E-Business Technology Adoption in Canadian Sectors

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E-Business Technology Adoption Assessing B2B and
e-Procurement in Canada
Sandra Charles Raymond Lepage Presentation for
the OECD Electronic Commerce Business Impacts
Project (EBIP) Workshop October 29-30, 2001 Rome,
Italy
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E-Business Technology Adoption Assessing B2B and
e-Procurement in Canada
Outline 1. Introduction 2. Findings related
to B2B and e-procurement 3. Policy
considerations 4. Issues to be addressed in
future research
3
"SMEs are connected, but not yet leveraging
Internet technology fully for real productivity
improvement... (Canadian E-Business
Opportunities Roundtable)
E-Business Adoption in Canada 2000

• E-Business adoption is concentrated heavily in
  urban Canada, larger provinces and larger
  companies
• Slow pace of e-commerce development, particularly
  the uneven pattern of growth regionally and
  within Canadian industry threatens to lead to
  digital divide
• Canadian SMEs continue to fall behind their U.S.
  counterparts when it comes to embracing
  sophisticated e-business applications
• Canadian organizations will be under increasing
  pressure to convert at significant cost

Source Survey on Electronic Commerce and
Technology, Statistics Canada
1. Introduction 2. Findings related to B2B and
e-procurement 3. Policy considerations 4. Issues
to be addressed in future research
4
Anecdotal and statistical evidence in e-business
transformation are crucial to the development of
appropriate policies

• Anecdotal evidence
• Case studies
• OECD Case Studies (6 sectors)
• Other Sectoral Case Studies (Academics)
• Statistical evidence
• Survey on Electronic Commerce and Technology 2000
  (SECT)
• Data on business transformation/Supply chain
  transformation
• Business-to-Business sales
• Purchasing online
• Purpose for using the Internet
• Canadian Leaders Surveys
• Data on e-procurement/Attitudes toward
  e-procurement
• Drivers and barriers
• Proportion of total purchasing

1. Introduction 2. Findings related to B2B and
e-procurement 3. Policy considerations 4. Issues
to be addressed in future research
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Fact 1 - Only 18 of Canadian firms are
purchasing online
E-Procurement Adoption By Canadian Sectors 2000

• Business-to-business transactions were the
  fastest growing segment of e-commerce in 2000.
  They accounted for 80 of total Internet sales
  or 5.8 billion
• Canadas private sector is using e-business
  technology
• 42 to access database of suppliers
• 32 to share or perform collaborative research
• 23 for training and education purposes
• 15 to access customer databases
• Almost half of Canadian public organizations are
  purchasing online (49.1)

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Online purchasing remains low in Canada
Source Survey on Electronic Commerce and
Technology,
Statistics Canada
1. Introduction 2. Findings related to B2B and
e-procurement 3. Policy considerations 4. Issues
to be addressed in future research
6
Fact 2 - Small firms are slow to adopt
e-procurement technologies
E-Procurement Adoption By Size of Firms 2000

• More than half of Canadas largest firms have
  implemented some e-procurement processes in their
  commercial activities. Leading sectors include
• Accommodation and Food Services (95)
• Information and Cultural Industries (81)
• Transport and Warehousing (81)
• Among the smaller firms, the percentage of firms
  purchasing online varies significantly between
  sectors. Leading sectors in 1-19 FTE category
• Information and Cultural Industries (55)
• Educational Services (45)
• Professional, Scientific and Technical Services
  (36)

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Most private sector Internet B2B transactions and
online purchasing are conducted by large
enterprises
Source Survey on Electronic Commerce and
Technology,
Statistics Canada
1. Introduction 2. Findings related to B2B and
e-procurement 3. Policy considerations 4. Issues
to be addressed in future research
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Fact 3 - E-procurement is on the radar screen
but fails to be implemented

• Top Leading Canadian CEOs
• 53 will procure online in the next two years
  while only 6 percent said that they had no plans
  to procure online
• 42 said that online procurement was among top
  7-10 strategic issues while 22 said that online
  procurement was not a strategic issue for their
  business
• Other Canadian CEOs
• 58 have an e-business strategy
• 67 of them have an e-procurement strategy
• 37 procure online, 34 will procure online in
  the next two year while 18 have no plans to
  procure online
• 47 said that e-procurement was not a strategic
  issue for their organizations

Canadian Leader Survey on E-Procurement
90 of them have an e-procurement strategy
84 of surveyed organizations have an e-business
strategy
38 of them procure online
There is a significant discrepancy between firms
that have an e-procurement strategy and firms
that are actually implementing it
Source Industry Canada based on Canadian Leader
Surveys
1. Introduction 2. Findings related to B2B and
e-procurement 3. Policy considerations 4. Issues
to be addressed in future research
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What have we learned from the surveys and EBIP
case studies?

• Fact 1 - Online purchasing remains low in Canada
• Policy considerations
• Awareness
• Drivers of e-procurement
• Lack of skilled workers
• Availability of skilled workers
• Training opportunities
• Security and privacy considerations
• Others
• Jurisdiction
• Lack of Technology standards
• Local and sectoral constraints

• Learning from EBIP Case Studies
• Privacy issues
• e.g. General Merchandising and Pharmaceutical
  Retailing, Intelligent Manufacturing Technology
• Skills
• e.g Consulting Engineering, ICT, Intelligent
  Manufacturing Technology, Plastic Industry
• Jurisdiction
• e.g Consulting Engineering
• Awareness/Standards
• e.g. ICT

1. Introduction 2. Findings related to B2B and
e-procurement 3. Policy considerations 4. Issues
to be addressed in future research
9
What have we learned from the surveys and EBIP
case studies?

• Fact 2 - Most private sector Internet B2B
  transactions and online purchasing are conducted
  by large enterprises
• Policy considerations
• Awareness
• Drivers of e-procurement
• Choice of technology
• Costs
• Financial cost/investment
• Time
• Market structure
• Vertical integration

• Learning from EBIP Case Studies
• Awareness
• e.g. ICT
• Market structure
• e.g Retail Travel Service, General Merchandising
  and Pharmaceutical Retailing, Intelligent
  Manufacturing Technology

1. Introduction 2. Findings related to B2B and
e-procurement 3. Policy considerations 4. Issues
to be addressed in future research
10
What have we learned from the surveys and EBIP
case studies?

• Fact 3 - There is a discrepancy between firms
  that have an e-procurement strategy and firms
  that actually purchase online
• Policy considerations
• Costs
• Transition from proprietary EDI to Internet-based
  EDI
• Industrial structure
• Lack of national and international standards
• Use of multiple technologies
• Infrastructure
• Intellectual properties
• Internal culture is slow to adapt to new
  technologies
• Reluctance from management
• Lack of skills

• Learning from EBIP Case Studies
• Privacy issues
• e.g. General Merchandising and Pharmaceutical
  Retailing, Intelligent Manufacturing Technology
• Skills
• e.g Consulting Engineering, ICT, Intelligent
  Manufacturing Technology, Plastic Industry
• Standards
• e.g. ICT
• Costs
• e.g. General Merchandising and Pharmaceutical
  Retailing, Consulting engineering, Retail Travel
  Services, ICT, Intelligent Manufacturing
  Technology, Plastic

1. Introduction 2. Findings related to B2B and
e-procurement 3. Policy considerations 4. Issues
to be addressed in future research
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Statistical issues related to B2B activities in
Canada

• Statistical Gap
• Drivers of e-business adoption
• 1. ROI
• 2. Government role as a model user
• Canadian SMEs
• 1. micro enterprises I.e. 1-9 employees
• Regional distribution of e-business adoption
• 1. Local environment
• Sectoral intelligence
• 1. Detailed sectoral intelligence
• Linking of databases
• 1. Establishments vs enterprises
• 2. Research

• Survey on
• Electronic Commerce
• and Technology 2001
• New Questionnaire
• New category of size of firms
• New question of perceived benefits of e-business
• New questions on application of ICT

1. Introduction 2. Findings related to B2B and
e-procurement 3. Policy considerations 4. Issues
to be addressed in future research
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S-Curve
Emerging issues related to B2B activities in
Canada

• Research Gap
• E-business in value chains
• E-business and inter-industrial trade
• E-marketplace
• E-business and innovation
• E-business and growth

Level of Electronic Commerce Activity
Source Industry Canada
Time
1. Introduction 2. Findings related to B2B and
e-procurement 3. Policy considerations 4. Issues
to be addressed in future research
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Food for thoughts - Potential policy research on
e-business adoption

• Understanding the economic, social, cultural and
  technological dimensions of e-business
• E-business and economic growth How does
  e-business influence the relative contributions
  to economic growth? e-business and productivity
  e-business and comparative advantage e-business
  and innovation impact of e-business on markets,
  investment, industrial structure, organizations
  and labor markets Cost of e-business in rural
  and remote areas vs urban center impact of
  e-business on SMEs and on SMEs on rural
  areasetc
• Understanding the major factors which influence
  productivity, growth and innovation in firms and
  organizations
• What are the features of innovative and leading
  firms in e-business and how do they develop?
  Are these features consistent across all sectors
  and firms sizes? e-business and firms
  productivity and innovation How does
  e-marketplace evolve?What can differentiate the
  behavior of SMEs and large firms in terms of
  adopting e-business technologies How does
  e-business provide competitive edge to
  self-employed and SMEs etc...

1. Introduction 2. Findings related to B2B and
e-procurement 3. Policy considerations 4. Issues
to be addressed in future research
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For more information, Visit our Web site
www.ecom.ic.gc.caor contact us
charles.sandra_at_ic.gc.ca lepage.raymond_at_ic.gc.c
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E-Business Technology Adoption Assessing B2B and
e-Procurement in Canada