1. E-Business Technology Adoption Assessing B2B and e-Procurement in Canada
Sandra Charles
Raymond Lepage
Presentation for the OECD Electronic Commerce Business Impacts Project (EBIP) Workshop
October 29-30, 2001
Rome, Italy
Industry Canada Industrie Canada

2. E-Business Technology Adoption Assessing B2B and e-Procurement in Canada
Outline
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

3. E-Business Adoption in Canada
"SMEs are connected, but not yet leveraging Internet technology fully for real productivity improvement...” (Canadian E-Business Opportunities Roundtable)
E-Business Adoption in Canada
2000
E-Business adoption is concentrated heavily in urban Canada, larger provinces and larger companies
Slow pace of e-commerce development, particularly the uneven pattern of growth regionally and within Canadian industry threatens to lead to digital divide
Canadian SMEs continue to fall behind their U.S. counterparts when it comes to embracing sophisticated e-business applications
Canadian organizations will be under increasing pressure to convert at significant cost
Source: Survey on Electronic Commerce and Technology, Statistics Canada
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

4. Anecdotal and statistical evidence in e-business transformation are crucial to the development of appropriate policies
Anecdotal evidence
Case studies
OECD Case Studies (6 sectors)
Other Sectoral Case Studies (Academics)
Statistical evidence
Survey on Electronic Commerce and Technology 2000 (SECT)
Data on business transformation/Supply chain transformation
Business-to-Business sales
Purchasing online
Purpose for using the Internet
Canadian Leaders Surveys
Data on e-procurement/Attitudes toward e-procurement
Drivers and barriers
Proportion of total purchasing
Private sector’s surveys and reports
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

5. E-Procurement Adoption Online purchasing remains low in Canada
Fact #1 - Only 18% of Canadian firms are purchasing online
E-Procurement Adoption
By Canadian Sectors
2000
Business-to-business transactions were the fastest growing segment of e-commerce in They accounted for 80% of total Internet sales or $5.8 billion;
Canada’s private sector is using e-business technology:
42% to access database of suppliers
32% to share or perform collaborative research
23% for training and education purposes
15% to access customer databases
Almost half of Canadian public organizations are purchasing online (49.1%)
18%
Online purchasing remains low in Canada
Source: Survey on Electronic Commerce and Technology, Statistics Canada
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

6. E-Procurement Adoption
Fact #2 - Small firms are slow to adopt e-procurement technologies
E-Procurement Adoption
By Size of Firms
2000
More than half of Canada’s largest firms have implemented some e-procurement processes in their commercial activities. Leading sectors include :
Accommodation and Food Services (95%)
Information and Cultural Industries (81%)
Transport and Warehousing (81%)
Among the smaller firms, the percentage of firms purchasing online varies significantly between sectors. Leading sectors in 1-19 FTE category
Information and Cultural Industries (55%)
Educational Services (45%)
Professional, Scientific and Technical Services (36%)
18%
Most private sector Internet B2B transactions and online purchasing are conducted by large enterprises
Source: Survey on Electronic Commerce and Technology, Statistics Canada
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

7. Fact #3 - E-procurement is on the radar screen but fails to be implemented
Top Leading Canadian CEOs
53% will procure online in the next two years while only 6 percent said that they had no plans to procure online
42% said that online procurement was among top 7-10 strategic issues while 22% said that online procurement was not a strategic issue for their business
Other Canadian CEOs
58% have an e-business strategy
67% of them have an e-procurement strategy
37% procure online, 34% will procure online in the next two year while 18% have no plans to procure online
47% said that e-procurement was not a strategic issue for their organizations
Canadian Leader Survey on E-Procurement
90% of them have an e-procurement strategy
84% of surveyed organizations have an e-business strategy
38% of them procure online
There is a significant discrepancy between firms that have an e-procurement strategy and firms that are actually implementing it
Source: Industry Canada based on Canadian Leader Surveys
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

8. Fact #1 - Online purchasing remains low in Canada
What have we learned from the surveys and EBIP case studies?
Fact #1 - Online purchasing remains low in Canada
Policy considerations
Awareness
Drivers of e-procurement
Lack of skilled workers
Availability of skilled workers
Training opportunities
Security and privacy considerations
Others
Jurisdiction
Lack of Technology standards
Local and sectoral constraints
Learning from EBIP Case Studies
Privacy issues
e.g. General Merchandising and Pharmaceutical Retailing, Intelligent Manufacturing Technology
Skills
e.g Consulting Engineering, ICT, Intelligent Manufacturing Technology, Plastic Industry
Jurisdiction
e.g Consulting Engineering
Awareness/Standards
e.g. ICT
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

9. What have we learned from the surveys and EBIP case studies?
Fact #2 - Most private sector Internet B2B transactions and online purchasing are conducted by large enterprises
Policy considerations
Awareness
Drivers of e-procurement
Choice of technology
Costs
Financial cost/investment
Time
Market structure
Vertical integration
Learning from EBIP Case Studies
Awareness
e.g. ICT
Market structure
e.g Retail Travel Service, General Merchandising and Pharmaceutical Retailing, Intelligent Manufacturing Technology
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

10. What have we learned from the surveys and EBIP case studies?
Fact #3 - There is a discrepancy between firms that have an e-procurement strategy and firms that actually purchase online
Policy considerations
Costs
Transition from proprietary EDI to Internet-based EDI
Industrial structure
Lack of national and international standards
Use of multiple technologies
Infrastructure
Intellectual properties
Internal culture is slow to adapt to new technologies
Reluctance from management
Lack of skills
Learning from EBIP Case Studies
Privacy issues
e.g. General Merchandising and Pharmaceutical Retailing, Intelligent Manufacturing Technology
Skills
e.g Consulting Engineering, ICT, Intelligent Manufacturing Technology, Plastic Industry
Standards
e.g. ICT
Costs
e.g. General Merchandising and Pharmaceutical Retailing, Consulting engineering, Retail Travel Services, ICT, Intelligent Manufacturing Technology, Plastic
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

11. Statistical issues related to B2B activities in Canada
Statistical Gap
Drivers of e-business adoption
1. ROI
2. Government role as a model user
Canadian SMEs
1. micro enterprises I.e. 1-9 employees
Regional distribution of e-business adoption
1. Local environment
Sectoral intelligence
1. Detailed sectoral intelligence
Linking of databases
1. Establishments vs enterprises
2. Research
Survey on
Electronic Commerce
and Technology 2001
New Questionnaire
New category of size of firms
New question of perceived benefits of e-business
New questions on application of ICT
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

12. Level of Electronic Commerce Activity Source: Industry Canada
Emerging issues related to B2B activities in Canada
S-Curve
Research Gap
E-business in value chains
E-business and inter-industrial trade
E-marketplace
E-business and innovation
E-business and growth
Impact
Level of Electronic Commerce Activity
Intensity
Readiness
Source: Industry Canada
Time
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

13. Food for thoughts - Potential policy research on e-business adoption
Understanding the economic, social, cultural and technological dimensions of e-business
E-business and economic growth; How does e-business influence the relative contributions to economic growth?; e-business and productivity; e-business and comparative advantage; e-business and innovation; impact of e-business on markets, investment, industrial structure, organizations and labor markets; Cost of e-business in rural and remote areas vs urban center; impact of e-business on SMEs and on SMEs on rural areas;etc…
Understanding the major factors which influence productivity, growth and innovation in firms and organizations
What are the features of innovative and leading firms in e-business and how do they develop?; Are these features consistent across all sectors and firms sizes?; e-business and firm’s productivity and innovation; How does e-marketplace evolve?What can differentiate the behavior of SMEs and large firms in terms of adopting e-business technologies; How does e-business provide competitive edge to self-employed and SMEs; etc...
1. Introduction
2. Findings related to B2B and e-procurement
3. Policy considerations
4. Issues to be addressed in future research
Industry Canada Industrie Canada

14. E-Business Technology Adoption Assessing B2B and e-Procurement in Canada
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