Time For E-Business Tools?

Time For E-Business Tools?

TechTransform, January 4, 2002: It's a good thing that, by recent survey, 83% of businesses are planning to begin new e-business* projects in 2002. Boy, do they need it!

Consider this:

According to a recent Jupiter Media Metrix survey, 45% of online shoppers choose e-commerce sites based on word-of-mouth recommendations, yet only 7% of companies are implementing tools that allow them to identify "viral influencers" through e-mail pass-along rates.

Jupiter Media Metrix also says 63% of businesses base loyalty on spending habits and order sizes, but only 13% of companies measure customer satisfaction. That shortsighted approach alienates valuable, lower spending consumers who may make recommendations to others.

Finally, the December 2001 Customer Service tracking report from Jupiter Media Metrix finds that although 57% of US consumers polled in November felt that the response rate to customer service e-mail inquiries would be a deciding factor for using the site again or not, only 33% of online-only retailers responded to such e-mails in December within a six-hour time frame. Additionally, only 28% of brick-and-mortar websites responded to customers' e-mail inquiries within six hours. ]

Jupiter also found that 40% of online-only retailers responded after three days...or not at all.

What does this mean?

In 2001, many businesses tried to hold off on IT spending. But e-business works, sometimes dramatically, to create markets and productivity, and to reduce costs. This will drive businesses to spend money on IT, and specifically on e-business, in 2002.

This good news comes too late for many vendors who disappeared in 2001-2002. For those left, there will be plenty of business, but because demand will outstrip budgets, terms will be very demanding**.

For businesses, the problem will be prioritization and planning. It may help to look at what other enterprises are thinking, as reported in the Line56 survey:

TOP 5 E-BUSINESSES THAT WILL GET BUDGET INCREASES IN 2002

Percentage of companies planning to increase spending in these areas:

Business intelligence/analytics	54%
Content management/catalog	51%
CRM/sell-side e-business	48%
Electronic payment & settlement	45%
Enterprise Application Integration (EAI)	42%

Smallest e-business budget increases: private and public exchanges; direct and indirect procurement; and Enterprise Resource Planning (ERP).

Source: Line 56, A.T.JKearney Joint Research, November 2001

The full study is available from Line56.

We will continue to report on developments in this important sector.

Riggs Eckelberry

Updated January 17, 2002

(Thanks to Line56 for the survey; Greg Jarboe for his Iconocast article, and Ken Rutkowski's Daily Tech News Clicks for these gems. Greg's article is particularly helpful in pointing to solutions.)

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* E-business: a range of online activities spanning procurement;supply-chain management; customer relationship management and sell-side e-commerce; business intelligence; Web services; enterprise resource planning; content management; and integration.

** "One clear warning lies in waiting: when economic recovery begins, rising demand for IT will outstrip the IT budgets set during leaner times." Diane Tunick Morello, vice president and research director for Gartner, as quoted in Cyberatlas.