ICT, eBusiness and SMEs The Policy Environment Case FINLAND

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ICT, eBusiness and SMEsThe Policy
EnvironmentCase FINLAND

• Antti Eskola
• Ministry of Trade and IndustryHelsinki,
  FinlandWSIS Thematic MeetingJanuary 17-19,
  2005
• Antigua, Guatemala

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1. ICT diffusion to businessFinland in OECD
Country Peer Review
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ICT Policy Framework of the OECD Peer Reviews on
ICT Diffusion to Business
Fostering ICT
Increasing ICT
Maintaining a Healthy ICT
Enhancing the
PromotingTrust Online
Innovation
Business Environment
Infrastructure
Diffusion and Use
Diffusion to households
Security of information
Electronic payment /
Competition in ICT markets
RD programmes
and individuals
systems and networks
settlement
Government
Diffusion to businesses
Standards
Privacy protection
Intellectual property rights
development
Professional/managerial
Government
Trade and FDI
Broadband
Consumer protection
ICT skills
procurement
International co-operation
Venture finance
Organisational change
General network infrastructure
e-government
Innovation networks
In addition - General coordination of ICT
Policy Initiatives- Public-Private-Partnerships
Content
Government demonstration
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Finnish Information Society Policy Program-
umbrella for some 100 governmental measures in

• Telecommunication infrastructure
• Citizens ability and skills to benefit from the
  information society
• Education, working life, research and development
• eGovernment services to citizens and enterprises
• Social welfare and health care
• eBusiness, digital content and services
• Governments own IT infrastructure and services

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Coordination of ICT Policy Initiatives in
FinlandInformation Society Policy Program 2004
- 2007
GOVERNMENT

• PRIME MINISTER
• AND A MINISTERIAL GROUP
• 5 ministers

• INFORMATION
• SOCIETY COUNCIL
• ministerial group
• 36 companies and other organisations
• 7 permanent experts

• PROGRAMME DIRECTOR
• AND THE PDS OFFICE
• 6 persons

• 7 SECTIONS OF THE COUNCIL
• external interest groups
• ministries representatives

• STEERING COMMITTEE
• FOR THE PROGRAMME
• 13 ministries
• local authorities representatives

• COUNCIL
• SECRETERIAT
• 12 representatives from ministries

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Coordination strenghts

• Political clout
• Led by the Prime Minister / five-member
  Ministerial Group
• Wide-ranging vertical/horizontal, public/private
  sector participation/ commitment building
• Council subgroups encouraged to present new
  initiatives
• Coordination and synergies between various
  national strategies
• Broadband Strategy
• Information Security Strategy
• Public Sector eServices Strategy (under
  formulation)
• eBusiness Promotion Strategy (feasibility study
  underway)

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of enterprises
Staff / persons
Source Statistics Finland
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Finland National Broadband Strategy (2004
2007)59 measures with emphasis on promoting
competition
Finland -Population 5.2 million-Households
2,4 million-Enterprises 224,000Current
situation-Broadband connections in 30 of
households, available to 94 of the
households-Broadband connections in 63 of
active SMEs Targets by end of 2005- Broadband
connections 1 million- Majority of broadband
connections at least 2 Mb/s Targets by end of
2007- 90 of internet connections broadband-
Most common type of bb connection at least 8
Mb/s
Finland
500 km
1100 km
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eCommerce in Finland 11.5 of total sales of
enterprises in 2003
Billion
Internet 4.2 of total sales by Finnish
enterprises
EDI 7.3 of total sales by Finnish enterprises
Source Statistics Finland
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Share of SMEs using various business software
/services
ERP
CRM
SCM
KMS
ASP
Survey among SMEs in Greater Helsinki Region,
Spring 2003, n476
Helsingin Chamber of Commerce
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SME business process integration in Finland and
six benchmark countries
Small Medium Large
Small Medium Large
Source OECD Information Technology Outlook 2004,
p. 127
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OECD Peer Review Recommendations to Finland

• Ensure political backing for the coordination of
  IT policy initiatives
• Focus more on seeking benefits for business from
  broadband and wireless infrastructure
• Ensure that SMEs benefit from government
  supported RD programs
• Use the mobile cluster as model for PPP, forum
  for standard formulation
• Introduce strategic vision to developing ICT
  skills in education and in workplace
• Consider introducing a pilot analysis tool for
  deepening the insight on business process
  restructuring
• Promote multichannel content industry through
  government example, enable reuse of public sector
  data for content industry
• Improve ICT awareness and ease of contact with
  SME support network

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Whose role is it to promote various factors of
efficient ICT use in SMEs?
X Some role, XX Active role, XXX Very
active role
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Employment and Economic Development Centres in
Finland
1. Uusimaa, Helsinki 2. Southwestern Finland,
Turku 3. Satakunta, Pori 4. Häme, Lahti 5.
Pirkanmaa, Tampere 6. Southeastern Finland,
Kouvola 7. South Savo, Mikkeli 8. North Savo,
Kuopio 9. North Karelia, Joensuu 10. Central
Finland, Jyväskylä 11. South Ostrobothnia,
Seinäjoki 12. Ostrobothnia, Vaasa 13. Northern
Ostrobothnia, Oulu 14. Kainuu, Kajaani 15.
Lapland, Rovaniemi
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13
14
12
8
9
11
10
5
7
3
4
6
2
1
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Expert Services of the Centers for SMEs
Global Training for internationalisation DesignSt
art For developing company or its product
image eStep For developing SMEs e-business
capabilities Multi-skill For developing personnel
skills from the perspective of the company's
business activities Sales Power For boosting
sales and marketing efforts Passing the Baton For
controlling the generation shift Product
Start For successful commercialisation of product
and service ideas Networking Rating For SMEs
in supply networks
ProStart for assessing business idea and
development PostStart for basic control of
business operations Balance for improving
financial competence Fitness for assessing the
current state of the enterprise Profit for
improving profitability of service
industry Profit for increasing
productivity Skills for increasing profitability
of handicraft enterprises
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2. The EU Perspective to SMEs and eBusiness
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EU analysis policy challenges to e-business
adoption by SMEs
Source European Commission 2003
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3. EU Tools for Addressing the Challenges
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An EU level Forum eBusiness Support Network
(eBSN)
Member States Candidate Countries EEA/EFTA States
eBSN Steering Group
Business, academia

• e-business watch function
• e-business legal portal
• e-marketplaces portal
• Thematic workshops
• Best practice promotion
• SME training toolkit
• Others

eBSN Members Governmental / non-profit SME
support organisations representing160
Initiatives in 25 EU Member States
eBSN Members
eBSN Portal (e-bsn.org)
Enterprise Programme Management Committee
eEurope Steering Group
www.e-bsn.org
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The Sectoral e-Business IndexA proxy to the
eEurope 2005 Index
(a) ICT Adoption by Enterprises
(b) ICT Use by Enterprises

• of enterprises purchasing products on-line
• of enterprises receiving orders on-line
• of enterprises whose IT system for managing
  orders is linked with back-end system
• of enterprises with access to extranet of
  business partners
• of enterprises using on-line banking
• of enterprises trading on specialised B2B
  e-marketplaces

• of enterprises with internet access
• of enterprises having a website
• of persons employed using computers in their
  normal work routine
• of enterprises with gt2Mbit/s connection to the
  internet
• of enterprises with an intranet

(a)
(b)
www.e-businesswatch.org
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Observing an e-typology
and size classes
of sectors

• Manufacturing sectors, with dominant large
  players, rank higher in ICT use
• ICT services are e-business pioneers and
  all-rounders
• Dichotomy between small large companies (e.g.
  retail)
• Tourism with a marketing oriented e-business
  profile.

www.e-businesswatch.org
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Objectives of the eBusiness Support Network (eBSN)

• Improve coordination among eBusiness policy
  initiatives in Europe
• Identify and promote exchange of best policy
  practices
• Discuss adapting national / regional policies to
  better respondSMEs eBusiness challenges
• Launch joint projects between eBSN members
• Offer and develop common tools for policy and
  policy exchange

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eBusiness Support Network Cooperation Themes in
2005

• Improving the availability of eBusiness solutions
  to SMEs
• eProcurement / eInvoicing
• Industry/Service sector-specific approaches to
  promotingeBusiness of SMEs
• Information security
• Cross-border eSales
• Legal issues of eBusiness
• eBusiness for micro-enterprises
• Promoting use of international, particularly
  UN/CEFACT standards

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3. Learning from regional initiatives and
spreading them
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An Initiative from Finland, which the eBSN has
identified as a best practice and helps diffuse
to other eBSN Members
South Karelia Speeding up the ICT uptake of the
Regions SMEs

• Aiming at reaching a critical mass of SMEs that
  adopt various eSolutions on long term
• Starting by encouraging and supporting SMEs to
  introduce internal IT applications
• Focusing on
• - hands-on training of company staff
• - eInvoicing as a killer application
• 4. Supported by
• - Regional eStrategies
• - Regional drivers

South Karelia Region
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SMEs core processes of financial management in
Finlands B2B-market produce over 1 billion
messages a year
South Karelia Why Focus on eInvoicing?
CurrentPenetration98
PAYMENTS 500 mill / year
INVOICES 220 mill / year
CurrentPenetration10
8 M
8 M


4 M
4 M
2 M
2 M

2000 2001 2002 2003 2004 2005
2006 2007
2000 2001 2002 2003 2004 2005
2006 2007
PRODUCT MANAGEMENT
PURCHASE INV 200 mill / year?
OFFERS 400 mill / year ?
8 M
8 M


4 M
4 M
2 M
2 M
2000 2001 2002 2003 2004 2005
2006 2007
2000 2001 2002 2003 2004 2005
2006 2007
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Cost of Paper Invoice vs. eInvoice
Sales Invoice
Purchase Invoice
Sales Invoice
Purchase Invoice
Sources Procountor 2004 Elma 2004 Kareltek 2004
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SPEED UP THE MARKET
South Karelia Removing Obstacles to uptake of
ICTs
Main Obstacles
Results 2004
Over 700 ePlans
Lack of ePlans
749 New Applications
Lack of Applications
726 of SMEs Personnel Educated
Lack of Knowledge
Lack of Integration
Over 60 of Operators Integrated
Source Kareltek 2004
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South Karelia Ensuring interoperability between
eInvoicing service providers
RESULTS 2003
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South Karelia Activation of the Critical Mass of
SMEs
SPEED UP THE MARKET
Number of SMEs Activated
100
2004
STATUS 2003
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Take off
Sources Kareltek 2004, Bolton 1996, Rogers 1995
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South Karelian Focus Areas in Supporting SME
eBusiness Development
2004-2006
2002-2003
gt
gt
gt
gt
eBusiness for SME
eBusiness on the Net
eMessages eProcesses
Product Managementand Publication
Network Management
Internal Applications and Processes

• CRM
• Customer Service
• Sales
• Marketing
• ERP
• Office Environment
• Management
• Personnel
• SCM
• Supply
• Production
• Deliveries

Customer

• Product Documents
• Planning
• Production
• Sales
• After Sales
• Spare Parts

• Order Delivery Chain
• Activity on the net
• Accurate Deliveries
• Process Deviations
• Process Status
• Monitoring
• Business Models
• Controlled Orders
• Project Business

• Messages
• Offers
• Orders
• Order Confirmations
• eInvoices
• Cover Letters
• Inventory Status

Retailer
Large Enterp
SME
Supplier
Connection to Improve Efficiency
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South Karelia Improving and exchanging the model

• Linking university research in the development
• Providing joint tools and portal for five other
  regions in Finland
• building Nordic and EU-level research ties with
  other regions
• presented their experiences in eBSN workshops
• engaged in cooperation with a Slovenian eBSN
  member

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4. eBusiness National Testbed Perspective
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Modeling eBusiness Environment on National
LevelGeneral View (eBusiness Community Model)
Implementation, solutions
Assurance (trust and confidence)
Legal and standards framework
Preconditions
Source Network of National eBusiness Testbeds,
www.eteb.org
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Thank you!Antti EskolaMinistry of Trade and
IndustryHelsinki, Finlandwww.ktm.fi