The CBI has unveiled a new report on information technology’s role in making UK companies competitive – said to show how IT helps British firms better meet customer needs, enter new geographic markets and build value in their offerings.
‘UK Competitiveness: The Role of IT Services’ is based on a survey of 500 UK companies, and is sponsored by Nominet – the internet registry for .uk domain names.
The report was welcomed by Baroness Shriti Vadera, Under-Secretary of State for Business and Competitiveness.
She said: “I welcome the CBI’s report into IT competitiveness.
“The development and take-up of IT is critical for business growth and efficiency. We need to make sure that all firms – large and small – have access to technology that will improve productivity and, importantly, the skills to use it effectively.”
John Cridland, deputy director-general of the CBI, said: “This report shows that the main driver for developing IT services is now the ability to help companies focus on customers and add value, rather than simply cutting costs.
“At a time of tougher economic conditions and ever-increasing international competition, it is vital that all firms understand how they can use IT to drive performance and create goods and services customers want.
“The report highlights ways for government to help companies better exploit the benefits of IT.
“Business wants clearer and more consistent policies on e-commerce, support for overseas activities, and measures to address technology and skills weaknesses, and security vulnerabilities.”
Emily Taylor, director of legal and policy at Nominet, also said: “Nominet welcomes the CBI’s evidence-based approach.
“I hope it can inform the ongoing international debate about how to foster an environment for innovation, investment, and the global development of the Internet.
“ The survey shows that what creates Internet and IT competitiveness is a combination of factors: broadband access, regulatory environment, skills and top level management support.”
Key findings in the report include:
Investing in internet-enabled IT services has given UK companies major competitive advantages. Sixty three per cent of respondents cited improved customer retention and satisfaction, 60 per cent cited better tailoring of products and services to customer needs, and 57 per cent cited the development of new marketing and delivery methods.
Customer focus rather than cost-saving is now the major driver of IT development. More demanding global customers were cited as a driver of IT development by 52 per cent of respondents, and more demanding national customers were cited by 51 per cent. Responding to these demands, 56 per cent of companies say they are now capable of serving customers through digital marketplaces.
Other major drivers of IT development were the varied costs of different locations (cited by 47 per cent) and low-cost international competition (35 per cent) as UK companies seek efficiency and competitive advantages.
Respondents would welcome help from government in the area of IT. Forty two per cent would like support using IT services to access overseas markets, and 39 per cent would welcome the development of a national centre of excellence to identify and share best practice. Thirty seven per cent called for greater Business Link technical support, and 30 per cent for greater regional peer networking.
The survey also shows the main barriers to the extensive development of iternet-based services are geographic dispersion of staff, information assurance concerns and differing regulatory requirements, but the UK’s self-regulatory regime for domain names registration and dispute procedures is seen as a significant plus in providing a fast and simple registration process.
Mid-cap companies appear to have benefitted less from IT in than either small or large companies in terms of entering new product markets and new geographic markets.
UK companies increasingly recruit foreign IT staff, with 59 per cent now employing them, up from 52 per cent two years ago.
The report also shows that 25 per cent of companies hire Indian IT staff and 11 per now hire Chinese IT staff.
But only 13 per cent of companies cite an inadequate UK skills base as the reason for hiring foreign staff; the main drivers were international growth (cited by 61 per cent) and individual project requirements (46 per cent).
Over two-thirds of companies spend a considerable amount of their IT budgets on outsourcing, with 24 per cent of those who do spending 11 to 20 per cent of their IT budget on outsourcing, and 17 per cent spending 21 to 40 per cent.
But companies often prefer to outsource to UK-based providers of services. For improving internal service delivery, 67 per cent prefer a UK-based provider.