UK businesses are failing to work online

Conducting your business electronically might be the best way to cut costs in these difficult times but UK plc remains reluctant to get involved.

According to B2B vendor Ariba the level of business conducted electronically in the UK is falling well short of a 20 per cent target set by analysts.

While early analyst statistics estimated that take up would hit the 20 per cent level by 2003, leading IT suppliers including Dell and Microsoft believe the real figure remains significantly lower.

"It depends on how you cut the cake, what do you consider to be an electronic transaction? If you include email transactions then it's probably about 20 per cent," said Mark Buckley, server solutions marketing manager with Microsoft.

Buckley's opinion is shared by many other IT suppliers who all widely agree that businesses are stretching the definition of electronic procurement to include everything from email orders to more complex XML-based e-procurement systems - thus making the business look more like the paperless ideal extolled by IT leaders than it might actually be.

For example, Dell Europe conducts 50 per cent of its business electronically, but Barry Wyse, European B2B and alliance manager with Dell, admitted this figure includes orders taken by email and orders involving a mix of electronic and manual processing.

He said: "It was hard to get to that 50 per cent, and it's going to be much harder to get to 70 or 80 per cent. We are making progress but it's going to take a long time for the market to mature."

Electrocomponents, a worldwide distributor of technical products, estimated that it does less than 10 per cent of its UK business via e-procurement. This figure falls even further in other European markets.

While take up has been highest in the high-tech industry, other sectors, particularly the public sector, continue to lag behind.

All sectors have been hard hit by the downturn of the past nine months, said Microsoft's Buckley, which could explain the lackadaisical approach.

He claimed B2B take up has been set back 18 months as companies adopt a wait and see attitude.

"Since 11 September a lot has changed. Companies are more focused on security than volume of transactions. Many companies are viewing this as a gap year to review what they already have."

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