The automotive industry is far behind other industries in terms of e-business, according to a global business-to-business e-commerce study conducted by professional services firm KPMG.
The report found that the industry must overcome significant cultural, technological and security issues to move forward.
KPMG`s global study of automotive leaders from multinational original equipment manufacturers (OEMs) and tier one and tier two suppliers in the US, England, Germany and Japan was conducted in October and November 2000.
Aside from the findings of its current study, KPMG and the Economist Intelligence Unit conducted a similar research project in June and July 2000 and found the automotive industry trailing six other industries, namely financial services, chemical, pharmaceutical, electronics, consumer markets and communications, in terms of e-business progress.
The survey found that only 35% of automotive senior execs were actively involved in e-business initiatives, which was by far the lowest response of all industries, and quite lower than the cross-industry average of 58%.
According to Brian Ambrose, national industry director of KPMG`s automotive practice, automotive chief executives need to follow two tracks to be successful.
"First, they must adopt an e-business vision that encompasses the entire value chain. And second, they can force change in their own organisations by instilling an e-business challenge that touches every employee."
KPMG`s study found a lack of trust between suppliers and OEMs to be holding back e-business progress. "One of the hallmarks of successful e-business is integration of the value chain," says Ambrose.
"Instead of keeping all your cards close to the vest, share some of what you are holding with your value chain partners. It isn`t a zero-sum game where your win is a value chain partner`s loss. It can be a win-win game where the whole value chain shares information and objectives."
In terms of organisations succeeding at e-business, Ambrose says progress must come bottom-up, not top-down. "The CEO must challenge its operating units to foster e-business ideas and initiatives. It is then up to the CEO and executive ranks to fund those ideas that are warranted and leverage the successful ones, where possible, across the organisation."
"The good news," says Ambrose, "is that very few industries have the right equation, and e-business momentum in the automotive industry can change fast."
In KPMG`s latest study, the majority of respondents reported widespread concern about security issues. Respondents cited security as one of the factors prohibiting OEMs and suppliers from swiftly adopting digital solutions.
"E-business security is a widespread concern that few companies really seem to understand," says Ambrose.
"There is a misperception out there that smaller Internet projects don`t need security protection by the nature of size. Security is one of the first e-business investments and one of the wisest. No one needs to have proprietary designs stolen or a production line shut down because of network penetration."
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