Open for e-business?
European companies appear to be more and more ready to do e-business, according to latest figures from Eurostat, the Statistical Office of the European Communities. Electronic business or e-business involves the use of computer networks by companies to carry out their day-to-day dealings. For many companies, setting up an internet connection is the first step on the road to e-business. In the EU in 2005, Eurostat finds that some 91% of businesses with 10 or more employees have reached this stage. In some countries such as Finland and Denmark, nearly 100% of companies can access the internet, compared to Latvia, where 25% of the business community is still without an internet connection. In addition to the internet, some companies decide to set up their own websites to increase their business presence. Although over 90% of large companies and 79% of medium-sized companies in the EU have done so, the overall statistics are much lower (61%), suggesting that there is still room for improvement, particularly among small businesses. Setting up an internal network and intranet are also seen as important components of e-business. The report finds that 65% of companies in the EU have installed a local area network (LAN), while around one third of companies use the intranet, ranging from 13% in Hungary to 46% in Belgium. The use of these solutions is particularly popular among companies in the services sector. But the e-business revolution is not just about the getting connected to the internet and setting up websites and intranets. Companies also need to get to grips with e-commerce - using computer networks for business transactions such as sending and receiving orders. While the statistics indicate that European companies are beginning to make online orders, online sales are a different matter. Overall, 24% of EU companies said they purchased items online in 2004. The best performers were the UK, with over half of the companies reporting online purchases, followed Germany, Ireland and Sweden, all with 41%. However, only 10% of European companies had an online sales service. Notable exceptions were companies in the hospitality and computer sectors. The slow development of online sales can be explained by the fact that it is more complex to put in place than purchases, as it entails a business model. The ability to integrate different business processes through automation is probably one of the key indicators of e-business readiness. Computer systems may be used to streamline and boost the efficiency of internal processes such as re-ordening of replacement supplies; invoicing and payment; and management of production, logistics or service operations. According to Eurostat, 68% of larger businesses, compared to just less than half of small businesses, have introduced one such system. The report finds that 35% of larger EU companies have automated external business processes, compared with 14% for small, and 20% for medium sized companies. Such systems are particularly prevalent among businesses in the distributive trades sector, especially in the sale, maintenance and repair of vehicles.