What's the prudent stance on e-commerce in a slowing economy? Forge full-steam ahead.

Item: A construction company CEO listens to a rousing talk on how the Internet has changed everything; he applauds vigorously. Asked about his own strategy, he confesses to having "a totally passive take on the Internet." He proposes "to do nothing."

Item: The chairman of an association of procurement managers listens to a similar wake-up call and skeptically asks the speaker: "We've had Total Quality Management, Management by Objectives and Business Process Reengineering. Isn't e-commerce another fad like those?"

Item: The CEO of a company with $43 million in global sales of gadgets for holding furniture together tells an audience how he is integrating all his data flows onto a Web-enabled enterprise suite to support expansion to more than $150 million by 2005.

These are not fictional examples. So which of these people is best poised to exploit their technological opportunities and reap the fruits of future success in the global economy?

It is, of course, no contest. The third guy must surely win -- as an overwhelming majority of CIOs would presumably agree. Yet, remarkably, just as large a majority are imitating not the single progressive but the two laggards.

The conservative procurement executive is very far from alone. On one informed estimate, only 8 percent of global companies use e-procurement. In Europe the proportion is far lower still. Yet e-procurement is a basic building block of the digital company, only slightly more advanced than e-mail. It's quicker and slicker -- and saves money. Even if prices for the actual purchases don't fall, you save 30 percent to 70 percent on transaction costs.

But the shift to e-procurement isn't being held back solely by head-in-the-sand purchasing officers. Adrian Slywotsky of Mercer Consulting, coauthor of How Digital Is Your Business: Creating the Company of the Future, reckons that only 5 percent of U.S. businesses are truly digital -- and that, he accepts, may still be an exaggeration. The lag in e-procurement is merely symptomatic of general reluctance among corporations to embrace a proactive Internet strategy. Too many share the totally passive take held by our friend the construction CEO.

This passivity is currently being fueled by two negative forces. The first is the prospect of recession in the United States. More on that later. The second is the widespread collapse of e-ventures -- not only overcapitalized, overhyped and underperforming dotcoms -- but big company forays into this brave new world. Disney, for one example, closed down its Go portal after heavy losses. Many other ventures are being put on hold, especially as the wave of failures rolls into Japan -- from which I've just returned in some amazement at the deep digital lag that exists there.

But neither of these temporary negative forces has any real connection with the issue of whether to digitize the company and its information flows. They are, in the original meaning of the term, red herrings, and irrelevant.

Now,

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