Businesses must understand how to make electronic commerce work for them, or risk being left behind in the commerce of the future, PricewaterhouseCoopers says in a report published today. The international consultancy says early adoption of "e-business" technologies has become a key strategic advantage.
The report, E-Business Technology Forecast, analyses a range of aspects to electronic commerce, including computer platforms and their integration with enterprise systems, payment technologies, and other infrastructure.
It highlights key e-business trends and predictions, including:
Customer service moves to the Web. While lack of bandwidth on the consumer side will initially limit this, there will eventually be two-way video interaction with customer service representatives.
Balancing "knowing the customer" with privacy concerns. Relationship management and customer retention strategies will grow, but so will concerns about privacy, and the technologies to guard it.
The rise of "infomediaries". Human intermediaries in the business chain - such as travel agents or insurance brokers - will be squeezed as customers find the most effective way to source and price some products is online. But new participants called info mediaries are emerging to capture customer information and develop detailed profiles for use by selected third-party vendors.
Currency does not go digital. Card transactions will predominate, with some growth in the use of electronic cheques. But cash will remain dominant for smaller purchases except for niche applications in the food, entertainment, education and transportation markets.
More negotiated prices on the Web. As more potential participants access the Internet, the use of negotiated pricing mechanisms will grow. The special-purpose technology available for online auctions today will be integrated into enterprise and speciality Web sites.
At a press briefing in Dublin yesterday, Pricewaterhouse
Coopers e-business specialist, Mr Dermot Walsh, said the Internet had changed the nature of commerce forever. Online shops were open 24 hours a day, seven days a week, and customers were becoming accustomed to that.
There were 150 million Internet users worldwide now, he said, with that number expected to grow to 500 million by 2003. Global e-commerce was now at $50 billion (€47 billion) a year, but would probably reach $1.3 trillion by 2003.
In the Republic, he said, there were 370,000 adults with Internet access last February, but the number of new users was rising at around 13,000 a month.
Mr Bill Bound, the company's European e-business leader, said the cultural gulf between the traditional customers and the newer, more technologically-aware firms was leading some financial institutions to open parallel businesses, addressing different customer needs.
"While chief and senior executives realise their businesses are being transformed by the Web and Internet-based commerce, they are unclear about the most effective way of moving from where they are today to becoming an e-business," Mr Bound said. "Technology is at the crux of this transformation - the best corporate leaders of tomorrow will be those who have harnessed the potential of this technology."
