The finding is the result of a study, sponsored by Dell Computers, in which 1,200 businesses in the US and Europe have been polled. This year in particular has marked the startup of scores of commercial real estate sites, an industry that traditionally has relied upon one-on-one contact for transactions. But, says Whinston, the industry has a long way to go in making Internet real estate work with the brick-and-mortar world.
Whinston told GlobeSt.com that commercial real estate is falling short by not thinking along more progressive lines, such as Internet auctions for leases, sales and buys. "It's basic economics," he says. "It should be that way, but whether it will be I can't say."
Many brick-and-mortar companies use only a small percentage of Internet options. "It's an organizational problem not a technology problem," Whinston told GlobeSt.com. "The technology is there, but people aren't grasping it."
The study is one of the largest and most in-depth ever conducted on e-business value. Most companies today have Web sites, but many fail to update or redesign their processes for e-business practices such as information sharing, quality monitoring and supplier selection, according to study findings. The CREC report has uncovered a strong relationship between a company's financial performance and e-business technology drivers, such as system integration, customer orientation and supplier-related processes and trading partner readiness for e-commerce.
"Technologies and process are synergistic, and investing in one without investing in the other is unlikely to provide a significant payoff," says Whinston. Within the real estate sector, he says "somebody's got to jump in there and become the dominant player" for fully tapping available Internet resources and developing new applications. The study shows 74% of the companies provide basic information online, but only 55% do any online customization.
Commercial property auctions would "raise the price not drive down the price," Whinston says, adding that such activity would open doors for moving property more quickly than ever envisioned with traditional methods.
The study team has been headed up by Whinston and Drs. Anitesh Barua and Prabhudev Konana. CREC is a leading research institution in generating critical knowledge and understanding for information systems and management, electronic commerce and the digital economy. Current research activities seek to provide an efficient and effective framework for global e-commerce and the digital economy through an integrated research agenda focusing on correlative effects among network infrastructure, products, processes, payment systems and policies, using markets and economic analysis as the central unifying theme.
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