Security fears are biggest obstacle to e-procurement

Security fears are biggest obstacle to e-procurement

Concerns over security and the trustworthiness of trading partners are the biggest obstacles to the expected growth in business-to-business (B2B) e-procurement over the Internet, according to a survey of business leaders in four European countries commissioned by PricewaterhouseCoopers.

Although still in its infancy (only about five percent of companies' spending is currently with online suppliers), the e-procurement market has massive potential and is set to double by the end of 2001, the study shows. By then, 62 percent of all companies expect to be conducting as much as 30 percent of their spending with suppliers electronically.

Over a third of the 400 European business leaders polled, cited issues surrounding online security as holding them back from doing more business online. Two-thirds of the businessmen said it was vital to build up a trusted business relationship with their suppliers before dealing with them over the Internet. The same proportion preferred to do business with companies that had a physical presence and not just exist in cyberspace.

Fears over security were just as significant among businesses which already had substantial experience of e-procurement. In fact, it appears that the more companies know about e-procurement, the more scared they are about security. A remarkably high nine percent of advanced e-procurement operations admitted to having had security problems with suppliers on-line.

Chris Potter, PricewaterhouseCoopers partner responsible for e-business risk management and security services in the UK, comments: "The concerns about security are not surprising given the current methods companies are using to secure e-procurement transactions. Our survey showed that 64 percent of the companies rely on password controls when dealing with their suppliers over the Internet, yet passwords alone are unlikely to be sufficiently secure."

PwC recently launched its own digital certification service, beTrusted.

A copy of the survey report Trust.....not built at 'e-speed': Trust issues in European b2b e-procurement is available from PricewaterhouseCoopers publication department in London telephone +44 207 804 42117.

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