The Plunge Not Taken

By now, it’s no secret that e-commerce is big business, but that doesn’t mean corporations have hit the ground – or the Web – running when it comes to ramping up their e-commerce capabilities. In fact, a surprising number of companies haven’t even begun to tackle e-commerce projects.

Such e-commerce lethargy flies in the face of industry analysts who predict e-commerce activity to continue to skyrocket. The Yankee Group, a Boston-based analyst company, anticipates that companies will, on average, purchase nearly 30 per cent of their goods and services electronically by 2004. In some industries, that number could hit 50 per cent. And in 1999, only 2 per cent of maintenance, repair and operating (MRO) supplies changed hands via the Internet, whereas The Yankee Group estimates that by 2004, that number should hit 40 per cent.

Another industry watcher, Meta Group in Stamford, Conn., polled 357 U.S. companies with annual revenues of US$100 million or more. That survey indicated that companies are not getting out of the e-commerce blocks as fast as its growing popularity would suggest. Of the companies surveyed, only about 10 per cent are spending more than US$5 million a year on e-commerce, whereas 65 per cent aren’t even spending US$1 million per year on e-commerce.

In such a Web-obsessed business environment, it’s difficult to understand why those investment numbers are so low. One reason might be the tight labour market for IT professionals. Among Meta’s survey respondents, a plurality (24 per cent) indicated that staffing tops the list of e-commerce investment needs.

Apparently, technology concerns have taken a backseat to people problems.