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Large
Firms Will Boost Internet Spending to $84 Billion
Although large enterprises (more than 1,000 employees)
are not necessarily using their web sites to sell their
wares, they are investing heavily in the Internet to improve
customer relationships and reduce operating costs, according
to a report by Cahners In-Stat Group. "Having made substantial
investments in offline distribution channels, large businesses
are inclined to leverage these key resources as much as
possible," says Kneko Burney, director of market segmentation
for Cahners In-Stat Group.
To large enterprises, Web selling and marketing capabilities
are a means to improve the effectiveness and efficiency
of offline resources including sales people. Vendors targeting
large firms should focus on Web-based customer relationship
management (CRM) and sales force automation (SFA) solutions
that can be integrated with and used to optimize existing
offline resources, Burney says.
The Internet has quickly evolved into a vehicle for businesses
to communicate with customers, partners, and employees
at any time from any place. This trend has spurred a flurry
of investment in Internet technology. Cahners In-Stat
Group estimates that large companies invested more than
$33 billion on information technology to support Internet
initiatives in 1998. By 2002, large firms will invest
more than $84 billion, roughly 20 percent of their total
technology spending, on Internet technology.
Large companies more and more are using the Internet
to streamline their supply chains. These firms typically
have hundreds of suppliers making it difficult to manage
relationships with each one and creating a huge challenge
to quickly find suitable suppliers for new products. Companies
are constantly seeking ways to speed up communications
and product delivery between themselves and suppliers.
The Internet is emerging as a means to achieve speedy
communications at a low cost. Vendors targeting large
company customers should help these firms use the Internet
to better communicate with supply chain partners, either
through Internet-based electronic data interchange (EDI)
or via powerful online trading networks.
Web sales accounted for less than 10 percent of large
company revenues in 1998. Large firms are optimistic about
their Web investments, however. Companies of more than
5,000 employees expect to earn more than 17 percent of
their revenues via the Internet by 2000.
The three key groups involved in the development of
Internet strategy and investments are senior management,
IT and marketing. Within large firms, Internet business
strategies are usually hatched within distinct operating
units and then empowered by senior management on a company-wide
scale. The IT department is responsible for executing
the Internet strategy cost effectively.
Given this arrangement, vendors selling technologies
and services designed for the Internet will have to target
and speak to all three groups, as each are involved in
the decision-making process. Each group should be addressed
individually as their priorities and technical knowledge
will vary. Key messages relevant to all three groups are:
timeliness to market, scalability, reliability, and flexibility.
Report
Information
The
Internet has quickly evolved into a means of communicating
with customers, partners and employees 24x7x365. This
always-available access to vital information and resources
has spurred a flurry of investments from these firms to
build their Internet infrastructure up and out. This report
provides a comprehensive analysis of the enterprise market
focusing on Internet usage and penetration (by size of
business and vertical industry), Internet spending, E-mail
applications and drivers, Internet commerce infrastructure
and decision-maker influences. In-depth forecasts are
included.
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