‘Foot dragging’ holds back electronic commerce in UK

Attempts by UK businesses to develop electronic commerce are being hampered by lack of funding and boardroom commitment, and the internal failure of company departments to co-ordinate Internet strategy.

Signs of foot dragging by major UK companies in backing e-commerce projects are contained in the second annual report into electronic commerce by consultants KPMG, which will be unveiled on Thursday this week.

The report is expected to show significant progress in the percentage of sales attributed to the Internet by leading UK companies in both the consumer and business-to-business sectors.

Last year, a cross-section of major UK companies attributed three per cent of sales to electronic promotion and ordering systems, which is expected to rise to five per cent of turnover this year.

KPMG will also report a major uplift in the average budget committed to funding e-commerce projects compared with last year. Then, only 59 per cent of companies reported Internet budgets for marketing activity, over half of which were under 10,000.

But Bill Hutchison, manager in charge of electronic commerce services at KPMG Consulting, says a major gap remains between “expectation and the reality” of what e-commerce will deliver to businesses.

He adds: “If companies are going to do something serious, they need high-level sponsorship from the board. If they believe their own figures for potential online sales, they will have to do more in allocating funds and co-ordinating strategy.”

New Media, page 26

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