P:\Application Data\Desktop\Going Global\Strategy Board 081209 Final

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GG - Dec SIB

GG - Dec SIB

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  • 1. UK ICT Strategy Implementation Board 8 December 2009 -------------------------------------------------------------------------------------------------------------------------- A proposition for SME global market support
  • 2. A proposition for SME global market support ---------------------------------------------------------------------------------------------------------------------------- What we’ve been up to Evidence of need The business landscape and opportunity The proposed solution Fit with the marketing strategy Funding, governance and ownership Next steps
  • 3. What we’ve been up to ---------------------------------------------------------------------------------------------------------------------------- If you’re a UK technology It won’t be company with difficult or take too between 1 and 500 long, and it could employees, we want to make a real talk – we’ve got all difference to your sorts of questions business. for you.
  • 4. 259 92
  • 5. UKTI Media Technology SMEs Service providers
  • 6. “New markets are always hard work. I’d be interested in sharing details of effective resellers and agents...” “It’s about local knowledge. A product that might sound great “I’ve had a lot of pain to a customer in San Francisco internationalising. I figured it may not sound so great to the out the hard way and spent a same sort of person on Boston” lot of money doing it” SMEs and suppliers are eager to share their problems, knowledge and expertise “More than anything else, I need “I believe that if a company is supply chain information. If this wholly committed to service can provide that, it’s internationalising it is doable. removed my biggest barrier to The problems arise with poor market entry.” preparation and half-hearted commitment”
  • 7. Evidence of need ---------------------------------------------------------------------------------------------------------------------------- “Limited firm resources and international contacts as well as lack of requisite managerial knowledge about internationalisation have remained critical constraints to SME internationalisation. These resource limitations… seem particularly prevalent among smaller, newly internationalising companies.” p.5 OECD (2009), “Top Barriers and Drivers to SME Internationalisation” Report by the OECD Working Party on SMEs and Entrepreneurship, OECD
  • 8. Evidence of need ---------------------------------------------------------------------------------------------------------------------------- Lack of managerial time, skills and knowledge* Inability to contact potential overseas customers* Limited information to locate and analyse markets *Crick, 2007: SMEs' Barriers Towards Internationalisation and Assistance Requirements in the UK
  • 9. Evidence of need ---------------------------------------------------------------------------------------------------------------------------- 100,000+ SMEs in UK technology sector
  • 10. Evidence of need ---------------------------------------------------------------------------------------------------------------------------- 100,000+ SMEs in UK technology sector 59,000 classed as active exporters
  • 11. Evidence of need ---------------------------------------------------------------------------------------------------------------------------- 100,000+ SMEs in UK technology* sector possibly as many as 100,000 active exporters seeking growth, profits, reduced dependence on a single market *Computing category only
  • 12. The business landscape ---------------------------------------------------------------------------------------------------------------------------- SMEs BUYERS £1.7bn marketplace?
  • 13. SMEs BUYERS
  • 14. CAPITAL & INVESTMENT REDUCING RISK LOCAL SERVICES INSIGHT & UNDERSTANDING LOCALISATION CREDIT OFFICIAL AGENCIES & CHECKS & DIRECTORATE VCs ACCOUNTANTS DUE PROMOTION ACTIVITY DILIGENCE TRADE DIRECTORIES INSURANCE (Shipping, health & employment insurance) BANKS LAW FREIGHT FORWARDER TRADE S DIRECTORIES & SITES SMEs fragmented RECRUITMENT COMPANIES LETTING AGENTS discontinuous & OFFICE RENTAL DIRECTORIES BUYERS unaccredited RDAs EVENTS ADVERTISIN G GENERAL INFO expensive TRADE ASSOCIATIONS MISSIONS & DELEGATIONS hard to find BOOKS & MARKETING GUIDES TRADE COUNTRY AGENCIES INFO INTERCULTURA CLUSTER L TRAINING GROUPS TRANSLATIONS, BLOGS, KNOWLEDGE LOCALISATION AND FORUMS & TRANSFER INTERPRETATION SOCIAL NETWORKS NETWORKS MARKET RESEARCH
  • 15. The opportunity ---------------------------------------------------------------------------------------------------------------------------- The internet allows us to facilitate collaboration across the SME community and its suppliers - inserting a layer of mutual support, sharing information, opinions and recommendations, aggregating this complex ecosystem. design approach technology approach collaborative filtering open source social proof application frameworks shared profiles plug-in architecture read/write content APIs
  • 16. The proposed solution ---------------------------------------------------------------------------------------------------------------------------- A dedicated platform that enables SMEs and supporting service suppliers to collaborate and share intelligence about market value, means of entry and participation. Going Global reduces the risk and time to payback of entering new country markets for UK ICT firms and especially SMEs.
  • 17. The proposed solution ---------------------------------------------------------------------------------------------------------------------------- At the heart of the system is a framework for identifying expert content (and expert responses) relevant to a particular situation or opportunity according to geography, company profile and company goal or task. The system enables participants to create or aggregate and add to useful content from across the web.
  • 18. The idea ---------------------------------------------------------------------------------------------------------------------------- Reputation Goal related Context Accreditation Viewpoints Activity related Latest Popularity
  • 19. Read/write content objects Articles, PDFs, videos, calendar items, links, lists etc. ---------------------------------------------------------------------------------------------------------------------------- Rate & review Comments Related content Viewed by... Also useful for topic x... Created by... Popularity Tags Accredited by...
  • 20. other websites via api Reputation Goal request for information related Context Accreditation Profile History response related Latest Popularity Market guide Sector dashboard Country dashboard
  • 21. User journeys ----------------------------------------------------------------------------------------------------------------------------
  • 22. The proposed solution ---------------------------------------------------------------------------------------------------------------------------- Content is graded and filtered by the audience and aggregated around objectives Content isn’t created by the service. It’s uploaded and managed by the participants. The body of content grows over time Valued content becomes the most visible content, accredited for accuracy and value-in- context by experts and by the community, according to their reputation
  • 23. The proposed solution ---------------------------------------------------------------------------------------------------------------------------- Reputation (of participants) is a critical component of the service mechanism. Accreditation (of content) is provided by experts and by the community.
  • 24. Fit with marketing strategy ---------------------------------------------------------------------------------------------------------------------------- Contextual presentation of marketing toolkit Domain expertise in market guide Generates SME data that feeds back into Govt. policy Provides scale and reach to influence a wider audience Market UK success stories
  • 25. What makes it different? ---------------------------------------------------------------------------------------------------------------------------- • A single focusthe needs of UK technology SMEs emphasis on on internationalisation, with a special • Relevant, up-to-date, qualified information generated by a range of enquiry/search methods • The backing ofservice providers networkandUKTI post staff and local an international ranked of rated by the community • A core webin promoting growth for all organisations interested infrastructure piece through internationalisation • Run for the public good
  • 26. What people said... ---------------------------------------------------------------------------------------------------------------------------- “This would be a huge value-add for my customers.” -- Leigh Odell, Accredit UK TechnologyWorld 09
  • 27. What people said... ---------------------------------------------------------------------------------------------------------------------------- “I like the competitive aspect. The country view or market view that shows market competitors and the effort required to get there -- that would really be helpful.” -- Alaric Jenkins, Info Stor in-person interview
  • 28. What people said... ---------------------------------------------------------------------------------------------------------------------------- “This is the kind of thing my customers have been looking for.” -- Merce Garcia i Cervera, MGC Consulting TechnologyWorld 09
  • 29. What people said... ---------------------------------------------------------------------------------------------------------------------------- “I’m looking for a well-coordinated and connected peer group of people who want to export to similar countries.” -- Max Toti, CapTech, LinkedIn discussion
  • 30. What people said... ---------------------------------------------------------------------------------------------------------------------------- “like to be part of an eco-system of exporters who can collaborate and share knowledge and experience, ideally at different stages of maturity, so the starters can learn from the veterans and avoid common mistakes.” -- Max Toti, CapTech, LinkedIn discussion
  • 31. Value exchanged ---------------------------------------------------------------------------------------------------------------------------- UK SMEs mutual support cohesive voice benefit of experience
  • 32. Value exchanged ---------------------------------------------------------------------------------------------------------------------------- recruitment success stories UKTI feedback innovation credit SME data marketing collateral local market insight targeted sales channel introductions to buyers endorsements UK SMEs mutual support recommended services cohesive voice Service providers specific information benefit of experience
  • 33. Value exchanged ---------------------------------------------------------------------------------------------------------------------------- Trade marketing recruitment associations UKTI success stories Foreign inward investment support feedback government promotion innovation credit agencies contacts SME data marketing collateral support local market insight targeted sales channel introductions to buyers endorsements UK SMEs grants mutual support UK RDAs recommended services cohesive voice Service providers specific information benefit of experience
  • 34. Is it sustainable? ---------------------------------------------------------------------------------------------------------------------------- •The revenue/cost model is a working hypothesis •£1.8m in yearan income stream of £0.7m in year 2 and We estimate 3
  • 35. Potential revenue sources ---------------------------------------------------------------------------------------------------------------------------- 1 Data & business intelligence services (UKTI, inward investors, service and solution providers) 2 Research commissions 3 Sponsorships and partnerships with other business intelligence services 4 Subscriptions (to gain access to the community) & membership 5 Advertising (by service providers) classified and display 6 Software licensing and custom development (dependent on model) 7 Supporter/industry contributions (dependent on model) 8 Exploitation of other IP and legal rights 9 Contributions in kind
  • 36. Is it sustainable? ---------------------------------------------------------------------------------------------------------------------------- •The revenue/cost model is a working hypothesis •£1.8m in yearan income stream of £0.7m in year 2 and We estimate three •Start-up costs in year 1 of circa £0.85m - £1.05m •annum, operating costsscale and development£1.3m per Annual depending on range from £0.5m to need •and need a keener idea of the size of the target market We the appetite and wallet-size of service providers •marketplace -the servicetolies in the participants in the The value of we need build critical mass
  • 37. Next steps ---------------------------------------------------------------------------------------------------------------------------- •Proceed in three phases...
  • 38. Project phasing ---------------------------------------------------------------------------------------------------------------------------- 1 2 3 4 Concept Working Full rollout Sustainable development prototype operation Complete Fundraising... Requires full Requires understanding critical mass and commencing of business and positive operating test of... case and net cash Identify SMEs most likely governance to internationalise and how they prefer to collaborate Business case Cost model Sources of funding Future governance models and... Build critical mass
  • 39. Project phasing ---------------------------------------------------------------------------------------------------------------------------- Concept Working Full rollout Sustainable development prototype Government? operation £ +industry? Future governance model UK Technology Full rollout Owning leadership phase Body Business case Research SMEs and service cos. Prototype Dev.
  • 40. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar £500K Prototype Build £400K Release One MxM/UKTI/LEADERSHIP Prototype Build Release Two £300K MxM/UKTI/LEADERSHIP Incubation Period £200K MxM/UKTI/LEADERSHIP Handover MxM/UKTI/LEADERSHIP/ £100K OWNING BODY £110K p/m £100K p/m Business as Usual ~£90Kp/m ~£40Kp/ OWNING BODY m
  • 41. Service principles ---------------------------------------------------------------------------------------------------------------------------- The service is run by industry for industry The service is designed primarily for UK SMEs looking to do business in overseas markets. Service for other participants or revenue generating partnerships with should not destroy value created for SMEs Commercial and non-government service providers are not the prime beneficiary of the service but their participation is essential and encouraged for the value they create for SMEs Central government (specifically UKTI) is not the prime beneficiary of the service, but it’s participation is essential for the value it creates for SMES; the service provides UKTI with an effective means of recruiting and engaging with SMEs The value of the service lies in its primary and secondary participants (buyers and sellers) and the tools it offers them to interact and exchange value in a marketplace for information and services. That value is embodied in the workings of the marketplace, eg such as reputation, accreditation, profile aggregation, openness, self-moderation, etc. The service is not exclusive to UK SMEs, UK service providers or UK government agencies The principle language of the service is English
  • 42. Service principles ---------------------------------------------------------------------------------------------------------------------------- The service seeks to collaborate rather than compete. Where other services create value in a more effective way, the service will seek to ally with and integrate with them The service will integrate with other open services. Where possible, it will endeavour to create relationships with other services where there is mutual benefit e.g. World Bank Statistics, Transparency Internationals Corruption Index, Linkedin, etc. The design should encourage participants to share success stories The service permits central and regional government to support areas offering “comparative advantage” and “overseas markets which offer the greatest opportunities”. SMEs may have different geographic priorities to larger companies. The service allows businesses to earn credibility through their behaviour on the system. This credibility is awarded on a peer-to-peer basis and includes ratings, accreditation, awards or other forms of social proof.
  • 43. Operational Models - Not For Profit -------------------------------------------------------------------------------------------------------------------------- Not for profit (NFP) body (possibly company limited by guarantee) outsources sales in Outsource order to fund marketing, Sales Sales development and community management and other overheads. Some income is retained. The body owns all IP rights associated with the platform. £ £ NFP Body Marketing £ Revenue As soon as it becomes affordable to do so, the body will provide grants to SMEs in order to assist them with their efforts to £ £ internationalise. £ Comms Dev. Mgmnt. Grants to SMEs
  • 44. Operational Models - For Profit -------------------------------------------------------------------------------------------------------------------------- For profit (FP) controls all operational aspects and IP rights associated with the the platform. Some work (particularly development) may be outsourced as required. The ultimate actions of the body are controlled by the guaranteeing members; the selected members may consist of the executive Comms created to manage the prototype phase Marketing Mgmnt. of the project. This model allows greater salaries to attract talent to the enterprise. For Profit Body Part of the remit of the organisation will be to provide grants to SMEs to £ Sales Dev. assist with their efforts to internationalise as soon as it becomes affordable to do so £ Guaranteeing members Grants to exercise controlling authority SMEs
  • 45. Discussion points ---------------------------------------------------------------------------------------------------------------------------- Should the work continue in the manner proposed? How should the Board go about funding and the working prototype and making the service operational?