The speed at which energy companies embrace the Internet isexpected to accelerate for at least two more years, after whichcompanies that have aggressively invested in eBusiness will moveahead of competitors because of expanded revenue growthopportunities and reduced cost structures. At least that’s what anindustry survey by energy adviser Cap Gemini Ernst & Young U.S.LLC suggests.

CGE&Y’s “Energy Industry eBusiness Predictions” is based onan ongoing quarterly public web site survey of the top energycompanies throughout the world, determining the growth and trendsin Internet use by the industry. The survey, released last week,reveals that after initially losing ground to new participants,which disrupted established supply chains and customerrelationships, the energy “empire” has struck back with topmanagement involvement and heavy resource commitments.

Thomas Yacko, CGE&Y vice president, said in the next 18months, eProcurement portals will be up and running at most energycompanies. Not all companies will be able to “ramp up” as quicklyas the major oil companies, but the successful ones will useportals for up to 75% of their purchasing.

Employee portals, also referred to as employee self service,will “dramatically increase” in the next 18 months, too. “Leaderswill reduce their travel and human resources expenditures, and willmore quickly enable their people and culture to accelerate to thenew eBusiness model,” Yacko said.

Next year, the limited use of “horizontal” portals foreProcurement will surface, that is, company-to-company portals, butmost of the procurement in the industry will occur in vertical,industry-to-customer portals.

Along with these predictions, CGE&Y found that traditionalenergy companies are evolving, now focusing on eBusiness and”gaining pace on start-up dot.coms. Proving that big,asset-intensive energy companies can be sensitive to their markets,the majors are being innovative, flexing their muscles andaccelerating” to the Internet.

“In the eBusiness world, legacy business models are primetargets for the fast and nimble,” said Yacko. “New entrants areattacking the majors from all directions. Some laggard companiesare dying, but the majors are fighting back and creating newbusiness models. Companies like BP, Shell and Chevron understandthat eBusiness is more than the Internet.”

Several industry leaders, including Chevron, Texaco, Citgo,Petro-Canada, ExxonMobil and Shell have begun aggressively movingtoward e-commerce. Trends in e-commerce show that credit cardtransactions are up 11%; online prices and quotations are up 8%;and the ability to order consumer products is up 15%.

Carolyn Davis, Houston

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