Study: Firms Not Using E-Business Applications

By Peter Strozniak A study of 120 U.S. industrial-equipment manufacturing companies says that less than half of these firms utilize e-business applications to improve their business functions. A little more than 53% maintain Web sites but only to provide information about products and services, according to a study by Roland Berger & Partners LLC, Troy, Mich. The remaining 47% have implemented more sophisticated e-business methods: 1% have adopted Internet-based technologies for all internal and external processes; 11% have developed an integrated system that connects product development, supply-chain planning, sales, and customer-relations management; and 35% have taken the first steps into electronic procurement and are making a gradual shift to a paperless order-to-delivery system. So why are these industrial-equipment manufacturers slow to adopt e-business applications? Coauthor of the study, Reinhard Geissbauer, who heads Roland Berger's Industrial Equipment/High Tech Competence Center in North America, believes there are two reasons. First, there is a lack of awareness about what e-business means and how it can be applied. Secondly, companies are struggling with daily issues to maintain competitiveness. "When you look at the industrial-equipment manufacturing industry there is a lot of competition coming in from Asia and Europe, and the [strong] U.S. dollar has not helped," says Geissbauer. "They are really under a lot of negative pricing pressures, and they also have the problem of finding skilled labor. They are so immersed in those problems that they are not turning their eyes to what is out there to solve these problems. Almost daily they are putting out fires and are not strategically thinking about e-business." The report partly focuses on the best practices of the 47% of industrial-equipment manufacturers that are extensively using e-business applications to improve their operations. The study includes companies such as Ingersoll-Rand Co., Honeywell International Inc., John Deere Co., Dana Corp., and Otis Elevator Co.

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