Specific challenges for small and medium-sized enterprises (SME) in M-Business

Appeared in: Proceedings of the International Conference on E-Business (ICE-B 2006), Setúbal, Portugal, August 2006, pages 169-174, INSTICC Press, http://www.ice-b.org SPECIFIC CHALLENGES FOR SMALL AND MEDIUM-SIZED ENTERPRISES (SME) IN M-BUSINESS A SME-suitable Framework for Mobile Services Michael Decker, Gunther Schiefer, Rebecca Bulander Institute AIFB, University of Karlsruhe, Englerstr. 11, 76 128 Karlsruhe, Germany Email:{decker, schiefer, bulander}@aifb.uni-karlsruhe.de Keywords: Platforms/frameworks for mobile and wireless services, value added mobile data services, Small and Medium-sized Enterprises (SME) Abstract: It seems to be a widely accepted notion that Small and Medium-sized Enterprises (SME) play an important economic and social role and often contribute to innovation. But at the present situation the development and operation of a service to be used with mobile and wireless terminals (mobile service) is not bearable for most of them due to technical reasons and the market structure. In this article we will discuss the SME- specific obstacles in m-business. We will also propose a technical framework as remedy for this situation. 1 INTRODUCTION solution we propose a technical framework, which offers a comprehensive runtime environment for Small and medium-sized enterprises (SME) mobile services. represent 99 % of all enterprises in the Europe The remainder of this article is organized as Union (European Union, 2006) and play thus an follows: in the second section we discuss definitions important role in the economy as well as in society. of SME and their characteristics; section three But at the current state-of-the-art and market covers our comprehension of mobile services. SME- situation in many European countries it is very hard specific challenges when dealing with mobile for them to set up data services to be used with services are covered in section four. Our proposed mobile and wireless terminals like cellular phones, solution approach — a technical framework for PDAs or smartphones. mobile services — is sketched in section five. In our opinion this is one of the main reasons for Section six gives an overview about related work, the absence of success of mobile data services in before we summarize and conclude in the last Europe. This phenomenon is called the “European section. Mobile Data Service Dilemma” (Steinert & Teufel, 2005) or “Advanced Mobile Services Paradox” (Blechar, Constantiou & Damsgaard, 2005); the 2 CHARACTERISTICS OF SME appellation as “paradox” stems from the fact that despite of the high penetration rates of mobile According to the European Union (2003) SME are terminals and the success of simple data services defined as enterprises which have at most 250 (e.g. SMS, download of ringtones and logos) employees and an annual turnover not exceeding 50 advanced mobile services generate only a few million Euros. Further there is the distinction of percent points of the revenue of mobile network small enterprises — they have fewer than 50 staff operators (Brücker et al., 2006). members and less than 10 million Euros of turnover In the article at hand we discuss special — and micro-enterprises (less than 10 persons and 2 characteristics of SME and the special challenges for million Euros of turnover). But this is by far not the them when they want to develop and operate mobile only quantitative definition of SME: other sources services, may it be for own use (e.g. support for define SME as businesses with fewer than 500 mobile workers) or for customers of the SME. As employees (Audretsch, 1999) or even give different values for different sectors (Marwede, 1983; p. 45): data transmission. Mobile terminals (MT) in our a industry firm is small when it has 50 employees, sense means “handheld device”; devices like but a trade business is medium-sized with more than notebooks or tablet PCs are not considered as real 2 employees. Using quantitative measurements mobile terminals, because one can’t carry them seems at least to be easy manageable, but how do we along in a ready-to-receive-state most of the day. count employees with different level of productivity Examples of standards for basic wireless or part time workers? communication services for data are GPRS, WiFi or There are also definitions based on qualitative UMTS. If a service provider (in our case SME) uses aspects like legal form, the role of the firm’s owner, these basic services for supplying additional their position on the market, the organisational information we talk about a “value added service”. structure or economic and legal autonomy An example for such a value added service would be (Marwede, 1983). a navigation service, which guides the user to Although there is no uniform definition of SME facilities in his nearer surrounding, whereas a the notion that SME play an important economic and GPRS-connection (basic service) is used to provide social role seems to be well accepted (OECD, 1982; the actual navigation hints in form of WML-pages. Acs, 1999). This is supported by surveys which state For the sake of simplicity we use the term “mobile that 70 % of all labour relations and over 80 % of service” in the remainder of this article if we actual apprenticeship training positions in the German non- mean “mobile value added data service”. public sector are provided by SME (Günterberg & Kayser, 2004). While SME are not able to exploit economies of 4 SPECIFIC CHALLENGES FOR scale at the same order of magnitude as big enterprises can do (Audretsch, 1999) they have the SME WHEN DEVELOPING advantage of flat hierarchies and thus being very AND OPERATING MOBILE flexible. There are many examples of SME that SERVICES contributed to major innovations (OECD, 1982, p. 12; Almeida, 1999; Audretsch, 1999). In some cases There are some specific challenges when developing inventions that were rejected by major firms were mobile services (see also Chittaro, 2006) which are later brought to market by small start-up companies. faced by big enterprises as well as by SME: Also SME don’t change their managers as often as Display quality: MT have only a small display big enterprises and thus can concentrate on long- with low resolution and reduced colour-depth, there term strategies. is no real keyboard or a “mouse” available for user SME often have high-specialized know-how in a input. certain area which could be utilized for mobile Limited Resources: MT have limited resources services. But they have limited resources and cannot like memory, cpu-power and battery capacity; the afford to employ highly specialized employees. available bandwidth for wireless data Since innovations always go together with risk big communication will be not as good, cheap and firms have several innovations running at the same reliable as for wired data communication. time to diversify risk, but SME cannot do the same Data protection concerns: Wireless data (Geschka, 1997). communication is more vulnerable with regard to security threats and could be eavesdropped. There is also the danger that a MT with sensible data on it is 3 MOBILE SERVICES lost or stolen. But there are more challenges, which are 3.1 Definition particular hurdles for SME because of their limited personal as well financial resources: The core business of mobile network operators Different types of mobile terminals: There is a (MNO) is the provision of wireless communication plethora of different types of mobile terminals. The capacity for both voice (telephony) and data estimation for the number of different types of transmission (“bit pipe”) to be used with mobile mobile terminals in the European market is several terminals like cellular phones, PDAs and hundred. They all have different capabilities and smartphones. In the article at hand we only consider support different formats for data exchange and programming platforms. While for Personal decisions. Without technical knowledge it is even Computers several minimum capabilities can be harder to assess the potentials of new technologies.