5 years ago… Top director urges firms to wake up to the Net

11.03.99: UK industry has been harshly criticised for ignoring the potential of the internet, in research published jointly by Oracle and the Institute of Directors (IoD).

IoD director general Tim Melville-Ross said the UK's refusal to recognise how ecommerce could boost business could seriously harm global competitiveness. The warning came at the launch of 'Connected World' - the second annual survey into UK business attitudes to technology.

Melville-Ross said the IoD is primarily worried about complacency. "The survey shows that Britain's businesses are less aware of the internet than, say, European and US competitors. In particular, they're ignoring the threats and the opportunities of the internet. And, in general, they lack innovation and effectiveness in their use of information management and IT."

The research, conducted by the Bathwick Group, found that one in 25 UK companies do not believe the web can save them money. Moreover, only 2 per cent of UK firms are worried about the digital economy, compared with 17 to 25 per cent of businesses on the continent.

Philip Crawford, senior VP at Oracle UK, said the internet can transform business models and cut costs. "I'm concerned by what I call the 'arrogance gap' - UK directors seem to genuinely feel that they themselves are innovative and that it is 'the rest of the country' which needs to shape up." The survey found that 50 per cent of UK businesses believe they use IT innovatively.

Crawford stressed that in a global market, UK companies with an "island mentality" risk losing business to US retailers. "Unless we are very careful, UK business will start to lose customers hand over foot," he said.

11.03.04: Well, we all know what happened next. As dot-com fever reached its height in the late 90s every man and his dog, driven purely by the fear of being left behind, rushed to either put existing business processes on the web or start up a completely new online channel.

The lesson is that the net can indeed be a profitable channel that can increase competitive advantage - but only if there's a sound business case behind it.