GG - Dec SIB

1. UK ICT Strategy Implementation Board
8 December 2009
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A proposition for SME
global market support

2. A proposition for SME global market support
----------------------------------------------------------------------------------------------------------------------------
What we’ve been up to
Evidence of need
The business landscape and opportunity
The proposed solution
Fit with the marketing strategy
Funding, governance and ownership
Next steps

3. What we’ve been up to
----------------------------------------------------------------------------------------------------------------------------
If you’re a UK
technology It won’t be
company with difficult or take too
between 1 and 500 long, and it could
employees, we want to make a real
talk – we’ve got all difference to your
sorts of questions
business.
for you.

6. 259
92

7. UKTI
Media
Technology SMEs
Service providers

8. “New markets are always hard
work. I’d be interested in sharing
details of effective resellers and
agents...”
“It’s about local knowledge. A
product that might sound great
“I’ve had a lot of pain to a customer in San Francisco
internationalising. I figured it may not sound so great to the
out the hard way and spent a same sort of person on Boston”
lot of money doing it”
SMEs and suppliers are eager to share
their problems, knowledge and expertise
“More than anything else, I need
“I believe that if a company is supply chain information. If this
wholly committed to service can provide that, it’s
internationalising it is doable. removed my biggest barrier to
The problems arise with poor market entry.”
preparation and half-hearted
commitment”

9. Evidence of need
----------------------------------------------------------------------------------------------------------------------------
“Limited firm resources and international
contacts as well as lack of requisite managerial
knowledge about internationalisation have
remained critical constraints to SME
internationalisation. These resource limitations…
seem particularly prevalent among smaller, newly
internationalising companies.”
p.5 OECD (2009), “Top Barriers and Drivers to SME Internationalisation”
Report by the OECD Working Party on SMEs and Entrepreneurship, OECD

10. Evidence of need
----------------------------------------------------------------------------------------------------------------------------
Lack of managerial time, skills and
knowledge*
Inability to contact potential overseas
customers*
Limited information to locate and analyse
markets
*Crick, 2007: SMEs' Barriers Towards Internationalisation and Assistance
Requirements in the UK

11. Evidence of need
----------------------------------------------------------------------------------------------------------------------------
100,000+ SMEs in UK technology sector

12. Evidence of need
----------------------------------------------------------------------------------------------------------------------------
100,000+ SMEs in UK technology sector
59,000 classed as active exporters

13. Evidence of need
----------------------------------------------------------------------------------------------------------------------------
100,000+ SMEs in UK technology* sector
possibly as many as 100,000 active exporters
seeking growth, profits, reduced dependence
on a single market
*Computing category only

14. The business landscape
----------------------------------------------------------------------------------------------------------------------------
SMEs
BUYERS
£1.7bn marketplace?

15. SMEs
BUYERS

16. CAPITAL & INVESTMENT
REDUCING RISK
LOCAL SERVICES
INSIGHT & UNDERSTANDING
LOCALISATION
CREDIT OFFICIAL AGENCIES &
CHECKS & DIRECTORATE
VCs ACCOUNTANTS DUE PROMOTION ACTIVITY
DILIGENCE TRADE DIRECTORIES
INSURANCE
(Shipping, health &
employment insurance)
BANKS
LAW
FREIGHT
FORWARDER
TRADE S
DIRECTORIES
& SITES
SMEs fragmented
RECRUITMENT
COMPANIES
LETTING AGENTS
discontinuous
& OFFICE RENTAL
DIRECTORIES
BUYERS
unaccredited
RDAs
EVENTS ADVERTISIN
G
GENERAL
INFO
expensive
TRADE
ASSOCIATIONS
MISSIONS &
DELEGATIONS
hard to find
BOOKS & MARKETING
GUIDES
TRADE
COUNTRY AGENCIES
INFO
INTERCULTURA
CLUSTER
L TRAINING
GROUPS
TRANSLATIONS,
BLOGS, KNOWLEDGE LOCALISATION AND
FORUMS & TRANSFER INTERPRETATION
SOCIAL NETWORKS
NETWORKS
MARKET
RESEARCH

18. The opportunity
----------------------------------------------------------------------------------------------------------------------------
The internet allows us to facilitate collaboration across
the SME community and its suppliers - inserting a layer
of mutual support, sharing information, opinions and
recommendations, aggregating this complex ecosystem.
design approach technology approach
collaborative filtering open source
social proof application frameworks
shared profiles plug-in architecture
read/write content APIs

19. The proposed solution
----------------------------------------------------------------------------------------------------------------------------
A dedicated platform that enables SMEs and
supporting service suppliers to collaborate and
share intelligence about market value, means
of entry and participation.
Going Global reduces the risk and time to
payback of entering new country markets for
UK ICT firms and especially SMEs.

20. The proposed solution
----------------------------------------------------------------------------------------------------------------------------
At the heart of the system is a framework for
identifying expert content (and expert
responses) relevant to a particular situation or
opportunity according to geography, company
profile and company goal or task.
The system enables participants to create or
aggregate and add to useful content from
across the web.

21. The idea
----------------------------------------------------------------------------------------------------------------------------
Reputation Goal
related
Context Accreditation
Viewpoints Activity
related
Latest Popularity

22. Read/write content objects
Articles, PDFs, videos, calendar items, links, lists etc.
----------------------------------------------------------------------------------------------------------------------------
Rate & review Comments
Related
content Viewed by...
Also useful for
topic x...
Created by...
Popularity Tags Accredited by...

23. other websites via api
Reputation Goal request for
information
related
Context Accreditation
Profile History
response
related
Latest Popularity
Market guide
Sector dashboard
Country dashboard

24. User journeys
----------------------------------------------------------------------------------------------------------------------------

59. The proposed solution
----------------------------------------------------------------------------------------------------------------------------
Content is graded and filtered by the audience
and aggregated around objectives
Content isn’t created by the service. It’s
uploaded and managed by the participants. The
body of content grows over time
Valued content becomes the most visible
content, accredited for accuracy and value-in-
context by experts and by the community,
according to their reputation

60. The proposed solution
----------------------------------------------------------------------------------------------------------------------------
Reputation (of participants) is a critical
component of the service mechanism.
Accreditation (of content) is provided by
experts and by the community.

61. Fit with marketing strategy
----------------------------------------------------------------------------------------------------------------------------
Contextual presentation of
marketing toolkit
Domain expertise in market
guide
Generates SME data that feeds
back into Govt. policy
Provides scale and reach to influence a wider
audience
Market UK success stories

62. What makes it different?
----------------------------------------------------------------------------------------------------------------------------
• A single focusthe needs of UK technology SMEs
emphasis on
on internationalisation, with a special
• Relevant, up-to-date, qualified information generated by
a range of enquiry/search methods
• The backing ofservice providers networkandUKTI post
staff and local
an international
ranked
of
rated by the
community
• A core webin promoting growth for all organisations
interested
infrastructure piece
through
internationalisation
• Run for the public good

63. What people said...
----------------------------------------------------------------------------------------------------------------------------
“This would be a huge value-add for my
customers.”
-- Leigh Odell, Accredit UK
TechnologyWorld 09

64. What people said...
----------------------------------------------------------------------------------------------------------------------------
“I like the competitive aspect. The country
view or market view that shows market
competitors and the effort required to get
there -- that would really be helpful.”
-- Alaric Jenkins, Info Stor
in-person interview

65. What people said...
----------------------------------------------------------------------------------------------------------------------------
“This is the kind of thing my customers have
been looking for.”
-- Merce Garcia i Cervera, MGC Consulting
TechnologyWorld 09

66. What people said...
----------------------------------------------------------------------------------------------------------------------------
“I’m looking for a well-coordinated and
connected peer group of people who want to
export to similar countries.”
-- Max Toti, CapTech, LinkedIn discussion

67. What people said...
----------------------------------------------------------------------------------------------------------------------------
“like to be part of an eco-system of exporters
who can collaborate and share knowledge
and experience, ideally at different stages of
maturity, so the starters can learn from the
veterans and avoid common mistakes.”
-- Max Toti, CapTech, LinkedIn discussion

68. Value exchanged
----------------------------------------------------------------------------------------------------------------------------
UK SMEs
mutual support
cohesive voice
benefit of experience

69. Value exchanged
----------------------------------------------------------------------------------------------------------------------------
recruitment
success stories UKTI
feedback
innovation credit
SME data
marketing collateral
local market insight
targeted sales channel introductions to buyers
endorsements
UK SMEs
mutual support
recommended
services cohesive voice
Service providers specific information benefit of experience

70. Value exchanged
----------------------------------------------------------------------------------------------------------------------------
Trade marketing
recruitment
associations UKTI
success stories
Foreign inward investment support
feedback
government promotion
innovation credit
agencies contacts
SME data
marketing collateral
support
local market insight
targeted sales channel introductions to buyers
endorsements
UK SMEs grants
mutual support
UK RDAs
recommended
services cohesive voice
Service providers specific information benefit of experience

71. Is it sustainable?
----------------------------------------------------------------------------------------------------------------------------
•The revenue/cost model is a working hypothesis
•£1.8m in yearan income stream of £0.7m in year 2 and
We estimate
3

72. Potential revenue sources
----------------------------------------------------------------------------------------------------------------------------
1 Data & business intelligence services (UKTI, inward investors, service
and solution providers)
2 Research commissions
3 Sponsorships and partnerships with other business intelligence services
4 Subscriptions (to gain access to the community) & membership
5 Advertising (by service providers) classified and display
6 Software licensing and custom development (dependent on model)
7 Supporter/industry contributions (dependent on model)
8 Exploitation of other IP and legal rights
9 Contributions in kind

73. Is it sustainable?
----------------------------------------------------------------------------------------------------------------------------
•The revenue/cost model is a working hypothesis
•£1.8m in yearan income stream of £0.7m in year 2 and
We estimate
three
•Start-up costs in year 1 of circa £0.85m - £1.05m
•annum, operating costsscale and development£1.3m per
Annual
depending on
range from £0.5m to
need
•and need a keener idea of the size of the target market
We
the appetite and wallet-size of service providers
•marketplace -the servicetolies in the participants in the
The value of
we need build critical mass

74. Next steps
----------------------------------------------------------------------------------------------------------------------------
•Proceed in three phases...

75. Project phasing
----------------------------------------------------------------------------------------------------------------------------
1 2 3 4
Concept Working Full rollout Sustainable
development prototype operation
Complete Fundraising... Requires full Requires
understanding critical mass
and commencing
of business and positive
operating test of...
case and net cash
Identify SMEs most likely governance
to internationalise and
how they prefer to
collaborate
Business case
Cost model
Sources of funding
Future governance models
and...
Build critical mass

76. Project phasing
----------------------------------------------------------------------------------------------------------------------------
Concept Working Full rollout Sustainable
development prototype Government? operation
£
+industry?
Future
governance
model
UK
Technology Full rollout Owning
leadership phase Body
Business
case
Research
SMEs and
service cos.
Prototype
Dev.

77. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
£500K
Prototype Build £400K
Release One
MxM/UKTI/LEADERSHIP
Prototype Build
Release Two £300K
MxM/UKTI/LEADERSHIP
Incubation Period £200K
MxM/UKTI/LEADERSHIP
Handover
MxM/UKTI/LEADERSHIP/ £100K
OWNING BODY
£110K p/m
£100K p/m
Business as Usual ~£90Kp/m
~£40Kp/
OWNING BODY
m

78. Service principles
----------------------------------------------------------------------------------------------------------------------------
The service is run by industry for industry
The service is designed primarily for UK SMEs looking to do business in overseas
markets. Service for other participants or revenue generating partnerships with should
not destroy value created for SMEs
Commercial and non-government service providers are not the prime beneficiary of the
service but their participation is essential and encouraged for the value they create for
SMEs
Central government (specifically UKTI) is not the prime beneficiary of the service, but
it’s participation is essential for the value it creates for SMES; the service provides
UKTI with an effective means of recruiting and engaging with SMEs
The value of the service lies in its primary and secondary participants (buyers and
sellers) and the tools it offers them to interact and exchange value in a marketplace for
information and services. That value is embodied in the workings of the marketplace, eg
such as reputation, accreditation, profile aggregation, openness, self-moderation, etc.
The service is not exclusive to UK SMEs, UK service providers or UK government
agencies
The principle language of the service is English

79. Service principles
----------------------------------------------------------------------------------------------------------------------------
The service seeks to collaborate rather than compete. Where other services create value
in a more effective way, the service will seek to ally with and integrate with them
The service will integrate with other open services. Where possible, it will endeavour to
create relationships with other services where there is mutual benefit e.g. World Bank
Statistics, Transparency Internationals Corruption Index, Linkedin, etc.
The design should encourage participants to share success stories
The service permits central and regional government to support areas offering
“comparative advantage” and “overseas markets which offer the greatest
opportunities”. SMEs may have different geographic priorities to larger companies.
The service allows businesses to earn credibility through their behaviour on the system.
This credibility is awarded on a peer-to-peer basis and includes ratings, accreditation,
awards or other forms of social proof.

80. Operational Models - Not For Profit
--------------------------------------------------------------------------------------------------------------------------
Not for profit (NFP) body
(possibly company limited by
guarantee) outsources sales in Outsource
order to fund marketing, Sales
Sales
development and community
management and other
overheads. Some income is
retained. The body owns all IP
rights associated with the
platform. £
£
NFP Body
Marketing £ Revenue
As soon as it becomes affordable
to do so, the body will provide
grants to SMEs in order to assist
them with their efforts to £ £
internationalise. £
Comms
Dev.
Mgmnt.
Grants to
SMEs

81. Operational Models - For Profit
--------------------------------------------------------------------------------------------------------------------------
For profit (FP) controls all operational
aspects and IP rights associated with
the the platform. Some work
(particularly development) may be
outsourced as required. The ultimate
actions of the body are controlled by the
guaranteeing members; the selected
members may consist of the executive
Comms
created to manage the prototype phase Marketing
Mgmnt.
of the project. This model allows
greater salaries to attract talent to the
enterprise. For Profit Body
Part of the remit of the organisation
will be to provide grants to SMEs to
£ Sales
Dev.
assist with their efforts to
internationalise as soon as it becomes
affordable to do so
£
Guaranteeing members Grants to
exercise controlling authority SMEs

82. Discussion points
----------------------------------------------------------------------------------------------------------------------------
Should the work continue in the manner proposed?
How should the Board go about funding and the working
prototype and making the service operational?