Conclusion 02

Conclusion 02: E-Commerce

Why implement an e-commerce system? The most common reason is to enhance customer satisfaction, which was cited by 81 percent of respondents. Companies want to increase revenues and decrease operating costs, but e-commerce still isn't contributing in a big way to most companies' bottom lines.

When it comes to e-commerce, two services stand out: Online product/service information and online transaction systems, which companies say they have invested or plan to invest in about 90 percent and 87 percent of the time, respectively. Net-based fraud/abuse management and mobile commerce come in at less than half those numbers, at 43 percent and 42 percent, respectively. The latter figure seems a solid counter to recent hype over mobile e-commerce, showing that companies have yet to invest in the arena. However, larger companies are more likely to have already implemented such systems than smaller businesses, at 15 percent vs. 6 percent.

The majority of responding companies are generating minimal revenue from their e-commerce efforts, but a growing number of firms expect those figures to improve. Only 14 percent said they had made 30 percent or more of their revenue from online sales last year, and that 14 percent is projected to rise to 20 percent this year. Next year, however, 27 percent expect to reach or exceed the 30 percent level.

The good news: 53 percent of larger companies saw their operating costs decrease through their e-commerce systems. The bad news: 84 percent had made this an objective. Results are somewhat less dismal for smaller companies, but only because their expectations were lower, with just 66 percent shooting for cutting costs. Just behind in the disappointment race: Two thirds of large companies thought they'd increase revenues, while only 45 percent saw an increase.

This article was originally published on 12-01-2001
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