Firms can cut costs by going online says report

The image of Internet users as "white, male thirty-something techies" is a myth, according to a new report on the use of e-commerce.

The report, by consultancy company Prospectus, also emphasises that major savings are to be made by companies who conduct business electronically.

Prospectus cites the example of a diverse range of companies in Ireland making use of the Internet for information sharing, direct sales, and service and support even though the electronic consumer market is not yet developed in many sectors.

Dell, which employs 3,000 people in Limerick and Bray, "have successfully combined e-commerce opportunities with their existing business, increasing turnover and greatly reducing costs", the report states, while Kennys bookshop in Galway provides a Book Parcels Club through e-mail for its customers. Companies such as Royal Tara China, with a US export market - where the level of home PC penetration is relatively high - can take advantage of a direct sales network, allowing the customer to order and pay online. Bord Failte, together with the Northern Ireland Tourist Board and Fexco, the Kerry-based financial services company, operate an online information and reservation system.

However, the report points out that for most businesses, "the first benefit from e-commerce will be to save costs rather than make directly attributable revenue". Prospectus says that Hewlett Packard, the US technology company which employs 1,500 people in the manufacture of inkjet cartridges in Leixlip, Co Dublin, has an intranet, a private network, accessed by more than 125,000 users, encouraging them to share ideas. "Hewlett Packard estimate that, due to their intranet, annual savings in the IT and administration costs are in the region of $200 million."

An intranet can also be used to provide up-to-date company information to customers and it increases the opportunity for teleworking. "Windmill Lane Pictures, based in Dublin, uses a form of company intranet which allows the head of multimedia to work at home in England for three days of every working week," the report says. Meanwhile, use of an extranet, which provides external access to specified third parties, provides for information sharing among a select group.

Opportunities also arise for hospitals to connect via extranets with GPs, outpatient clinics or remote hospitals.