B2B To Offer Productivity Gains Of Up To 50%, Forrester Calculates

LONDON, December 13, 2001 . . . Net-enabling B2B processes will offer European firms productivity gains of up to 50% in eight years, according to a new report from Forrester Research (Nasdaq: FORR). Cost savings, process benefits and the timing of gains will vary depending on a firm's mix of B2B processes, but for all firms, achieving gains will require metrics, change management and partner buy-in, the report asserts.

"Our interviews confirm that today European businesses are seeking double-digit productivity gains from B2B initiatives, but firms are failing to achieve these gains because naive project management is blocking success as execs still lack experience in launching B2B technology projects," said Forrester Analyst, David Metcalfe. "Indeed, European firms are still operating a mishmash of customized back-end data systems and integration challenges which hold back B2B projects. Additionally, low-tech users avoid apps, and Europeans' preference for relationship-based business is holding back Net-based productivity gain opportunities. Finally, Europe's mosaic of local business practices and regulations are impeding cross-border B2B projects."

But Forrester advises that despite today's hurdles, European firms should persevere in their quest for cost savings and process benefits, and that firms can overcome internal and external barriers with early user involvement, multi-firm collaboration, mixed B2B project teams and realistic growth objectives.
 
To help companies achieve B2B productivity gains, Forrester analyzed the potential cost savings and process benefits from Net-enabling product design, purchasing, sales and service, and supply chain management. Results of this analysis indicates that manufacturers will achieve a maximum of 45% productivity gains -- weighted across all B2B processes -- in eight years. While high-tech manufacturers will drive productivity gains with collaborative product design and supply chain visibility, chemicals distributors in the model will optimize sales and service to achieve a punchy 47% gain in productivity. Finally, business services firms -- providing services like facilities management and catering -- will achieve a sustainable productivity gain of 46% eight years after B2B apps go live.

"European execs who believe Net-enabling B2B processes will deliver cost savings and process benefits are right," added Metcalfe. "But to achieve gains today, firms should incentivize employees to use Net-based processes, broadcast B2B best practices across the enterprise and orchestrate a B2B marketing campaign. Furthermore, businesses across Europe have the potential to capture early cost savings and speed up qualitative improvements. But to maximize gains over several years, firms must act to get and keep Net-based processes synchronized, target general managers with B2B goals and draft a three-year scalability plan."

For the report "Achieving B2B Productivity", Forrester spoke with 50 executives at European firms with a mean annual turnover of 28 billion euros