Magazine

Table: Hitting Pay Dirt in the Virtual World


Even with the crash in Internet stocks, companies are investing heavily in online initiatives. Here's a look at where they're putting their money--and the payoff.

ELECTRONIC COMMERCE

Pegged to hit $6.8 trillion in 2004, with 90% of that coming from business-to-business sales, says Forrester Research. About 80% of Cisco Systems' orders are taken online, about $5 billion last quarter--saving the networking giant $760 million in annual operating costs.

E-MARKETPLACES

Transactions on e-marketplaces expected to reach $2.8 trillion in 2004, says AMR Research. Defense contractor United Technologies bought $450 million worth of metals, motors, and other products from an e-marketplace in 2000 and got prices about 15% less than what it usually pays.

PROCUREMENT

Businesses will buy $2.8 trillion in supplies over the Internet in 2004, excluding e-marketplace purchases, says AMR Research. Eastman Chemical is buying 19% of its supplies online now, up from almost nothing two years ago. That has helped boost productivity 9% per year.

KNOWLEDGE MANAGEMENT

Companies will spend $10.2 billion to store and share their employees' knowledge over the Net by 2004, says IDC. Electronics manufacturer Siemens has spent $7.8 million to create a Web site for employees to share expertise to help win contracts. The result: new sales of $122 million.

CUSTOMER RELATIONSHIPS

Corporations will invest $12.2 billion by 2004 on linking customers, sales, and marketing over the Web, says the META Group. Lands' End converts more than 10% of its Web visitors to buyers--compared with the average 4.9%--in part because it offers live chat and other customer-service extras.


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