Technology stampede slows to a stroll

By KARYN SCHERER

Businesses are becoming increasingly sceptical about the benefits of electronic technology, according to a survey published this week.

The survey of 445 mostly small and medium-sized businesses by accounting firm Deloitte Touche Tohmatsu shows that while many believe technology is important, few are using electronic tools beyond an e-mail contact point and an online brochure.

While the firm has warned that New Zealand is lagging behind its major trading partners in embracing technology, it also suggests the results might simply show that many firms are becoming more realistic about its benefits.

While almost all the businesses that responded to the survey had e-mail, and nearly two-thirds had a website, only a quarter bought online.

Less than a fifth of them sold goods or services online or used electronic data interchange, and only 11 per cent used an extranet (an intranet which extends onto the Internet, allowing certain people to interact from the Internet).

The figures are much the same as last year's inaugural survey of 279 businesses, showing many organisations appear to be adopting a wait and see attitude before committing themselves to further development.

According to Deloittes, a notable trend is a general slump in spending, both current and planned.

Just over a quarter of those surveyed said they had not yet spent anything on e-business initiatives - this was well up on last year.

Nearly three-quarters said they planned to spend no more than $20,000 over the next year, and more than half said their organisation had no e-business strategy.

Cost and a lack of knowledge were seen as the major barriers.

However, the report also notes that there is a "clear cooling of attitude" towards technology.

An increasing number of the businesses surveyed were either sceptical or unsure what effect e-commerce would have on their organisations over the short and medium term.

"Businesses believe e-business will be vital for their competitive advantage in the longer term and they understand the need for engaging in e-business activities, yet few have thought about how to put it in practice," it concludes. " ... It is difficult to understand how much competitive advantage will be derived by following your competitors or offering the same capabilities as other organisations."

Deloittes has warned the overall picture is probably much worse, given that only e-literate firms are likely to have responded.

The survey, carried out during February and March, appears to contradict other published surveys which show New Zealand holding its own in the technology stakes against key trading partners.

However, it gives some support to last month's report by the Economist's economic intelligence unit which ranked New Zealand 20th out of 60 countries in terms of e-readiness.

Commerce Minister Paul Swain has questioned the Economist's survey methodology, particularly since Australia came in second.

Deloitte e-business leader Alasdair Macleod, a former energy sector director for Unisys and former head of power supplier First Electric, vowed when he took up his latest job that he wanted to stir up the business community over the issue.

However, the report appears to have a dollar each way, warning that while "the e-business tidal wave is going to leave a substantial segment of these organisations in its wake," it could be that businesses are "no longer mesmerised by the hype and just getting on with it."

It goes on to concede that a year ago the mantra was that if you did not adopt e-business, "you would die." Today a more realistic interpretation should be "adopt e-business disciplines by all means, but only if it works for your organisation."