Remember the euphoric days of the burgeoning dotcoms,
when amateur entrepreneurs thought they could spin money
out of the web? Remember the consequent meltdown of IT
stocks on the bourses worldwide and the ''dotgone'' era?
those who had burnt their fingers and lost jobs may look
at it as a nightmare that has passed, a recently released
survey by research firms AT Kearney and Line56 reveals
that e-business is once again becoming serious business
across the globe with IT budgetary allocations for its
implementations showing a marked rise.
unlike in the past when e-business strategy was mainly
guided by hype and peer pressure, companies today
and tomorrow are likely to be more cautious, making
the whole exercise driven only by concrete positive results
with a customer-focus.
sample was 150 IT executives worldwide from companies
spending in excess of $250 million in revenue to develop
e-business spending benchmarks and to assess the demand
drivers and governance of e-business initiatives.
who participated in the survey include chief information
officers, chief technical officers and IT managers of
top 10 sectors such as manufacturing, government, retail,
health, medical, insurance, legal, financial services,
automotive, aerospace, military, utilities, energy, chemicals
are some of the trends that were revealed by the survey:
spending now exceeds 20 per cent of the entire IT budgets
compared to 17.5 per cent in 2001 and 19.3 per
cent in 2002.
e-business spending will grow at 2.5 per cent
and companies spending more than 20 per cent of IT budgets
on e-business are predicting even larger growth.
and infrastructure get the largest slice of the e-business
pie results reveal that companies are spending,
on an average, 16.4 million on e-business networking
and infrastructure, $15.2 million on e-business applications
and $11 million on e-business tools.
investments still take the largest portion of funding
the following areas are attracting the greatest
slice of company spend, despite hype around areas like
mobility solutions and web-services:
E-business networking / infrastructure: server H/W
($3.3 million), server S/W ($2.3 million) Database
E-business applications: ERP ($3.2 million), portals
($2.7 million), SCM ($2.5 million), CRM ($2.5 million).
E-business tools: content management ($1.8 million),
document management ($1.6 million), analytics ($1.4
investment lags user demand.
in governance: E-business centralised with corporate
e-business management is most commonly centralised
within the corporate technology organisation. Outsourcing
is the most common form of management but is expected
to double within the next three years.
the e-business environment companies with
centralised e-business units had a greater extent of
standards definition and adoption across all of the
mandate required in all categories of e-business,
a ''corporate mandate'' is the most effective way of achieving
the cost of e-business initiatives centrally
purchased e-business technology is most commonly fully
absorbed by the central e-business / IT unit rather
than being charged out to internal customers.
relationship management (CRM), which was a ''hot button''
in the earlier phase, has declined in overall importance.
However, CRM showed a stronger position in among smaller-sized
companies, says the survey. While CRM come in at 16 per
cent of the application budget overall, but in companies
with less than $1 billion business the figure jumped to
23.7 per cent.
survey also explores at length the idea of e-business
governance and found that management of e-business is
now most commonly centralised within the corporate technology
organisation. These findings differ significantly from
a 2001 Line56 research, which found that e-business was
predominantly governed within operating units or as standalone
units. This shift in the governance of e-business is,
however, consistent with the future re-organisational
trend towards centralisation that was revealed in the
was also revealed that centralised e-business units are
not only becoming more prevalent, but their roles are
also expanding, and that those companies with centralised
e-business unit are not only more likely to have standards
definition, but are also more likely to gain adoption
of defined standards.
survey also found that e-business investments are made
to follow with user demand 74 per cent of the time which
also revealed a paradox: companies that first sense or
predict demand and then invest also find that in the end,
user demand has often not met investment levels.
are, therefore, on the threshold of an interesting era
of e-business but with the difference a
more cautious careful era, where doing business through
the electronic medium is driven by hard-nosed business
results rather than just an idea.