IT Strategies in SMEs Presented By Group 6: DJ Monzyk | Angela Lieb | James Campbell
What is a SME? Small to Medium size Enterprise • No single definition • USA: fewer than 500 employees • Europe: fewer than 250 employees 1 • • Micro: 0 -9 employees Small: 10 -49 employees Medium: 50 -249 employees Large: 250+ employees 9 • In US and Japan, SMEs count for 99% of businesses • In the European Union, SMEs count for 99. 8% of businesses 9
Size of Company
Spending • SMEs – fastest growing purchasers of IT products; led in spending growth vs. large firms in 2004 • Total of $156 B spent nationwide (in 1999)3 • Typical manufacturer – 2% of budget on IT • Typical service company – 5% of budget on IT • Typical SME in US - 6. 4% of revenue Ø Why such a large percentage? . . . Fixed costs in infrastructure • Projected IT budget growth in 2005 Ø 6. 6% for small sized firms Ø 10. 8% for medium sized firms • Basic infrastructure accounts for majority of IT budget 4
Spending Survey results Ø 30% of companies interviewed were manufacturing On average, they spend. 73% of their budget on IT Ø Our survey of SME’s averaged 14% on IT Ø 40% of the companies we surveyed were providing technology as a service or product
Reasons for Adopting IT • No longer for competitive advantage, but trying to keep up 4 • Enhanced entrepreneurship 6 • More innovative workplace cultures 6 • SMEs are using IT primarily for 4 Ø Marketing Functions § Internet / E-commerce Ø Ø Basic Web Access Customer Management Financial Management Knowledge Management
Adoption of Internet • 80% of all SMEs are connected to the web 5 • Reasons for adoption of Internet 5 Ø Used primarily for Marketing Function Ø Can extend efficiency and market reach Ø Flexibility and ability for strategic change Ø …. but must adopt further than marketing alone Ø Can create better marketing relationships with customers Ø Expanded virtual assets 6 Ø Can enter global market 6 • High costs due to 6 Ø Ø New infrastructure Information skills Constant reconfiguration Separate online marketing methods
Adoption of Internet Survey results Ø More opportunities to start businesses – website, internet, e-mail, contact management, cost effective Ø 70% of companies were launched within last 5 years Ø All companies are using the technology in the same formats as the research indicated – marketing, building relationships, managing client information, etc.
SME Statistics Survey results Where are they doing business Ø 95% doing business nationally Ø 35% doing business internationally Ø 90% doing business locally Where does their revenue come from? Ø 46% Local Ø 47% National Ø 7% Global
Adoption of Ecommerce • Reasons for adoption Ø Breaks down traditional barriers of competition Ø Growth potential • Process Ø Find market position of competitors Ø Build specific objectives Ø Start in niche market(s) Ø Define Critical Success Factors (CSF) Ø Adapt strategy to CSF • Barriers Ø Lack of time, finances, and expertise 8
Adoption of Ecommerce Survey results Ø 100% of companies interviewed are connected Ø 100% have web presence Ø 100% using e-mail Ø 50% of those surveyed are using the website as a brochure only Ø 30% are using their website for e-commerce Ø 25% are using their website for customer support
Adoption of Customer Solutions • Reasons for adoption Ø Higher standard for customer communication Ø Large firms acting like small firms Ø Can identify customers • What is enabling SMEs to be able to finally obtain affordable customer solutions? Ø Ø Economic downturn New solutions Need for CRM packages eliminated More efficient and economical • Benefits of new solutions Ø Ease of use Ø Unified view of customers 7
Adoption of Customer Solutions Survey results • How SME’s are relating to customers via the web Ø New customers can purchase services online Ø Real time sales and technical support through online javabased chat Ø Current/future customers can initiate e-mail contact Ø Facilitate new sales partners through partner programs Ø Provide password protected access to tools for customers Ø Enable existing customer to make changes to their account/services Ø Clients can update their account information or profile Ø Answer FAQ’s
Adoption of Knowledge Management • Reasons for adoption Ø Can provide competitive advantage Ø Value creation • Benefits for a SME vs. large firm Ø Ø Smaller structures Intimate relationships within firm supports KM Corporate mindset Decision making control is centralized • Downfalls for a SME vs. large firm Ø Ø Ø Ø Trying to externalize their KM Mechanistic Limited vocabulary Less sympathetic at sharing knowledge Less formalization and standardization Time issue for management Low specialization of employees 9
IT in the small business Case Study: Host Analytics Interview: Jim Eberlin, CEO • Host Analytics provides Business Performance Management Solutions which include: Ø Financial Budgeting and Planning, Forecasting Software Ø Sales Forecasting and Sales Budgeting Software Ø Financial Consolidation and Reporting Software Ø Balanced Scorecarding and Dashboarding • • Employees – 35 in 3 locations Locations: Texas, St. Louis and Technolgoy Center in India Revenue – confidential, however would guess about $50 M IT Budget: 6% annual revenue is dedicated to paying expenses related to internal technology
IT in the small business Host Analytics: Jim Eberlin, CEO • Customer Relationship Management system: use Salesforce. com and website analytic application • Architecture: Microsoft OS 2000, 4 servers, 26 workstation, running XP • Website: is used as brochure, customer self-serve for information and registration for prospects • Customers: 5% of business is local, 80% national and 15% is international • Biggest technology Challenge: it’s that all of their expenses go to support sales, service and product development and they borrow from service for internal support- this works ok for now, but not for long – we will have to invest in internal infrastructure
IT in the small business Host Analytics: Jim Eberlin, CEO • Customer Solutions Ø Ø Focus on smaller companies Make sure they are 100% satisfied Save costs where necessary to make it affordable Use their applications internally to manage customer data • Knowledge Management Ø Small team, therefore changes are easy to implement, corporate mentality – all employees are involved with decision process. New hires are company focused, not sales focused. Ø The company uses their Score carding and Dashboarding to help create Key Performance Indicators – this application helps manage the following areas: Financial, Customer, Internal Processes, Learning and Growth are
Adoption of ERP • ERP for small businesses? ØIn the past ERP supplier ignored companies with under $100 million in sales 10 ØFrom 2002 to 2003 companies under $30 million increased ERP spending 14%11 ØFrom 2002 to 2003 companies over $30 million ERP spending remained flat 11 ØSpending on ERP packages in Canada estimated to be $389 million by 200712
Adoption of ERP • Reasons for adoption Ø Create competitive advantage 13 Ø Improved efficiency Ø Value creation • Issues to consider Ø Find the right supplier 14 Ø Define CSF’s 14 Ø Determine how business processes must change 14
Adoption of ERP Case Study: Edge Manufacturing • Background Information – Employees: 60 – 2003 sales: approximately $7 million – 2003 profit: $30, 000 – Spending on IT: 1. 2%
Adoption of ERP Case Study: Edge Manufacturing • Reasons for adoption Ø Better Inventory Control Ø Update product costing regularly Ø Streamline production planning Ø Reduce tribal knowledge Ø Reduce time to close month • Review of project Ø Scope of project Ø Problems/Issues Ø State of Project
Adoption of ERP • Review of Best Practices in a SME mind frame 12, 13 Ø Ø Ø Ø Ø Secure the support of top management Project leaders are veterans Redesign business process before selecting Change management goes hand-in-hand with project management Do not underestimate the training, maintenance, and support costs Insource the development, but buy in vendor expertise Implement incrementally Include business users on development team A satisficing mindset prevails
Summary • Areas Researched Ø Spending on IT Ø Adoption of Ecommerce Ø Adoption of Customer Solutions Ø Adoption of Knowledge Management Ø Adoption of ERP • Best Practices Ø Review of Variables Ø Conclusions
Summary of Strategies used by SME’s • Maximize the use of the website to market, manage inquiries, take care of clients • When competing with the larger company, either collaborate with them as a resource OR serve the smaller companies who can’t afford their product • Utilize employees in several areas of the business and outsource what you don’t know – networking, web maintenance, telephone maintenance, etc. • Do invest in a contact management software that you can grow with and that allows you to track history of emails, correspondence, marketing, financials • Develop systems NOW • Read e-Myth Revisited by Michael Gerber
Sources 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Small Business Service (U. K. ), “Small and Medium Enterprise (SME) – Definitions” http: //www. sbs. gov. uk/default. php? page=/analytical/statistics/smedefs. php, viewed October 25, 2004. Zimmermann, Jim, “ 2004 IT Spending Predictions Roundup” Bitpipe. com, http: //wp. bitpipe. com/resource/org_973204426_74/Analyst_Views_Roundup__bitpipe. pdf, viewed October 28, 2004. 3. U. S. Small Business Administration Office of Advocacy, “Small Business Expansions in Electronic Commerce” June 2000, p. 1 -17, http: //www. esa. doc. gov/pdf/Digital. Age. Pub. R 1. pdf, viewed October 26, 2004. Kraus, Bob, “SMB Spending Is Robust and Growing Into 2005” AMR Research, http: //www. amrresearch. com/Content/View. asp? pmillid=17458&docid=11267, viewed October 27, 2004. Martin, Lynn M. , and Matlay, Harry. , “Innovative use of the Internet in established small firms: The impact of knowledge management and organisational learning in accessing new opportunities” Qualitative Market Research, Vol. 6, Iss. 1, 2003, p. 18 -26. Tetteh, Emmanuel, and Burn, Janice, “Global strategies for SMe-business: applying the SMALL framework”, Logistics Information Management, Vol. 14, Iss. 1/2, 2001, p. 171 -180. O’Connell, Sean, “Leveling the playing field: Advanced customer service solutions for small and medium businesses”, Customer Inter@action Solutions, Vol. 21, Iss. 11, 2003, p. 60 -62. Jeffcoate, Judith, Chappell, Caroline, and Feindt, Sylvie “Best practice in SME adoption of e-commerce” Benchmarking, Vol. 9, Iss. 2, 2002, p. 122 -132. Wong, Kuan Yew, and Aspinwall, Elaine, “Characterizing knowledge management in the small business environment” Journal of Knowledge Management, Vol. 8, No. 3, 2004, p. 44 -61. Caldeira, Mario M. , and Ward, John M. , “Using resource-based theory to interpret the successful adoption and use of information systems and technology in manufacturing small and medium-sized enterprises” European Journal of Information Systems, Vol. 12, Iss. 2, 2003, p. 127 -141.
Sources 11. 12. 13. 14. 15. 16. “Spending fastest in small business segment last year; increase expected: , MSI, July 2004, Vol. 22, Iss. 7, p. 29. Solomon, Howard, “Mid-size enterprise resource management applications”, Computer Dealer News, September 12, 2003, Vol. 19, Iss. 12, p. 4. Caldeira, Mario M. , and Ward, John M. , “Using resource-based theory to interpret the successful adoption and use of information systems and technology in manufacturing small and medium-sized enterprises” European Journal of Information Systems, Vol. 12, Iss. 2, 2003, p. 127 -141. “Production Management: No pain, no gain”, Metalworking Production, March 19, 2003, p. 22. Subramanian, Ashok, and Lacity, Mary C. , “Managing client/server implementations: today’s technology, yesterday’s lessons”, Journal of Information Technology, Vol. 12, 1997, p. 169 -186. Brown, Carol V. , and Vessey, Iris, “Managing the next wave of enterprise systems: leveraging lessons from ERP”, MIS Quarterly Executive, Vol. 2, No. 1, March 2003, p. 65 -77.
Survey/Interview Sources 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Rick Sartori, CFO, CDM Fantasy Sports, interview by email by Angela Lieb October 19 -November 1, 2004, www. cdmfantasysports. com Lynn Potts, Publisher, Concierge Preferred Magazine, interview by e-mail by Angela Lieb October 19 November 1, 2004 www. conciergepreferred. com John Pawlikowski, President USA, Deloro Stellite, interview by e-mail by Angela Lieb October 19 November 1, 2004 www. stellite. com Chris Shocklee, VP, Drumtech, interview by e-mail by Angela Lieb October 19 -November 1, 2004 www. drumtechus. com Jim Campbell, Edge Manufacturing, www. edgemfg. com Erman Ramos, CEO, Foundation Mortgage, interview by e-mail by Angela Lieb October 19 -November 1, 2004 www. foundationmortgagellc. com Jim Eberlin, CEO, Host Analytics, interviewed in person November 1, 2004 www. hostanalytics. com Ken Cox, Director Internal Operations, Hostirian, interview by e-mail by Angela Lieb October 19 November 1, 2004 www. hostirian. com Donald Ficken, CEO, Leapfrog Performance Services, interview by e-mail by Angela Lieb October 19 November 1, 2004 www. ileapfrog. com Offi. Start Business Centers, Angela Lieb, Founder, www. offistart. com 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. David Prouhet, CEO, Pronett Solutions, interview by e-mail by Angela Lieb October 19 -November 1, 2004 www. pronettsolutions. com Ken Lauer, CEO, Rising Media, interview by e-mail by Angela Lieb October 19 -November 1, 2004 www. risingmedia. net Tom Sears, CEO, Riverbend Capital Group, interview by e-mail by Angela Lieb October 19 November 1, 2004 www. riverbendcapitalgroup. com DJ Monzyk, Signs Now, www. signsnow. com Mary Schanuel, CEO, Synergy Group, interview by email by Angela Lieb October 19 -November 1, 2004 www. synergy-pr. com Tom Jordan, CEO, US Net, interview by e-mail by Angela Lieb October 19 -November 1, 2004 www. us. net Mark Giannotti, VP, Venmar Solutions, interview by email by Angela Lieb October 19 -November 1, 2004 www. venmar. com Craig Mc. Callum, COO, Vistawiz, interview by e-mail by Angela Lieb October 19 -November 1, 2004 www. vistawiz. com Toni Davis, Partner, Wetrak, interview by e-mail by Angela Lieb October 19 -November 1, 2004 www. wetrak. com Shannon Brewer, CEO, Zarchivist, interview by e-mail by Angela Lieb October 19 -November 1, 2004 www. zarchivist. com
Скачать презентацию IT Strategies in SMEs Presented By Group 6
83de3df78eca4932cc11ff761b80348d.ppt