„Technologie und Wachstum im Mittelstand. Die nächsten zehn Jahre.“

Technology and growth at mid-sized companies The next ten years A white paper by the Economist Intelligence Unit sponsored by Oracle Technology and growth at mid-sized companies The next ten years Introduction 2 The role of ICT in GDP growth 4 How much does ICT help? 4 The role of ICT in company growth 6 How survey respondents rank ICT constraints on growth 7 Software constraints 7 IT talent constraints 7 Broadband constraints 8 Security constraints 8 Hardware constraints 9 Data integration constraints 9 Growth strategies among mid-sized companies 10 The need for a comprehensive growth strategy 10 IT-specific elements 10 Where money is best spent 11 Customer relationship management (CRM) 12 Knowledge management 12 Collaboration tools 13 Support 13 Measuring ROI 14 Lessons from the top performers 15 Fast-growing firms tend to outsource more 15 Fast-growing firms tend to focus on IT integration 16 Fast-growing firms tend to see high returns on IT 16 investments Fast-growing firms are more willing to invest in 17 production and distribution Differences among industries 18 Financial services 18 Consumer goods 18 Healthcare, pharmaceuticals and biotechnology 19 Professional services 19 Manufacturing 19 The public sector 19 Conclusion 20 Appendix 1: Survey results 21 Appendix 2: The impact of ICT on economic growth 30 © The Economist Intelligence Unit 2007 1 Technology and growth at mid-sized companies The next ten years Introduction S mall to mid-sized enterprises (SMEs) that infrastructure and the technology required to exploit make intelligent use of ICT (information and it can help companies to execute faster and more communications technology) can gain a flexibly in order to reach their business goals. competitive edge within their industries. They are This study takes a two-pronged approach to able to grow faster—and more profitably—than their the issue of technology investments in mid-sized rivals. Data integration provides all parts of the companies. At the macro level, how do investments in business with customised views of the same data, a country’s ICT infrastructure facilitate the growth of increasing flexibility and accountability. Applications both the overall economy and mid-sized companies? that automate processes such as payroll, accounts At the micro level, once the ICT infrastructure is in payable, customer relationship management place, to what extent can technology solutions help (CRM) and inventory management boost efficiency. mid-sized companies adopt industry best practices Through networks, SMEs can communicate from any and achieve their business goals? These questions are location with wireless connectivity, access geospatial answered using three types of research: information, and keep in touch with customers and suppliers from around the world. ● An economic analysis of the effect of investment in But the benefits of technology cannot enable ICT infrastructure on GDP growth in 60 countries. growth without an adequate ICT infrastructure in the ● A worldwide survey of 535 senior IT, financial and country of operation. The better the infrastructure, management executives at SMEs on the use of the greater the impact of a company’s technology technology to achieve business objectives. investments on growth. To the extent the use of ● An analysis of the survey results—broken down by PCs is not widespread, broadband penetration is the best and worst performers among the company low and people lack the skills necessary to operate respondents—to generalise about the IT practices in the digital age, technology investments will of firms outperforming their peers. have little effect on the growth of companies. Only ● In-depth supporting interviews with 20 senior after an adequate ICT infrastructure exists—often executives at SMEs in the financial services, achieved at least partly through government policies professional services, consumer goods, healthcare and programmes—will businesses be able to use and manufacturing industries. technology to reduce costs and accelerate revenue growth. Of course, technology investment cannot What’s unique about mid-sized compensate for poor leadership, flawed strategy companies? or sub-par execution. No business can flourish SMEs are different: they have fewer resources than without a coherent strategy and the ability to make it giant corporations, less market power and are forced operational, which typically requires investments in to do more with less. In industries such as financial multiple areas of the business. But given a realistic services and healthcare, they face regulatory burdens expansion plan, the combination of adequate that even big companies find challenging; in the 2 © The Economist Intelligence Unit 2007 Technology and growth at mid-sized companies The next ten years manufacturing sector, they lack the economies of communications at a US government agency. “We’re scale that help larger competitors to hold down big enough to have our own IT staff of eight or nine costs. Mid-sized firms are being squeezed from all and solid IT expertise, but small enough for someone sides: larger rivals are trying to edge them out, and to say ‘That’s not working’ and have it fixed.” A new customers are gradually exerting their increased member of IT staff can be ”walked through” the power in pricing and the setting of other contract organisation on joining. “We’re big enough too to terms. To respond effectively, mid-sized firms must have IT expertise in the user community [more than work smarter, using their people and technology to 300 staff], but small enough to know each individual.” maximum effect. The ”smaller is beautiful” argument can Despite these challenges, many of the executives apply just as much in the world of cyber stores surveyed are upbeat about the benefits of working as in the traditional public sector. Stuart Rowe, at a medium rather than large organisation –and managing director of play.com, a UK-based online not just from an IT perspective. Mid-sized companies entertainment retailer, explains: “As a smaller tend for focus on building a strong niche rather than company we’ve got advantages over our larger trying to dominate an entire sector. At small- to mid- competitors [such as amazon.com]. We don’t have to sized companies, executives have more control and follow specific policies and can concentrate on the can adapt more quickly to changing demand and the market. It gives us nimbleness and we can use IT to actions of competitors. Employees are closer to the the fullest.” One example is enabling the public to business, which often results in more job satisfaction. sell its own wares on play.com. Mr Rowe also feels There is less bureaucracy. Smaller groups often result that large corporations are more likely to be lumbered in tighter personal bonds and better communication. with legacy IT systems, not to mention long-term “Mid-sized works better,” says the head of web relationships with suppliers. © The Economist Intelligence Unit 2007 3 Technology and growth at mid-sized companies The next ten years The role of ICT in GDP growth M ore so than their larger competitors, ● Investments in ICT allow companies to boost SMEs depend on a well-developed local what economists call total factor profitability. ICT infrastructure to grow quickly. This is the ability to make more efficient use of all Large companies can build their own high-speed factors of production—for instance, by streamlining communications networks; smaller firms are more organisational structure and internal processes, likely to depend on local Internet service providers outsourcing non-core functions, improving inventory (ISPs) and generic broadband connections.