The ASPect Project Case:
a Model for SME Adoption of ICT Innovation
Piet Boekhoudt
Telematica Instituut
P.O. Box 589, 7500 AN Enschede
The Netherlands
+31(0)53 - 4850412
Piet.Boekhoudt@telin.nl
ABSTRACT
The process of adoption of technological innovations in Small and
Medium sized Enterprises (SMEs) is highly complex. Whereas
SMEs are particularly important to the Dutch economy, the
innovation potential of SMEs is still highly unused. Information
and Communication Technology (ICT) is seen as a modern
catalyst for innovation. In this paper we propose the use of a
network of SMEs, industry organizations, intermediary parties
and knowledge institutes, to achieve adoption of new information
and communication technologies. This proposed network is
motivated by our experiences in the ASPect project, which
intends to enable the adoption and diffusion of Application
Service Providing within SMEs. We discuss the project’s
organization, the results and effects and the lessons learned. The
ASPect project thus serves as a case of how a knowledge network
can foster ICT innovation. Finally, we argue that this knowledge
network may serve as a model for an R&D network of SME
companies.
Keywords
Technology Adoption, Innovation, Application Service Providing,
e-business, SME.
1. INTRODUCTION
The process of adoption of technological innovations in business
environments is highly complex. Behavioral, financial and
business related factors play an important role. This is particularly
true for the adoption of Information and Communication
Technologies (ICT) and e-business by Small and Medium sized
Enterprises (SMEs). Despite the possible benefits, SMEs
experience inhibitors for adoption of e-business technologies. The
Dutch Ministry of Economic Affairs in [6] identified the
following barriers:
– lack of SME awareness, skills, knowledge, urgency and
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Petra van der Stappen
Telematica Instituut
P.O. Box 589, 7500 AN Enschede
The Netherlands
+31(0)53 - 4850419
Petra.vanderStappen@telin.nl
money;
– 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. According
to [3] the Netherlands have almost 700.000 companies, whereas
only 1% has more than 100 employees. Therefore, more than 99%
of private enterprises in the Netherlands are small and medium
sized. SMEs account for employment of 2.3 million people (60%
of the Dutch labor force) and 52% of national income in the
private sector. Clearly, SMEs are a job engine for the Dutch
economy.
According to the Dutch Ministry of Economic Affairs (cf. [6]),
companies can improve their competitive position by using the
opportunities of ICT. Low adoption of ICT might leave the
innovative potential of SMEs unused. This lead the Dutch
government to develop a set of interventions and incentives that
aim at (a.o.) strengthening the communication infrastructure,
improving the knowledge infrastructure and improving the ability
of citizens and companies in using new ICT developments. One of
the ambitions of the Dutch government is to have a leading
position 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 should
provide Dutch SMEs ‘a ramp to the digital highway and stimulate
electronic business’. The NGD program is financed by the Dutch
Ministry of Economic Affairs and the program runs from 2000
until 2005. The NGD-program consists of a set of policy
implementation instruments, most of them conducted and
coordinated 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 as
independent knowledge brokers. They advise SMEs and organize
workshops for SMEs on business, organizational and
technological subjects, such as Internet technology.
Part of the NGD-program is the sector program, which should
help industry organizations to develop an ICT vision for their
sector and to stimulate their members in using Internet and e-
business. Strategy sessions with representatives of the industry
and an ICT scan of the sector help industry organizations to
formulate an ICT vision and, accordingly, to formulate an action
plan. The sector program offers industry organizations the
opportunity to participate in pilots and theme projects on different
subjects, such as electronic marketplaces, open source software
and Application Service Providing. One of these theme projects
(ASPect) serves as a case in Section 2, where we discuss the
project’s organization and the obtained results. In Section 3 we
present a model of a knowledge network. Based on our
experiences in the ASPect project, we believe this model helps
achieving adoption of ICT innovation amongst SMEs. We share
lessons learned. In Section 4 we argue that the model can also be
applied to create an R&D network for SMEs.
2. THE ASPect PROJECT CASE
In this section we present the case of the ASPect project which
serves as an example of how SME adoption of an ICT innovation,
e.g. Application Service Providing (ASP), could be realized. The
ASPect 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 total
project budget of 7 full time equivalents. Partners in the project
are the Telematica Instituut (which conducts the research),
Syntens, and industry organizations. The project intends to enable
the adoption and diffusion of the ASP model within SMEs and to
provide SMEs with customized knowledge and tools to help them
identify opportunities and make well-founded decisions. When
the introduction of an innovation is considered as a traversal of
five stages (unawareness – awareness – consideration –
implementation – exploitation), ASPect puts emphasis on the first
three stages.
Whereas the subject ASP is of a technological nature, most of the
efforts in the project relate to non-technological issues, like how
to help decision makers with appropriate decision tools and
information material. Our focus is on technology adoption, not on
the technology itself. The subject ASP as such is therefore not
very relevant for the case we want to make. In fact we believe that
the same approach holds for other ICT subjects, like for instance
electronic marketplaces, knowledge management or RFID. For
this reason, in what follows we only give a very brief account of
ASP.
The ASP model is a relatively new solution for outsourcing
applications and related services by making these applications
remotely 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 the
one hand SMEs lack awareness of the possible benefits of the
ASP model, such as, reduced maintenance concerns, faster time to
market, transparent IT budgeting, scalability, and focus on core
business. On the other hand the ASP model is surrounded by
concerns about reliability of the service and the service providers
and about security and performance of the delivered service.
2.1 The ASPect approach
The ASPect project has been conducted along four inter-related
lines, as shown in Figure 1, which correspond to the work
packages of the project.
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sectors
Management and PR
Introduction line
SMEs
sectors
SMEs
Knowledge line SME advisors
market parties
Education line SME advisors
Figure 1 ASPect project structure.
The introduction line, central in the project, aims at an
investigation of the ASP needs, opportunities and implications for
some 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 is
developed for ASP introduction in their sector. This should
guarantee alignment to the industry organization’s mission and
commitment of the industry organization to the project goals.
Some of the deliverables of the industry introductions are meant
for the industry organization itself, whereas others are meant for
their allied members (i.e. the SMEs). See section 2.2 for more
details on project deliverables.
The purpose of the knowledge line is to provide the target
audience, SMEs and SME advisors, with easily accessible
information and decision support tools. Examples of results are an
interactive website (http://aspect.telin.nl) and easily digestible
brochures on different ASP related topics. The knowledge line
also provides input for the other project work packages
(introduction, education and public relations). See also section
2.2.
In the education line ASP courses and course material have been
developed for SME advisors, in particular for Syntens ICT
advisors.
The project shares experiences and results with SME and
scientific audiences through publications and ‘PR-expressions’.
Finally, project management guides the project activities, controls
the 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 whether
industry organizations would be willing to participate in ASPect.
Some however already showed initial interest. Syntens, which
managed the sector program, provided contacts and organized an
informative meeting with Syntens sector program advisors. In
order to raise further interest, a project flyer and a proposition for
industry organizations were written. These should convince
industry organizations that the project left room for an ASP
introduction adapted to the industry’s needs. An extra incentive in
the proposition was the promise of a financial contribution to
sector specific information material. Later in the project also a
short survey was sent to 340 industry organizations to assess the
importance of ASP in their industry and to measure the interest
for an ASP introduction. About 30 industry organizations showed
their interest.
In the course of the project 6 industry organizations were finally all project deliverables in detail: most of the material is disclosed
selected for participation. Criteria for selection were the via the ASPect website (cf. http://aspect.telin.nl).
professionalism of the industry organization, the number of allied The ASP brochures are meant as self-contained information
members, and (related to each other) the extent to which the material with a low ‘reading threshold’. The brochures are
selected industry organizations represent the Dutch SMEs in intentionally short and to the point, i.e. filling no more than two
general. The participating industry organizations were pages, elucidated with examples and checklists. The total of 30
– FOCWA: automobile damage repair and automobile body ASP brochures cover ASP-related subjects from very different
work, 2,100 members; viewpoints. These brochures are grouped along four thematic
– Koninklijke Metaalunie: metal processing industry, 11,000 lines: ‘ASP accents’, ‘ASP applications’, ‘The ASP life cycle’ and
members; ‘ASP innovation’ (cf. Figure 3). The brochures are available in
electronic and hardcopy form and can be ordered for free from the
– Uneto-VNI: installing companies and technical retailers, website.
6,000 members; ASP accents ASP applications ASP life cycle ASP innovation

– BOVAG ABA: independent garage owners, 3,200 members; ‰ Pros and cons ‰ Payroll ‰ Outsourcing of ICT ‰ The future
‰ Technology ‰ Buying and selling ‰ ASP for me? ‰ Wireless access
– Mitex: fashion, shoes and sports retailers, 4,400 members; ‰ Security ‰ CRM ‰ Making the decision ‰ Web services
‰ Applications & services ‰ ERP ‰ Getting started
– HBA: handicraft companies, 60,000 members. ‰ Organizational aspects ‰ Accounting ‰ In operation
‰ Social aspects ‰ Security services ‰ When roads part
For each of these industry organizations it was investigated in ‰ ASP is quite common ‰ Demo’s
what way allied members can profit from ASP. Discussions with ‰ Risk control ‰ HRM
‰ Customization ‰ Logistics
the boards and staff members led to global insights that were used ‰ Competences ‰ CAD
to formulate the questions for user surveys. These surveys ‰ SLA’s
provided insight in the ASP needs and possibilities in the ‰ Privacy
industries. The ASP-developments at the ICT-supply side were Figure 3 ASP themes covered in brochures.
also investigated for each sector. This knowledge was the starting
Experience of others (even of competitors) is an important
point for the industry organization’s strategic decision process,
inspirational factor for SME decision makers. For this purpose
which ASPect counseled. As soon as the goals were clear, an
approximately ten decision makers, who decided to actually let
outline of steps to be taken was made and formalized in a sector
their company use ASP, were interviewed. These user interviews
project plan. ASPect played an active role in the fulfillment of
were presented in brochure format. Also supplier interviews were
these sector project plans.
conducted, giving potential ASP clients a flavor of the ASP
Compared to each other, the industry introductions were of a very companies hidden behind the façade of their website. All user and
different nature. The main reason for this was of course that ASP supplier interviews are published on the ASPect website.
should be aligned with other ICT initiatives of the industry
The ASPect project developed decision support tools for SME
organization. One industry organization preferred an explicit role
decision makers and SME advisors. The ASP Toets-tool helps to
in the ASP partner selection process, whereas another industry
decide whether the company concerned can benefit from ASP.
organization just wanted to know the possibilities and benefits of
The tool guides the user through a set of questions, depending on
ASP for their sector. Each industry introduction, however, ideally
the goals the user wants to achieve or the problems he wants to
should at least have interaction with the industry organization’s
solve. The result of using the tool is an indication whether the
members in terms of interviews, surveys and publications in
company can benefit. If so, the tool offers a tailored steps plan.
sector periodicals.
Another tool, the COPAFIJTH Redeneertool, aids the user in
The diversity of needs from the industry introductions asked for a
systematically analyzing the effects of change. The COPAFIJTH
varied set of project deliverables. These deliverables should
acronym stands for Commerce, Organization, Personnel,
bridge the gaps between the levels of acceptance of the ASP
Administrative organization, Finance, Information, Juridical
model in the sector (cf. Figure 2).
aspects, Technology and Housing. COPAFIJTH represents all
What are the possibilities? Is it within reach? How to move market players? How to inspire others? important business aspects that might be affected by a change, for
What are the pros and cons? Where to start? How to move SMEs? How to keep it running?
example the introduction of a new technology such as ASP into
Unawareness Awareness Consideration Implementation Exploitation the organization.
‰ Brochures ‰ Sector surveys and ‰ RfPs ‰ Knowledge base In the end, the effect of all efforts is what really counts for the
‰ ASP interviews interviews
‰ Pilots ‰ Knowledge transfer
‰ ASP user experiences ‰ Supply scans mechanisms project’s success. This is hard to measure, because the project is
‰ Market surveys ‰ Decision support tools ‰ ASP interest groups not performed under isolated laboratory conditions: the ASP
‰ Website ‰ Feasibility studies market evolved during the project and also the adoption of web-
‰ Publications ‰ Process facilitation
based applications (such as e-banking) gained momentum. It is
‰ Workshops, courses
and events
therefore difficult to separate these autonomous factors from
factors that describe the impact of the project on SME adoption
Figure 2 Project deliverables related to levels of acceptance. and diffusion of ASP. Having said this, there still is evidence that
The following project deliverables will be discussed in some the project reached SMEs and SME advisors through many
detail: ASP brochures, ASP user and provider interviews, and different channels. The project received appraisal for its work
decision support tools. It is however not our intention to describe from industry organizations, market parties, SME advisors and
website visitors. Furthermore, the results of the project are

203
preserved in an ASP knowledge base, which will remain publicly
accessible after the project has finished.
3. THE KEY TO ICT-ADOPTION
In the ASPect project we learned that it is hard to achieve
adoption of new information and communication technologies by
SMEs without the help of surrounding organizations, such as
industry organizations, knowledge brokers, supply chain partners
and customers.
The ASPect project used a network of organizations, containing
industry organizations, a knowledge broker (Syntens) and a
knowledge institute (Telematica Instituut). ASPs or software
companies were invited to participate when opportune. We
advocate the use of such a network to facilitate ICT-adoption.
3.1 An SME knowledge network
SMEs do not actively monitor ICT developments. They need
external help to point out interesting developments. ICT
companies have the knowledge, but also have a commercial
interest. SMEs need independent information that helps them
placing developments into perspective. ICT knowledge institutes
have an overview of ICT-developments and their general
importance. Industry organizations are able to assess the
possibilities for new ICT developments in their industries. A
broker organization can bring together industry organization and
knowledge institute. Together they can create the knowledge
desired by the SMEs.
ICT company
Knowledge Knowledge
broker institute
Industry
organization
SMEs
Business
Customers
partners
Figure 4 A model for an ICT knowledge network.
Some knowledge brokers, like Syntens, are in close contact with
the individual SMEs. They could disseminate the knowledge
directly to the SMEs. Besides this direct channel, we advocate to
involve industry organizations in the dissemination. Industry
organizations play an important and sometimes even pivotal role
to encourage innovation in their sector. Allied members ask for a
sector vision and trust the industry organization’s opinion.
Generating general information on ICT-developments is not
enough. SMEs prefer a personal advice and a referral to an ICT-
supplier. ICT knowledge institutes can investigate which ICT
suppliers are active on the local market. Knowledge brokers can
involve intended ICT suppliers in the process and establish direct
contacts between SMEs and suppliers.
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3.2 Lessons learned
From the ASPect project we learned a number of lessons that we
would like to share. These lessons might not only prove useful in
knowledge networks, but for SME oriented ICT innovation
projects in general.
Involve industry organizations
Innovations are sometimes perceived by SMEs as a threat, rather
than an opportunity, because traditional roles may change. This
explains the conservative nature of some industry organizations.
It is easier to involve industry organizations, if the innovation is
not only beneficial for allied members, but also for the industry
organization itself. Industry organizations need to keep their
members satisfied, and are often looking for ways to offer more
service and added value.
An active role for the industry organization guarantees more
commitment, which may make the network more successful. On
the other hand, it can slow down the start up, as more time will be
spent on formulating the goals.
For most industry organizations ICT is not core business. ICT
innovations may therefore have low priority. The path and time
scheme for the knowledge transfer has to fit the industry
organization’s general plan and time scheme.
With each industry organization we agreed on a goal and wrote a
plan to realize it. To emphasize the importance of the industry
organization’s commitment, we signed a declaration of intent.
In preparing the innovation path, one will often deal with the
organization’s staff members. The board, however, usually takes
the decisions. The board represents the allied members and
consists of opinion leading entrepreneurs. It is important to attain
commitment from both staff members and board, right from the
beginning. Often, there is only one staff member for ICT. In this
case, it is even more important to attain commitment from the
board.
Involve ICT suppliers
Demand needs supply. It is of no use to inform users about new
ICT developments if these are not available on the local market. It
is therefore sensible to involve intended ICT suppliers in the
process.
In the ASPect project it turned out that SMEs in the ICT industry
also need knowledge on new developments. We received many
requests for information and help. These suppliers showed a great
willingness to cooperate in a knowledge network.
Take time to build the relation network
It takes time to get the network running, specially if the
innovation subject is not demand driven and interest for
participation still has to be raised. ICT investments are often
driven by necessity. Expansion, pressure from customers or
suppliers, and the need for new functionality are typical drivers
for ICT innovation.
There is a large heterogeneity between Dutch industry
organizations. There are considerable differences in size, i.e. the
number of members, the size of industry organization’s staff, and
the degree of professionalism. These differences are important for
the pace of decision taking.
The broker organization should already have relations with either
the SMEs or the industry organizations. A new relationship must
be built between broker and knowledge institute. Individual
advisors must learn what knowledge is available at the knowledge
institute. An initial set of information material is therefore a
prerequisite.
All available means and channels to reach industry organizations
and SMEs should be used. Try to give the new development its
own place in existing interventions. In the ASPect case, for
example, the ICT scan that Syntens offers to industry
organizations now includes an ASP scan.
For knowledge institutes a survey is an effective way of
contacting industry organizations. Apart from measuring interest
of industry organizations, a survey also results in a list of potential
organizations that can be invited to participate in the network.
Tailor communication to the SMEs
Industry organizations know channels to reach the SMEs. They
often have their own media, like newsletters or magazines. The
industry organization itself is the best channel for direct contact.
Tailor information material to the SME’s context and use sector
specific examples. SMEs are inspired by examples that reflect as
close as possible their own situation.
Information material aimed at SMEs should be short, to the point
and in the native language. In the ASPect project the information
was disseminated in short brochures, each one answering a
specific question or taking a specific point of view.
Questions about costs and benefits always arise. Anticipate by
answering them up front or having the answers ready.
Seeing is believing: success stories are a convincing means to
spread the use of new technology or methods. The closer the story
approaches the entrepreneur’s situation, the more effective it will
be.
4. KNOWLEDGE NETWORKS FOR R&D
The Dutch government has given priority to innovation. Based on
the Lisbon EC-treaty (2000), the Netherlands wants to belong to
the top of Europe as “the most dynamic knowledge based
economy in the world”. The ambition is to reach an R&D
expenditure of 3% of GNP by 2010. In 2002 the Dutch R&D
expenditure according to [9] was 2.02% of GNP, well below the
3% target. According to the Netherlands Bureau for Economic
Policy Analysis (CPB) (cf. [5]), the Dutch economy has
specialized in R&D-extensive industries, which accounts partly
for a relative low R&D-expenditure (compared for example to
Scandinavian countries). Still, the Netherlands performs well in
terms of inventions and takes a third place in terms of scientific
publications per citizen, just behind the USA and Switzerland.
Note that, innovation is more than R&D alone: think of process
innovation and service innovation. This lack of accurate
innovation figures may distort the discussion on the innovative
power of the Netherlands.
In the introduction to this paper we stated that SMEs are
important to the Dutch economy. According to [13] SMEs are
responsible for no less than 80% of the innovations in the
Netherlands, whereas only 7% of the SMEs is involved in
realizing these innovations. These figures point to an unused
innovation potential. One of the factors responsible for this
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unused potential is the fact that SMEs have insufficient access to
new knowledge. Only 2% of Dutch SMEs have a knowledge
relation with knowledge institutes such as universities and
research institutes. The Netherlands lacks an adequate knowledge
infrastructure, i.e. a system for circulation, diffusion and
application of knowledge. Too many companies do not have
access to new knowledge. New combinations of knowledge are
required. Knowledge, and in particular the exchange of
knowledge, is therefore the key to innovation in the unfolding
knowledge economy of the Netherlands.
According to Ravesloot (cf. [10]), Dutch SMEs need to know
which new technologies and other innovative ideas will be
interesting and can be made applicable in the coming 2 years.
Large enterprises often have R&D departments that monitor
scientific developments and scout opportunities. Some
opportunities are the result of several new developments that can
be combined. Usually, it takes a series of development steps to
translate the knowledge into a concrete product or process that
can be handed over to production.
This R&D approach of large enterprises is not suitable for SMEs.
SMEs do not monitor scientific developments the way R&D
departments do. They need external help to point out interesting
developments. These developments must be presented to the
entrepreneur in an understandable way. Contact must be made
between an interested SME and the knowledge institute behind
the development. Most likely, the development process will not
only involve a knowledge institute and the SME that is going to
produce or use the final result, but also enterprises that carry out
part of the development. These parties have to find each other first
and then cooperate and communicate. Therefore they have to
speak each other’s language.
A knowledge network, similar to the one we advocated for ICT-
adoption, might bridge the gap between SME and knowledge
institute.
Knowledge Knowledge
broker institute
Industry
organization
SMEs
Business
Customers
partners
Figure 5 An SME knowledge network for R&D.
The knowledge institute creates scientific knowledge and has
access to such knowledge created by other scientists. As argued
above, an SME needs someone to point out the interesting
developments. The knowledge broker can play this role. To
realize the development chain, parties have to find each other. As
there are few contacts between SMEs and knowledge institutes,
help is also required here. The broker may bring SMEs and the
knowledge institute together. For this, the broker can use the help
of the industry organization. The industry organization is able to
assess the feasibility of innovations in the sector and to involve
SMEs in innovation projects. For cooperation in the development
chain it is necessary for the knowledge institute to present its
results in an accessible way.
Innovation is stimulated if the SMEs not only absorb information
from knowledge institutes, but also feed the institutes with their
needs. Knowledge institutes may use this to steer their research
programs. Again, industry organizations play an important role in
this information stream. They know what is going on in their
sector and know the needs of their allied members. They may set
future directions and stimulate innovation in the industry. One
innovation induces others. Finally, industry organizations share
innovation results and experiences with other entrepreneurs.
This collaboration in a knowledge network is not common
practice yet. The ASPect project is an example of how
governmental financial incentives might resolve this problem of
knowledge market failure.
5. CONCLUSION
The ASPect project used a network of organizations to achieve
the adoption of ASP (Application Service Providing) among
SMEs. This turned out to be a successful approach. Knowledge
brokers and industry organizations are essential links between ICT
industry and knowledge institutes on one side, and individual
SMEs on the other. In this project they mainly facilitated
knowledge dissemination. However, once the network has been
established, SMEs also have a channel to ventilate their needs.
All parties involved did benefit from the cooperation. The ASP-
concept received much attention, which was beneficial for the
application service providers. As a knowledge institute, we found
many new channels to disseminate our knowledge towards SMEs.
The knowledge broker updated its advisors knowledge on ASP
and added new parties to its relation network. The participating
industry organizations gained enough insight to determine their
strategic position with respect to ASP. A number of them plan to
offer ASP-advice or services to their members, enhancing their
service portfolio. The SMEs gained an easy channel to learn about
ASP.
We strongly believe that this model works for all ICT innovation
among SMEs. We encourage others to copy our approach. In this
paper we shared some useful lessons with those that want to
follow our approach.
Finally, we think the same approach can be used to stimulate
innovation in other areas than ICT. Knowledge brokers and
industry organizations can help build a network or chain of SME
companies for R&D activities.
6. ACKNOWLEDGEMENTS
The authors would like to thank the ASPect project members for
their direct and indirect contributions to this paper. The Dutch
Ministry of Economic Affairs, under the flag of ‘Nederland gaat
digitaal’, financed the ASPect project.
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[13] Syntens, Innoveren met passie. Innovisie, 14, 3 (Sept. 2003).