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SME. IT Usage for Direct Exports by SMEs Mexico. Mex. Present Condition of IT and SME´s - Mexico. Introduction.

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  1. SME IT Usage for Direct Exports by SMEs Mexico Mex

  2. Present Condition of IT and SME´s - Mexico

  3. Introduction • The implementation of economic policy instruments ruled by the Mexican Government with the aim to encourage the IT industry development in Mexico and the creation of a IT culture inside the SME’s could be one of the important support items to improve the SME’s international competitiveness levels in many business sectors. • Many Public and Private Universities with SME’s and the Mexican government are making agreements to improve their school programs, advance in students preparation and perform entreperneur programs and business incubators for create new IT business

  4. SME Growth • As in other countries, the SME sector accounts for an important share of economicactivity in Mexico. SME in the formal sectors are estimated to nearly 2million economic units across the country, or about 60% of the total number. • Theycontribute about 45% of private sector value added and provide 55% of the private sector labor force.[1] Their activities are, as elsewhere, veryheterogeneous: commerce, services and manufacturing. • Federal District, for example, registered SME’s in the industrial sector are concentrated in food, clothing, furniture and wood products, publishing and printing, and metalproducts.. • [1] Source FUNDES Mexico.

  5. IT and SME In Mexico the applications of IT by SME´s are running slowly, many business are far to reach the operational advantages that IT can give to them, mainly when the relation with big clients or suppliers chains depends in the opportunity to share information in many areas as inventories, factoring, production control, logistics and their connection with the central management of the business networks. The current composition of annual IT investment in Mexico is similar to the composition found in other countries under invested in IT capital. Most investment is in hardware (60.8 percent); least is in commercial software (10.3 percent).

  6. IT and SME However, unlike as other countries—those that are under invested in IT capital as well as all others— the commercial software share of total IT investment is expected to decline in Mexico. There are many potential factors causing this trend. Between 2002 and 2006, the commercial software share of annual IT investment in Mexico will fall from its already low value of 10.3 percent to only 7.9 percent.

  7. IT and SME

  8. IT Applications The industry of software in Mexico is weak and it has big difficulties to be able to export his production. Most of the companies of software are below international standards what impedes considerably the fact that the companies have access to the international markets. • In the business sector of IT, there are few companies who offer integrated business solutions. • The majority of these companies are very small, and are not well know in the technology market. • Most of the companies works without methodologies that allow them to establish real costs and to determine the size of the efforts necessary for the development of applications.

  9. Enterprise size Employees Average employees Enterprise Total Micro < 15 7 63 Small From 16 to 100 60 117 Medium From 101 to 250 175 14 Big From 251to 1000 600 11 Corp. Business More than 1000 1500 1 IT Solutions Development Enterprises

  10. Present Situation of IT market and IT usage by SMEs • The rising industry of software in Mexico is very dispersed, composed by a reduced number of professionals, who in its majority and except in a few cases, are outside of any model of quality recognized internationally. • The number of establishments that dedicate to product development and services related to computer science is not known precisely • Principal obstacles • The nonexistence of aStock Market dedicated to medium and small companies • The piracy of human resources • The strategies for the economic development in Mexico that are far to stabilize the economy scenario for SMEs of the country • Doing a general analysis related to the basic aspects for the development of the Mexican IT sector results a potential profile, creating conditions for their development.

  11. Mexican SME Direct Exports • Export activity is concentrated on the United States market (88.56 % of the whole). • Export products offer, belong from the manufacturing industry (88.6 % of the whole) emphasizing by volume in the following sectors: • Metallic products, Machinery and 66.3 % • Auto- parts industry 28.3 % • Electrical – Electronics Industry 19.8 % • Machinery and equip for industries 15.6 % (information process and machine parts ) • The difference of total is distributed between textiles, food and drinks, chemical substances, petrochemical and others. • In - bond industries (Maquiladora) generate big exports with low value added in most of the cases.

  12. Mexican SME Direct Exports

  13. Mexican SME Direct Exports • About export incentives, SMEs has received few benefits from government programs, due the lack of national suppliers, instead of international ones who operates a high volume of imports,to support the direct export activities and promote commercial alliances. • In direct exports, SMEs have a minimal participation of 6.65 % in direct exports, compared to 51.86 % of the big exporting companies and 41.49 % of in-bond industries ( Maquiladora). • The slow dynamics of the Mexican internal market affected the SMEs activities, resulting in the dismantling of productive chains caused by the international offer obeying criteria of minor costs high volume and/or major quality.   • The weakening of the Mexican productive chains was a result of the low participation of national suppliers. In few cases this participation reach more than 50 % in appliances production and up to 40% in automotive sector, reducing it in high - tech industry, electrical auto parts and computers, as lower than 5 %.

  14. Mexican SME Direct Exports

  15. IT support for SME Exports: FreightMinds Case FreightMinds a new venture Mexican company dedicated to system development and implementation to facilitate SME international trade, providing web based solutions, specifically for the freight forwarding, logistics and cargo handling industry. The aim is to fill the current gap for a systematic approach to shipment creation, tracking, performance measurement as well as a comprehensive industry and customer database management tool, together with warehouse operations visibility, all via the internet, supported by five modules design:

  16. IT support for SME Exports: FreightMinds Case... e-CRM – (Electronic-Customer Resource Management Module) Sales and Marketing Process Management, creation of customer database and maintenance, sales and marketing surveys and sales planning, as well as a helping tool for productivity measurement. e-FOM – (Electronic-Freight Operations Module)Designed to improve the creation and execution of air, ocean and ground service shipments in a automated manner, and simultaneously managing operational requirements in addition to shipment tracking and tracing via WEB as well as service level and performance monitorig.

  17. IT support for SME Exports: FreightMinds Case... e-WOM – (Electronic-Warehouse Operations Module)        Designed for the automation of warehouse and inventory process control, distribution, order management, as well as WEB based visibility of the processes and inventory levels and their locations.One of the manyfeatures is the capability to remotely access the information from anywhere in the world, at any time, in real time. This permits immediate control, flow and distribution of goods to and from any geographical areas and locations, allowing for immediate deployment of inventory levels, at any time. .

  18. IT support for SME Exports: FreightMinds Case... e-BIM-(Electronic Business Intelligence Module) Designed for access via WEB of customer's business KPI’s (Key Performance Indicators) and BSC’s (Balanced Score Cards) productivity and performance   elements. Special feature to enable the user to drill down and obtain information from any of the business areas, in real time at any time. e-FMC (E-FreightMinds Consulting) A complementary support service developed to work with customers and help them identify and analyze the areas of opportunities and determine the possible solutions applicable to their operational and management requirements .

  19. IT Industry Export Experience Mexico began to export software in 1985 and already has successful commercial software exporters. Sinapsis Technologies Mexico, has been in business for 12 years, employs 180 people, and exports approximately 5 percent of its products. Companies like GE Dem, Seguridata, and Softtek are successful software exporters for Mexico. These successful commercial software producers have the potential to be significant contributors to Mexico’s trade balance. For support the competitive level of the Mexican IT industry in the international market, many IT development companies are beginning to carry on the CMMI process certification, and a little group of 6 business already obtained their certification CMM2 level, 8 the CMM3 and only one CMM5 .

  20. IT Industry Export Promotion One of the main objectives of Mexico’s Software Industry Development Program is to increase the export potential of Mexican software – companies to be a worldwide leader supplier of software services. One of the areas that need government support is marketing to promote exports. As promoters appeared Mexican institutions including Economy Ministry, International Trade Development Bank (BANCOMEXT), Mexican IT Industry Association (AMITI), and Electronic Productive Chain Center (CADELEC) in Jalisco, among others.

  21. National Program of Development Management To give solution to the big existing economy differences with our commercial partners and to meet the social demands of the country, the current government through his National Development Plan proposed to support a growth with quality, focused in five big targets: • Lead the economic dynamics of the country • Raise the country competitiveness • Assure that the development should be enclosing to all sectors • Achieve a regional balanced development • Establish conditions to reach a permanent development

  22. Strategies 1) Generate a favorable environment for development and a control for the principal economic variables, and encourage structural reforms and the good performance of the public administration, for allow companies of all sizes and sectors, to develop and to increase his competitiveness, in addition to stimulating the creation of new companies. 2) Transform the companies of the country, especially the SME´s, into competitive organizations, supporting the development of their capacities for his successful participation in the national and international markets.  3) Identify the opportunities of new economic activity in specific regions and productive sectors, strengthening the capacity of the federative entities and the municipalities in the whole country to capitalize his competitive and comparative advantages.

  23. IT policies in the overall country’s development strategy • Create a IT Industry support framework with a new law to enforce the technological development and a IT initiative named PROSOFT with a financial scheme and grants to encourage IT developers to “go in” the technological markets. • PROSOFT has the target to create the necessary conditions in order that our country possesses a competitive industry of software internationally and to assure his growth in the long term.

  24. Prosoft support • Promote exports and the attraction of new investment • Orientate actions of export promotion in niches with comparative advantage for the industry. • Education and competent personnel training in software development, in suitable quantity and quality • Develop the internal market • Identify the level of adoption of IT in economic sectors, detecting those where it is possible to accelerate his adoption • Develop the internal market of IT • Strengthen the local industry • Open the government adquisitions to the Mexican software industry.

  25. Prosoft..... 9. rReach international levels in process capacity. 10. Provide a method of evaluation that guarantee in the organization a proficiency level of capacity of their processes and a qualification of service. 11. Creation of the category of IT in the National Award of Technology. 12. Promote the construction of physical infrastructure and telecommunicationsclusters 13. Encourage initiatives of IT on the federative entities and managerial groupings for develop the country as a world class player.

  26. The goals that the PROSOFT has defined to reach for 2013 are: • Achieve an annual production of software for 5,000 million dollars • Reach the average world indicators of expense in technologies of information • Have a new position of Mexico IT industry as one of the Latin-American leaders for software development and digital contents in Spanish. To reach the goals, 7 strategies were defined as: investments, exports, human capital, legal frame, internal market, local industry, quality and managerial support grouping.

  27. SME IT Usage for Direct Exports by SMEs Mexico Mex

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