By Timothy Prickett Morgan

According to a new study conducted between August and October of this year by market researcher MORI, contrary to popular opinion, companies in the United States are only barely ahead of their counterparts in Europe when it comes to understanding and implementing e-business applications. The MORI study, which was conducted on behalf of midrange ERP vendor Intentia International AB, the number two ERP vendor in Europe behind SAP AG and a rising star in the States, and IBM, the leading server vendor in Europe for just about as long as there has been a server business in Europe.

The MORI study asked all kinds of e-business related questions of the board directors of 100 companies each in the UK, France, Germany, Sweden and Spain, as well as of directors at 200 companies in the United States. The companies ranged in size from $50m to $1bn in those geographies and were in the manufacturing, distribution and retail sectors of the respective countries. Based on replies from the 702 respondents in the study (there was an extra company surveyed in Spain and Germany), MORI estimated that the total e-sales for these three sectors of the economy would represent about $152bn over the next two years in Europe and about $118bn in the United States.

The total, $271bn, represented about 13% of sales for the combined US and European manufacturing, distribution and retail sectors. This estimate includes both business-to-business and business-to-consumer e-sales. Given the fact that the US economy is smaller than the combined European economy, the higher e-sales revenues in Europe do not indicate a more widespread adoption of e-business in these sectors.

MORI says that the overwhelming reason why companies are gearing up to do e-business is the fear of being knocked out of business by a competitor. All told, About 7% of respondents in all regions said e-business was essential to their business models, with 17% saying it is very important, 24% saying it is fairly important, 40% saying it is not very important and 11% saying it is not at all important. But, looking out into the future over the next two years, 23% say e-biz is essential, 33% say it is very important and 30% say it is fairly important. There is hardly any difference in the data between companies in the US and companies in Europe, says MORI. In all cases, companies in the retail industry are most keen on e-business, with wholesale lagging a bit and manufacturing behind them in terms of level of importance.

Companies in the US do show a slightly higher propensity when it comes to actually using internet technologies to help them run their businesses. MORI found that 94% of US companies use email to communicate with their customers and suppliers, while European companies only did so about 89% of the time. Similarly, 87% of US companies had a web site, a bit more than the 83% of European firms. US companies were also more likely to communicate with employees with email (82%) and to promote their products over the internet (78%), more than the rates in Europe (78% and 70%, respectively), but European companies were more likely to have an employee intranet (75%) than their US counterparts (67%). Only a minority of companies in the US and Europe have really started using internet technologies to manage supply chains or maintain customer relationships, but this is obviously the wave of the immediate future.

Companies are all over the map when it comes to the return on investment they expect from their e-business investments, says MORI. About a third say it will be under 10%, another quarter say between 11% and 25% and the remainder of companies polled say they will do considerably better or, more likely, admit that they have no idea. This uncertainty is higher in Europe than in the US, but that could just be conservative accounting rather than poorer math and forecasting skills. On average, companies polled by MORI expect about 22% return on their e-business investment. This is a far cry from the triple-digit ROIs that early adopters of ERP software were promised so they would spend multiple millions in local currency to buy ERP software and implementation services.