Irish SMEs falling behind in e-business adoption

27 Jan 2004

SAN DIEGO – At its AppsWorld event in California, Oracle argued that an economic upturn means that the time is ripe for the adoption of e-business by European SMEs, but there were worrying signs that that Ireland was likely to be a laggard rather than leader, facing a tough challenge from EU-funded accession countries.

Of the 97 Irish firms that that were interviewed as part of a new Oracle survey, 26pc of respondents saw e-business software a way of increasing sales and market share but none of them saw any value in adopting technology to drive external collaboration with supply chain partners.

The notion that Irish businesses were missing out on a new generation of technologies was reinforced by Gartner DataQuest forecasts on growth in expenditure on e-business software. On average, European SMEs were expected to increase their spend by 4pc over the next year. For Ireland the figure was around 1pc.

“I would expect Ireland to do better than the forecast,” commented Oracle’s Anthony Peake, senior director, applications marketing. “When Ireland joined the EU there were lots of drivers and I heard more about the adoption of technology in Ireland than in any other country. Now there is an expectation that a lot of new investment will go to Eastern Europe that would traditionally have gone to Ireland.”

The accession countries will benefit from €40bn of EU investment for developing infrastructure, 5-7pc of which will be dedicated to IT projects. Vendors such as Oracle see it an opportunity for businesses in Eastern Europe, unencumbered by legacy systems, to leapfrog to cutting edge e-business solutions.

The last two years has seen Oracle redirect its e-business software to companies of 10-500 employees rather than large enterprise. The adoption, says Peake, will be triggered by an upturn in the economy that will make SMEs re-evaluate their strategies and realise that the “slash and burn” cycle of freezing IT funds and shedding staff will inhibit growth. Best practice IT solutions are, according to Oracle, the way forward. “There is a return to B2B [business-to-business] which is beginning to be discussed in less embarrassed tones and efficiencies are happening,” said Peake. “Business models are being corrected and becoming profitable.”

According to Peake the sea change was visible in the way countries have moved from measuring their technology prowess firstly in terms of internet penetration, then through broadband roll out and now by the adoption of e-business. It’s an evolution where Ireland has been struggling to get up to speed. An apparent failure to recognise the benefits of e-business must be addressed, according to Peake. “They have to adopt and adopt quickly,” he warned.

By Ian Campbell