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The ASPect Project Case:a Model for SME Adoption of ICT Innovation
Piet Boekhoudt
Telematica InstituutP.O. Box 589, 7500 AN EnschedeThe Netherlands+31(0)53 - 4850412
Piet.Boekhoudt@telin.nlPetra van der Stappen
Telematica InstituutP.O. Box 589, 7500 AN EnschedeThe Netherlands+31(0)53 - 4850419
Petra.vanderStappen@telin.nl
ABSTRACT
 The process of adoption of technological innovations in Small andMedium sized Enterprises (SMEs) is highly complex. WhereasSMEs are particularly important to the Dutch economy, theinnovation potential of SMEs is still highly unused. Informationand Communication Technology (ICT) is seen as a moderncatalyst for innovation. In this paper we propose the use of anetwork of SMEs, industry organizations, intermediary partiesand knowledge institutes, to achieve adoption of new informationand communication technologies. This proposed network ismotivated by our experiences in the ASPect project, whichintends to enable the adoption and diffusion of ApplicationService Providing within SMEs. We discuss the project’sorganization, the results and effects and the lessons learned. TheASPect project thus serves as a case of how a knowledge network can foster ICT innovation. Finally, we argue that this knowledgenetwork may serve as a model for an R&D network of SMEcompanies.
Keywords
 Technology Adoption, Innovation, Application Service Providing,e-business, SME.
1. INTRODUCTION
The process of adoption of technological innovations in businessenvironments is highly complex. Behavioral, financial andbusiness related factors play an important role. This is particularlytrue for the adoption of Information and CommunicationTechnologies (ICT) and e-business by Small and Medium sizedEnterprises (SMEs). Despite the possible benefits, SMEsexperience inhibitors for adoption of e-business technologies. TheDutch Ministry of Economic Affairs in [6] identified thefollowing barriers:lack of SME awareness, skills, knowledge, urgency andmoney;lack of supply side transparency;inhibiting external factors in the business environment (i.e.trust, security, etc.)SMEs are extremely important to the Dutch economy. Accordingto [3] the Netherlands have almost 700.000 companies, whereasonly 1% has more than 100 employees. Therefore, more than 99%of private enterprises in the Netherlands are small and mediumsized. SMEs account for employment of 2.3 million people (60%of the Dutch labor force) and 52% of national income in theprivate sector. Clearly, SMEs are a job engine for the Dutcheconomy.According to the Dutch Ministry of Economic Affairs (cf. [6]),companies can improve their competitive position by using theopportunities of ICT. Low adoption of ICT might leave theinnovative potential of SMEs unused. This lead the Dutchgovernment to develop a set of interventions and incentives thataim at (a.o.) strengthening the communication infrastructure,improving the knowledge infrastructure and improving the abilityof citizens and companies in using new ICT developments. One of the ambitions of the Dutch government is to have a leadingposition in Europe on the electronic highway in the year 2005.This ambition is implemented in the ‘Nederland gaat digitaal’-program (‘The Netherlands go digital’, NGD), which shouldprovide Dutch SMEs ‘a ramp to the digital highway and stimulateelectronic business’. The NGD program is financed by the DutchMinistry of Economic Affairs and the program runs from 2000until 2005. The NGD-program consists of a set of policyimplementation instruments, most of them conducted andcoordinated by Syntens. Syntens (‘the Dutch innovation network’)is the national organization for stimulation of SME innovations.Syntens has fifteen regional offices with in total 450 employees,mostly SME advisors. The Syntens advisors operate asindependent knowledge brokers. They advise SMEs and organizeworkshops for SMEs on business, organizational andtechnological subjects, such as Internet technology.Part of the NGD-program is the sector program, which shouldhelp industry organizations to develop an ICT vision for theirsector and to stimulate their members in using Internet and e-business. Strategy sessions with representatives of the industryand an ICT scan of the sector help industry organizations toformulate an ICT vision and, accordingly, to formulate an actionplan. The sector program offers industry organizations theopportunity to participate in pilots and theme projects on different
Permission to make digital or hard copies of all or part of this work forpersonal or classroom use is granted without fee provided that copies arenot made or distributed for profit or commercial advantage and thatcopies bear this notice and the full citation on the first page. To copyotherwise, or republish, to post on servers or to redistribute to lists,requires prior specific permission and/or a fee.ICEC'04, Sixth International Conference on Electronic CommerceEdited by: Marijn Janssen, Henk G. Sol, and René W. WagenaarCopyright 2004 ACM 1-58113-930-6/04/10…$5.00
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subjects, such as electronic marketplaces, open source softwareand Application Service Providing. One of these theme projects(ASPect) serves as a case in Section 2, where we discuss theproject’s organization and the obtained results. In Section 3 wepresent a model of a knowledge network. Based on ourexperiences in the ASPect project, we believe this model helpsachieving adoption of ICT innovation amongst SMEs. We sharelessons learned. In Section 4 we argue that the model can also beapplied to create an R&D network for SMEs.
2. THE ASPect PROJECT CASE
In this section we present the case of the ASPect project whichserves as an example of how SME adoption of an ICT innovation,e.g. Application Service Providing (ASP), could be realized. TheASPect project is an integral part of the sector program within‘Nederland gaat digitaal’, as discussed in the previous section.The project runs from March 2002 until June 2004 with a totalproject budget of 7 full time equivalents. Partners in the projectare the Telematica Instituut (which conducts the research),Syntens, and industry organizations. The project intends to enablethe adoption and diffusion of the ASP model within SMEs and toprovide SMEs with customized knowledge and tools to help themidentify opportunities and make well-founded decisions. Whenthe introduction of an innovation is considered as a traversal of five stages (unawareness – awareness – consideration –implementation – exploitation), ASPect puts emphasis on the firstthree stages.Whereas the subject ASP is of a technological nature, most of theefforts in the project relate to non-technological issues, like howto help decision makers with appropriate decision tools andinformation material. Our focus is on technology adoption, not onthe technology itself. The subject ASP as such is therefore notvery relevant for the case we want to make. In fact we believe thatthe same approach holds for other ICT subjects, like for instanceelectronic marketplaces, knowledge management or RFID. Forthis reason, in what follows we only give a very brief account of ASP.The ASP model is a relatively new solution for outsourcingapplications and related services by making these applicationsremotely accessible via the Internet on a rental basis. As such,ASP is an interesting solution to some of the problems of SMEs.However, SMEs are reluctant in adopting the ASP model. On theone hand SMEs lack awareness of the possible benefits of theASP model, such as, reduced maintenance concerns, faster time tomarket, transparent IT budgeting, scalability, and focus on corebusiness. On the other hand the ASP model is surrounded byconcerns about reliability of the service and the service providersand about security and performance of the delivered service.
2.1 The ASPect approach
The ASPect project has been conducted along four inter-relatedlines, as shown in Figure 1, which correspond to the work packages of the project.
Introduction lineKnowledge lineEducation line
   M  a  n  a  g  e  m  e  n   t  a  n   d   P   R
sectorsSMEsSME advisorssectorsSMEsSME advisorsmarket parties
 
Introduction lineKnowledge lineEducation line
   M  a  n  a  g  e  m  e  n   t  a  n   d   P   R
sectorsSMEsSME advisorssectorsSMEsSME advisorsmarket parties
 
Figure 1 ASPect project structure.
The
introduction line
, central in the project, aims at aninvestigation of the ASP needs, opportunities and implications forsome pre-selected industry organizations. The selection of industry organizations should cover a representative range of SME sectors, for example from industry, retail and construction.With each of the selected industry organizations a project plan isdeveloped for ASP introduction in their sector. This shouldguarantee alignment to the industry organization’s mission andcommitment of the industry organization to the project goals.Some of the deliverables of the industry introductions are meantfor the industry organization itself, whereas others are meant fortheir allied members (i.e. the SMEs). See section 2.2 for moredetails on project deliverables.The purpose of the
knowledge line
is to provide the targetaudience, SMEs and SME advisors, with easily accessibleinformation and decision support tools. Examples of results are aninteractive website (http://aspect.telin.nl) and easily digestiblebrochures on different ASP related topics. The knowledge linealso provides input for the other project work packages(introduction, education and public relations). See also section2.2.In the
education
line ASP courses and course material have beendeveloped for SME advisors, in particular for Syntens ICTadvisors.The project shares experiences and results with SME andscientific audiences through publications and ‘PR-expressions’.Finally, project management guides the project activities, controlsthe project budget and secures project results.
2.2 Results and effects of the project
At the very beginning of the project it was not clear whetherindustry organizations would be willing to participate in ASPect.Some however already showed initial interest. Syntens, whichmanaged the sector program, provided contacts and organized aninformative meeting with Syntens sector program advisors. Inorder to raise further interest, a project flyer and a proposition forindustry organizations were written. These should convinceindustry organizations that the project left room for an ASPintroduction adapted to the industry’s needs. An extra incentive inthe proposition was the promise of a financial contribution tosector specific information material. Later in the project also ashort survey was sent to 340 industry organizations to assess theimportance of ASP in their industry and to measure the interestfor an ASP introduction. About 30 industry organizations showedtheir interest.
202202
 
In the course of the project 6 industry organizations were finallyselected for participation. Criteria for selection were theprofessionalism of the industry organization, the number of alliedmembers, and (related to each other) the extent to which theselected industry organizations represent the Dutch SMEs ingeneral. The participating industry organizations wereFOCWA: automobile damage repair and automobile bodywork, 2,100 members;Koninklijke Metaalunie: metal processing industry, 11,000members;Uneto-VNI: installing companies and technical retailers,6,000 members;BOVAG ABA: independent garage owners, 3,200 members;Mitex: fashion, shoes and sports retailers, 4,400 members;HBA: handicraft companies, 60,000 members.For each of these industry organizations it was investigated inwhat way allied members can profit from ASP. Discussions withthe boards and staff members led to global insights that were usedto formulate the questions for user surveys. These surveysprovided insight in the ASP needs and possibilities in theindustries. The ASP-developments at the ICT-supply side werealso investigated for each sector. This knowledge was the startingpoint for the industry organization’s strategic decision process,which ASPect counseled. As soon as the goals were clear, anoutline of steps to be taken was made and formalized in a sectorproject plan. ASPect played an active role in the fulfillment of these sector project plans.Compared to each other, the industry introductions were of a verydifferent nature. The main reason for this was of course that ASPshould be aligned with other ICT initiatives of the industryorganization. One industry organization preferred an explicit rolein the ASP partner selection process, whereas another industryorganization just wanted to know the possibilities and benefits of ASP for their sector. Each industry introduction, however, ideallyshould at least have interaction with the industry organization’smembers in terms of interviews, surveys and publications insector periodicals.The diversity of needs from the industry introductions asked for avaried set of project deliverables. These deliverables shouldbridge the gaps between the levels of acceptance of the ASPmodel in the sector (cf. Figure 2).
ConsiderationUnawarenessAwarenessImplementationExploitation
What are the possibilities?What are the pros and cons?Is it within reach?Where to start?How to move market players?How to move SMEs?How to inspire others?How to keep it running?
 
Brochures
 
ASP interviews
 
ASP user experiences
 
Market surveys
 
Website
 
Publications
 
Workshops, coursesand events
 
Sector surveys andinterviews
 
Supply scans
 
Decision support tools
 
Feasibility studies
 
Process facilitation
 
RfPs
 
Pilots
 
Knowledge base
 
Knowledge transfermechanisms
 
ASP interest groups
 
ConsiderationUnawarenessAwarenessImplementationExploitation
What are the possibilities?What are the pros and cons?Is it within reach?Where to start?How to move market players?How to move SMEs?How to inspire others?How to keep it running?
 
Brochures
 
ASP interviews
 
ASP user experiences
 
Market surveys
 
Website
 
Publications
 
Workshops, coursesand events
 
Sector surveys andinterviews
 
Supply scans
 
Decision support tools
 
Feasibility studies
 
Process facilitation
 
RfPs
 
Pilots
 
Knowledge base
 
Knowledge transfermechanisms
 
ASP interest groups
 
ConsiderationUnawarenessAwarenessImplementationExploitation
What are the possibilities?What are the pros and cons?Is it within reach?Where to start?How to move market players?How to move SMEs?How to inspire others?How to keep it running?
 
Brochures
 
ASP interviews
 
ASP user experiences
 
Market surveys
 
Website
 
Publications
 
Workshops, coursesand events
 
Sector surveys andinterviews
 
Supply scans
 
Decision support tools
 
Feasibility studies
 
Process facilitation
 
RfPs
 
Pilots
 
Knowledge base
 
Knowledge transfermechanisms
 
ASP interest groups
 
Figure 2 Project deliverables related to levels of acceptance.
The following project deliverables will be discussed in somedetail: ASP brochures, ASP user and provider interviews, anddecision support tools. It is however not our intention to describeall project deliverables in detail: most of the material is disclosedvia the ASPect website (cf.http://aspect.telin.nl).The
 ASP brochures
are meant as self-contained informationmaterial with a low ‘reading threshold’. The brochures areintentionally short and to the point, i.e. filling no more than twopages, elucidated with examples and checklists. The total of 30ASP brochures cover ASP-related subjects from very differentviewpoints. These brochures are grouped along four thematiclines: ‘ASP accents’, ‘ASP applications’, ‘The ASP life cycle’ and‘ASP innovation’ (cf. Figure 3). The brochures are available inelectronic and hardcopy form and can be ordered for free from thewebsite.
ASP accents
 
Pros and cons
 
Technology
 
Security
 
Applications & services
 
Organizational aspects
 
Social aspects
 
ASP is quite common
 
Risk control
 
Customization
 
Competences
 
SLA’s
 
Privacy
ASP applications
 
Payroll
 
Buying and selling
 
CRM
 
ERP
 
Accounting
 
Security services
 
Demo’s
 
HRM
 
Logistics
 
CAD
ASP life cycle
 
Outsourcing of ICT
 
ASP for me?
 
Making the decision
 
Getting started
 
In operation
 
When roads part
ASP innovation
 
The future
 
Wireless access
 
Web services
ASP accents
 
Pros and cons
 
Technology
 
Security
 
Applications & services
 
Organizational aspects
 
Social aspects
 
ASP is quite common
 
Risk control
 
Customization
 
Competences
 
SLA’s
 
Privacy
ASP applications
 
Payroll
 
Buying and selling
 
CRM
 
ERP
 
Accounting
 
Security services
 
Demo’s
 
HRM
 
Logistics
 
CAD
ASP life cycle
 
Outsourcing of ICT
 
ASP for me?
 
Making the decision
 
Getting started
 
In operation
 
When roads part
ASP innovation
 
The future
 
Wireless access
 
Web services
 
Figure 3 ASP themes covered in brochures.
Experience of others (even of competitors) is an importantinspirational factor for SME decision makers. For this purposeapproximately ten decision makers, who decided to actually lettheir company use ASP, were interviewed. These
user interviews
 were presented in brochure format. Also
supplier interviews
wereconducted, giving potential ASP clients a flavor of the ASPcompanies hidden behind the façade of their website. All user andsupplier interviews are published on the ASPect website.The ASPect project developed decision support tools for SMEdecision makers and SME advisors. The
 ASP Toets
-tool helps todecide whether the company concerned can benefit from ASP.The tool guides the user through a set of questions, depending onthe goals the user wants to achieve or the problems he wants tosolve. The result of using the tool is an indication whether thecompany can benefit. If so, the tool offers a tailored steps plan.Another tool, the
COPAFIJTH Redeneertool
, aids the user insystematically analyzing the effects of change. The COPAFIJTHacronym stands for Commerce, Organization, Personnel,Administrative organization, Finance, Information, Juridicalaspects, Technology and Housing. COPAFIJTH represents allimportant business aspects that might be affected by a change, forexample the introduction of a new technology such as ASP intothe organization.In the end, the effect of all efforts is what really counts for theproject’s success. This is hard to measure, because the project isnot performed under isolated laboratory conditions: the ASPmarket evolved during the project and also the adoption of web-based applications (such as e-banking) gained momentum. It istherefore difficult to separate these autonomous factors fromfactors that describe the impact of the project on SME adoptionand diffusion of ASP. Having said this, there still is evidence thatthe project reached SMEs and SME advisors through manydifferent channels. The project received appraisal for its work from industry organizations, market parties, SME advisors andwebsite visitors. Furthermore, the results of the project are
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