European Executives Rising to E-Commerce Challenge

Europeans are beginning to take up the e-commerce challenge, and in many cases, are reaping substantial rewards, according to a study by Andersen Consulting.

Andersen’s study “eEurope Takes Off,” found that many of Europe’s e-commerce leaders are well-established organizations that have seen significant opportunities and are beginning to capitalize on them. A similar study done by Andersen Consulting in 1998 found most companies reported limited Internet use, almost exclusively in marketing and sales. In 1999, more than one-third are applying e-commerce to procurement, logistics, finance, and even product development. Within five years, Andersen expects no fewer than 90 percent expect to use e-commerce in sales and marketing and 83 percent in procurement.

Almost two-thirds of respondents to Andersen’s survey see e-commerce offering a real competitive advantage in their marketplace today, compared to 51 percent one year ago, with those expressing a strong belief rising from 23 percent to 33 percent. An increasing number of Europeans agree strongly they have plans to use e-commerce in the future, up to 44 percent from 31 percent in 1998.

The study also found that, although the US is where e-commerce has had the greatest impact, Europe is catching up.

“There have been some very positive and encouraging changes in European e-commerce since our study last year,” said Rosemary O’Mahoney, a managing partner at Andersen Consulting. “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.”

Europe’s changing e-commerce landscape is contributing to this growth, according to the study. Telecommunications infrastructure is being revolutionized by digital, cable, and satellite services. Europe’s continued leadership in mobile technology and interactive digital television will deepen, providing high-speed connections via the Web to mobile phones and other devices, and offering significant new opportunities for business and consumers to engage in e-commerce. At the same time, Internet access costs continue to fall, driven by deregulation and competition, with more Europeans than ever going online.

“While progress has been made, there are some clouds on the horizon,” O’Mahoney said. “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 so they can succeed in the dynamic and competitive electronic economy.”

According to the survey, both European and US executives expressed concern about continuing impediments to the widespread and rapid adoption of e-commerce, particularly their organizations’ ability to transcend significant managerial, cultural, and technical issues:

  • 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
  • 83 percent of Europeans and 85 percent of US executives say their organizations do not have the culture necessary to make the changes required to compete in a new, electronic economy
  • Many Europeans see e-commerce as an isolated issue. Forty-five percent of the Europeans surveyed do not believe e-commerce offers a mechanism for tackling their key issues and challenges, compared to 34 percent of the US executives. Conversely, 41 percent of the Europeans surveyed and 59 percent of the US executives believe e-commerce is a means for tackling their key business issues and challenges
  • Strong belief in the transformational impact of e-commerce is also lower in Europe — 39 percent compared to 55 percent in the US
  • Not surprisingly, therefore, senior management commitment to e-commerce is also lower in Europe — 50 percent versus 67 percent in the US.

The study also 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.

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