Businesses slow to move buying online

Although businesses still have ambitions to make purchases over the Internet, they have yet to take significant steps to make online procurement a reality, a study says.

The National Association of Purchasing Management and Forrester Research analyzed responses from more than 400 businesses and found that online procurement efforts were slowed by the economic downturn, difficulties of internal and external integration of computer systems, and a lack of data standards.

The "NAPM/Forrester Research Report on eBusiness," released Monday, said just over half of all respondents reported that they are still in the earliest stages of adapting to the Web. Huge, large-dollar buyers and non-manufacturers reported the most progress, though less than a quarter of these companies see themselves as being more than 20 percent toward completing their online efforts.

While about 71 percent of the companies "bought some indirect materials online" during the past three months, the report found, a smaller number of manufacturers and small-volume purchasers classified the Internet as being very important or critical to their businesses compared with last quarter.

The release of the report comes amid market turmoil among the companies that make some of the most widely used e-business software. Earlier this month, business-to-business software maker Ariba said it expects to report a fiscal second-quarter loss, announced layoffs, and abandoned plans to acquire supply-chain software maker Agile Software.

Ariba was just one of many e-business software makers that raised the warning flag of tough times ahead.

Electronic marketplaces, once trumpeted as a surefire way to alleviate paperwork and better connect buyers with suppliers, have also struggled, the report said. Only about 23 percent of the respondents said they bought goods or services through online marketplaces.

Although the companies in the survey said a number of challenges kept them from quickly switching to the Internet in their purchasing processes, most said the Internet remains an important part of procurement plans for the next 12 months.