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Industry Standard

Europe needs e-commerce jolt

April 21, 1999
Web posted at: 12:58 p.m. EDT (1658 GMT)


by Jeanette Borzo

PARIS (IDG) -- In order to succeed with e-commerce, European IT managers need to react in an un-European manner.

That's the apparent finding of a report released Tuesday by Forrester Research in Amsterdam if you accept the premise that European businesses don't like to make rapid decisions or quick changes in strategy.

E-commerce growth in Europe is simply too measured, Forrester explained in the study, with e-commerce spending and staffing increasing too slowly. "Agile IT for E-commerce in Europe," recommends that IT managers promote "agility" in order to lead an e-commerce charge for their companies something which is bound to represent a significant change in corporate culture for many businesses in Europe.

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In an interview just last month, for example, Compaq's general manager for Europe, Middle East and Africa Andreas Barth summarized some European cultural trademarks. "Europeans are much more perfectionist. They won't jump into a new solution very quickly, unless they are sure it works," Barth said. Americans on the other hand, want the newest and most innovative technology and are willing to assume the risks with being early adopters, he added. In February, speakers at Gartner Group's Internet and Electronic Commerce Europe conference in Amsterdam agreed that in part, European culture has caused an e-commerce disparity between Europe and the U.S. Businesses in Europe are by nature more cautious than U.S. businesses, noted Nick Smith, a principle consultant for KPMG Peat Marwick in London.

But if European businesses don't spring to action to overcome their record of inadequate e-commerce plans, spending and staffing, Forrester said, e-commerce here will be crippled by a lack of resources, slow development and frustrated innovators.

Fortunately, the study offered a host of practical suggestions for IT managers who want to change the tradition at their companies in order to jump start their companies' e-commerce activities:

  • Seek out senior-management allies in order to win corporate support for boosting the e-commerce cause.

  • Explain to senior management that the IT department should no longer be thought of as a cost-center but rather needs to be a corporate tool.

  • Demonstrate a thorough understanding of your company's business strategy so that you can link it directly to your e-commerce plans.

  • Create e-commerce management groups made up of senior executives and IT staff.

  • Develop IT infrastructure in a modular fashion so that you can more quickly respond to changes in corporate management, budgets, and staff.

  • Staff your IT department with personnel who understand business issues.

While Forrester didn't differentiate between national markets as far as e-commerce agility is concerned, in a previous Forrester study called "Europe's eZones" listed out countries and regions at three levels of e-commerce success.

Scandinavia, the U.K., and Germany are currently doing the best with e-commerce in Europe, according to the eZone study. The Netherlands, Switzerland and Ireland are all listed as countries that are catching up quickly, while other countries such as France, Italy and Spain fell into the bottom category of e-commerce success in Europe.

Recent e-commerce growth expectations for Europe vary. The European Information Technology Observatory (EITO) said last month that 15-country European Union (EU) market for e-commerce is set to explode. But International Data Corp., while admitting that Europe caught on to the Internet in 1998, said that Europeans still have a long way to go in terms of e-commerce.

Europeans are wary of purchasing products online and only 11 percent of Internet users here actually made an online purchase in the last three months of 1998, IDC said in "Internet Usage and Commerce in Western Europe 1997-2002." In 1998, e-commerce was worth 4.87 billion euros ($5.6 billion) in Western Europe, with the majority of that coming from business-to-business transactions business-to-consumer transactions accounted for just 1.61 billion euros by the end of 1998, IDC said.

By 2002, IDC expects about 25 percent of Western European Web users to buy something online. In that same year, the percentage of Western Europeans using the Internet is expected to reach 35 percent, IDC added meaning that it will reach the same level Internet penetration as there is today in the U.S. "Agile IT for E-commerce in Europe," is based in part on interviews with more than 250 Europeans: corporate IT executives, e-commerce vendors, integrators, consultants, and experts across Europe. Forrester also worked with Cambridge Technology Partners (CTP) to poll chief information officers belonging to CTP's forum on the World Wide Web.

Jeanette Borzo writes for the IDG News Service.

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