The e-biz skinny on leather tanning

The UK's leather tanning sector is reluctant to take part in the ecommerce revolution despite pressure from the Government to get businesses online.

A Government-sponsored report found that fewer than one in five companies (17 per cent) has a formal ecommerce strategy.

And while three quarters of leather tanners have a Web site and use email, the use of intranets, electronic data interchange (EDI) and extranets is rare.

The E-commerce Impact Study for the Leather Tanning Sector - the latest in a series of industry sector studies commissioned by the Department of Trade and Industry (DTI) - also found that barely ten per cent of UK tanners use ecommerce for order processing and payment.

Those quizzed as part of the PricewaterhouseCoopers (PwC) study said that the cost of telecommunications and its lack of flexibility and reliability were a "significant barrier" to investing in ecommerce.

Those that had dipped their toe in the water said ecommerce has had little impact on their core business functions.

Hides tanned

The report concludes: "The overall effect of ecommerce on leather tanners’ performance in the last two years has been minimal."

Advocates of ebusiness claim that ecommerce can bring significant benefits to firms including an increase in productivity and competition.

However, few of those tanners questioned reported that ecommerce had had any impact on competition in the sector. Few expect that to change in the future.

Brian Jones, a director at Fenland Sheepskin Co Limited, has yet to be convinced about the benefits of ecommerce.

"The industry does not lend itself to ecommerce," he said.

"We are involved in electronic invoicing in the UK - but this is few and far between," he said.

Patchy take-up

So is this scepticism representative of UK plc or just an anomaly? With more than a third of the 60 impact studies now complete, it's possible to begin piecing together a picture of the ecommerce landscape in the UK. It's becoming clear that the take-up and adoption of ecommerce is patchy even though many companies aspire to the ideals of the ecommerce revolution.

For example, in October the DTI published its E-commerce Impact Study for the Bookselling Sector. Considered to be one of the "most mature" areas in the e-tailing arena, the report was largely upbeat about the sector's prospects.

It concluded that the top booksellers do believe that e-commerce can provide competitive advantage and that they are using their Web sites for on-line ordering and payment, as well as tracking the progress of orders. They are also trying to use technology to improve efficiencies with suppliers.

Even management consultants avoid ecommerce

Yet a similar study in September concerning management consultants found that while responsibility for the development of e-commerce lies at a senior level there appears to be little emphasis on formal strategies.

The report found that only one third of the consultancies surveyed had a formal ecommerce strategy or plan, and even fewer had maximised their use of ecommerce technologies for running their businesses.

Worse still, a report into the
aerospace industry in August 2000
concluded that "there has been little impact of web enabled e-business on the internal operations of UK aerospace companies". Those that took part in the study agreed that there had been "no significant impact on the UK aerospace industry to date".

While a majority of aerospace companies have traditional IT systems, e-mail and a Web site, only a few have begun to address the issues associated with adopting Web-enabled ebusiness.

Conversely, an impact study into the telecoms industry in November 2000 found that more than two thirds of those quizzed used business-to-business (B2B) e-commerce. Those that did not were in the process of developing systems.

Sally Low E-Business Policy Adviser at the British Chambers of Commerce (BCC), which represents 135,000 small and medium-sized enterprises (SMEs), agrees that the situation differs depending on individual sectors.

"British businesses are keen to embrace ecommerce but this does differ from sector to sector. They have to be shown the sound business benefits of ecommerce before they will get involved. They need good, clear information - that's a role Government can play," she said.

In fact, it goes much wider than that. There are a number of themes that keep recurring in the studies that suggest that there's still much to do until UK business is happy to embrace ecommerce.

The Government's task

Some would like the Government to so more to increase awareness of ecommerce and its benefits. Others would like to see the Government intervene to bring down the costs associated with high-speed Internet access. Some smaller companies have called for grants to help out with IT investment, while others cite a skills shortage as a barrier to entry into the world of ecommerce.

Even if all these were introduced, it still might not be enough to get the UK's leather tanning industry interested in ecommerce. ®

Related Link

A complete list of Ecommerce Impact Studies