An Overview of E-Commerce in Key Regions of the Construction Industry :
Recent Successes and Recent Failures in Electronic Commerce

Electronic trade, like many other new technologies, contains an immense potential which is waiting to be exploited. While in some industries, decision-makers quickly took up, or even went so far as to impose, this new way of doing business, in the construction industry the situation is quite different. However, a number of inducements have been proposed in many countries to encourage the industry to adopt electronic trade; while some have met with success, others did not have the expected impact.

Drawing from her experience within the American building industry and from information provided by Swedish and Japanese colleagues, Ms. Molad sketched a general portrait of the use of electronic trade in the construction sector.

Despite its novelty, electronic trade has been the source of important changes in many enterprises. Looked at in this way, the objections expressed regarding electronic trade are essentially similar to those which hold back many innovations as soon as they start to upset traditional ways of working. If we now have a long-distance view that enables us to assess the impact of, for example, the telephone, we do not have a corresponding way of looking at electronic trade. In fact, nobody can really measure the impacts that will stem from this new technology; we can only suspect that it will affect the very foundations of the way we organize our work.

Even so, experts constantly amend - upwards - their forecasts regarding electronic trade. Thus, even if the advantages of this new technology are difficult to measure empirically, the headlines are already formulated:

“If you don’t believe wholly and viscerally that e-commerce is going to change your business, you are going to lose out” and again:

“None of us knows where all this is heading, but if we get it right, we have an opportunity that comes once every couple of hundred years”.

Far from being reserved for retail trading, electronic commerce addresses - above all - the broad field of inter-firm relations; thus, for example, some studies predict that 80% of electronic trade will be oriented to ‘business-to-business’ exchanges. Construction, in this context, is not so different from other industries. In effect, a number of tasks like customer relations, billing etc. are common to almost all industries. Furthermore, construction has another characteristic that makes it suitable for electronic trade, namely the importance that building professional and commercial firms attach to the exchange of information - at the very center of any building project. According to Ms. Molad, we are currently witnessing a major change where the main and systemic focus will be on information exchange - irrespective of whether electronic trade is or is not involved.

So, as far as the building industry is concerned, several efforts have been initiated in Europe in order to standardize the form of the information which flows from one firm to another; these initiatives have paved the way for some business being conducted electronically. In Japan, similar efforts have met with some success. A pilot project prepared for small Japanese enterprises but lead by a major builder, is currently being set up; more than 200 firms are thus now participating in electronic trade. In the United States, some building industry participants have been using electronic trade for more than five years; once again the initiatives are lead by major firms. It is possible to state that, in the USA, several large building contractors are using electronic trade regularly.

Nonetheless, an overall observation must be made: whether in Europe, America or Asia, the use of electronic trade in the construction sector has not yet been generalized. Many initiatives have been taken but most of them were limited - that is to say, short term or adapted to a specific environment. In Japan, for example, the few building contractors who attempt to introduce electronic trade ran into difficulties when they had to assume - singly - the costs involved in adopting the new technology. En Europe, considerable sums have been invested in electronic tendering systems; these projects are now stalled, because they are not supported by the major players in the construction sector.