the art of connecting global business - bt broadband · · 2015-09-21the art of connecting global...

© British Telecommunications plc 1

The art of connecting global business International report

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.

1150 business decision makers were interviewed by Vanson Bourne in April/May 2014. The

companies interviewed for this report each employ over 100 staff and are all in the process

of, or are considering, international expansion.


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%).


Reasons for international expansion

4


Figure 1: “To what extent is expanding into other countries and setting up fully operational subsidiaries an essential requirement for your organisation's success?”

3%

16%

80%

Not essential to success

Essential to some extent

Highly essential to success

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).

75%

44%

35%

31%

The growth opportunities within those markets

The current global economic climate

Our competitors have started expanding into

those markets

Our sector is not presently well represented in those

markets

Figure 2: “For what business reasons has your organisation discussed moving into other countries?”



62%

60%

52%

32%

4%

The quality of IT infrastructure and services in those markets

The quality of digital/communications

infrastructure

The IT skills of workforces

Governance and regulations surrounding IT security/data

protection

Other

Figure 3: “For what technology reasons has your organisation discussed moving into other countries?”

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).


What is needed for international expansion

7 © British Telecommunications plc

52%

48%

48%

43%

39%

32%

25%

12%

Reliable communications amongst all branches/territories

Flexible business strategy

Reliable customer communications/CRM

Consistency of approach regardless of market

Cost effective communications amongst all branches/territories

Reliable logistical infrastructure

Reliable supply chain

Cultural awareness

Figure 4: “Please rank the above in terms of how crucial they are to the successful running of a global organisation?” –

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.

Desirability of markets

8

Desirability of markets

Figure 5: Analysis of those markets seen as highly desirable for expansion, both externally and internally from each of those 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.

33% 30% 29% 27% 26%

23% 21% 20% 18% 18% 17% 17% 17% 16% 16%

13% 13%

59%

37% 38%

20%

37%

30%

25%

58%

48%

53%

NA

24%

NA

52%

NA

6%

NA

Highly desirable (as seen by other markets) Highly desirable (as seen by themselves)


US

Figure 6: Analysis of the criteria seen as attractive for expansion into the US – multiple choice (BASE: all respondents)

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. The US is also most attractive for the IT skills of the workforce, and the innovation and creativity of the workforce. While most other markets have only one element that differentiates it from other countries, the US has many, explaining its high desirability.

37%

36%

34%

33%

31%

31%

27%

26%

25%

11%

Potential customer base

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

IT skills of the workforce

Strength of local suppliers

Culture and ethics

The innovation and creativity of the workforce

Tax/governance

None of the above


UK

Figure 7: Analysis of the criteria seen as attractive for expansion into the UK – multiple choice

Business decision-makers rank the UK as Europe’s most desirable country, and second in the world. 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%).

37%

37%

34%

30%

29%

29%

28%

26%

23%

8%







Culture and ethics

Tax/governance


None of the above


China

Figure 8: Analysis of the criteria seen as attractive for expansion into China – multiple choice

As with the US and UK, business decision-makers see the potential customer base as an appealing element for expansion into China. 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.

44%

35%

29%

25%

25%

22%

22%

21%

20%

10%






Tax/governance



Culture and ethics

None of the above


Brazil

Figure 9: Analysis of the criteria seen as attractive for expansion into Brazil – multiple choice

Brazil is the market most likely to be seen as important for its potential customer base. However, Brazil is rated relatively poorly on its perceived quality of governance around data protection (16%) and the IT skills of the workforce.

49%

21%

21%

19%

18%

16%

14%

14%

13%

14%



Tax/governance


Culture and ethics





None of the above


India

Figure 10: Analysis of the criteria seen as attractive for expansion into India – multiple choice

The potential customer base is the leading factor in India’s attractiveness as market for expansion. 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.

36%

28%

25%

21%

21%

21%

19%

18%

17%

14%



Culture and ethics

Tax/governance






None of the above


Hong Kong and Singapore

Figure 11: Analysis of the criteria seen as attractive for expansion into Hong Kong – multiple choice

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.

32%

31%

28%

26%

23%

22%

22%

21%

21%

13%

Tax/governance








Culture and ethics

None of the above

29%

26%

23%

23%

23%

23%

22%

21%

21%

15%




Tax/governance





Culture and ethics

None of the above

Figure 12: Analysis of the criteria seen as attractive for expansion into Singapore – multiple choice


France and Germany

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

35%

35%

33%

30%

28%

27%

27%

26%

23%

9%







Culture and ethics

Tax/governance


None of the above

31%

31%

29%

25%

24%

22%

22%

20%

17%

13%






Culture and ethics


Tax/governance


None of the above

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.


Spain and Benelux

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

Spain (figure 15) and Benelux (figure 16) are the least desirable of the European markets.

28%

27%

24%

24%

21%

20%

19%

19%

14%

15%






Tax/governance

Culture and ethics



None of the above

22%

21%

21%

20%

18%

18%

17%

17%

15%

24%







Tax/governance

Culture and ethics


None of the above


UAE and South Africa

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)

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.

30%

25%

23%

22%

19%

18%

17%

15%

12%

17%



Tax/governance





Culture and ethics


None of the above

31%

21%

20%

16%

22%

18%

17%

17%

12%

21%



Tax/governance

Culture and ethics






None of the above


MINT markets

Figure 19: Analysis of respondents that believe there are no attractive criteria in the MINT markets (BASE: all respondents)

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%). 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


21%

23%

31%

Mexico

Indonesia

Nigeria

The effect of a digital first economy

20

The importance of a digital first economy

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?”

91% see a ubiquitous, nation-wide, high-speed internet as being the greatest help in making a market desirable (figure 20).

39%

52%

9% 0%

It is the greatest help It is a great help

It helps slightly It is no help at all


Barriers to international expansion

22

Challenges for organisations moving into new countries

23 © British Telecommunications plc

Figure 23: “Which of the following are challenges for your organisation when moving into new countries?”

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%).

47%

45%

40%

33%

33%

31%

30%

30%

Government regulation

Established competition

The cost of the initial investment

Market insight

Workforce IT skills

Logistical infrastructure (roads/rivers/ports etc.)

Cultural differences

Communications/digital infrastructure

Technology challenges: digital infrastructure

Figure 24: “To what extent have the digital infrastructures of your most desired markets hindered any expansion plans into said market?”

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


Technology challenges: internal IT

Figure 25: “Which of the following elements of your organisation are hindering its expansion into other countries?” – multiple choice

37%

31%

30%

Technology

Personnel

Logistics/distribution

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).


How BT can help

26

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

bt.com/globalservices


http://www.globalservices.bt.com

the art of connecting global business - bt broadband · · 2015-09-21the art of connecting global...

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