Written by: Jeff Walter 10/8/2008 2:45 PM
Increasingly, many small to mid-sized organizations see that their success depends on technology—either as part of their business offering or to keep operations running smoothly and stay competitive in their market. Through the Michigan Economic Development Corporation and other initiatives, Michigan has invested to create an economic environment where organizations can apply innovation and technologies for future success. Latitude published a white paper based on our study of small businesses in Michigan. The white paper was “Why Small Businesses Should Adopt e-Business?” with the subtitle, “A report for small businesses that could benefit from using information technology to improve their processes.” According to the study, surveyed businesses had adopted Internet-based technology for less than 50% of their processes. The survey identified patterns describing how information technologies were being used. You might find information in the updated study useful to benchmark your own organization and see how your technical infrastructure is providing a competitive edge or putting you at a disadvantage. The original study was published in 2004. I’ve provided in updated view of eReadiness in 2008 by republishing an abridged and edited study with comments (in bold red type). In addition to making the report more concise, I’ve changed some of the trendy language used at the time, such as e‑business, and replaced it with the more generic term, information technology. I also replaced the term e-adoption with eReadiness. I’ve divided the republished study into two entries. This entry includes part 1. I will post part 2 separately. Are Michigan Businesses Embracing Information Technology? The Survey In 2004 Latitude surveyed a small sample of Michigan small businesses. Respondents were asked a series of demographic (number of employees, for example) and scaled opinion questions that required that a statement, such as “I make sales transactions through the web,” be rated from 1 (disagree with statement) to 5 (agree). eReadiness Survey data revealed that two-thirds of these had a public web site, where the business and its products or services were promoted. eReadiness was graded by three factors: collaboration, ecommerce, eBusiness benefits. · The Collaboration factor measured the degree that the business marketed and provided customer service online, exchanged digital information and files with business partners, and collaborated or shared information effectively · The E-commerce factor , naturally, captured high ratings on questions about online ordering, affiliate programs, and customer order tracking. · The e-Business Benefits factor was less a measure of eReadiness than an outcome of the first two measurements: a web site’s ability to increase revenue or reduce costs, or how well it helped customers and vendors better understand the business’s product or service. Patterns of eReadiness By clustering respondents according to their scores on eReadiness, four types of businesses emerged: collaborative, e-commerce, webless, and e-mailers. The collaborative businesses, the largest group representing nearly half of survey respondents, had a web site and used information technologies to varying degrees. Although, they might have sold products online, they didn’t use more sophisticated ecommerce or collaboration technologies, such as allowing customers to track orders online or sharing information with partners through the web. While some businesses in this group collaborated effectively and used online technologies, just as many did not. Of all the groups, this group had realized the most benefit from IT, but not as much as they believed they could. This collaborative group was represented by a range of industries, including manufacturing, marketing, and consulting companies. The group had a low employee headcount and a few business partners, and it worked with an average of 18 different vendors and 37 current customers. The goals over the next year for most of these companies were more growth-oriented (increased profit, revenue, or market share) than goals related to efficiencies or containing costs. The remaining groups were represented more by service industries, like consulting. Similar in scope and size, these groups were often a single proprietorship with no employees and worked with no or a low number of vendors and business partners. These businesses had an average of 21 current customers. · The e-commerce businesses, 25% of respondents, didn’t collaborate with its customers and partners as well as they would like. While some of these businesses might have used more e-commerce technologies than others included in the study, like affiliate programs and customer order tracking, just as many did not. · The webless business, 25% of respondents, didn’t have a web presence and didn’t utilize any information technologies. The reason that these groups scored at all on a scale of eReadiness was due to · The e-mailers, a small group (less than 5% of respondents), had no web presence and had all the collaboration they wanted. They marketed and sold products or services, as well as providing customer service, through e-mail. The following stacked bar chart shows the eReadiness of each group as measured by combining the e-commerce and collaboration factors. If we did a similar study today, I would expect a modest, probably not dramatic, increase in eReadiness for both the ecommerce and collaboration groups. Cloud computing has made it possible for even a single proprietor with an Internet connection to take advantage of relatively easy-to-use web‑based applications at low or no cost. Google offers several of these cloud applications. The online social networking phenomenon has also exploded on the scene. While some of the technologies, such as online forums, have been around for years, implementing them is now easier. LinkedIn and Blogging are two examples of how businesses can build online communities. While all of these changes might suggest a more dramatic increase in eReadiness, I think an increase is moderated somewhat by the challenge a small to mid-sized business might have in locating the staff or the third-party vendor that has the expertise to support the technical infrastructure requirements of a more eReady organization. In addition, some businesses may not maximize their potential, because they are unaware of powerful solutions that they already have access to. Similar to the way several different programs are bundled in Microsoft Office, Microsoft has bundled its business solutions together (Microsoft Exchange with Microsoft Business Server, for example), but it is not always obvious to the business user what the full capabilities of the bundle are. Read Part 2 >>
Increasingly, many small to mid-sized organizations see that their success depends on technology—either as part of their business offering or to keep operations running smoothly and stay competitive in their market. Through the Michigan Economic Development Corporation and other initiatives, Michigan has invested to create an economic environment where organizations can apply innovation and technologies for future success.
Latitude published a white paper based on our study of small businesses in Michigan. The white paper was “Why Small Businesses Should Adopt e-Business?” with the subtitle, “A report for small businesses that could benefit from using information technology to improve their processes.” According to the study, surveyed businesses had adopted Internet-based technology for less than 50% of their processes. The survey identified patterns describing how information technologies were being used. You might find information in the updated study useful to benchmark your own organization and see how your technical infrastructure is providing a competitive edge or putting you at a disadvantage.
The original study was published in 2004. I’ve provided in updated view of eReadiness in 2008 by republishing an abridged and edited study with comments (in bold red type). In addition to making the report more concise, I’ve changed some of the trendy language used at the time, such as e‑business, and replaced it with the more generic term, information technology. I also replaced the term e-adoption with eReadiness.
I’ve divided the republished study into two entries. This entry includes part 1. I will post part 2 separately.
In 2004 Latitude surveyed a small sample of Michigan small businesses. Respondents were asked a series of demographic (number of employees, for example) and scaled opinion questions that required that a statement, such as “I make sales transactions through the web,” be rated from 1 (disagree with statement) to 5 (agree).
Survey data revealed that two-thirds of these had a public web site, where the business and its products or services were promoted. eReadiness was graded by three factors: collaboration, ecommerce, eBusiness benefits.
· The Collaboration factor measured the degree that the business marketed and provided customer service online, exchanged digital information and files with business partners, and collaborated or shared information effectively
· The E-commerce factor , naturally, captured high ratings on questions about online ordering, affiliate programs, and customer order tracking.
· The e-Business Benefits factor was less a measure of eReadiness than an outcome of the first two measurements: a web site’s ability to increase revenue or reduce costs, or how well it helped customers and vendors better understand the business’s product or service.
By clustering respondents according to their scores on eReadiness, four types of businesses emerged: collaborative, e-commerce, webless, and e-mailers.
The collaborative businesses, the largest group representing nearly half of survey respondents, had a web site and used information technologies to varying degrees. Although, they might have sold products online, they didn’t use more sophisticated ecommerce or collaboration technologies, such as allowing customers to track orders online or sharing information with partners through the web. While some businesses in this group collaborated effectively and used online technologies, just as many did not. Of all the groups, this group had realized the most benefit from IT, but not as much as they believed they could.
This collaborative group was represented by a range of industries, including manufacturing, marketing, and consulting companies. The group had a low employee headcount and a few business partners, and it worked with an average of 18 different vendors and 37 current customers. The goals over the next year for most of these companies were more growth-oriented (increased profit, revenue, or market share) than goals related to efficiencies or containing costs.
The remaining groups were represented more by service industries, like consulting. Similar in scope and size, these groups were often a single proprietorship with no employees and worked with no or a low number of vendors and business partners. These businesses had an average of 21 current customers.
· The e-commerce businesses, 25% of respondents, didn’t collaborate with its customers and partners as well as they would like. While some of these businesses might have used more e-commerce technologies than others included in the study, like affiliate programs and customer order tracking, just as many did not.
· The webless business, 25% of respondents, didn’t have a web presence and didn’t utilize any information technologies. The reason that these groups scored at all on a scale of eReadiness was due to
· The e-mailers, a small group (less than 5% of respondents), had no web presence and had all the collaboration they wanted. They marketed and sold products or services, as well as providing customer service, through e-mail.
The following stacked bar chart shows the eReadiness of each group as measured by combining the e-commerce and collaboration factors.
If we did a similar study today, I would expect a modest, probably not dramatic, increase in eReadiness for both the ecommerce and collaboration groups. Cloud computing has made it possible for even a single proprietor with an Internet connection to take advantage of relatively easy-to-use web‑based applications at low or no cost. Google offers several of these cloud applications.
The online social networking phenomenon has also exploded on the scene. While some of the technologies, such as online forums, have been around for years, implementing them is now easier. LinkedIn and Blogging are two examples of how businesses can build online communities.
While all of these changes might suggest a more dramatic increase in eReadiness, I think an increase is moderated somewhat by the challenge a small to mid-sized business might have in locating the staff or the third-party vendor that has the expertise to support the technical infrastructure requirements of a more eReady organization.
In addition, some businesses may not maximize their potential, because they are unaware of powerful solutions that they already have access to. Similar to the way several different programs are bundled in Microsoft Office, Microsoft has bundled its business solutions together (Microsoft Exchange with Microsoft Business Server, for example), but it is not always obvious to the business user what the full capabilities of the bundle are.
Read Part 2 >>
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