Mobility drives Internet adoption to boost business productivity

-- Market focus on reduced operating costs/increased
productivity will fuel IT expenditure in Small to Medium-Sized Companies

3 October 2002 -- Small-to-medium-sized businesses (SMBs) achieved a 22 percent increase in profitability as a result of adopting Internet technology solutions. The result is revealed in a Europe-wide survey, undertaken by research company IDC, and published yesterday by Cisco.

The survey, entitled Fastrackers 02, shows that, on average, SMBs achieved a 22 percent increase in profitability as a result of adopting Internet technology solutions. Much of the increase can be attributed to SMB use of mobility access technologies and enabling devices and solutions, such as mobile phones, laptops and wireless LANs, which enable SMBs to remotely obtain secure, high-speed Internet connections to their corporate networks.

IDC's findings demonstrate that enhanced productivity is the greatest driver for the uptake in Internet and mobile solutions. SMBs have produced competitive advantage through faster time to market and timely customer service.

Results from the study show Internet "Enthusiasts", the group characterised as SMBs which have a basic Internet infrastructure in place with some applications integrated with the Web, account for the highest uptake in Internet and mobile solutions. Mobile sales force automation (SFA) and customer support are cited as the most prevalent mobile applications employed.

The percentage of "Fastrackers", the group of SMBs that have built a strong Internet infrastructure and have enterprise applications bundled with the Web, has increased over the last 12 months and even the more IT-basic SMBs increasingly understand the value that the Internet can bring to their business. This is evident in the 26.1 percent of companies, the Enthusiast cluster, that demonstrate strong intentions towards investing in these areas in 2002 and 2003.

In addition, IT decision-making has moved up the value chain to the board-level, indicating an increased awareness amongst SMBs of the business benefits IT can deliver.

"The research demonstrates an increased strategic understanding of the Internet at the board level, signifying greater appreciation of the value that new solutions bring," said Andrew Walton, Business Analyst Consulting at IDC.

The prevailing insecurity in the economy has, however, resulted in a certain group of SMBs adopting a "wait and see" attitude. This group of SMBs, known as Internet "Sensitives", has been strongly affected by the hype surrounding the e-economy, and are reducing budgets dedicated to Internet technologies, although Web based spending will still amount to approximately 18 percent of overall IT budgets.

"The past year has been challenging for European SMBs, but despite this there has been great acceptance and uptake of Internet and mobility solutions," said John Mason, VP of Commercial Segment EMEA of Cisco Systems. "As the report demonstrates, greater efficiency has been a key driver in this uptake and is expected to further fuel the demand for the Mobile Internet in the next 12 months."

"SMBs which embrace Internet and mobility technologies can benefit from a huge competitive advantage in a highly crowded marketplace," continued Mason. "Internet and mobile solutions can make a real difference to the SMB bottom line as they can keep costs low, productivity high and increase customer satisfaction, as can be seen in the results of the qualitative research."

There are many socio-economic factors that will effect the speed with which new solutions will be adopted, such as legislation, the performance of the global economy and the uptake of broadband technologies. The research shows that companies across Europe are adopting or planning to adopt enabling mobility technologies: 85 percent of SMBs are adopting or planning to adopt remote access, followed by IP VPNs at 70 percent and Wireless LAN technologies at 42 percent.

IDC has surveyed 1236 SMBs in the 20 to 499-employee size class. Conducted between May and June 2002, countries surveyed included France, Germany, Italy, The Netherlands, and the UK. The report, Fastrackers '02, is the third in a series commissioned by Cisco Systems and conducted by IDC, which looks at the evolution of European SMBs in relation to ebusiness technology uptake.