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Increasing the Value of Business: The Role of ICT

Increasing the Value of Business: The Role of ICT. Presentation by Gordon Lee Chief Executive Officer Parallel 56 Limited 14 October 2005. What does Parallel 56 do….

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Increasing the Value of Business: The Role of ICT

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  1. Increasing the Value of Business:The Role of ICT Presentation by Gordon Lee Chief Executive Officer Parallel 56 Limited 14 October 2005

  2. What does Parallel 56 do… • We help economic development agencies to develop and implement strategies to help SMEs increase business value through the use of ICT • Marketing Strategy and Project Management • Business Research, e-Business Adoption Benchmarking and Project Evaluation • E-Business Training Programme Development and Implementation • ICT Consultancy and Project Management • We have been the primary e-business development contractor to Scottish Enterprise for the past 5 years • We also help businesses directly to achieve customer-led business improvement

  3. Let’s consider what makes a business valuable…

  4. Management Team Innovation Customer Value Commercial Advantage Financial Performance Business Value

  5. Management Team Innovation Customer Value Commercial Advantage Financial Performance Information and Communications Technologies Acting as an Enabler and as a Differentiator Business Value and the Role of ICT

  6. Business Value and the Role of ICT ICT is now recognised as contributing up to 50% of business growth…* Leadership Internationalisation Customer Management Supplier Management Innovation ICT *: Study by SQW Ltd 2004 using Parallel 56 Scottish e-Business Survey 2004 data

  7. Our research provides the evidence…

  8. What have we discovered… • E-business is being seen as increasingly important by owners of small businesses • Having broadband and wireless connectivity only enables change – business transformation does not come automatically • 65% of businesses do not understand how ICT can help their business • Across Europe internet connectivity is decreasing as well as increasing – in some regions by as much as -10% • Skills and knowledge of managers and of employees is the most significant barrier to advanced adoption • Adoption is most heavily influenced by customer demand and this holds the key to advanced adoption

  9. Some statistics… Fact: e-Business is even more important this year than last The Importance of e-Business to the Current Needs of the Organisation Sample: 100% of organisations asked Based on research conducted by Parallel 56 in 2004 and 2005 in 5 regions of the UK and with over 15,000 businesses

  10. Some statistics… Fact: Most believe they’ve benefited from their e-business investment Benefits found from e-business activities Sample: 74% of organisations asked Based on research conducted by Parallel 56 in 2004 and 2005 in 5 regions of the UK and with over 15,000 businesses

  11. Some statistics… Fact: Lack of relevance is the main barrier to adoption Barriers to the development of e-business within the organisation Sample: 26% of organisations asked Based on research conducted by Parallel 56 in 2004 and 2005 in 5 regions of the UK and with over 15,000 businesses

  12. Some statistics… Fact: Access to the internet has increased in 2005 Access to the Internet Sample: 100% of organisations asked Based on research conducted by Parallel 56 in 2004 and 2005 in 5 regions of the UK and with over 15,000 businesses

  13. Some statistics… Fact: Gap between a process being important and being IT-supported IT-supported business processes compared Sample: 100% of organisations asked Based on research conducted by Parallel 56 in 2004 and 2005 in 5 regions of the UK and with over 15,000 businesses

  14. Some statistics… Fact: 47% have no internal IT resource The main sources of IT skills within the business Sample: 100% of organisations asked Based on research conducted by Parallel 56 in 2004 and 2005 in 5 regions of the UK and with over 15,000 businesses

  15. Some statistics… Fact: 50% require e-business support on at least one topic Topics of e-business advice or training sought Sample: 100% of organisations asked Based on research conducted by Parallel 56 in 2004 and 2005 in 5 regions of the UK and with over 15,000 businesses

  16. Some statistics… Fact: Organisations that are growing use and value e-business more Based on research conducted by Parallel 56 in 2004 and 2005 in 5 regions of the UK and with over 15,000 businesses

  17. Some statistics… Fact: Difference in turnover per employee related to adoption of e-business Based on research conducted by Parallel 56 in 2004 and 2005 in 5 regions of the UK and with over 15,000 businesses

  18. Some statistics… Fact: Turnover improvement per employee in businesses with e-business Based on research conducted by Parallel 56 in 2004 and 2005 in 5 regions of the UK and with over 15,000 businesses

  19. Achieving transformation through IT…

  20. Current State Step Change Continuous Improvement • Inefficient • Lack of Innovation • Poor Management • Cost driven • Not Customer-Led • Lack of Planning • Lack of Investment • Lack of Growth • More Efficient • Some Innovation • Focused Management • Value Driven • Customer-Led • Business Planning • Investment Plan • Growth Recognition • Improving Efficiency • Constant Innovation • Strong Management • Value Driven • Customer-Led • Planning Cycle • Continuous Investment • Continuous Growth Recognised scope for improvement Looked at their business objectively Recognised weaknesses Completed planning Improved focus Made some investments (infrastructure, people) Managing their business differently Looking for opportunities to improve Constant recognition of what brings success More optimistic and innovative environment Better place to work The right kind of growth More profit Business transformation through ICT…

  21. Technology Adoption Strategy and Motivation Importance of ICT Demands of Customers Demands of Suppliers IT skills within organisation Influences Support Internet connectivity Broadband Email Website LAN/WAN Wireless Application integration Ordering online Paying online Selling online Online collaboration Sharing knowledge online Managing supplier relationships Managing customer relationships Benefits gained to-date Return on investment Business growth profile Attitude to future adoption Attitudes and Impact Business Processes Business transformation through ICT… The four components… Business Transformation Through ICT

  22. Company completes short profiling questionnaire Company’s profile is compared to the datasets Business transformation through ICT… Benchmarking the sophistication of adoption… Company Questionnaire(online) Datasets (10,000+) • Company • Profile • Compared to • All companies in sector/type • All companies - regional • All companies - national • Profiling tool (questionnaire) helps to create an agenda for change within the business by providing a competitive positioning • This also provides the LEC and the adviser with the same information in order to plan intervention • Impact can be evaluated by assessing the company again in 3, 6 or 12 months

  23. Business transformation through ICT… The spread of businesses by level of sophistication and attitude ebusiness transformers 22% ebusiness pragmatists 26% ebusiness sceptics 35% non adopters 17%

  24. Making change happen…

  25. So what needs to happen… To create strong, competitive e-enabled businesses • Measure current and emerging trends in the use of ICT in SMEs • Sustained promotion of e-business to SMEs to meet their needs • Focus on what they do with broadband – not simply getting them connected • Develop the skills of managers and employees - crucial • Adopt customer-led strategy development with companies • Concentrate on the customer-facing aspects of the business to motivate a non-adopter • Involve ICT suppliers in the process - including the major vendors

  26. And what will the benefits be… • Improved customer-led focus • Improved marketing effectiveness • Improved capability for internationalisation • Improved business management • Improved profitability And ultimately… Improved Business Value

  27. Thank You… Gordon Lee Chief Executive Officer Parallel 56 Limited 155 Bath Street Glasgow G2 4SQ Scotland, UK Tel: +44 (0)141 273 7000 Fax: +44 (0)141 273 7001 Email: gordon@parallel56.com Web: www.parallel56.com

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