Even in the midst of a jittery economy and a parade of dot-com disasters like Go.com, the vice president of e-business for Eastman Chemical is doing e-business like it's 1999ââ,¬"not 2001. This year, Buehler will spend more, do more and devote more people to the company's e-business efforts than ever before. In a slowing economy, he's moving more quickly.
And, surprisingly, he's not alone. Despite the well-publicised gloom and doom, companiesââ,¬"many of them traditional brick-and-mortar playersââ,¬"are continuing to invest in the Web. To be sure, some enterprises are taking a cautious, scaled-back approach to spending on e-business initiatives, concerned about dour economic news and shakiness among their e-commerce technology vendors. In recent talks with eWEEK, however, many savvy CIOs say now is not the time to scale back on e-business initiatives. Many are increasing spending, some by 100 percent this year.
What's changed isn't the willingness to spend, but rather where the spending is going and the expected returns. Senior business managers no longer see the Web as a cure-all or a must-have at any price, IT executives say. Their take on the Web has matured.
Rather than focusing on sexy Web sites and the dreams of instant e-commerce, this year many enterprises are putting the emphasis on making supply chains more efficient, customers happier and operating costs lower by integrating e-commerce much more deeply into existing core processes and systems. They're low on sizzle, sure, but they're high on potential ROI (return on investment).
"E-business is just business," said Giga Information Group analyst Chip Glidman. "The bulk of the money companies can make in e-business is going to come from using the Web to be more efficient. People thought the Web meant the rules had all changed. They haven't. In the end, the Web must be evaluated like any other technology initiative. And this is the year that's going to happen."
For many established companies, that scrutiny is leading to one conclusion: Spending on e-business initiatives still makes sense. Overall, according to research company Cahners InStat Group, large and midsize businesses are expected to increase Web-oriented technology spending from US$49 billion last year to $110 billion by 2004.
Backing that up, a recent survey by AMR Research said 87 percent of enterprises this year will be either increasing spending on e-business or at least holding steady. Ninety-four percent said they'll be increasing or sustaining current levels of e-marketplace investments. Among e-business initiatives, only investments in intranets are declining. That's because, according to a separate report by Forrester Research, two-thirds of enterprises have completed installation of their intranets. In fact, according to Forrester, 65 percent of billion-dollar-and-larger companies are considering investing in procurement technologies this year, while 53 percent are looking at supply chain technologies.
