Study Finds Sweden, Ireland and UK Lead in Information and Communications Technology Use - U.S. is Seventh.

NEW YORK -- A new study, produced by management consulting firm Booz Allen Hamilton for the UK Department of Trade and Industry (DTI), found that Sweden, Ireland and the UK are the most sophisticated users of Information and Communication Technology (ICT), such as Internet and wireless networking. The United States slipped to seventh place in the study, down from third place in 2003.

The DTI's International Benchmarking Study is the eighth in a series dating back to 1997, reporting on the findings from a survey of business use of information and communication technology undertaken each year. The study uses a Sophistication Index, based on a broad range of metrics, as a means of measuring businesses' ICT sophistication. The index analyzes awareness, adoption, deployment and impact of technology innovations, and also examines people, technology and processes - the key areas of commerce affected by ICT.

Globally, the study found that more businesses are measuring the benefits of technology, as companies place increasing emphasis on the value provided by ICT, rather than solely its costs. In addition, the focus of business has shifted from internet access to the speed and reliability of the connection. Levels of internet access appear to have reached a plateau while access speeds continue to rise.

In addition, businesses are becoming more selective in the type of information that they provide and the activities that they perform online. Companies are focusing more on applications that deliver measureable benefits, such as online ordering, payment and invoicing. In contrast, businesses are not as active as in previous years in providing marketing material, information about after-sales support services and enabling the tracking of order progress.

"Overall, businesses are taking a more thoughtful and selective approach to deploying technology," said Frederick Knops, Vice President of Booz Allen Hamilton. "We see a tighter focus on value-added applications, and greater emphasis on measurement to assess the benefits of new technology."

The analysis identified significant variations in the level of technology adoption and deployment across private industry sectors among the companies studied. For example, 88 percent of financial services businesses have a website, compared to 65 percent for retail and 60 percent for construction businesses. The average proportion of sales made online was highest among financial services businesses (30 percent), and lowest in the retail and services industries (17 percent each), and construction (14 percent).

In the U.S., businesses placing orders online and tracking order progress online are down five percent and eight percent, respectively. Use of e-marketplaces has declined from 26 percent of U.S. businesses to 15 percent.

Despite these declines, the U.S. ranks first in terms of technology impact, with online channels contributing significant proportions of sales and procurement activity. The average percentage of total purchases made online by U.S. businesses increased to 28 percent, from 26 percent in 2003 and 21 percent in 2002.

Methodology

The International Benchmarking Study (IBS) 2004 has been carried out for the DTI by Booz Allen Hamilton, in partnership with HI Europe. This is the eighth in a series examining the adoption and deployment of ICT in the G7 countries, plus Australia, Ireland, South Korea and Sweden. The study is based on nearly 8,000 telephone interviews with businesses, over 2,700 of which were with UK businesses.

The IBS uses data weighted by employee, so that, for example, "30% of businesses" should be understood to mean "businesses accounting for 30% of employment in that country". Weighting by employment takes into account the economic importance of the businesses involved and allows more meaningful comparisons to be made between countries.

The study is available online at: http://www.dti.gov.uk/bestpractice/assets/ibs2004.pdf

About Booz Allen Hamilton

Booz Allen Hamilton has been at the forefront of management consulting for businesses and governments for 90 years. Booz Allen, a global strategy and technology consulting firm, works with clients to deliver results that endure.

With more than 15,000 employees on six continents, the firm generates annual sales of $2.7 billion. Booz Allen provides services in strategy, organization, operations, systems, and technology to the world's leading corporations, government and other public agencies, emerging growth companies, and institutions.

Booz Allen has been recognized as a consultant and employer of choice. In a 2003 independent study by Kennedy Information, Booz Allen was rated the industry leader in performance and favorable client perceptions among general management consulting firms. Additionally, Working Mother has twice ranked the firm among the top 10 in its "100 Best Companies for Working Mothers" list.

To learn more about the firm, visit the Booz Allen Web site at www.boozallen.com. To learn more about the best ideas in business, visit www.strategy-business.com, the Web site for strategy+business, a quarterly journal sponsored by Booz Allen.