The art of connecting global business

Transcription

1 The art of connecting global business International report British Telecommunications plc 1

2 About the research BT s The art of connecting global business report surveyed 1150 business decision makers based in 13 regions around the globe, exploring the reasons for international expansion, which markets are desirable and why, the effects of being a digital first economy and barriers to expansion. The regions surveyed are: UK, Benelux, France, Germany, South Africa, Spain, UAE, Brazil, China, Hong Kong, India, Singapore and USA. The art of connecting global business is being launched to mark the opening of the International Festival of Business, one of the biggest business events of 2014, of which BT is an official partner business decision makers were interviewed by Vanson Bourne in April/May The companies interviewed for this report each employ over 100 staff and are all in the process of, or are considering, international expansion. British Telecommunications plc 2

3 Top-line summary 80% of business decision makers believe that international expansion is highly essential for the success of their organisation. 75% say growth opportunities are the main reason to look overseas. The main technology reasons for international expansion are the quality of IT infrastructure and services (62%) and the quality of digital/communications infrastructure (60%) within the markets into which businesses want to expand. The UK has been voted Europe s most desirable country, and second in the world. Overall, the USA is the most desirable for expansion (33%), followed by the UK (30%), China (29%), Hong Kong (27%) and Germany (26%). While all three of these markets are seen as attractive for their citizen affluence and potential customer base, the UK is appealing because of its IT security and governance (37%), the USA for the ability to roll out SLAs to the same standard as an organisation s headquartered country (34%), and China for the IT skills of the workforce (29%). 91% of businesses say that if a country is a digital-first economy then this is great help when expanding into it. The report also highlights the challenges that organisations face when they are looking to expand internationally. 37% of firms globally still don t have the technologies needed to achieve their international ambitions. This is the top internal barrier to international expansion, ahead of personnel issues (31%), logistics (30%) and regulation and tariffs (29%). British Telecommunications plc 3

4 Reasons for international expansion 4

5 Reasons for international expansion 80% of business decision-makers (BDMs) believe international expansion is highly essential to their business, with a further one in six (16%) seeing it as essential to some extent (figure 1). The majority (75%) see growth opportunities within other markets as a business reason for international expansion, this being the only reason selected by the majority (figure 2). 3% 16% The growth opportunities within those markets 75% The current global economic climate 44% 80% Not essential to success Essential to some extent Highly essential to success Our competitors have started expanding into those markets Our sector is not presently well represented in those markets 35% 31% Figure 1: To what extent is expanding into other countries and setting up fully operational subsidiaries an essential requirement for your organisation's success? Figure 2: For what business reasons has your organisation discussed moving into other countries? British Telecommunications plc 5

6 Reasons for international expansion Business decision-makers also factor technology in their discussions on moving into other markets. The most prominent technology reasons are the quality of IT infrastructure and services (62%), and the quality of digital/communications infrastructure (60%) within target markets (figure 3). The quality of IT infrastructure and services in those markets The quality of digital/communications infrastructure 62% 60% The IT skills of workforces 52% Governance and regulations surrounding IT security/data protection 32% Other 4% Figure 3: For what technology reasons has your organisation discussed moving into other countries? British Telecommunications plc 6

7 What is needed for international expansion Reliable communications amongst all branches/territories 52% Flexible business strategy Reliable customer communications/crm Consistency of approach regardless of market Cost effective communications amongst all branches/territories Reliable logistical infrastructure 32% 48% 48% 43% 39% Just over half of business decision-makers say that reliable communications amongst all branches and territories is the critical for their global organisations to run successfully. Reliable supply chain 25% Cultural awareness 12% Figure 4: Please rank the above in terms of how crucial they are to the successful running of a global organisation? British Telecommunications plc 7

8 Desirability of markets 8

9 Desirability of markets The US (33%), UK (30%) and China (29%) are the markets most likely to be seen as highly desirable by respondents not located in these countries. The UK is ranked best for business in Europe. Of the BRIC (Brazil; Russia; India; China, South Africa) markets only China is seen as highly desirable. Both India and Brazil believing themselves to be more desirable than other markets do. Very few respondents worldwide consider the MINT (Mexico; Indonesia; Nigeria; Turkey) countries as highly desirable. 59% 58% 48% 53% 52% 33% 37% 38% 30% 29% 27% 26% 20% 37% 23% 30% 25% 20% 24% 18% 18% 17% 17% 17% 16% 16% NA NA NA 13% 6% 13% NA Highly desirable (as seen by other markets) Highly desirable (as seen by themselves) Figure 5: Analysis of those markets seen as highly desirable for expansion, both externally and internally from each of those markets British Telecommunications plc 9

10 US Potential customer base 37% Average affluence/disposable income of citizens The ability to roll out SLAs to the same standard as our headquartered country The quality of governance and regulation around IT security/data protection 36% 34% 33% The ability to roll out service level agreements (SLA) means the US is more likely to be seen as attractive to investors than in any other market. IT skills of the workforce Strength of local suppliers 31% 31% The US is also most attractive for the IT skills of the workforce, and the innovation and creativity of the workforce. Culture and ethics The innovation and creativity of the workforce Tax/governance None of the above 11% 27% 26% 25% While most other markets have only one element that differentiates it from other countries, the US has many, explaining its high desirability. Figure 6: Analysis of the criteria seen as attractive for expansion into the US multiple choice (BASE: all respondents) British Telecommunications plc 10

11 UK Business decision-makers rank the UK as Europe s most desirable country, and second in the world. The quality of governance and regulation around IT security/data protection Average affluence/disposable income of citizens 37% 37% The UK leads in the perceived quality of its governance and regulation around IT security/data protection. The UK is also the market most likely to be attractive for the average affluence/disposable income of citizens as well as its culture and ethics. More than half (51%) of respondents in India see the UK as highly desirable. The markets UK-based respondents see as highly desirable for expansion are the US (33%), Germany (29%) and China (28%). Potential customer base Strength of local suppliers The ability to roll out SLAs to the same standard as our headquartered country IT skills of the workforce Culture and ethics Tax/governance The innovation and creativity of the workforce None of the above Figure 7: Analysis of the criteria seen as attractive for expansion into the UK multiple choice 8% 23% 30% 29% 29% 28% 26% 34% British Telecommunications plc 11

12 China Potential customer base Average affluence/disposable income of citizens IT skills of the workforce 29% 35% 44% As with the US and UK, business decisionmakers see the potential customer base as an appealing element for expansion into China. Strength of local suppliers The innovation and creativity of the workforce Tax/governance The ability to roll out SLAs to the same standard as our headquartered country The quality of governance and regulation around IT security/data protection Culture and ethics None of the above 10% 25% 25% 22% 22% 20% More than a third (35%) see affluence of citizens as attractive, and three in ten (29%) believe the IT skills of the workforce in China are important. The perceived quality of IT knowledge combined with the affluence of citizens make China a desirable market and makes it far more desirable than the other BRIC countries. Figure 8: Analysis of the criteria seen as attractive for expansion into China multiple choice British Telecommunications plc 12

13 Brazil Potential customer base Average affluence/disposable income of citizens Tax/governance 49% Brazil is the market most likely to be seen as important for its potential customer base. Strength of local suppliers Culture and ethics The quality of governance and regulation around IT security/data protection 19% 18% 16% However, Brazil is rated relatively poorly on its perceived quality of governance around data protection (16%) and the IT skills of the workforce. The innovation and creativity of the workforce 14% The ability to roll out SLAs to the same standard as our headquartered country 14% IT skills of the workforce 13% None of the above 14% Figure 9: Analysis of the criteria seen as attractive for expansion into Brazil multiple choice British Telecommunications plc 13

14 India The potential customer base is the leading factor in India s attractiveness as market for expansion. Potential customer base IT skills of the workforce Culture and ethics 28% 25% 36% Just under three in ten (28%) of respondents seeing the IT skills of the workforce as an appealing element. India s relatively low ranking on affluence / disposable income reduces its attractiveness as a destination for expansion. Tax/governance Strength of local suppliers The quality of governance and regulation around IT security/data protection The innovation and creativity of the workforce Average affluence/disposable income of citizens The ability to roll out SLAs to the same standard as our headquartered country 19% 18% 17% None of the above 14% Figure 10: Analysis of the criteria seen as attractive for expansion into India multiple choice British Telecommunications plc 14

15 Hong Kong and Singapore Business decision-makers believe Hong Kong has the most attractive tax and governance regime. 32% say this is the most desirable element for expansion into Hong Kong (figure 11). As with the majority of markets, the affluence of citizens and the potential customer base of both Hong Kong and Singapore (figure 12) lend to their relative attractiveness. Tax/governance Average affluence/disposable income of citizens Potential customer base 32% 31% 28% Average affluence/disposable income of citizens Potential customer base The ability to roll out SLAs to the same standard as our headquartered country 29% 26% 23% IT skills of the workforce 26% Tax/governance 23% Strength of local suppliers 23% IT skills of the workforce 23% The ability to roll out SLAs to the same standard as our headquartered country The innovation and creativity of the workforce The quality of governance and regulation around IT security/data protection 22% 22% The innovation and creativity of the workforce The quality of governance and regulation around IT security/data protection Strength of local suppliers 23% 22% Culture and ethics Culture and ethics None of the above 13% None of the above 15% Figure 11: Analysis of the criteria seen as attractive for expansion into Hong Kong multiple choice Figure 12: Analysis of the criteria seen as attractive for expansion into Singapore multiple choice British Telecommunications plc 15

16 France and Germany While France (figure 13) came third for ability to roll out SLAs (behind the US and the UK) its low score on workforce IT skills and innovation and creativity could be a concern. Germany (figure 14) was the market where strength of local suppliers was seen as most attractive. Potential customer base 31% Average affluence/disposable income of citizens 35% Average affluence/disposable income of citizens 31% Strength of local suppliers 35% The ability to roll out SLAs to the same standard as our headquartered country The quality of governance and regulation around IT security/data protection Strength of local suppliers 29% 25% 24% Potential customer base The quality of governance and regulation around IT security/data protection The ability to roll out SLAs to the same standard as our headquartered country 33% 30% 28% Culture and ethics 22% IT skills of the workforce 27% IT skills of the workforce 22% Culture and ethics 27% Tax/governance 20% Tax/governance 26% The innovation and creativity of the workforce 17% The innovation and creativity of the workforce 23% None of the above 13% None of the above 9% Figure 13: Analysis of the criteria seen as attractive for expansion into France multiple choice) Figure 14: Analysis of the criteria seen as attractive for expansion into Germany multiple choice British Telecommunications plc 16

17 Spain and Benelux Spain (figure 15) and Benelux (figure 16) are the least desirable of the European markets. Potential customer base 28% Potential customer base 22% The quality of governance and regulation around IT security/data protection Average affluence/disposable income of citizens 27% 24% Average affluence/disposable income of citizens IT skills of the workforce The ability to roll out SLAs to the same standard as our headquartered country 24% The quality of governance and regulation around IT security/data protection 20% Strength of local suppliers Strength of local suppliers 18% Tax/governance 20% The ability to roll out SLAs to the same standard as our headquartered country 18% Culture and ethics 19% Tax/governance 17% IT skills of the workforce 19% Culture and ethics 17% The innovation and creativity of the workforce 14% The innovation and creativity of the workforce 15% None of the above 15% None of the above 24% Figure 15: Analysis of the criteria seen as attractive for expansion into Spain multiple choice Figure 16: Analysis of the criteria seen as attractive for expansion into Benelux multiple choice British Telecommunications plc 17

18 UAE and South Africa The UAE (figure 17) scored well in terms of affluence of citizens and South Africa (figure 18) as having a good potential customer base. No IT elements are seen as particularly attractive for either the UAE or South Africa. With IT infrastructures so key for expansion plans, this is something to consider. Average affluence/disposable income of citizens 30% Potential customer base 31% Potential customer base 25% Average affluence/disposable income of citizens Tax/governance 23% Tax/governance 20% IT skills of the workforce 22% Culture and ethics 16% The quality of governance and regulation around IT security/data protection 19% Strength of local suppliers 22% The ability to roll out SLAs to the same standard as our headquartered country Strength of local suppliers 18% 17% The quality of governance and regulation around IT security/data protection The ability to roll out SLAs to the same standard as our headquartered country 18% 17% Culture and ethics 15% IT skills of the workforce 17% The innovation and creativity of the workforce 12% The innovation and creativity of the workforce 12% None of the above 17% None of the above Figure 17: Analysis of the criteria seen as attractive for expansion into UAE multiple choice Figure 18: Analysis of the criteria seen as attractive for expansion into South Africa multiple choice) British Telecommunications plc 18

19 MINT markets Mexico Indonesia 23% The MINT markets have high percentages of respondents reporting that none of the surveyed criteria were attractive for these markets, with Nigeria being the market most likely to have no attractive criteria (31%). Nigeria 31% However, around three in ten of all respondents report the potential customer base of Mexico (29%) and Indonesia (28%) as an attractive element for expansion into these markets Figure 19: Analysis of respondents that believe there are no attractive criteria in the MINT markets (BASE: all respondents) British Telecommunications plc 19

20 The effect of a digital first economy 20

21 The importance of a digital first economy 91% see a ubiquitous, nation-wide, high-speed internet as being the greatest help in making a market desirable (figure 20). 9% 0% 39% 52% It is the greatest help It helps slightly It is a great help It is no help at all Figure 20: To what extent does being a digital first economy (i.e. having a ubiquitous, nation-wide, high speed internet connection) help foster the sense of being a desirable place in which to do business? British Telecommunications plc 21

22 Barriers to international expansion 22

23 Challenges for organisations moving into new countries Government regulation 47% Established competition 45% The cost of the initial investment Market insight Workforce IT skills Logistical infrastructure (roads/rivers/ports etc.) 33% 33% 31% 40% Government regulations are the biggest challenge faced by organisations expanding internationally (47%), followed by established competition (45%) and the cost of the initial investment (40%). Cultural differences 30% Communications/digital infrastructure 30% Figure 23: Which of the following are challenges for your organisation when moving into new countries? British Telecommunications plc 23

24 Technology challenges: digital infrastructure Despite being an accelerator for expansion, poor digital infrastructures are also a hindrance; the vast majority (94%) of BDMs claim the digital infrastructures of their most desired markets have hindered their plans to some extent (figure 24). 6% 94% Not at all hindered by digital infrastructures Hindered by digital infrastructures to some extent Figure 24: To what extent have the digital infrastructures of your most desired markets hindered any expansion plans into said market? British Telecommunications plc 24

25 Technology challenges: internal IT There are also issues internal to organisations that are hindering expansion. 37% of respondents report that they don t have the technologies needed to achieve their international ambitions (figure 25). Technology 37% Personnel 31% Logistics/distribution 30% Figure 25: Which of the following elements of your organisation are hindering its expansion into other countries? multiple choice British Telecommunications plc 25

26 How BT can help 26

27 How BT can help We believe communications technology powers business and economic growth. In the connected world, we also see technology as increasingly an art as much as a science. When used creatively, technology can deliver stunning business outcomes, and with everything connected, distance no longer sets limits on what we can achieve. BT operates a global network infrastructure with the ability to provide services for its customers in 198 countries and territories. We take a total network approach, global and local, integrating connectivity seamlessly to deliver improved business performance for its customers. Our highly reliable international network is complemented with a comprehensive portfolio of services in the areas of security, unified communications and collaboration, customer relationship management and cloud solutions. These are all underpinned by BT Advise, a 4,000-strong global team of professional services specialists. 27

28 bt.com/globalservices British Telecommunications plc 28