July 21 2009, Birmingham Post, column by Mike Musson
Earlier this year the West Midlands ICT Cluster, supported by Advantage West Midlands, conducted a survey into the level of export activity amongst ICT companies in the region, previously identified as exporters. A healthy 84% of these respondents have been exporting ICT products and services across the globe – from Europe to Asia and Africa during the past two years. Amongst those companies not currently exporting, 64% stated that they plan to do so within the next 12-18 months.
The results are encouraging. When sales are down, companies need to be innovative about finding new markets. ICT is a global opportunity so if a product is successful in the UK, the chances are there are potentially lucrative new markets overseas. Entering any new market requires careful research and planning andthere is a wealth of support on offer to facilitate successful entry into overseas markets; many of these support schemes are listed on the ICT Cluster website.
Another interesting finding of the ICT Cluster research was the identification of the EU (40%) and USA/Canada (30%) as the most important export markets for existing ICT exporters. Most of the currently exporting companies were selling through agents, partners or joint ventures. Indeed, as many European countries are faring better than the UK they offer potentially large markets for Midlands companies.
But as an SME how do you embark on an export strategy? The best starting point is to research and develop a smart business plan. It’s important to really understand your product; how it adds value; where potential customers are; and identify key decision makers. On top of this it’s essential to know the country you’re targeting including cultural, language and regulatory issues.
Support for international trade comes in many guises and is available whether you are already exporting or just exploring options. The two primary organisations for a first point of contact are UKTI and the British Chambers of Commerce, who offer and can access a range of export advisory services as well as providing grants for SMEs to attend overseas trade missions. The University of Warwick Science Park has just launched a short term mentor driven initiative for innovative high-tech businesses keen to develop new international markets. The European Commission (EC) also provides a number of international schemes aimed at encouraging cross-border trade and investment between EU member countries. One example is the Enterprise Europe Network, providing a range of free services to SMEs including business partnership facilitation and information and advice on EU legislation, regulation and policy.
As globalisation occurs and the world becomes metaphorically smaller, targeting foreign markets has become a reality for any size of business. Exporting can be a big step into the unknown but once you take it, you won’t be alone.
Mike Musson, ICT Cluster Manager, Advantage West Midlands
Social networks are essentially online communities of people who share interests and activities. The ICT Cluster, along with other private and public sector organisations, is already feeling the benefits of creating a group identity and interacting with members of the group through services such as discussions, news postings, direct contact or instant messaging. The majority of social networks are free to use and are attracting millions of users so their power cannot be ignored.
One of the major benefits, in particular for small technology SMEs with limited marketing resources, is the opportunity to generate contacts and keep in touch with people simply and very cheaply. The right network can provide a source of potential business partners, suppliers, customers and employees. However, choosing the right network is essential and, once you become a member, participation is crucial. Communication with other members needs to be relevant and interesting or you can alienate people, therefore it needs to be handled thoughtfully.
One of the main applications to consider is business community LinkedIn. On joining, you can upload your email contacts list and LinkedIn will identify existing members and send them invites to connect to you. As well as being a great networking site, it has the potential to generate new business. LinkedIn Answers enables you to ask questions of your extended network including feedback on a product, recommendations for contacts or recruitment. Users can also join industry groups, including the ICT Cluster Group, to share information and exchange opportunities.
Twitter, the new kid on the block, works a bit like text messaging. Users choose which people or organisations (e.g. our group at twitter/wmidlandsict), they want to ‘follow’ or receive messages from. Messages, called tweets, can be up to 140 characters and are sent for general distribution or to a named individual. It’s a great way to let interested parties know important snippets of news or promote offers, share links to interesting blogs or comment on industry issues. Twitter users tend to be web-savvy so it’s important to be part of the community not just an information source.
There are a number of ‘consumer’ social networking sites such as Facebook, MySpace and Bebo. Users set up a profile which can include photos, message boards and links to favourite sites or videos. Facebook is the site which also offers an opportunity for business profiling. If your profile is the face of the company it’s important to keep it professional. Members can also join industry groups, such as IT Professionals and participate in discussion forums.
In these difficult economic times, the ICT Cluster, which is funded by Advantage West Midlands, believes that it’s worth taking advantage of any ‘free’ marketing tool, especially one as widespread and influential as social networking. To ensure its effectiveness, it needs to be treated seriously and incorporated into an existing marketing strategy. But beware, If managed incorrectly, it has the potential to damage your reputation instead of enhance it.
Join our Linkedin Group called ICT Cluster.
Follow us on Twitter: http://twitter.com/WMidlandsICT
As a starting point, you need to recognise an opportunity or an issue. Is there a product not selling as well as it could or a marketing channel that’s not delivering leads? Is there scope to enhance an existing service or alternative route to market?
The first potential source of inspiration is to brainstorm ideas within your company; your employees know your products and operations the best. Sometimes an informal or external location can be more conducive to creative thought. It’s also essential to take the approach that no idea is a bad one otherwise you may stifle contribution. The next step is to address how best to adapt your business strategy. Can you do this in-house or do you need external help?
There are many Advantage West Midlands funded organisations that can offer advice. Also, Business Link provides counsel on business related issues; projects initially established by the ICT Cluster, such as iCentrum, and IT Futures, help companies successfully exploit ICT as part of their business strategy. iCentrum enable personal introductions to other SMEs, large IT companies, education establishments and research institutes. IT Futures offers the expertise of the University of Wolverhampton’s School of Computing and Information Technology, whilst Warwick Digital Lab provides subsidised or sometimes free access to a range of leading edge expertise and technology.
The internet continuously offers-up new low-cost marketing opportunities. There are numerous ways of driving traffic to your website such as Search Engine Optimisation tools or by linking to websites such as West Midlands Collaborative Commerce Marketplace. Companies can also fulfil networking potential through business forums such as LinkedIn which often have Groups focused on specific market areas.
A recent study by the Chartered Management Institute revealed that 48% of businesses have implemented ‘product innovation programmes’ as part of a concerted effort to beat the recession. This study is backed up by the ICT Cluster’s own recent Economic and Export survey, which indicated that 51% of companies had considered diversification as a viable option for increasing sales.
Innovation, in its many forms, can help us survive the economic down turn and be in the best possible position for when things improve. Resting on your laurels is not only a riskier option but could be a recipe for failure.
The day to day running of critical services needs to be as economical as possible. A review of financing options offers scope for reduced outgoings from leasing of equipment to reduce short-term capital expenditure, to all manner of hosted and managed services. There are companies, for example, who can manage your software–as-a-service (SaaS) for a monthly subscription which means daily operation, support and maintenance are all run by a remote team of specialists without major capital outlay. For an SME, an expert third party will ensure the running of essential IT services leaving the company to focus on its core business.
In terms of investment, high on the list should be technologies and services that have the potential to reduce expenditure or increase productivity. Consider the implementation of voice over IP, for cost-efficient telecoms, or using energy efficient hardware. In terms of productivity, mobile technologies enable flexible operation and remote support; while business intelligence applications will improve data analysis leading to better decision making and improved performance.
The Advantage West Midlands ICT Cluster is also helping small and medium sized businesses in the region to realise the huge opportunity that lies in Open Source software which often provides the benefits of a proprietary system but at no purchase cost or licensing cost for the software. Open Source can be used for: web application developments, database developments, CRM systems, document management, digital archiving, online learning and training, systems integration and internet telephony.
On the other side of the fence, the recession is hitting ICT vendors through reduced demand. The ICT Cluster is helping local companies through this tough time with Advantage West Midlands funded initiatives such as iCentrum; which is designed to encourage business growth. iCentrum helps SMEs with practical ICT policy and advice including Customer Relationship Management and internet marketing, affordable web hosting and software and application testing.
With over 3,000 technology SMEs in the West Midlands region offering a variety of solutions, we believe that any company looking to reduce costs will be able to find a solution right on their doorstep.
Mike Musson, ICT Cluster Manager, Advantage West Midlands
One of the first casualties in a Credit Crunch is often investment in innovation and R&D, yet such investment is often a key factor to being able to compete in the current economic climate. The question confronting businesses today is ‘how can I afford to innovate when revenue levels are under severe pressure?’
For West Midland businesses there is a range of resources available, and many useful initiatives are now operating in the region ranging from the Proof of Concept Grant, Grants for Research and Development (R&D) and a plethora of regional venture capital funds.
For example, the grant for R&D from Advantage West Midlands is aimed at supporting businesses in carrying out R&D activity that they might not otherwise undertake and attracting other private finance. There is a graduated system in place, providing grants from small (£20,000) short-term research projects through to exceptional development projects of national importance that can receive up to £500,000. Another option is the Selective Finance for Investment (SFIE), a form of financial assistance available to UK businesses for investment in capital expenditure. Awards can range from £10,000 to just shy of £2 million. The latest funding available from AWM is the Proof of Concept Grant offering a 75% grant of up to £30,000 operated by University of Warwick Science Park.
However, the key to unlocking the widest range of funding for the SME lies in providing strong evidence of future commercial success. Businesses often make the mistake of thinking that because they happen to be in need of external funding, they are by default investment ready.
The truth is that to become investment ready requires aligning the interests of the business as closely as possible with the interests of potential investors. This also requires being extremely realistic about the type and stage of funding that you plan to obtain. A clear-eyed assessment of whether working capital, product development or research funding is needed can save much time and heartache.
One of the best moves an ambitious company can make is to contact the advice and support network available in the region. Here you will gain access to networking opportunities with relevant companies and investors that will help drive ideas forward – this is often by far the best investment an entrepreneur can make.
For further information on business support for ICT contact: Business Link on 0845 113 1234. For information on how the ICT Cluster can help technology companies grow please visit www.wmictcluster.org or email [email protected].
Mike Musson, ICT Cluster Manager
One of the most significant technological advances of the 21st century is ‘electronic mobility’ which frees us from our 9 -5 office constraints and offers us more opportunities to decide where and when we do business. The growing use of wireless technologies, such as laptops and PDAs, is often focused on flexible working, cost-cutting environmental concerns and business continuity in the event of a disaster.
However, recent events internationally show that we should perhaps be exploiting such technologies for another reason - that of national economic security. Since the end of the 20th century the UK has moved from being an exporter of gas and oil to an importer. This reliance on imports poses a new and growing threat for business because of the potential disruption to our energy supplies. Whilst Germany has storage to accommodate 180 days of gas supplies, the UK has just eleven days. As the top five producers of oil are Saudi Arabia, Russia, Norway, Iran and the UAE, only one source is located outside a potentially problematic region.
Businesses should be gearing up to address the issue of how they will survive if reduced energy supplies and cost cutting become major concerns. There is a real danger that we may return to the three day week experienced in the 1970s. In addition, petrol rationing would exacerbate the situation and impact on the numbers of people able to travel to work.
The use of electronic mobility devices can play an important role in sustaining a business during such a crisis, but the implemention of the right technology requires a considerable degree of planning and decision making. Organisations must identify the most appropriate technology for business survival addressing both the specific technological and the more generic security issues and build this into their business continuity planning. Businesses should therefore identify and address:
· priorities to enable the selection of appropriate technologies
· the most appropriate supplier of both technologies and services based on both business and employee requirements
· how existing assets and resources can be employed and integrated during an emergency situation
· the expected levels of productivity – any mobile solution employed must deliver benefit during normal business working
· compliance issues to avoid possible litigation due to mistakes by employees while working outside the office.
By addressing these issues prior to a potential energy crisis businesses will not only be protecting their long-term sustainability but will also be addressing the productivity gains that electronic mobility offers.
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