Too early to crow over our flight into e-commerce

By ROB O'NEILL*

The Government may be feeling chirpy with its PR triumph over the business community at last week's e-commerce summit. There was an undeniable sense of positivity about the event.

But among all that rah-rah came some dubious claims about New Zealand's position in the wired world.

Some said we were among the leaders in the region, which is true. Others, mainly from the Government and including Prime Minister Helen Clark, said we were the leaders, or at least ahead of those darned Aussies.

Unfortunately, that isn't true.

An array of statistics was presented at the summit - the number of internet connections, number of hosts, number of secure hosts, number of domain name registrations - and some interesting analysis of advertised web addresses.

But no one really got inside the questions of what business was actually doing online.

What are our online capabilities? What percentage of businesses can accept online transactions?

What percentage have integrated database capabilities? And how does that compare with, say, Australia?

Let's face it, this was an e-commerce summit, not an e-mail summit and not a website summit. Who is actually doing e-commerce?

Strategic Research polled the top 1500 businesses in New Zealand and the top 4000 in Australia at the end of last year. Just under 10 per cent responded to both surveys.

The bad news is that we trail on all significant measures, whether it is the percentage of businesses with websites, the percentages transacting or the percentages allowing online access to billing information.

These issues need to be addressed.

The survey also asked what the major challenges were for online business.

In Australia and Southeast Asia the main challenge was security by a narrow margin over the business model. In India it was infrastructure issues. But in New Zealand the major challenge was, by a country mile, the business model.

Defining an online business model that will deliver a tangible return on investment and a competitive advantage is always hard. But to do it in our tiny market is very hard.

Further, justifying the case for e-commerce investment has just become a whole lot harder. According to research from MIS magazine, over 80 per cent of organisations have already felt the impact of the declining dollar on their IT budgets.

Many are now talking about scaling back IT projects. The dollar's decline has come at a bad time. Many projects were postponed due to Y2K. They can't be put off any longer.

* Rob O'Neill is a research analyst with Strategic Research. Contact him at robo@strategicpublishing.com.

Herald Online feature: e-commerce summit

Official e-commerce summit website