E-business integration

Data extracted in June 2018.

Planned article update: June 2020.

Highlights

In 2017, 34 % enterprises used enterprise resource planning software applications.

In 2017, the percentage of EU enterprises using ERP ranged from 28 % for small enterprises to 76 % for large enterprises.

Use of Enterprise Resource Planning (ERP) in enterprises in 2017

Enterprises making slow progress in adopting ICT for e-business integration

This article presents recent statistics on the information and communication technologies (ICT) used by enterprises in the European Union (EU). ICT has fast become an integral part of enterprise functioning and its extensive and intensive use, combined with new ways of accessing and using the internet efficiently, characterise what we refer to as the digital economy (e-economy).

These driving forces are decisive for the way that enterprises run their business, organise internal communication, share information with business partners and communicate with customers. In this context, e-economy includes 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 latter refers to commercial transactions for either goods or services.

Full article

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)
  • Use of websites (77%) is still slightly growing.
  • The gap between small and large enterprises is reportedly bigger for those using more advanced ICT applications 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 using enterprise resource planning (ERP).
  • More enterprises used customer relationship management (CRM) for operational purposes (32 %) than for the analysis of information about customers for marketing purposes (21 %).
  • Radio frequency identification (RFID) technologies are mainly used for person identification or access control.
Table 1: Enterprises adopting technologies for e-business, 2014 and 2017 (% enterprises)
Source: Eurostat (isoc_ciweb) and (isoc_eb_ics) and (isoc_eb_iip)


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 internet

Use of websites is still slightly growing

Enterprises consider it important to be visible on the internet. Consequently, enterprises’ websites increasingly 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 active role than just having an internet connection. Some 77 % of enterprises reported having a website. An increase can be observed compared with 2014 (+3 percentage points).

The adoption of e-business technologies varies among enterprise size classes. The gap between small and large enterprises is considerably bigger for those using more advanced ICT applications 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 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 between different business functions within an enterprise as opposed to external integration, in which other business 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 applications, 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 internal and external management information across several functions of an enterprise. A characteristic of ERP is that it 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 slight increase of 3 percentage points compared with 2014. The small increase is mainly due to the low adoption of ERP 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 (Table 1). These may be explained by differences in the understanding of ERP as the ‘enterprise wide information management 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 all sectors reported increases. As shown in Figure 3, the highest increases were found in the Professional, scientific and technical activities (+6 percentage points), the Information and communication sector, Administrative and support 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 an enterprise and its suppliers and customers. This information may concern, for example, inventory levels, production plans, demand and supply forecasts or progress of deliveries.

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

SCM actively involves all resources — business functions — concerned with planning and forecasting, purchasing, 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 chain of suppliers, manufacturers, service providers, distributors and customers.

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

The extent to which SCM information is shared varies among economic sectors. As shown in Figure 4, some 28 % 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 the Administrative and support service activities or the construction sector.

Overall, in comparison with 2014, the percentage of EU enterprises that shared SCM information electronically 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)

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. For this specific purpose, they use software applications for managing information about their customers, customer relationship management (CRM) applications.

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

Table 3: Enterprises using Customer Relationship Management, by size class, EU-28, 2014 and 2017 (% 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 patterns of customer preferences and behaviour (analytical CRM). This information is essentially used for marketing purposes, such as sales promotions that are effective in creating interest in a product or for optimising market penetration through the use of alternative distribution channels.

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 levels of analytical CRM are much lower than those of operational CRM, except for enterprises in the Accommodation 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 enterprise. Overall, for many countries, further progress can still be expected as regards adopting both operational and analytical CRM in view of the potential benefits that customer centric marketing practices may bring to enterprises.

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 tags attached to objects. They give an indication about the degree of business automation. Enterprises that use RFID technologies may automatically store and retrieve data through the use of tags or transponders (devices that 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 either during or after the production process.

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 economic sectors (Figure 7). Retail trade was the only sector that used RFID instruments more for product identification after the production process than as part of the production and service delivery process.

Source data for tables and graphs

Data sources

The data in this article are based on the results of the 2014 and 2017 surveys on ICT usage and e-commerce in enterprises. The statistics were obtained from enterprise surveys conducted by national statistical authorities in 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) and 3 % with 250 or more (large).

Data in some tables are shown as ‘:’ and refer to data that are unavailable, unreliable, confidential or not applicable. 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 classification 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, scientific and technical activities, administrative and support activities and repair of computers and communication equipment. Enterprises are broken down by size: small (10-49 persons employed), medium (50-249) and large enterprises (250 or more).

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

Context

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

These driving forces are decisive for the way that enterprises run their business, organise internal communication, share information with business partners and communicate with customers. In this context, e-economy includes 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 latter refers to commercial transactions for either goods or services.

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ICT usage in enterprises (isoc_e)

Summary of EU aggregates (isoc_ci_eu_en2)
Websites and functionalities (isoc_ciweb)
Connection to the internet (isoc_ci)
Internet access (isoc_ci_in_en2)
Use of computers and the internet by employees (isoc_ci_cm_pn2)
E-business (isoc_eb)
Integration of internal processes (isoc_eb_iip)
Integration with customers/suppliers, supply chain management (isoc_eb_ics)

Notes