♦  Business Management Research by Geography

Australia Online

Australia is making huge strides in broadband adoption, particularly among small businesses, but also in the home.ADSL remains the most popular access technology; however, various forms of mobile broadband are also winning customers.

The percentage of households with broadband connections increased by 14.6 points in 2006, boosted by the long-delayed rollout of nationwide ADSL service by the country’s dominant carrier, Telstra. eMarketer projects that 2007 will be the first year in which a majority (53.9%) of Australian households will have a broadband connection. By 2011, nearly 79% of Australian households will have a high-speed connection to the Internet.

Australian broadband penetration is high in comparison to India and China (1.2% and 12.6% in 2006, respectively), but still trails South Korea (78.8%) and Japan (52.3%).

from Australia Online (EM-2282)

What Every CIO Should Know About China

The culture in China places a high value on relationships and will therefore respond more readily to a local presence in meeting business demand for IT services. This, however, runs against many Western practices. Consider most Western corporate governance models, service agreements, account and communication plans, and portfolio prioritization and rationalization strategies. Many are developed top-down, allowing for limited local variation on common shared processes, metrics, decision rights, and organizational designs. China, on the other hand, with its multiple and diverse government entities, state-owned enterprises, ownership structures, and evolving legal system, has adapted to value individual relationships to supplant what is structurally embedded in the west - standardization, integration, and commonality. Therefore, where Western companies typically standardize and centralize much of the activity of managing demand for IT services, operating in China may necessitate a more localized approach. At a minimum, collaboration with local business and IT leaders throughout the development and planning of account strategies, investment portfolio, decision rights, and local versus global roles will be key to improving local leadership alignment, support, and buy-in.

IT investments that seem to clearly make sense in America and Europe may fail in China because of language, economics, ownership, or even receptivity to change local practices. A corporate standard application may fail because it doesn’t conform to local Chinese language conventions, or the benefits supporting its adoption in the West may fail completely in China when the benefits of automation are less than the cost of manual processes. Also, with some joint venture ownership structures, or with state-owned or private enterprises, implementing application standards can become problematic.

from What Every CIO Should Know About China: As Market, Business Location, and Technology Services Center (CG-4528)

Europe Online Advertising

Western Europe ranks second only to North America in total media spending, and will continue to do so through 2009, according to ZenithOptimedia. Of the $458.6 billion forecast to be spent on total advertising this year, North American advertisers will spend $191 billion to Western Europe’s $105.4 billion.

However, global advertising market share for both North America and Western Europe, currently at 41.6% and 23%, respectively, will begin to erode by 2009 - to 40.3% and 22.4% - as emerging regions such as Central and Eastern Europe and Asia-Pacific gain momentum. Zenith predicts Central and Eastern Europe will garner 6.9% of all global ad spending in 2007, or $31.4 billion, but in 2009 will account for 8%, or $41 billion. Likewise, the Asia-Pacific region now contributes 21% of worldwide ad spending, projected to be $96.2 billion this year; in 2009 this will grow to a 21.4% share, or $109.4 billion. The Middle East - part of Zenith’s - Middle East/Africa/Rest of World - category - will grow from a 3.1% share of global ad spending in 2007 to 3.4% in 2009. Latin America’s share, by contrast, will remain flat, around 4.5% in 2007 and 2009.

from Europe Online Advertising: Spend, Trends and Audience (EM-2263)

Outsourcing in Argentina

Argentina has demonstrated remarkable success in growing its way out of the economic crisis of 2001-2002. A key factor in its success is a competitive exchange rate resulting from its devalued currency. This has accelerated performance in its Business Process Outsourcing (BPO) sector. Contact center or voice based BPO agent count has grown from 6,500 agents in 2001 to 24,000 at the end of 2005. Agent density is projected to reach 33,000 by the end of 2006 and approach almost 42,000 by December 2007. Its 34% average BPO growth rate for the last 3 years will slow down slightly to 31% in 2007. The country is Latin America’s highest provider of bilingual agents with 60% serving U.S. and Eururopean companies.

Approximately 40 contact center BPO service providers dominate the Argentine call center industry and are concentrated in Buenos Aires, Cordoba and Rosario, three cities with 94% of the market’s agent capacity. Cordoba has the highest per capita concentration of software university graduates in Latin America. Revenues from these centers will exceed US$70 million in 2006 and are projected to reach each US$90-95 million by 2007. Compulsory primary education and free university education provide businesses with over 1.5 million university graduates concentrated in its three cities. These high education levels coupled with extensive bilingual education programs, low attrition rates, falling E1 telecommunication costs and favorable BPO and IT investment incentives make Argentina an ideal location.

from Argentina Executive Call Center Report 2007: Heart of Innovation and Care (ZA-4802)

Canada Online

According to PricewaterhouseCoopers, online advertising spending in Canada is estimated at C$801 million in 2006. Although still behind the US, in Canada as in the US, online marketing continues to see stronger growth than other forms of marketing.The 2005 estimate represents a 54% increase over the 2004 figure of C$364 million. The Interactive Advertising Bureau (IAB) expects online to account for 6.4% percent of an estimated total C$12.5 billion ad spend in Canada for 2006.

According to the latest Institute of Communications and Advertising (ICA) "Survey of Marketing Budgets," conducted by NTC Research, online marketing was expected to account for approximately 4% of total marketing spending, up from around 3% a year ago.

from Canada Online (EM-2252)

Indian Business and Investment

Indian IT and biotech firms are also eyeing the overseas market to gain technology and domain expertise. Among the most active has been Wipro, which has made five acquisitions in a span of six months. In December 2005, it acquired mPower Inc., a US headquartered company with a development center in Chennai and MPACT Technology Services, based in Chennai, for a cash consideration of $28 million. Wipro Technologies, the global IT services division of Wipro, acquired Quantech Global Services LLC, the US-based provider of computer-aided design and engineering services and the India-based Quantech Global Services Ltd. It also took over another company called Saraware for $32 million. Thedeal gave Wipro a local presence in Finland with focus on end-to-end engagements through nearshore development centers. Wipro made one of its largest overseas acquisitions by taking over the Portugal-based retail solutions provider Enabler for $53.3 million (Rs 240 billion). The acquisition gave Wipro a toehold in the Latin American market as Enabler has two development centers - one each in Portugal and Brazil.

Tata Consultancy Services, India’s largest exporter of software, acquired financial services company FNS of Australia for $26 million and then Chile’s outsourcing company Comicrom for $23 million. In June 2006, the Aditya Birla Group acquired Minacs Worldwide, a Canada-based BPO firm, for $25 million. However, the largest acquisition in IT was by Subex Systems, a software company, which acquired the UK-based Azure Solutions, the world’s largest revenues assurance company, for $140 million. The two companies later merged in April 2006.

from India Business and Investment Report (PS-6711)