While much attention is focused on the possibilities offered by selling direct to consumers over the Internet, the real benefits of e-commerce lie in the realm of supply-chain management, according to an IT executive.
Ray Lamoureux, managing principal at IBM e-commerce, said increasingly, established companies were looking at the supply side of the equation to achieve dramatic cost efficiencies from e-commerce.
Denis O'Sullivan, principal at British-based IBM Management Consulting, said there were four key reasons why the Internet had galvanised e-commerce in the supply chain.
They included low entry costs, fast return on investment, protection of existing investment because electronic data interchange could be integrated with Web technologies and ease of connectivity.
Many companies had seen a return from simply setting up e-mail accounts and communicating with suppliers electronically, Mr O'Sullivan said.
E-commerce generated real-time information about customer behaviour, he said, adding that companies were discovering that if they had the right information, in the right place at the right time, then logistical decision-making could become easier and more efficient.
It even created competitive advantages in some cases, he said.