What Do You Want?

International survey reveals different expectations for B2B initiatives

Broomfield, CO  April 2, 2001  Adoption rates of B2B e-commerce among developed countries vary widely, but the majority of companies worldwide expect their solutions to pay for themselves within two years, according to a global survey sponsored by Izodia, an international provider of B2B e-commerce software solutions and services.

Respondents to the global survey, released today by Izodia (formerly Infobank), indicated that 50 percent expected a return on their investment (ROI) within one year and 83 percent said they expected their B2B initiatives to pay for themselves within two years. Respondents from the manufacturing sector were the most aggressive, with 47 percent demanding a ROI in one year.

Even more surprising were the wide variances in the rate of adoption between countries. The United States and Holland led the way as early adopters of B2B initiatives, while South Africa and Italy reported dramatically lower rates of adoption. Furthermore, certain sectors (such as the finance industry in Germany) reported lower than expected adoption rates of B2B models.

When asked about their top priorities in implementing B2B initiatives, respondents  regardless of location  cited the ability to integrate B2B platforms with legacy back-office systems, speed of implementation and value received for the cost of software systems as their top criteria.

"The survey results are clear when it comes to B2B. Regardless of their location, companies will not tolerate B2B solutions with expensive price tags that do not integrate with existing systems," said Anthony Stepanski, Izodia's president and CEO. "This survey proves our belief that e-commerce is not a one-size-fits-all approach."

A portion of the survey focused on the rates at which companies worldwide intended to pursue B2B e-commerce initiatives. The survey found the following results around adoption rates among various countries:

  • Not surprisingly, the U.S. market is more advanced than the largest European markets in terms of adopting B2B e-commerce initiatives, with 75 percent of U.S. companies surveyed indicating they were either in the process of embarking on or already had adopted B2B e-commerce initiatives.

  • The United Kingdom followed closely, with 69 percent in various stages of B2B initiatives. Distant fourth and fifth was Germany and Sweden, respectively.

  • In last place for adoption was Italy, where more than half of the respondents said they had no plans to launch B2B initiatives. When asked about the perceived benefits of B2B e-commerce, the majority of  Italian companies who responded indicated they saw no benefit.

  • South Africa also shook out as a late adopter, with 25 percent of respondents indicating they had no immediate plans for B2B.

  • Of the major markets, Germany (and in particular, Germany's finance sector) was the laggard, with 21 percent saying they had no plans to initiate an e-commerce venture. In Germany's finance sector, more than 41 percent said they had no plans to pursue a B2B e-commerce project.

Cost savings, automating the supply chain and the ability to behave as both a buyer and seller were just a few of the most valuable benefits of B2B e-commerce identified by all companies surveyed. The top findings are highlighted below:

  • Seventy-eight percent of respondents rated cost savings through automated procurement processes as the largest benefit of B2B. In second place with 67 percent was the ability to mobilize the supply chain.

  • In the United States, 85 percent of respondents cited the ability to connect to other marketplaces as the biggest benefit of B2B. This contrasts with only 42 percent of Swedish respondents, who placed greater value on the ability to conduct collaborative commerce.

  • Respondents in the United Kingdom cited the ability to mobilize the supply chain and provide management tools that analyze B2B activities as the most important benefits to e-commerce. That supports a separate finding that UK companies were 72 percent more likely to implement B2B initiatives up and down the supply chain.

Regardless of how companies plan to benefit from B2B e-commerce or how fast they expect to experience a ROI, 56 percent cited the ability for a B2B solution to integrate with other back office legacy systems as the No. 1 priority. Of those who have already implemented a B2B solution, 64 percent ranked open integration as of one of the top three criteria for selecting their platform. Other findings include:

  • Half of all respondents identified support for multiple trading models as a top priority. Support for multiple platforms came in third overall, with 47 percent citing it as a top concern.

  • U.S. companies placed more emphasis on integration as a top feature, at 64 percent. Also in the United States, 60 percent rated support for multiple platforms as a top feature, compared with 47 percent globally.

  • In Germany, 60 percent rated support for multiple trading models and connection to other marketplaces as two of the top three features, versus 49 percent who placed priorities on those benefits globally.

  • Worldwide, manufacturers placed a higher priority on issues, like catalog creation and logistics.

  • Overall, features such as auctioning were generally not seen as a top priority for B2B.

"As we enter a new era of adoption of B2B e-commerce globally, we must take into account the needs of customers from a financial and technical perspective," said Izodia's Stepanski. "At Izodia, we have built our solutions and developed an approach to B2B e-commerce that is sensitive to those needs."

Independent information technology research consultant Vanson Bourne conducted telephone interviews with 360 executives in companies with annual revenues below $700 million in the United States, Germany, United Kingdom, Italy, Sweden, Holland and South Africa. Companies equally represented three key industry segments: manufacturing, retail, and distribution and finance.

Participants were asked about their company's adoption of B2B e-commerce, the benefits they expected to derive and the timetables for which they expected to implement B2B initiatives. Participants also were asked to outline their top priorities when faced with implementing B2B e-commerce ventures and their expectations for ROI. A copy of the full survey report is available on request.