Adoption of Internet Technologies in Small Business by xlq89369

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									Business Adoption of Broadband Internet
in the South West of England



Martyn Warren, University of Plymouth
mwarren@plymouth.ac.uk

EFITA Conference
Wageningen, June 2009
Keep   It   Simple,   Stupid
Agenda


   Microbusinesses and the e-ladder
   Broadband4Devon
   actnow in Cornwall
   Lessons for the future
The e-ladder concept

 Model of e-Adoption Ladder
               Business                                                                   transformed
               benefits                                                                  organisations
                                                                                                 - open systems of
                                                                         e-business              information for
                                                                                                 customers, suppliers
                                                                                                 and partners
                                                                              - integrate supply - new business
                                                      e-commerce              chain so           models based on
                                                                              manufacture and interworking
                                                          - order and pay     delivery become between
                                       website            online, reducing    seamless           organisations and
                                                          transaction costs   - minimise waste individuals
                                                          - maximise          at every stage of
                                         - place in                           the supply chain
                     e-mail              worldwide market accessibility and
                                         - window on      speed

                - efficient internal     worldwide
                and external             suppliers
                communications

Adapted from Cisco led Information Age Partnership study   Extent of organisational change
on e-commerce in small business
                                                           & sophistication


                                                                                                         Willis 200x?
WigglyWigglers.co.uk
             WigglyWigglers
•   Customer focussed
•   Family farming business (500 ha)
•   Farmer’s wife (Heather Gorringe)
•   E-business/transformed organisation
•   Heavy use of social networking software
    (Facebook, MySpace, Twitter, blogs,
    weekly podcasts)
Inspirational…
…but exceptional
 Heather is a Nuffield Scholar (2007)
 studying ‘The Development of the Web
 and Social Media’, and completed the
 Institute of Agricultural Management
 Leadership Course in 2008.
The area




                      Devon

           Cornwall
Broadband4Devon
Broadband4Devon

   Methodology
      broad online survey of a sample of 1000 (out
       of 3000) at two points, 14 months apart (2005
       and 2006)
      twelve highly focussed case studies;

   Target population:
      the total of those signing up to the
       Broadband4Devon scheme by a particular date
       (February 2005):
   Effective response rates to the surveys:
      38% for the first and 16.5% for the second.
Broadband4Devon


   78% represented microbusinesses,
    defining the latter as employing 10 FTE or
    less.
Broadband4Devon

Pattern of business types
                             Other


             Public adm inistration


            Services and Finance


   Transport and Com m unications


                 Retail/Wholesale


                    Construction


           Prim ary/m anufacturing


                                      0    10        20      30         40   50
                                                % respondents (N-371)

                                          survey    Devon March 2003 (ONS)
Broadband4Devon

Use of online technologies by the business

                                                        change,
                                          2005% 2006%   % points
own website                         164      72    75           3
wireless Local Area Network (LAN)   164      40    53         13 **
remote or mobile terminals          164      17    21           4 *
intranet                            164      12    12           0
Voice over internet (VoIP)          164      10    19           9 **
Wide Area Network (WAN)             161       8     4          -4
Electronic Data Interchange (EDI)   163       6     6           0
desktop videoconferencing           164       6     7           1
computerised process control        164       5     6           1
extranet                            164       4     4           0

* p<0.05; ** p<0.01 (Sign test)
   Broadband4Devon

   Online provision for customers

       Does your business provide any of the following for customers online?
                                                                   perception perception
                                                                    change,    change,
                                                          change,   positive   negative
                                        N     2005% 2006% % points    (no.)      (no.)   Sig.

info about products                     163      72     79        7         17         5 *
info about product availability         163      36     34       -2         15        17
info about pricing, terms, conditions   163      47     52        5         12         3 *
info about delivery schedules           162      17     19        2         10         9
info about after sales service          162      22     24        2         13        13
info about customer account details     162       7      7        0          5         4
opportunity to place orders             163      34     41        7         18        12
opportunity to make payments            162      20     28        8         21        11

* p<0.05 (Sign test)
   Broadband4Devon

   Use of online technology in purchasing

                                                                  opinion opinion
                                                                 change, change,
                                                         change, positive negative
                                       N     2005% 2006% % points (no.)     (no.) Sig.

use online technology for invoicing?   162      20    28         8     21       8 *
place orders online?                   163      66    72         6     26      15
make payments online?                  163      62    71         9     24      11 *
use online banking?                    163      69    76         7     16       5 *

* p<0.05 (Sign test)
Broadband4Devon

Interaction with government or public-body websites in last
   12 months
                                                                 change,
                                               N     2005% 2006% % points

accessing information                          162       79      79             0
making payments (e.g. taxes and levies)        161       34      38             4
making purchases                               161       22      19            -3
accessing or responding to tenders             161       12       9            -3
delivering services                            161        8      11             3

No significant differences between 2005 and 2006



 Online interaction with government or public bodies by
   email in last 12 months
                                                   opinion     opinion
                                                   change,     change,
                                 change,           positive    negative
               N     2005% 2006% % points           (no.)        (no.) Sig.

 yes           155      45      68        23              47          10 ***

 *** p<0.001 (McNemar test)
actnow farmers’ survey
actnow

   ‘a not-for-profit partnership…
    accelerating economic growth and social
    inclusion in Cornwall through use of
    broadband and ICT’
   advice and financial assistance to
    businesses and voluntary organisations
   A change agent in the provision of
    infrastructure
actnow for farmers

In 2005 actnow launched its farm business
  programme:
     help connecting to broadband;
     a rebate of at least £60 on the costs;
     free advice.
Methodology

   Sample of 209 farmers in Cornwall, selected at
    random from a supplied database, within a quota
    for farm type.
   Telephone survey, administered during May 2007
   Response rate: 26%
   Analysis via SPSS, limited to frequency
    distributions, cluster analysis and chi-square
    tests so far.
   Qualitative follow-up (3 focus groups) is now in
    progress
     A
         ra
            b   le
                   /




                         0
                             5
                                            10
                                                           15
                                                                                      20
                                                                                           25
                                                                                                30
                                                                                                     35
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                ix
                   ed
               O
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                                                                                                               Distribution by farm type




                                 (N=9066)
                                 Cornish holdings 2006 %
                                                            Actual sample % (N=209)
      Have you diversified your
      business?
                60   56

                50
% respondents




                40                      34
                30

                20
                            10
                10

                 0
                     no   yes: ag   yes: non-ag
Workforce – regular full time
(including respondent)

                        45
                        40
% respondents (N=209)




                        35
                        30
                        25
                        20
                        15
                        10
                         5
                        0
                             0   1   2   3   4   5   6   >6


2 businesses with 70 employees
Internet use


   65% respondents use internet for business
   Use is higher in diversified businesses
    (74% vs 58%)
                                           email

           information to support daily decisions


Uses of                        general research


internet       downloading farming documents

                 sending information to DEFRA

                        online business banking

                buying supplies for the business

                               online tax returns

                  using online farming software

                            selling farm produce

                       voice over internet (VoIP)

               taking part in online communities

                             video-conferencing


                                                0.0 20.0 40.0 60.0 80.0 100.
                                                   % internet users (N=136) 0
Has your business had any email
contact in the last month with…

government
 or public
  bodies

    your
 customers                               % email users
                                         (N=124)
                                         % respondents
    your                                 (N=209)
  suppliers


     other
   farmers


              0.0   20.0   40.0   60.0
How important is having access to the
internet?


  very
important


                                   to diversified
                                   enterprises (N=68)
                                   to farming enterprises
                                   (N=136)


 not at all
important

              0   20   40     60
Does the business have its
own website?

35

30

25

20

15

10

5

0
     % respondents (N=208)   % internet users (N=135)
Diversifiers much more likely
to have website


 35
 30                      % diversified
                         (non-
 25                      agricultural)
 20                      % diversified
                         (agricultural)
 15
 10                      % not
                         diversified
  5
  0
  Sophistication of website


Provides basic information about
          the business
     Provides detailed price and
         product information

allows ordering and paying online

  integrates ordering and paying
        with other systems

                                    0     20     40     60      80
                                        % with website (N=43)
 Benefits of broadband – current and
 potential
           being able to w ork in various locations


   making cost savings through online purchasing


reducing paperw ork by making online submissions


         cutting cost of phone calls by using VoIP


                         freeing up the phone line

freeing up daylight hours by conducting business                                            current benefits
                      online
                                                                                            further potential benefits
           developing new channels of business


                        able to operate a w ebsite


         able to use greater range of applications


          saving time through faster connections


                                 alw ays-on email


                                                      0    20     40    60     80     100
                                                          % broadband users (N=107)
    Ways in which time has been
    saved
                          faster connection


                            save paperwork


           don't have to spend time talking

taking bookings online: can refer customers
                to website

                   finding info more quickly


           can work at more suitable times


      use phone and internet at same time


                                      other


                                               0      5    10    15    20      25
                                                   % Broadband users (N=107)
Conclusions
The businesses studied are
generally unsophisticated in
their business models


Most are low on the e-adoption ladder
The e-ladder concept

 Model of e-Adoption Ladder
               Business                                                                   transformed
               benefits                                                                  organisations
                                                                                                 - open systems of
                                                                         e-business              information for
                                                                                                 customers, suppliers
                                                                                                 and partners
                                                                              - integrate supply - new business
                                                      e-commerce              chain so           models based on
                                                                              manufacture and interworking
                                                          - order and pay     delivery become between
                                       website            online, reducing    seamless           organisations and
                                                          transaction costs   - minimise waste individuals
                                                          - maximise          at every stage of
                                         - place in                           the supply chain
                     e-mail              worldwide market accessibility and
                                         - window on      speed

                - efficient internal     worldwide
                and external             suppliers
                communications

Adapted from Cisco led Information Age Partnership study   Extent of organisational change
on e-commerce in small business
                                                           & sophistication


                                                                                                         Willis 200x?
Main benefits come from basic
uses of broadband

 Email
 Web searching

 Online purchasing

 Simple website
Basic is OK…

… it can represent a huge leap in potential
for a small business, and may be all that is
needed for a long while yet.
     In which case pressure to adopt more
      sophisticated applications is unlikely to
      motivate, and may in fact de-motivate.
The same applies to training and
knowledge transfer


The most common skills needs
identified by the respondents for their
staff related to efficient and prompt
answering of e-mails, internet search
techniques, and basic IT skills.
The ‘e-ladder may not be the best
benchmark for microbusiness

   Businesses acting quite rationally can
    have a convoluted path between ‘steps’,
    and may justifiably never aspire to more
    than one or two of them.
   Some of the most powerful developments
    can be lateral rather than vertical –
    especially ‘convergence’ of different
    technologies.
An alternative explanation? (from
more recent work at UoP?

    These businesses are small, and their
     markets are generally local.
    Our work suggests that while people in
     rural communities engage well with the
     internet at national and global level, they
     engage less well at the local level.
    This may affect those running businesses,
     and also their customers – lack of
     development of local internet-based
     markets.
Business Adoption of Broadband Internet
in the South West of England



Martyn Warren, University of Plymouth
mwarren@plymouth.ac.uk

EFITA Conference
Wageningen, June 2009

								
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