E-commerce set for big boom

Banking and retailing already extensively use e-commerce

Business on the Internet is about to undergo a period of major growth, according to a report from the Deloitte & Touche Consulting Group.

Within two years, many businesses will be conducting more than half their transactions over the Internet as e-commerce grows by 300%, the study says.

So far, the benefits are largely unrealised, but that is about to change. Banking, retailing and energy are already aggressively embracing the new medium, along with the public sector.

The report says companies in Europe are trailing behind their rivals in North America, where the growth in e-commerce is twice that predicted on this side of the Atlantic.

"We are approaching a historic business watershed," said John Reeve, a partner at Deloitte Consulting UK.

"Until now, businesses have been hesitant to adopt e-commerce because of security concerns or the perception that their customers aren't using it to buy products and services.

"Now, companies are coming to the realisation that security will always be an issue, but less of a concern than missing out on a vital new channel that could provide a tremendous competitive advantage."

Among the study's main findings:

• The energy, oil and gas industry led the way, with 23% of transactions carried out over the Internet, followed by the public sector (20%), because most of their activities are business-to-business rather than with consumers.

• The big growth area is in banking and finance, where Internet transactions are set to jump from 12% to 54% within two years.

• Within two years, 70% of companies would use the Internet for business-to-business trade.

  The Deloitte Consulting 1998 Survey of Chief Information Officers, polled more than 1,000 senior executives in six industries across 25 countries.