The internet: Mission-critical tool or untapped resource?

Industrial professionals increasingly use the internet for business.

06/01/1999


Industrial professionals increasingly use the internet for business. The question is: Will the internet remain a limited-use application, or will it become a mission-critical component to the success of an organization?

The industrial landscape is diverse and generalizations are difficult. However, a recent survey by Thomas Regional Directory and Find/SVP asked purchasers and engineers how the internet affects the purchasing process. They uncovered changing comfort levels and shifts in business practices. A few of the results are summarized below.

Internet in industry

Use of the web is largely untapped. The study showed that much of industry (85%) does have access to the internet. Engineers appear to be the early adopters and frequent users of the web. The internet is used to gather information and do research, but most surveyed said they spent less than 3 hr/week online. Purchasers still turn to established and conventional resources first. It appears the key to making the internet more valuable is to provide users with more detailed information on products and sources.

Positive e-commerce figures

About a fifth (21%) of those with internet access have ordered goods or services online. Of those who have never ordered, 37% estimate they will order within 1 yr. Some 34% said they would never use e-commerce. Reasons given for declining to use the net for purchases include wondering if the transaction is secure and confidential, and who on the other end is accountable for the orders.

Changing the way business is conducted

As use of the internet has grown, considerable differences in the way business is performed have emerged. Because the web promotes easier research of companies, users consider an increased number of suppliers for new projects.

More than 40% of frequent internet users now consider more vendors. However, all customers still communicate by phone and 95% by fax. Regular mail is used 67% of the time and e-mail is used 53%. And while the internet may be creating a global market, industrial plants are still buying most goods and services locally (42%) or regionally (23%).

A look to the future

All indications are that internet use is increasing. The statement that in 2 yr 87% of industry will have participated in e-commerce is striking. The fact that only 14% of current users turn to the net as their first source shows there is plenty of room for growth. The increase in e-commerce appears to be directly related to the amount of information provided on the web.

This survey lets some predictions be made about the internet's future in the industrial marketplace. It demonstrates that the internet is gaining acceptance as a valuable tool, particularly for researching and buying products and services.

Information for this article was provided by George Short, Thomas Regional Directory Co. (An online version of the Thomas Regional Directory is available on the Plant Engineering web site at www.plantengineering.com).





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