CEOs worldwide worried about impact of the Web

By Clare Haney, IDG News Service |  Business

Chief executive officers in North America, Europe and Asia see dealing with the Internet as a growing challenge, according to a study released Wednesday by consulting organization Accenture, formerly known as Andersen Consulting, and business membership and research body The Conference Board Inc.

The survey polled 506 CEOs during the middle of last year asking them to rate their top three marketplace and management issues for 2001, choosing from a list of 15 concerns in each of the two categories.

The number-one marketplace concern chosen by 41 percent of the CEOs was "changes in the type or level of competition," with the "impact of the Internet" next (38 percent of CEOs) -- up from eighth place last year. Third position was "industry consolidation" (37 percent). The CEOs viewing the Net as a key concern tended to come from non-technology industries.

"The Internet will continue to evolve, but at the moment most people are using it as an electronic fax machine," was a comment the survey quoted from an executive at an unidentified European media company.

Turning to the top three management issues facing CEOs worldwide, 37 percent of those surveyed chose "customer loyalty" giving it the number-one spot, followed by "increasing flexibility and speed" (34 percent). In third position overall was "industry consolidation."

"Half the growth of my industry is coming from consolidation as opposed to pure organic growth, as a result of a need to service clients on a global basis. ... We'll have fewer but bigger customers," said an executive from an unnamed U.S. media company quoted in the report.

Mergers and acquisitions are a constant fact of life for many CEOs. The survey quotes the CEO of a major U.S. telecommunications company, who didn't want to be identified, as saying, "About 50 percent of our customers have been bought out in the last four years. Our second-largest customer was bought out twice."

There was plenty regional variation between the CEOs' responses. For example, while it's an issue for CEOs in the U.S. and Europe, Japanese CEOs only ranked "customer loyalty" in 10th position, down from last year's seventh place on their listing of management issues.

"Shortages of key skills" was the top marketplace concern of U.S. CEOs, while their European counterparts worried about the "impact of the Internet." Over in Japan, CEOs put "changes in type or level of competition" as their primary marketplace challenge.

Japanese CEOs also fear they are behind their Western counterparts in Internet adoption and usage in their businesses.

"IT utilization (in Japan) lags behind the U.S." according to the CEO of one unnamed Japanese technology company quoted in the survey. "That is in part because we could not picture what comes next after the manufacturing economy."

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