World’s CEOs now embracing the Net

For years, Bernie Garcia (not his real name) thought he would never have to learn computers. He’s already past 50, with grown-up children and a fairly successful career as owner and chief executive officer (CEO) of a trading company.

But Garcia’s mindset began to change two years ago. While trying to strike a deal with a client, he was asked his e-mail address.

"I was completely taken aback by the question. I couldn’t answer," he said. "My first reaction was, ‘So I really need an e-mail!’ I thought all the while that I wouldn’t need these computer stuff since I already have a fax machine right beside my desk."

Garcia is just one of the estimated millions of CEOs, young and old, who have discovered the need to learn and use the Internet in their day-to-day business.

In a study done by Accenture and The Conference Board (TCB), it was shown that CEOs the world over now view the Internet as a major concern for their businesses.

Accenture used to be known as Andersen Consulting, a $10-billion company with 70,000 people in 46 countries. TCB, on the other hand, is an 85-year-old, non-profit organization with 3,000 members in 67 countries.

The study, titled "The CEO Challenge: Top Marketplace and Management Issues 2001," is considered the most comprehensive survey of business executives, covering the views of 506 CEOs in North America, Europe and Asia.

The CEOs polled were asked to select the top three challenges they believe their companies would face this year. The answers – changes in competition, impact of the Internet, and industry consolidation – were ranked very close to each other, getting 41, 38 and 37 percent of the respondents’ votes, respectively.

A year ago, CEOs still did not consider the Internet’s impact as among their top three concerns.

"The study clearly underscores the importance of technology and the Internet to business leaders around the world," said Richard Cavanagh, president and CEO of TCB. "The Internet, six months ago, was only the concern of emerging dot-coms and the fascination of Wall Street. Now, it has become the practical technological lever for large and mid-sized competitors."

While the Internet showed the greatest gain from last year’s survey, the jump appears to be due to its users, not providers. In fact, fewer technology CEOs rated the Internet’s impact as their top concern this year.

The study also showed that CEOs of trading companies, utilities, healthcare and other non-tech industries were far more likely to consider the Internet a major challenge this year. It was found out that larger firms with average sales of $5 billion a year, and not startups, are the ones that have began embracing the Internet as a critical factor to their success.

Net’s benefits

Why embrace the Internet, you may ask. CEOs interviewed attributed their concern for new technology to the following:

• The Internet has made pricing even more transparent, contributing to a pressure on other companies to lower their prices.

• Customers now expect faster and constantly available service – again at lower cost.

• Internet-based competitors – whether successful or not – have changed their expectations on how businesses get done. Companies now feel they need to have an e-business strategy and a presence on the Web.

• In Asia, executives feel they are behind in using the Internet and in IT in general, and that they may face more government barriers. Despite this, they all see tremendous opportunities in engaging in B2G or business-to-government.

• Unlike last year, when young Internet upstarts were in the driver’s seat of the Internet’s growth, "adult" enterprises have now clearly gotten on board and fully embraced the importance of the Internet to their customers and their operations.