ICT and e-Business in the Pulp, Paper and Paper ... - empirica

Pulp, paper and paper products
Cooperative initiatives should involve not only the companies that trade with each other,
but also third party service providers such as ICT companies (e.g. local representatives of
software providers), banks and other payment solution providers. All of them are e-
business stakeholders; the policy focus would basically be in aligning the interests of
these stakeholders towards a common goal. Such initiatives could also be used to
clarify certain open legal issues regarding e-invoicing (see Section 5.2.2).
Promote the development of affordable ERP modules for SMEs
The e-Business Survey 2006 confirmed that ERP systems are still mostly used by large
and medium-sized enterprises. In the P&P industry, about 70% of large firms have an
ERP system, about 45% of medium-sized ones, but less than 20% of small firms (see
Section 3.4.1). Figures are similar for other manufacturing sectors, e.g. the food &
beverages industry. As also illustrated by case studies presented in this report, ERP
systems play an important role for B2B e-business processes in this industry (see Stora
Enso, ICT for Production Tracking, VPK Packaging). The implementation of an ERP
system constitutes a major turning point in every company, as this move has significant
impact on work processes, and can require substantial investments.
ERP software providers have frequently been confronted with criticism that they have
mainly catered for large firms, while not developing suitable packages for the requirements
of smaller companies. The situation has changed over the past few years, since
the large company market shows signs of saturation. This has forced software firms to
make changes in their business strategy and increased competition in the segment of
SME oriented solutions, with positive effects on prices. 124 Anecdotal evidence confirms
this development, which might even trigger serious internal change processes in large
software firms in the short and medium term. 125
Depending on the particular type of solution proposed (e.g. packaged versus customised)
and the extent of consultancy services necessary for successful implementation, the total
actual investment for ERP solutions – even for packaged ones – can vary considerably.
In principle, this should remain a market-driven development. However, a faster
deployment of ERP systems among medium-sized and small enterprises would create a
much broader base for e-business (not only in the P&P industry), and this could drive
process efficiency and productivity gains in European enterprises. If more companies
engage in advanced forms of e-business, a snowball effect may set in and aggregate
effects on the industry level surge – cf. Mecalfe's law. 126 Against this background,
mechanisms to enhance and accelerate this development could be considered.
124 Current developments in the ERP systems market are also discussed in the e-Business W@tch
Sector Study on the Food & Beverages Industry (2006), Section 4.1 ("Internal process
automation"). This report is available at www.ebusiness-watch.org ('resources').
125 See for instance: "SAP buhlt um den Mittelstand", in: Computerwoche, 10.3.2006, p. 1;
"Kampf der Kulturen", in: WirtschaftsWoche, 20.3.2006, p. 58-64
126 Metcalfe's law states that the value of a telecommunications network is proportional to the
square of the number of users of the system (n²). This can be applied to B2B e-business: if
more companies engage in advanced forms of e-business, the increase in value and effects will
be disproportionally high.
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