Worldwide manufacturer’s embrace e-commerce

Worldwide manufacturer’s embrace e-commerce

McKenna, Joseph F

But they expect a lot in return

At the Internet Saloon, manufacturers are regulars. Here’s their typical order: “Give us a B2B, with a ROI back-up.”

Manufacturers have adopted B2B e– commerce at a higher rate than any other user sectors, but set the most aggressive expectations for a return on their investments, according to a global survey commissioned by e-commerce software provider Izodia (formerly Infobank).

The survey, “The State of Global B2B E-Commerce,” found that 66 percent of all manufacturing companies that participated in the survey had implemented or were in the process of deploying B2B initiatives. That puts manufacturing ahead of the finance and retail sectors, according to the survey.

The survey also found that while manufacturing companies are quickest to adopt B2B e-commerce, they require much faster timetables for obtaining a return on their initial investments. Of those surveyed, nearly half (47 percent) of manufacturers expected a return on investment within a year. Overall, 83 percent of respondents across all sectors expected a return on investment within two years of deploying an e– commerce initiative.

Savvy users

“We believe these figures are indicafive of the maturity and understanding of e-commerce in the B2B sector,” says Izodia CEO Anthony Stepanski. “Not only is this sector furthest ahead in terms of its adoption, but also reflects manufacturing’s appreciation for the benefits of e-commerce. These companies understand how collaboration across the entire supply chain and practices such as lean manufacturing can help to drive down costs and increase operational and financial efficiencies.”

Other findings in the manufacturing sector include:

* Manufacturing companies in the United States and Germany led the pack in terms of B2B adoption, well ahead of the United Kingdom in ongoing and completed e-commerce implementations.

* Only 10 percent of manufacturing companies had no plans to introduce B2B e-commerce, half as many as other sectors that participated in the survey.

* Over one-fourth of manufacturing companies said they were automating procurement functions first. That compares with 13 percent in retail and 22 percent in finance industries, respectively.

* Although manufacturing companies in the United Kingdom are behind in adopting B2B, the survey suggests that these companies express a higher desire to automate processes both up and down the supply chain. More than 83 percent of UK manufacturers intend to automate both procurement and supply functions, compared with 61 percent in the United States and Germany.

* The manufacturing sector cites open integration, support for multiple trading models and the ability to connect to other marketplaces as the three most important features.

* The top priorities among manufacturing companies is getting value for the money spent on B2B software and services and integrating those tools with legacy systems already in place.

Independent IT research consultant Vanson Bourne conducted telephone interviews with 360 executives in companies with annual revenues below $700 million in the United States, Germany, United Kingdom, Italy, Sweden, Holland and South Africa. Companies equally represented three key industry segments: manufacturing, retail and distribution and finance. For more information, go to http://www. izodia.com.

Copyright Adams Business Media Jul 2001

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