… or why a ‘new angle’ is required to talk business owners into broadband
We are all connected now, aren’t we? Internet connectivity is simply an essential in a globally connected economy. Large enterprises know this, and have long had the wherewithal to integrate networked applications into their business operations. (At SNG, we talked about this integration as “e-solutions.”) Of course, the increasing availability of affordable broadband Internet access has opened up the same opportunities for small and medium enterprise (SMEs). So, why are many SMEs still unable or reluctant to take on e-solutions? We would like to share a few ideas.
Of course, there are always the (not so) early (by now) adopters. Where broadband is available, a good number of SMEs do not need a lot of convincing about the cost-benefit of taking service – whether it be via DSL, cable, fiber, or wireless access. For them, higher connection speeds speak for themselves: no need for a complex business case to prove that being able to do the same things faster and more efficiently improves productivity; or that having an affordable ‘always on’ connection can save on phone connection costs or expensive T1 circuits.
And beyond the day-to-day efficiencies, there are the things they couldn’t do before broadband, such as: the promotions company that couldn’t transfer artwork files quickly between its offices and remote contract artists and was spending a fortune on time and costs of transportation; or the precision machining company that needed to be able to receive and send complex drawings online simply to be “eligible” to bid for major clients’ business. In fact, SNG research shows that over 60% of SMEs rate broadband as very important for making everyday operations easier and allowing them to make more effective use of resources.
However, more than 50% of SMEs have not (yet) internalized how broadband can increase revenues, reduce costs, or evolve how they do business. Here is the real challenge: why are so many SMEs still not taking full advantage of what broadband can offer?
Answers
Looking “inside” the businesses themselves can help. Firstly, some business owners don’t recognize the benefits of broadband. When it comes to “technology and the connected economy,” they often “don’t know what they don’t know” – and they have limited time or resources to figure it out. And, if the case isn’t made in terms of savings, growth or competitiveness they don’t allow much time for convincing. Also, there is often an assumption by business owners that implementing e-solutions requires technical know-how, or is something a small business cannot afford to implement or maintain. In fact, our research tells us that over
two-thirds of SMEs view the cost of development and maintenance and their lack of internal expertise and knowledge as important barriers to adopting e-solutions.
A different angle
We believe that SME owner-managers need to be enlightened about the transformative effects of technology, and the significant benefits they could reap from jumping on the broadband train. Without the jargon, they need to be informed about what happens when technology intersects with business processes; when it becomes possible to do different things and do things differently – creating new operating models and new business opportunities. This is the e-solutions moment. Rather than about speed and bits, business owners should think about “any business activity that can leverage the power of the Internet.”
Beyond e-commerce, SMEs should get a stronger, better feel for the opportunities that connectivity offers to transform how they conduct business (increased market reach, easier processing of orders, cheaper product delivery, smoother – when done right – customer service and technical support, etc.). Business owners, especially those who don’t want to sell online, need to be told about the good news – that there are many affordable e-solutions available online for them – and solutions that don’t need to be complicated to have big impacts, such as: sales force management and CRM tools to more effectively generate revenue, collaborative networks to enhance internal and external interactions and sharing, online national and global supply chain networks to uncover new opportunities, or remote access and tele-working packages to extend out-of-office reach. And of course, because not all solutions are applicable (or important, or useful, or affordable…) for every business, owner-managers need support in navigating through the mass of information, and in figuring out the “what works for my business; what solutions are appropriate; where is the greatest benefit; what should be done first, and what later?” questions.
An important focus
We know because we have been there too: support organizations have long had a hard time convincing the reluctant owners to act. However, we believe that the time has come when many SMEs will be receptive to effective support to find that intersection between technology and their business that works for them – provided it’s done without adding excessive burden that detracts from their business focus. Because making such support available to SMEs is as important as making broadband available in the first place it is becoming an urgent priority for public policy. Let’s keep in mind that that SMEs are a key engine for employment and economic growth (95% of businesses have less than 50 employees). More SMEs adopting e-solutions, enabled by broadband, improves growth, productivity, and competitiveness, with positive effects not only for SMEs but also for their communities and the economy overall. After all, that’s what sustainable adoption is all about.
By Gary Dunmore, SNG
Click here to download this SNG position paper
If you think we can help, or would like to learn more about our broadband sustainable adoption services, please contact us.
Why you should ensure you’ve got visibility on carrier-provided broadband data
NTIA administrator Larry Strickling recently expressed his confidence that broadband service providers will not only provide the detailed supply data requested by his agency (which includes more data elements than has ever been provided for a broadband mapping project), but also that they would waive the confidentially provisions that keep this data from being associated with specific companies. Though we certainly hope Mr. Strickling is correct, we don’t believe this will happen. And, just in case we are right, we recommend that states be ready to gather as much broadband data as they can – without relying too much on carrier cooperation.
We suggest a two-pronged approach. On one hand, states should work closely, in good faith, with carriers to develop ways in which they can provide the data elements set forth in the NOFA while preserving their confidentiality. However, we warn states against becoming too dependent on carrier cooperation in the design and execution of their broadband mapping programs.
The reason: carriers may perceive the public interest goals of NTIA’s broadband mapping effort as too much at odds with their own self interests. Because the truth is: these companies are run to maximize shareholder value—not the public interest.
On the other hand, states need to build their mapping programs to include a strong multi-source data collection process that not only satisfies NTIA’s requirement for verification of carrier-supplied data, but also can “fill-in” for that data if carriers are either unwilling or unable to provide it. That’s what we call an “augment and verify” strategy.
Isn’t that what Strickling means when he says that if carriers refuse to comply, “There are other ways to collect this [data]: there are survey techniques and other ways to collect this information short of the carrier?” “We have appropriated $350 million” to this task, he continues, and “we are expecting the states to be creative, to be collaborative, to work together, and to find some new ways to collect the data, whether or not it is supplied by the carrier.” And he concludes: “Once that is made clear to [the carriers] at the most senior levels, then this thing will work itself out.”
It’s not so simple…
That’s where we beg to differ. Our guess is that, if we just hope “this thing will work itself out,” it probably won’t – because carriers have decades of practice in stonewalling to get their way. However we agree that, as Strickling suggests, the best way to get carrier cooperation may very well be for each state to gather as much broadband data as it can without relying on them, while continuing to invite their cooperation in a shared national effort to serve the public interest.
We strongly believe that if we heed Strickling’s invitation to be creative and collaborative and “work together… to find… new ways to collect the data,” things may work out just fine mapping efforts can succeed. The choice is up to state decision makers as they evaluate their options in the next two weeks. Our suggestion: work respectfully with carriers to obtain their data on mutually acceptable terms, but also augment and verify.
Why you should launch a “planning” program as well as a “mapping” one
In the rush to apply for mapping grants, states should not forget the opportunity to leverage up to $500,000 of federal stimulus funds for broadband planning. So, if you are about to submit to the NTIA a broadband mapping proposal for your state, we urge you to take the parallel step of launching a planning program too.
That planning program should aim to organize the most efficient way to help your state’s businesses and communities overcome the barriers to adopting BEST practices – hence reaping their benefits of their broadband effort.
Because it’s worth remembering that the real value of broadband is not only measured by availability, speed or price — though all of these are important enabling factors. Rather, that value is most directly tied to the benefits of broadband connectivity combined with e-Solutions – an e-Solution being “a way to do what we’ve already doing, only better thanks to the Internet”. Thanks to over 10 years of hands-on experience, we know that the winning equation for the country must be: “broadband connectivity + e-Solutions = self-sustaining stimulus.”
And we also know that the key to maximizing broadband and e-Solutions benefits is to develop a “combined understanding” of both barriers to adoption and use and BEST (broadband e-Solutions transformative) practices, and an ongoing involvement of teams and people on the ground, in our communities, businesses and organizations. Achieving that requires solid planning!
As noted above, up to $500,000 is available to each state mapping project to support such planning activities.
But to take advantage of this federal support for broadband planning, states need to submit a planning proposal and budget along with their mapping proposal. And they need to do so by NTIA’s August 14 deadline. Because if they don’t, the $500,000 available for planning effectively disappears for their state. So, don’t miss it. In our view, decision makers in every state should take advantage of this opportunity to set a course toward “self-sustaining stimulus.”
Do you need help?
For states concerned about how to come up with the 20% matching funds, we suggest careful consideration of ways to cover some, or all, of this amount through in-kind contributions. According to the NOFA, these can include “employee or volunteer services; equipment; supplies; indirect costs; computer hardware and software; use of facilities; [and] expenditures for existing programs presented as part of the [planning] project proposal.” Based on our experience, there’s a lot of value that can be derived from these forms of in-kind contribution.
Also, to help communities understand and plan the move up the BEST practices learning curve, we’ve developed tools such as e-Solutions Benchmarking (to establish a baseline and direction for planning investments in broadband infrastructure and sustainable adoption programs) and Evaluation and Adoption Analytics (to help evaluate the impacts of these investments and adjust plans and strategies based on clear and measurable evidence).
…or why broadband planners shouldn’t rely solely on carrier-provided broadband data
NTIA administrator Larry Strickling is wrong: carriers shouldn’t be trusted – certainly not to share broadband data. That’s because you shouldn’t rely on carriers to agree to serve the public interest. Not that they are inherently bad corporate citizens; but because carriers’ interests and the public’s interest are not aligned. And never will be. Consequently, carriers are never going to take
steps that would entail favoring the public’s interest over theirs. It’s just plain logic; economic logic – unencumbered by the hardcore free-market ideology that telecom lobbyists always talk about.
Let’s look at the facts. To put it simply, free markets don’t quite work in the broadband world. Everywhere you look, you find a juxtaposition of local oligopolies: a limited number of firms serving a sub-
regional market. Where are there more than three telcos competing in the same county? We’re certainly not saying that telcos are plotting to rip off consumers – we’re simply noticing that they have no real incentive to be very aggressive commercially.
That’s why we believe one shouldn’t trust carriers too much. But that’s all right: because carriers are working for their shareholders. Whereas public authorities looking to foster broadband deployment and adoption are working on behalf of their constituencies. The truth is that broadband is a public responsibility, not something that should be entrusted solely to the private sector. Within that context elected officials and the government can actually have a say.
Here is a little background story. Back in the early 2000s the French incumbent, France Telecom, spent three years fighting a law meant to enable public bodies (“départements” and “regions”) to start building broadband infrastructure – and in 2004, it lost. Then, when it became clear that public networks would start sprouting out all over the country, France telecom decided to work with small, alternative, local telcos and public-private partnerships planning and running public networks. If you can’t beat them, join them. Today, five years later, 96% of the French population enjoys broadband (and there they mean over 3 Mb) access for less than 30€ ($42 dollars) a month. They can’t be trusted – but in the end carriers cooperate when they’re pushed!
At SNG, we think it is important that public officials understand this context, so that elected decision-makers can decide to allocate the required resources to do their own broadband mapping – without relying on the goodwill of carriers to share their broadband data. Because, as Art Brodsky writes today: “At the end of the day, somebody is going to be in control of the mapping. It will either be the public, and the public interest, as represented by NTIA, or the industry.”
If you think we can help, or would like to learn more about our broadband planning support services, please contact us.
Introducing Strategic Networks Group, Inc.
“You wouldn’t make a major investment in your business without knowing all the facts – investing in broadband is no different.” At SNG, we help our clients build solid, credible, and successful, business cases for necessary e-solutions, ICT and connectivity infrastructure investments within their communities. We have the experience and the tools to show clients where ICT investments can shorten the path to local economic growth. We adapt our methodologies to de-risk investment decisions and accelerate uptake rates for client broadband initiatives. We can help you now make the most of the broadband stimulus package funds – for the good of your constituents.
Specifically, we have developed a unique approach to broadband supply and demand mapping – the only way to gather all the info needed to prepare the right deployment plans – and strong grant requests.
“Broadband mapping should be done in the public interest”
“[It could be that North Carolina might be] the latest state in which the economic and political clout of incumbent service providers is being exercised at cross-purposes to the public interest goals of broadband mapping. This is especially troubling today, since very large amounts of public money will soon be spent to generate data, maps and analysis that are supposed to serve the public interest.
Read more »
SNG enables E-NC to seek input about broadband access and use statewide, presented in TechJournal South ( click here)
SNG’s Michael Curri has a recent position paper posted on BuddeComm ( click here)
The National Post (Canada) presents the innovative survey conducted by SNG on behalf of the National Golf Association: “Golf big contributor to economy, says survey” ( click here)
quotes Michael Curri on how that agency should best handle the ARRA broadband grants application process, see on page 2
