UK boards failing to take initiative on e-business

In a scathing attack on UK plc for failing to embrace e-business, KPMG said financial concerns and a lack of confidence in staff was holding back British companies.

‘We believe that UK boards justify the current stasis because they cling to the misconception that IT does not contribute to profit, and because they may not fully understand how entry into the e-business environment could benefit their organisation. There is also a substantial lack of confidence in the ability of staff to implement and utilise new technology,’ the report said.

Some 81% of participants – chief executives and board members of UK companies – said that IT is already significantly or totally changing the way their organisations operate while 70% of IT budgets have increased since 1998 and are forecast to continue growing. ‘Even when anticipating tough times, business leaders say they would not cut back on IT expenditure, seeing this as false economy,’ according to the report.

Additionally nearly 80% of interviewees cited growing customer expectations as their greatest external pressure. And in the majority of cases (62%), IT is regarded as the optimal business tool to satisfy these expectations.

KPMG warned that without immediate action to avert the decline, the damage could be irreparable. ‘Organisations are tending to wait until they have seen the benefits of innovation being realised elsewhere – usually by a rival enterprise. If this attitude persists, there is a real danger that many companies will be left too far behind ever to catch up.

‘With just a small percentage of business leaders making a direct link between new technology and enhanced profitability, financial arguments are frequently given as an excuse for hesitating,’ the report said.

The firm also criticised executives for allowing competittors to seize the initiative.

‘Some boards are doing themselves a grave disservice by allowing financial concerns to hold them back. Although half of the business leaders claim to undertake IT decisions in much the same way as any other business decision, a conservative view of the returns offered by technological developments is inhibiting organisations’ ability to innovate. Companies are opting to stand back and allow their rivals to seize the markets, revenues and efficiencies opened up by e-business, compromising their own chances for future success.’


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