E-business integration Statistics Explained

Source : Statistics Explained (http://ec.europa.eu/eurostat/statisticsexplained/) - 26/09/2018 1

Data extracted in June 2018.

Enterprises making slow progress in adopting ICT for e-business inte-grationThis article presents recent statistics on the information and communication technologies (ICT) used by en-terprises in the European Union (EU) . ICT has fast become an integral part of enterprise functioning and itsextensive and intensive use, combined with new ways of accessing and using the internet efficiently, characterisewhat we refer to as the digital economy (e-economy).

These driving forces are decisive for the way that enterprises run their business, organise internal communica-tion, share information with business partners and communicate with customers. In this context, e-economyincludes both electronic business ( e-business ) and electronic commerce ( e-commerce ).

The former refers to the use of ICT in business processes and is the subject of this article, while the latterrefers to commercial transactions for either goods or services.

Adoption of e-business: highlights

Figure 1: Adoption of e-business technologies in enterprises, EU-28, 2014 and 2017 (% enterprises)Source: Eurostat (isoc_ciweb) and (isoc_eb_ics) and (isoc_eb_iip)

http:/ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Information_and_communication_technology_(ICT)http:/ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Enterprisehttp:/ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Enterprisehttp:/ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:European_Union_(EU)http:/ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:E-businesshttp:/ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:E-commerce

• Use of websites (77%) is still slightly growing.

• The gap between small and large enterprises is reportedly bigger for those using more advanced ICTapplications than for those with a website. The percentage of enterprises with a website ranged from 74% for small enterprises to 94 % for large enterprises, but from 28 % to 76 % respectively for those usingenterprise resource planning (ERP).

• More enterprises used customer relationship management (CRM) for operational purposes (32 %) thanfor the analysis of information about customers for marketing purposes (21 %).

• Radio frequency identification (RFID) technologies are mainly used for person identification or accesscontrol.

Table 1: Enterprises adopting technologies for e-business, 2014 and 2017 (% enterprises) Source:Eurostat (isoc_ciweb) and (isoc_eb_ics) and (isoc_eb_iip)

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Figure 2: Enterprises adopting technologies for e-business, by size class, EU-28, 2017 (%enterprises) Source: Eurostat (isoc_ci_in_en2) and (isoc_ciweb) and (isoc_eb_ics) and(isoc_eb_iip)

Enterprises’ presence on the internetUse of websites is still slightly growing

Enterprises consider it important to be visible on the internet. Consequently, enterprises’ websites increas-ingly offer various functionalities, such as online ordering, product catalogues and information, order tracking,customisation of products, links to social media etc. Importantly, the use of a website involves a more activerole than just having an internet connection. Some 77 % of enterprises reported having a website. An increasecan be observed compared with 2014 (+3 percentage points).

The adoption of e-business technologies varies among enterprise size classes. The gap between small andlarge enterprises is considerably bigger for those using more advanced ICT applications than for those with awebsite. The percentage of enterprises with a website ranged from 74 % for small enterprises to 94 % for largeenterprises, but from 28 % to 76 % respectively for those using enterprise resource planning (ERP).

Table 2: Persons using computers and accessing the internet, by size class, EU-28, 2014 and 2017(% persons employed) Source: Eurostat (isoc_ci_cm_pn2)

Enterprise resource planning (ERP)More than one in three enterprises uses enterprise resource planning software applications

Enterprises’ internal e-business integration refers to sharing information electronically and automatically be-tween different business functions within an enterprise as opposed to external integration, in which other busi-

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ness partners are involved. Internal integration potentially streamlines and boosts the efficiency of an enterprise.

Integration is implemented in various forms. One of them is data linking between various software applica-tions, using a common database. The use of a single modular software application, enterprise resource planning(ERP), is another commonly-used alternative.

ERP software applications aim to facilitate the flow of information and the potential to integrate internaland external management information across several functions of an enterprise. A characteristic of ERP is thatit is delivered in ’modules’ that typically integrate processes relevant to planning, purchases, marketing, sales,customer relationship, finance and human resources.

The percentage of EU enterprises that used ERP software applications reached 34 % in 2017, that is a slightincrease of 3 percentage points compared with 2014. The small increase is mainly due to the low adoption ofERP software applications by medium and in particular small enterprises (Figure 2).

The comparison between 2014 and 2017 shows different trends among countries in the use of ERP (Table1). These may be explained by differences in the understanding of ERP as the ’enterprise wide informationmanagement system’, due to various country specific implementations and customisation of ERP packages,which may evolve differently over time.

Figure 3: Enterprises using resource planning software applications (ERP), by economic activity,EU-28, 2014 and 2017 (% enterprises) Source: Eurostat (isoc_eb_iip)

A comparison of the use of ERP in the economic sectors over the same period shows that enterprises in allsectors reported increases. As shown in Figure 3, the highest increases were found in the Professional, scientificand technical activities (+6 percentage points), the Information and communication sector, Administrative andsupport service activities and Real estate (each + 5 percentage points).

Supply chain management (SCM)Sharing supply chain management information strongly depends on economic sector

Supply chain management (SCM) includes all activities concerning the exchange of information between anenterprise and its suppliers and customers. This information may concern, for example, inventory levels, pro-duction plans, demand and supply forecasts or progress of deliveries.

Accordingly, the use of SCM software applications aims to coordinate effectively the availability and deliv-ery of products to final consumers, in the right quantity, at the right time, into the right hands at optimal cost.

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SCM actively involves all resources — business functions — concerned with planning and forecasting, pur-chasing, product assembly, logistics, sales and customer service.

Depending on the industry served, SCM and ERP software applications may overlap to a certain extent.However, the former tends to focus on financial information and material flows along the complete value chainof suppliers, manufacturers, service providers, distributors and customers.

Figure 4: Sharing Supply Chain Management information, by economic activity, EU-28, 2014and 2017 (% enterprises) Source: Eurostat (isoc_eb_ics)

The extent to which SCM information is shared varies among economic sectors. As shown in Figure 4, some28 % of enterprises in the wholesale and retail trade — the highest among enterprises in all economic sectors— shared SCM information with their suppliers or customers whereas slightly more than 10 % did so in theAdministrative and support service activities or the construction sector.

Overall, in comparison with 2014, the percentage of EU enterprises that shared SCM information electroni-cally with their suppliers or customers, remained almost at the same level.

Figure 5: Enterprises using Customer Relationship Management, 2017 (% of enterprises) Source:Eurostat (isoc_eb_iip)

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Customer relationship management (CRM)Almost one in three enterprises uses operational customer relationship management

Enterprises streamline their marketing efforts and target their customers to maximise business potential. Forthis specific purpose, they use software applications for managing information about their customers, customerrelationship management (CRM) applications.

It is believed that the adoption of CRM improves marketing and sales performance by improving customerservice and customer relationships. Improvements come, for instance, from providing user-friendly mechanismsfor receiving complaints, identifying potential problems before they occur, in general, by facilitating communi-cation with the customer and by anticipating customer preferences. These technology enabled improvementslead to long term customer satisfaction and can ensure increased customer loyalty, decreasing marketing costsand increasing sales.

Table 3: Enterprises using Customer Relationship Management, by size class, EU-28, 2014 and2017 (% of enterprises) Source: Eurostat (isoc_eb_iip)

As shown in Table 3, some 32 % of EU enterprises used operational CRM software applications to capture,store and make available information about the enterprise’s customers to other business functions.

Furthermore, a CRM software application can be used to analyse customer information to identify patternsof customer preferences and behaviour (analytical CRM). This information is essentially used for marketingpurposes, such as sales promotions that are effective in creating interest in a product or for optimising marketpenetration through the use of alternative distribution channels.

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Figure 6: Enterprises using Customer Relationship Management, 2017 (% enterprises) Source:Eurostat (isoc_eb_iip)

In 2017, some 21 % of EU enterprises used CRM for such sophisticated analysis. Overall, adoption levelsof analytical CRM are much lower than those of operational CRM, except for enterprises in the Accommoda-tion sector, which reported using both types of CRM to a similar extent (34 and 41 % respectively, see Figure 6).

Compared with 2014, the use of CRM increased for both types of CRM regardless of the size of the enter-prise. Overall, for many countries, further progress can still be expected as regards adopting both operationaland analytical CRM in view of the potential benefits that customer centric marketing practices may bring toenterprises.

Radio frequency identification (RFID)More than one in ten enterprises uses radio frequency identification technologies

Radio-frequency identification technologies use electromagnetic fields to automatically identify and track tagsattached to objects. They give an indication about the degree of business automation. Enterprises that useRFID technologies may automatically store and retrieve data through the use of tags or transponders (devicesthat can be applied to or incorporated into products) so they transmit data via radio waves.

In 2017, some 12 % of EU enterprises used these technologies. RFID tags can be used for various purposes,such as enabling hands-free building access control systems of persons, or tracking or identifying products eitherduring or after the production process.

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Figure 7: Enterprises using Radio Frequency Identification (RFID) technologies, by purpose,EU-28, 2017 (% of enterprises) Source: Eurostat (isoc_eb_iip)

RFID was mainly used for person identification or access control (10 %), which holds true for all economicsectors (Figure 7). Retail trade was the only sector that used RFID instruments more for product identificationafter the production process than as part of the production and service delivery process.

Source data for tables and graphs• E-business integration 2017 - graphs and tables

Data sourcesThe data in this article are based on the results of the 2014 and 2017 surveys on ICT usage and e-commerce inenterprises. The statistics were obtained from enterprise surveys conducted by national statistical authoritiesin both years.

In 2017, 159 000 out of 1.6 million enterprises in the EU-28 were surveyed. Of the 1.6 million enterprises,approximately 83 % were enterprises with 10-49 persons employed ( small ), 14 % with 50-249 ( medium ) and3 % with 250 or more ( large ).

Data in some tables are shown as ’:’ and refer to data that are unavailable, unreliable, confidential or notapplicable. Unreliable data are included in the calculation of European aggregates.

The observation statistical unit is the enterprise, as defined in Council Regulation 696/93 of 15 March 1993.The survey covered enterprises with at least 10 persons employed. Economic activities correspond to the clas-sification NACE Revision 2. The sectors covered are manufacturing, electricity, gas and steam, water supply,construction, wholesale and retail trades, repair of motor vehicles and motorcycles, transportation and storage,accommodation and food service activities, information and communication, real estate, professional, scien-tific and technical activities, administrative and support activities and repair of computers and communicationequipment. Enterprises are broken down by size: small (10-49 persons employed), medium (50-249) and largeenterprises (250 or more).

Data presented in this article could differ from the data in the database, due to updates made after the dataextractions used for this article.

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ContextICT has fast become an integral part of enterprise functioning and its extensive and intensive use, combinedwith new ways of accessing and using the internet efficiently, characterise what we refer to as the electroniceconomy (e-economy).

These driving forces are decisive for the way that enterprises run their business, organise internal communica-tion, share information with business partners and communicate with customers. In this context, e-economyincludes both electronic business (e-business) and electronic commerce (e-commerce). The former refers to theuse of ICT in business processes and is the subject of this article, while the latter refers to commercial transac-tions for either goods or services.

Other articles• E-commerce statistics

• ICT specialists - statistics on hard-to-fill vacancies in enterprises

• Internet advertising of businesses - statistics on usage of ads

• ICT security in enterprises

• Social media - statistics on the use by enterprises

• Cloud computing - statistics on the use by enterprises

• Digital economy and society statistics - enterprises

Tables• Digital_economy_and_society

Database• Digital_economy_and_society

Dedicated section• Digital_economy_and_society

Publications• Enterprises making slow progress in adopting ICT for e-business integration - Statistics in focus 6/2013

Methodology• ICT usage and e-commerce in enterprises (ESMS metadata file - isoc_e_esms)

Legislation• Regulation (EC) No 808/2004 of 21 April 2004 concerning Community statistics on the information society

• Regulation (EC) No 960/2008 of 30 September 2008 implementing Regulation 808/2004 concerning Com-munity statistics on the information society

• Regulation (EC) No 1023/2009 of 29 October 2009 implementing Regulation 808/2004 concerning Com-munity statistics on the information society

• Regulation (EU) No 821/2010 of 17 September 2010 implementing Regulation 808/2004 concerning Com-munity statistics on the information society

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http:/ec.europa.eu/eurostat/statistics-explained/index.php/E-commerce_statisticshttp:/ec.europa.eu/eurostat/statistics-explained/index.php/ICT_specialists_-_statistics_on_hard-to-fill_vacancies_in_enterpriseshttp:/ec.europa.eu/eurostat/statistics-explained/index.php/Internet_advertising_of_businesses_-_statistics_on_usage_of_adshttp:/ec.europa.eu/eurostat/statistics-explained/index.php/ICT_security_in_enterpriseshttp:/ec.europa.eu/eurostat/statistics-explained/index.php/Social_media_-_statistics_on_the_use_by_enterpriseshttp:/ec.europa.eu/eurostat/statistics-explained/index.php/Cloud_computing_-_statistics_on_the_use_by_enterpriseshttp:/ec.europa.eu/eurostat/statistics-explained/index.php/Digital_economy_and_society_statistics_-_enterpriseshttp://ec.europa.eu/eurostat/web/digital-economy-and-society/data/main-tableshttp://ec.europa.eu/eurostat/web/digital-economy-and-society/data/databasehttp://ec.europa.eu/eurostat/web/digital-economy-and-society/overviewhttp://ec.europa.eu/eurostat/product?code=KS-SF-13-006&language=enhttp://ec.europa.eu/eurostat/cache/metadata/en/isoc_e_esms.htmhttp://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004R0808:EN:NOThttp://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32008R0960:EN:NOThttp://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32009R1023:EN:NOThttp://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32010R0821:EN:NOT

• Regulation (EU) No 937/2011 of 21 September 2011 implementing Regulation 808/2004 concerning Com-munity statistics on the information society

• Regulation (EU) No 1083/2012 of 19 November 2012 implementing Regulation 808/2004 concerning Com-munity statistics on the information society

• Regulation (EU) No 859/2013 of 5 September 2013 implementing Regulation (EC) No 808/2004 concerningCommunity statistics on the information society

• Regulation (EU) No 1196/2014 of 30 October 2014 implementing Regulation 808/2004 concerning Com-munity statistics on the information society

• Regulation (EU) 2015/2003 of 10 November 2015 implementing Regulation (EC) No 808/2004 concerningCommunity statistics on the information society

• Regulation (EU) 2016/2015 of 17 November 2016 implementing Regulation (EC) No 808/2004 concerningCommunity statistics on the information society

• Regulation 696/1993 of 15 March 1993 on the statistical units for the observation and analysis of theproduction system in the Community

External links• Digital Agenda for Europe

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http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32011R0937:EN:NOThttp://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32012R1083:EN:NOThttp://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1408629660038&uri=CELEX:32013R0859&from=EN:NOThttp://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1416490553847&uri=CELEX:32014R1196&from=EN:NOThttp://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1479825436547&uri=CELEX:32015R2003&from=EN:NOThttp://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1480330280143&uri=CELEX:32016R2015&from=EN:NOThttp://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31993R0696:EN:NOThttp://ec.europa.eu/information_society/digital-agenda/index_en.htm

Enterprises making slow progress in adopting ICT for e-business integrationAdoption of e-business: highlightsEnterprises' presence on the internetEnterprise resource planning (ERP)Supply chain management (SCM)Customer relationship management (CRM)Radio frequency identification (RFID)Source data for tables and graphsData sourcesContextOther articlesTablesDatabaseDedicated sectionPublicationsMethodologyLegislationExternal links