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

Pulp, paper and paper products
The overall trend appears to be that more services will be outsourced in the future.
Asked whether outsourcing would increase, decrease or remain the same in 2006/07
(compared to 2005), about 30% of companies from the P&P industry anticipated an
increase, and only very few companies (5%) said that outsourcing would rather decrease.
Exhibit 3-5: Outsourcing trend: percentage of companies that have increased / decreased
their outsourcing activities in 2005
-10 -5 0 5 10 15 20 25 30
Pulp & Paper (EU-10)
-5
29
All 10 sectors (EU-10)
-3
26
Outsourcing has decreased
Outsourcing has increased
Base (100%): Companies that have outsourced ICT services. N (for sector, EU-10) = 145.
Weighting: in % of firms. Questionnaire reference: B7
Source: e-Business W@tch (Survey 2006)
ICT expenditure and investments
The average ICT budget of a company in the P&P industry, including hardware,
software, services and personnel, corresponds to about 5% of total company costs (see
Exhibit 3-4 above). Close to 20% of all firms in the P&P industry plan to further increase
their ICT budgets in 2006/07, compared to the current budget. About 10% say that they
will cut down on their budgets (see Exhibit 3-7). A majority of about 70% say that they will
maintain their current level of spending.
Large firms in the sector appear to be significantly more inclined to cut down on their
ICT budgets than smaller firms. Close to 20% of the large companies said that they
would decrease budgets; this is twice as much as on average in the 10 sectors studied
this year by e-Business W@tch – in total, about 10% of the large firms plan budget cuts.
Moreover, the share of large companies with an expansive ICT strategy (at least in terms
of budgets) is also lower than on average.
Although results should not be over-emphasised, since the number of cases on which
this observation is based is rather low (N = 66), it is still significant as a probable trend.
There is no easy explanation why large players from the P&P industry appear to act
against the overall trend. On the contrary, new developments, e.g. in RFID technology
and e-marketing, and the increasing use of ICT for quality assurance and in production
processes (see case studies in this report) could rather signal demand for investments
and extended budgets. On the other hand, some investments in e-business technologies
have reached a mature status in large firms (e.g. ERP implementation and system
integration) and this may lead to reduced budgetary requirements. Another possible
reason is that ICT services are increasingly concentrated in headquarters, which enables
large companies to reduce costs.
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