The European e-Business Report 2004 - Berlecon Research GmbH

The European E-Business Report 2004Exhibit 2.8-7: Overview of e-business related opportunities and challengesin the ICT services sectorOpportunities• Improve internal processes and enhanceinformation flows• Improve customer relationship management• Extend market reach towards SMEs• Enhance procurement processesOpportunitiesSource: e-Business W@tch (2004)Challenges• Increase customer retention• Develop common standard and protocols in thesecurity domain• Design of more interoperable and easy-to-usee-business systemsImprove internal processes and enhance information flows: One of the most importantopportunities of e-business is to improve the efficiency of internal work processes and achieve respectiveproductivity gains. While this benefit is often related to manufacturing sectors, it is equally truefor ICT services. In particular, in those sub-sectors where activities are typically knowledge-based andorganised in projects, e-business solutions such as project and human resource management orknowledge management can significantly enhance the efficiencies of internal processes.Improve customer relationship management: Particularly in large companies, where customer caretasks make up for a large part of overall business processes, increasing efficiencies and decreasingcosts related to these processes can have a major impact on overall profitability.Extend market reach towards SMEs: Internet offers smaller companies the chance to make theirservices known to a global audience at low costs. As many products and services in the sector areexperience goods, making trial products (for example, free market research, trial versions of software)available over the Internet reduces typical trust problems of such goods.ChallengesIncrease customer retention: While e-business technologies can help to improve customer serviceson the one hand, they bear a certain risk of weakening customer retention on the other hand. This riskresults from a replacement of personal services by more efficient online customer self-services. Whenbuying standard software, for example, the entire process, from making the purchasing decision, toactually buying, paying and downloading the software and even to using after-sales services such asupdates or bug fixes can be conducted online by the customer without any personal contact with theselling company.Develop common standard and protocols in the security domain: European institutions andstandard organisations have tried to facilitate the emergence of common standards in the securitydomains. The growing number of virus attacks and threats and the lack of standards in theidentification and authentication applications limit data exchanges through the Internet.2.8.5 OutlookThe ICT services sector is going through a critical period of transition after the bursting of the Internetbubble. Despite a context of low sales, ICT services companies keep on implementing e-businessapplications to gain productivity, as well as developing remote communications access to deal withand transfer data to their external partners. ICT services companies still have a high IT investment ratecompared to other sectors. As the economy is becoming more global with cheaper communicationsprices, ICT services companies are at the foremost position (except for electronics) to adopt moreflexible organisations and take advantage of lower labour costs in other countries. Outsourcingservices are rapidly becoming involved in this process of cost reduction.160