Forfás, the State's advisory board for enterprise, trade, science and technology, has warned that Irish businesses have fallen behind their international counterparts in using e-business techniques and are missing out on higher revenues and lower costs as a result, writes Conor Lally.

In a new report - e-Business: Where Are We And Where Do We Go From Here? - the agency says while awareness of the internet is very high among Irish firms, many businesses simply use the web for e-mail and sourcing information and have failed to apply technology in more sophisticated ways such as supply chain management, banking and paying bills.

Mr Declan Hughes, manager of e-business policy at Forfás, said Irish firms were now lagging well behind best practice internationally when it came to applying technology. He believes businesses in the Republic must now turn high awareness of technology into action in the workplace.

"Around 80 per cent of businesses in Ireland have access to the internet so the awareness is good," he said.

"But beyond e-mail and sourcing information, a lot of companies have failed to use technology in more sophisticated ways. For example, in supply chain management only one-third of Irish businesses are using technology and in banking and payments it's under 20 per cent when in places like Sweden, Denmark and the Netherlands it is 70 per cent which would be best practice."

There was now a perception in Ireland that e-business was less important since the demise of the dotcom sector and this has been fuelled in large part by the relative failure of internet retailing and distribution businesses, he added.

The Forfás report shows that firms that use e-business effectively can generate revenue increases of 10 to 20 per cent and cut costs by between 20 and 45 per cent. The report also warns companies and countries not responding dynamically to the challenges that e-business brings, may find themselves at a competitive disadvantage relative to e-enabled companies and countries when the world economy improves.

The agency is calling for a "an overarching legislative and regulatory framework for e-business" to be put in place. It said the roll-out of a comprehensive broadband network should be accelerated and that Irish businesses should invest further in e-business by integrating information and communication technologies into their business processes.