According to a new study by Benchmarking Partners, a majority of leaders of consumer and industrial market companies believe that e-commerce is critical to their ongoing success but do not have funded strategies or a decision maker in place.
Moreover, the funded initiatives that do exist tend to be tactical, rather than strategic initiatives across an enterprise.
Need For Decision Makers
The study, funded by research and consulting firm KPMG, was conducted through in-depth interviews with business executives responsible for e-commerce activities at 48 companies.
Participants represented a cross-section of responsibilities, including operational units, e-commerce units, and marketing and IT organizations. Seventy-eight percent of the corporations interviewed reported revenues greater than $1 billion (US$).
The companies interviewed represented nine industries, including automotive, aerospace and defense, chemicals, consumer-packaged goods, food and beverage, industrial, retail, transportation, and utilities.
While 65 percent of those surveyed indicated that e-commerce is one of their most important initiatives, only 26 percent of the companies could point to one centralized decision-maker for e-commerce.
“Typically, responsibility for e-commerce was scattered throughout the organization,” explained Debra Hofman, managing director of Benchmarking Partners.
“What we found is that most e-business activities are very customer-and revenue-driven, which is a fundamental change from past technology-enabled projects focusing on internal operations and cost reduction. This brings a new set of decision-makers to the table, such as sales and marketing executives.”
The study also found that only 40 percent of those who serve as the “decision maker” actually control the e-commerce budget.
“Rather than being involved in the strategic applications for e-commerce, those with the [decision maker] title are more often involved in governance, coordinating common “look-and-feel” for corporate Web sites, standards for tools and processes, and defining, helping, or motivating others to define strategy,” continued Hofman. “Additionally, almost 75 percent of the activity we saw was in the business-to-business arena.”
The study also found that only 50 percent of the companies surveyed were able to identify total enterprise-wide e-commerce spending, and only 21 percent were able to identify spending by initiative.
Additionally, of the companies that could identify spending by initiative, spending per initiative ranged from $15,000 for Web site enhancements to $50 million for an e-procurement capability integrated into an Enterprise Resource Planning system, with the majority falling in the range of $500,000 to $4 million.
Finally, of the nine industries in the study, the chemicals and consumer packaged goods industries led the pack in the amount of e-commerce activity.