         Agree Strongly  52
E-commerce will open up new geogr-    Total Agree     54
aphical markets to my company         Agree Strongly  48
E-commerce will be a different way    Total Agree     44
of doing existing business, not a     Agree Strongly  38
way to generate new business
E-commerce will eventually become     Total Agree     46
more important than traditional       Agree Strongly  40
distribution channels in reaching
customers
We would seriously consider           Total Agree     31
outsourcing e-commerce in the         Agree Strongly  22
future