The Forum and its accompanying study on eBusiness strategies among automotive suppliers revealed that nearly half of automotive suppliers do not know the expected payback period for an eBusiness investment, and when they do, it's often underestimated. The Forum also revealed that business-to-business communication in the suppliers' supply chain is expected to increase ten-fold in the next two years.

Currently, 41% of automotive suppliers surveyed are not in the process of implementing eBusiness strategies. For those suppliers that do have eBusiness strategies in place, the top reasons for doing so include reducing operating costs, satisfying OEM requirements, and improving competitive advantage. Only 16% of suppliers identified revenue growth as a business driver for eBusiness -- suggesting that these benefits are not well understood.

"Clearly, if an eBusiness strategy is not already in place, the need to move quickly and develop a global eBusiness strategy should be a top priority," said Randy Miller, the Global Automotive Partner for Arthur Andersen. "The focus should be on strategy development and execution in 100 day cycles." Nearly half of automotive suppliers indicated that they didn't know the expected payback of their eBusiness investments. Of the remaining half of suppliers that are tracking the expected payback period, half expect less than a one-year payback period, and the other half expect payback in a one to four year timeframe.

"Given the pace of technology evolution, a payback period of greater than a year should be closely examined," noted Gary Baker, Director of Arthur Andersen's Advanced Technology Group's Development Center. "eBusiness investment needs to be treated like any other investment."

Today, only 6% of automotive suppliers conduct more than half of their transactions with suppliers via eBusiness. In two years, this number is expected to increase to 66%. The expected growth areas in the next two years include order tracking follow-up, production specification/information, and online price quoting. Suppliers anticipate that the usage of EDI (Electronic Data Interchange), telephone, and fax communication methods will decrease over the next two years. ANX usage will increase from 3% to 45% and Internet usage will increase from 15% to 76% -- becoming the two most widely used communication methods in the next two years.

(March 24, 2000)