The European e-Business Report 2004 - Berlecon Research GmbH

The European E-Business Report 2004then exploit its position by charging monopoly prices. Thus, it will also be important to monitor thestrategy and pricing policies of industry-specific platforms like SupplyOn.Lock-in effects are not very problematic as long as there is no superior alternative to such a scenario.For example, a “lock-in” to the e-business paradigm of doing business is fine as long as no otheralternative exists that would yield a higher pay-off to enterprises. Alternatively, if a firm gets locked-into the best technology provider in the market, this should also not be problematic as long as thetechnology provider does not gain a monopoly position and abuses its market power. What is,however, important for enterprises is that they should be aware that investments into e-businesstechnologies are likely to be subject to network effects and possible lock-ins. They then need tocarefully evaluate whether such lock-ins could lead to disadvantages or not.2.4.5 OutlookThe Internet is currently an important enabler of innovation in the transport equipment manufacturingsector. Many firms actually make use of ICT to conduct process innovations or to offer new productsor services to their customers. In fact, about two thirds of all process innovations in the sector in 2003appear to be directly related to or enabled by Internet-based technology. Thus, e-businesstechnologies and the Internet do begin to have a significant impact on enterprises and theirperformance. However, most firms in the sector have not yet taken full advantage of all opportunitiesthat e-business technologies offer to improve their business. It can be expected that e-business willcontinue to gain acceptance in this sector, primarily as a strategic device that helps firms to makeinternal processes more efficient, to save costs, and to comply with the new communication andbusiness standards that are currently developing in this industry.Exhibit 2.4-8: Overview of e-business enablers and barriers in the transport equipmentmanufacturing industryEnablers• Competition• Access to technology• Positive network externalitiesBarriers• Implementation costs• Need to re-engineer business processes• Lack of e-business skills and experience• High endowment with EDI• “Battle of power” between OEMs and suppliers• Return on investment issuesSource: e-Business W@tch (2004)Enablers: factors that could drive e-business adoptionCompetition is intense in the transport equipment sector, both among OEMs and their suppliers. Thisleads to a rapid imitation of innovations and, hence, to a continuous search for new diversifyingfeatures, cost-saving techniques and opportunities. E-business provides a set of powerful tools forthese objectives and can thus become an important competitive factor.Access to technology does not appear to be a problem for many companies. The sector exhibits ahigh endowment with basic ICT infrastructures that are a necessary prerequisite for participation in e-business. In addition, the increasing use of e-business technologies by many firms in the sectorprovides positive network externalities to other potential e-business adopters. Often, firms decide toadopt certain technologies primarily because some of their most important business partners also usethem. Also, there can be knowledge and experience spill-overs between firms via communication oremployee migration. Finally, some e-business technologies and services have reached critical massand therefore become attractive for enterprises that had previously chosen a “wait-and-see” approach.120