ebusiness presentation jim hanna

8/13/2019 eBusiness Presentation Jim Hanna

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ECA Innovation and Competitiveness Workshop

e-Business for MSME Competitiveness

February 18, 2004

Jim Hanna

Lead Operations Officer & eBusiness Advisor

Latin America & Caribbean Region

[email protected]

The World Bank GroupWorking for a World Free of Poverty

e-Business as innovation

Contributions to development

Accelerating e-business adoption


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E-business is a major business innovation that most firms will have to adopt.ICT and Economic Growth: Evidence from OECD Countries, Industries & Firms, OECD, 2003

e-Businessmore than PCs and wires

Most economic benefits of e-business begin with:

Transactionsfront officerelational & productinnovation to improve market reach and product range

Customer development & e-marketing solutions

E-business solutions to buy & sell services via Internet

Customer service and support solutions

Integrationback officeprocess & organizationalinnovation to improve production and management

Product design and production solutions

Procurement and supply chain management

Finance, online banking and accounting solutions

eLearning solutions to upgrade employee skills


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Contributing to productivity & growthA micro view

Net Impact Study Canada: The International Experience 1/Canadian eBusiness Initiative, May 2003

Key business innovation impacts

Lower customer service costs Sales and marketing efficiency

Increased worker efficiency

Reduced materials costs

Improved inventory management

Lower distn or shipping cost

New customer acquisition

___________________________________

eBusiness Adoption by Small FirmsSolutions Adopted

0 10 20 30 40 50 60 70

Customer Dev. & e-Marketing

e-Commerce (incl. B2B)

Customer service

Finance & Accounting

Procurement

Sales Force Automation

Supply Chain Management

%Sha re of Total Firms

EU

Canada

US

eBusiness Adoption by Small Firms

Financial Impacts

0 2 4 6 8 10 12

% Increase in

Revenue

% Decrease in

Cost of Goods

Sold

% Decrease in

Sales & Gen.

Admin.

Percent Increase/Decrease

EU

Canada

US

1/ Source: The Canadian e-Business Initiative (CeBI) and the OECD ICT Database Eurostat Survey measuring the Information Economy, 2002. Total surveysize was1,668 small (to 100 employees) and medium (100-250 employees) firms in Canada, the US and EU. Results reflect 1-2 years implementation periods.

Front Office

Back Office


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Reducing transaction costs, expanding opportunityChile

Programa VentanillaEmpresa 2002-2003

Simplified and Internet-enabled

New business registration - tax administration,

trademarks & patents, health

Export procedures - customs, transport permits, publichealth certificates

Labor regulations - labor ministry work permits,severance, contractor certification

Selected by 1,200 entrepreneursthemselves infocus groups

Cost-sharedamong 17 government participatinginstitutions

Implementation costs already paid forin publicbudget savingsbusiness savings to be calculated

eBusiness agencies developmentservices programs

MIN. ECONOMYSwww.comprachile.cl

Information & bidding on public services

Contracting for more than 100 public services

SERCOTECs www.redsercotec.com

Supports small business management Facilitates new business opportunities Encourages business networks Access to training and consulting services

PROCHILEs VideoNegocios and Inter-PYME

Export market information & assessments Export management support and training


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Business

Womens cakes & desserts baking network

Producing & delivering to families in 8 provinces of Peru

Goods purchased mainly by Peruvian expatriates

E-business functions

Web-based marketing, ordering and payment

Business growth

4-5 orders per month to 50 orders per day, now witha client base of 500 customers

Employment

Full-time for 14 mamas

Wages & profitability

Twice minimum wage, 30% margins

Non-monetary benefits

...settles a conflict between finding a job or being with our children

a way for women to become comfortable with technology

right here in Peru, we are part of the globalization processMara del Carmen Vucetich,Proprietor

Advancing the MDG to reduce povertyPeru

Tortas Peru - the virtual cake network expanding market outreach and income


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e-Business market trends

LA e-business markets- est. $6.5 billion in 2002, ofwhich Brazil $3.7 billion

Argentinamost advanced infrastructure but in deeprecession depressing investment

Brazil & Mexico - largest LA markets for hardware, software,internet access services, e-business revenues

Chile - most developed technology infrastructure and highest

Internet penetration in region, small market (16 million people)

LA markets small in relation to OECDnearly $1trillion in B2B e-business in 2002

No sign of major expansion a la Korea, where total B2B

revenues nearly doubled over 2001-03 to over $170 billion

eBusiness transactions and integration rates are not following

trends in Internet access rates, even in market leader Chile, Rates are markedly lower than in digitally advanced countries

e-Business remains mainly a large-firm activityoperating in upper socio-economic income segments

90% of Brazil s e-business generated by 30 largest firms

Only 2% of Mexican SMEs engaged in e-business transactions

Functionality 2000 2001 2002 2003

Internet access 42 61 64 69

Web presence 7 11 16 25

order online 16

receive orders online 11

2000 2001 2002 2003

Internet access 56 69 72 84

Web presence 16 22 24 64

order online 4 20 25 43

receive orders online 6 9 26 37

(share of total firms)

Australia, 2000-2003

E-business Adoption Rates in Australia & Chile

Chile, 2000-2003


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ESW & CAS exercises

From Natural Resources to the Knowledge Economyincreasing growth and job qualityFlagship Report (2002)

Chile and Colombia CAS (2002)

Closing the Gap in Education and TechnologyFlagshipReport (2003)

Argentina & Chile New Economy Study (2003)

Brazil and Mexico CAS Reports (2003)

e-Readiness assessments (infoDEV)

Bolivia

Honduras & Nicaragua (Bank)

Costa Rica

Jamaica

Panama & T&T

Telecom reform & connectivity project finance

Bolivia Rural Telecommunications

Chile Community Telecenters (infoDEV)

El Salvador Mobile Telphony

Honduras Solar Power Rural Telecenters

Nicaragua Telecommunications Reform Venezuela Movilnet

Supporting ebusiness innovationLAC

e-Business project finance & piloting

Ecuador Power, Communications & Rural Services Reforms(Bank, MicroNet component)

Mexico E-business for Small Business Development Project(Bank, free-standing project)

NOVICA e-business portal for artisans (IFC)

PeruConnecting Small-Scale Coffee Farmers andConsumers via Internet (infoDEV)

LAC e-Business for Small Business Competitiveness

Initiative (2004)

Research on good practices programs

GDLN e-Business series LAC & advanced countries

En Breve dissemination series

www.worldbank.org/ebusinesslacweb site
http://www.worldbank.org/ebusinesslachttp://www.worldbank.org/ebusinesslac


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Building e-business leadership

Policy reforms

Promote coordinated regulatory reforms and digital adoptionacross government agencies

Program designs

Decentralize program focus on end-users at regional andlocal levels

Encourage sectoral & inter-sectoral collaboration

Implementation

Minimize expansion of public entities utilizing outsourcing

Facilitating private intermediary market delivery capacityconsulting, trade associations, banks, training institutes, etc.

Monitoring & evaluation

Regular national, sectoral & regional data collection,surveys, analysis & dissemination

Refocus impact indicators on innovation & productivity-oriented benchmarks

ICT skills & e-Learning

new market outreach

B2B relationships

trust & security

The ECs eBusiness Support Network

Supporting member countries national programs

of the EU eBusiness Action Plan 2005

Policy analysis, workshops and summits on

ICT & e-business skills

Economic analysis of e-business Methodologies in e-business measurement

Legal environment for e-business

B2B Internet trading platofrms

Competitiveness of the ICT sector

Regular benchmarking of progress andconstraints to e-business adoption

Outsource contractor for member state firm-levels surveys and analysis

Web-based tools, such as eBusiness Lex onlegal issues in doing e-business


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Continuing policy reformsInfrastructure, trust and security

Trustmost Latin American countries enacted legislationon electronic signatures, contract & other documents

model legislation, like UNCITRAL (Colombia, Peru)

own legislation based on comparative law (Argentina, Brazil,Chile, Panama, Venezuela)

specific amendments to federal civil & commerce codes,administrative law, criminal code (Mexico)

Security- upgrading is now a main focus

Protection from third-party access/threat to communications,transactions and confidential information

Increase in firm-level and private sector protection digitaltools, risk management strategies, trust marks and seals

Cybercrime legislation to criminalize interference withinfrastructure, transactions

Privacy & data protection laws to regulate collection, use,dissemination of personal data accessible to Internet actors

Intellectual property protection of digital rights managementsystems to protect content, secure rights, revenues

Awareness campaigns and regulatory simplification to build

trust of MSMEs

Broadband makes firms more competitive

Unmetered and fast access to the web

Use of videoconferencing, outsourcing (ASPs), e-learning

Online procurement/auctions, online ordering, emailmarketing and customer service support

Accelerates local content development

Key broadband access policy issuesfoster privatesector competition

Promote and facilitate inter-modal competition betweencable, DSL, fiber and wireless operators.

Remove barriers to local loop and leased line competitionand sharing of infrastructure

Promote demand by shared use of Internet (schools,SMEs, etc) and community access to broadband(telecenters, schools)


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Issues Registration time for business formation is 91 for medium

complexity and 136 days for high complexity firms

(Monterrey)

Government lacks comprehensive system to electronically

link the more than a dozen agencies involved in the process

Objectives Process re-engineering to simplify registration & operating

permits in 10 states

ICT-based solutions to integrate operations at all layers

Improved e-procurement system to build value chains

Training for government staff and business

Dissemination program among business to promote use

pproach Demand-driven by interests of states and municipalities

Coordinated with Federal regulatory reform program (SARE)for business process simplification

Managed under each state and local authorities workinggroup by integrator managers

Bank financing of consulting services, equipment, works andtraining under approved reform plan

Minimum 25% state f inancing contribution

Expanding G2BBusiness registration & procurement in Mexico


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Deepening ebusiness marketsAwareness, training & learning-by-doing

Barriers to Adoption of E-business by Chilean Firms(Percentage of total responses)

0 5 10 15 20 25 30 35 40

Not interested or consider unjustified

Staff unprepared

No trust or lack of know ledge

Inadequate financial resources

Inadequate ICT infrastructure

Size of firm

Privacy/security

Cost

Complexity

Top barriers to e-business adoption among MSMEs

Lack understanding of how e-business functions as a strategic,value-adding tool

Lack metrics and models that convince them that benefits aregreater than costs

Lack internal ICT & e-business know-how, outside support &time to design and implement e-business systems

Promote e-business awareness information, tools &

training programsused to determine business case andprepare e-business investment plan

Workshops and peer exchange of experience

Online information, downloads and self-service tools

Initial economic & technical consultations

Facilitate pre-investmentsupport for in-firm learning-by-doing and innovation

Demonstrates success in overcoming market failures

lack of information & hands-on experience in e-business

underestimate e-business value & under-invest in e-assets

Support development of intermediaries to facilitate adoption


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Reaching the poor - lessonsof telecenters in LAC

Good at expanding communications

Weak ICT and e-business training and upskilling

Low sustainability and business value added

Low development impact

Little commercial investment in e-learning, applications & content

Need to redirect toward high value, sustainable e-business

service markets - pilots in Ecuador and Mexico to

Reach at least 50,000 low income microbusinesses

Generate market outreach, competitiveness, growth

Yield financial sustainability & franchising within 3 years

Key design features

Private sector management, governance & co-financing

Sector-specific e-learning programs Microbusiness-appropriate applications for market outreach,

transactions and improving core business processes

Local business content market development

eBanking services with microfinance partners

Peru - Red Cientifica Peruana (RCP)

Connectivity, not productivity

89% of Perus Internet users use RCPCabinas Publicas

User profile - higher education & income

56% users between 15- 25 years old

40% users have a computer at home

Use profileemail, info search, chat

Email (60%), Search for information (51%),chat (39%)

60,5% total users visit Cabinasbetween 2 to 3times per week.

Deepening ebusiness markets among microbusinessSustainable eBusiness development services markets


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Recap

E-business is one important innovation strategy that can

Advance productivity, competitiveness and growth

Reduce business environment barriers

Contribute to MDG for poverty reduction

The Bank can help accelerate e-business adoption by supporting

1. e-leadership institution-building for policy reforms, programs, monitoring and evaluation

2. Continued reforms in ICT infrastructure, trust and security regulations

3. G2B programs to lower transaction costs and expand opportunities4. Awareness, training and pre-investment programs to deepen e-business markets

5. Expansion of sustainable e-business services markets to reach low-income microbusiness

ebusiness presentation jim hanna

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