NALYSIS
F HE ARKET F UPPORT ERVICES
ITH HE IEW F MPROVING TS FFICIENCY
N HE ONTEXT F HE ORKING ROUP
N HE ISIBILITY UALITY
F UPPORT ERVICES
ASE REECE
1 MARKET RESEARCH
SERVICES PROVIDED TO SMES
OBJECTIVE: IMPROVEMENT OF VISIBILITY & QUALITY
WORKING TEAM:
- N. KORALLIS - COORDINATOR
- DR. THEODORE KOKKORIS
- SPYROS TOBRAS
- I. CHATZAKIS TABLE OF CONTENTS ΕΟΜΜΕΧ
TABLE OF CONTENTS
TABLE OF CONTENTS 3
INTRODUCTION 5
PREFACE 7
SUMMARY OF PILOT STUDY 9
A. EXAMINATION OF THE DEMAND FOR BUSINESS CONSULTANT SERVICES BY SMES IN THE GREEK MARKET 9
B. EXAMINATION OF THE OFFER FOR BUSINESS CONSULTANT SERVICES IN THE GREEK MARKET 10
CHAPTER I: ANALYSIS OF THE MARKET CONDITIONS FOR SERVICE PROVIDING COMPANIES 12
1. ANALYSIS OF THE SME MARKET CHARACTERISTICS 13 1.1 DESCRIPTION OF THE SERVICE SECTOR 19 1.1.1 Market Size 19 1.1.2 Areas of Specialisation 21 1.1.3 Categories (Company Classification) 25 1.1.4 Prospects 27 1.2 GREEK SERVICE PROVIDING COMPANIES 30 1.3 STATE INFORMATION AND CONSULTING SERVICE BODIES 32 1.4 S.P.C. IN THE BROADER PUBLIC SECTOR 33 1.5 PRIVATE SERVICE PROVIDING COMPANIES (S.P.C.) 39 1.6 RESEARCH METHODOLOGY 42 1.6.1 Selection of the Sample for the SMEs Sector 42 1.6.2 Special Criteria 42 1.6.3 Selection of Sample for Service Providing Companies (S.P.C.) 44
CHAPTER II: ANALYSIS OF THE POSITION OF PROVIDING COMPANIES 45
2. THE SERVICE PROVIDING COMPANIES (S.P.C.) IN THE GREEK MARKET 46 2.1 SERVICE PROVIDING COMPANIES (S.P.C.) 46 2.2 SMES (SMALL & MEDIUM SIZED ENTERPRISES) 48 2.2.1 Types of Services 48 2.2.2 Geographic distribution 49 2.2.3 Practices in order to overcome the gap 50 2.2.4 New Services 50 2.3 CONCLUSIONS 52
Research of Services Provided to SME 3 November 2000 TABLE OF CONTENTS ΕΟΜΜΕΧ
CHAPTER III: ANALYSIS OF THE DEMAND 52
3. DEMAND FOR SERVICES IN GREECE 54 3.1 SERVICE PROVIDING COMPANIES (S.P.C.) 54 3.2 USE OF SERVICES 56 3.3 THE OPINION OF THE SMES REGARDING S.P.C. 56 3.4 UNDERSTANDING THE NEEDS OF THE SMES 57 3.5 GAPS AND PRICING POLICIES FOR SERVICES 58 3.6 SERVICES WITH THE HIGHEST DEMAND FROM THE PART OF THE SMES 58
CHAPTER IV: ANALYSIS OF THE RECOGNISABILITY OF SERVICES 59
4. VISIBILITY OF SERVICES 60 4.1 SERVICE PROVIDING COMPANIES (S.P.C.) 60 4.2 SMES 64
CHAPTER V: ANALYSIS OF THE QUALITY 66
5. QUALITY OF SERVICES OFFERED 67 5.1 SERVICE PROVIDING COMPANIES (S.P.C.) 67 5.1.1 Pricing Policy 67 5.1.2 Qualitative Criteria 73 5.1.3 Level of Quality 75 5.1.4 Service Demand 77 5.2 SMES 78 5.2.1 Pricing Policy 78 5.2.2 Who does what 80 5.2.3 Qualitative Criteria and Services 80 5.2.4 Communication, Strategies, Follow – Up 82 5.2.5 Common Quality Elements for SMEs in the E.U. 83
CHAPTER VI:CONCLUSIONS 84
6. CONCLUSIONS 85
CHAPTER VII ACTION PLAN PROPOSALS 89
7. PLAN OF ACTION FOR INCREASING THE EFFECTIVENESS OF SERVICES PROVIDED - PROPOSALS 90
BIBLIOGRAPHY 93
ANNEXES 94
Study of Services Provided to SME 4 November 2000 TABLE OF CONTENTS ΕΟΜΜΕΧ
INTRODUCTION
On August 7, 1999, the 23rd General Directorate of the European Union assigned to EOMMEX S.A., the execution of a pilot market research study for the analysis of the service providers’ market from Service Providing Companies (S.P.C.) to the SMEs. The purpose of the study was to examine the present situation and to propose measures for improving and increasing the demand for these services.
The study, which includes Greece as a whole, is aimed at:
A. Analysing and evaluating the demand for consultant services by the Greek SMEs. B. Analysing and presenting the services offered today by the Greek Business Consultant Firms as well as other State and broader public sector bodies. C. Formulating and submitting proposals regarding ways to improve the services provided, as well as the materialization of the conclusions of the study.
The methodology of the study was based on primary research of the market, which was conducted on a Panhellenic scale, based on special questionnaires that the 23rd GD drew up, following proposals by the member states involved in the present study. These questionnaires were analysed and processed by the Study Team by means of a special statistical computer program. Conclusions were extracted for each facet of the market (offer and demand), whose cross - analysis led to the final conclusions of the research study.
The study was conducted during the period Oct. – Dec. 99. The elaboration of the data and the final text was completed in November 2000.
Study of Services Provided to SME 5 November 2000 TABLE OF CONTENTS ΕΟΜΜΕΧ
Using the results from the Greek market research, the internationally accepted practices regarding business consultants, as well as the present institutional – administrative framework in force in our country, the Study Team formulated its final conclusions and proposals for their implementation. The Study Team conducted the market research planning and carrying out, the data elaboration and the writing up of the study. The Study Team was comprised of the following members: Mr. Nikolaos Korallis, economist – project coordinator, as well as Mr. Spyros Tombras, Chemical Engineer and Mr. Theodoros Kokoris, Ph.D., Marketing, employees of EOMMEX, Mr. I. Chatzakis, Consultant to the Ministry of Development Secretary General, assisted by EOMMEX colleagues – employees, whom we thank for their invaluable assistance.
It is worth noting that the same pilot study – market research was also conducted in the EU member states, Italy, Germany, Ireland and Sweden simultaneously.
For the Study Team
Nikolaos Korallis Project Co-ordinator EOMMEX Consultant
Study of Services Provided to SME 6 November 2000 PROLOGUE EOMMEX
PREFACE
The constantly changing external environment for businesses, economic, fiscal, legal, social, technical, etc., and the need to adapt to it, obliges businesses to act and develop in a continuously more open market, necessarily more competitive than it was in the past. Furthermore, there is a continuous increase in the quantity and type of information which businesses receive and must process, absorb and transform into profit opportunities.
This fact leads SMEs, since they cannot do it by themselves due to their internal organisation or it is not in their interest from a cost point of view to develop an internal mechanism for the research and exploitation of the information and opportunities, to seek – regardlesss of their size – advanced, specialised, reliable, qualitative and more efficient services from third parties.
In Greece in particular, the problem is considerably intense if the following factors are to be taken into account as well: · The small size of businesses · Poor internal organisation · Disproportionately large concentration in the 2 large cities, as opposed to the periphery · Adjustment difficulties · Financial capabilities · High cost of services rendered · Lack of informational updating.
Given this situation, it is obvious that proper means must be developed, so that the Supply and Demand of Services will be combined to the benefit of the S.P.C. (Service Providing Companies) and the SMEs.
Study of Services Provided to SME 7 November 2000 PROLOGUE EOMMEX
In order to achieve this, it is necessary to set clear purposes and aims. This clarity is expressed through notifying the SMEs about the Supply, and the S.P.C. about the demand.
That is: WHAT WHERE WHO WHEN HOW MUCH HOW it will be possible (through the development of a system) for the SMEs to have access in order to use the – quality – services they need for the solution of problems when they need them.
As far as the Supply is concerned, that is, the Service Providing Companies (S.P.C.), what is required is to know exactly what the “market” wants. That is, which services exactly the SMEs need, and how they will become aware of the existence of the appropriate S.P.C. as well as what Services they offer.
Study of Services Provided to SME November 2000 SUMMARY EOMMEX
SUMMARY OF PILOT STUDY
A. EXAMINATION OF THE DEMAND FOR BUSINESS CONSULTANT SERVICES BY SMES IN THE GREEK MARKET
The main aim of the research was to identify the following:
A. The identity of the enterprise B. The intensity of demand for various types of consultancy services C. The enterprises’ point of view on the role of the service consultant D. The criteria for the selection of consultants E. The way to improve and develop the role of consultants and their functional linkage to the needs of the enterprises F. The way of payment for the services rendered.
In summary, the research conclusions are:
1. The small extent of the demand for the services of Service Providing Companies (S.P.C.) in the Greek market. 2. Lack of quality standards by the S.P.C. 3. Lack of promotion for the service provided by the S.P.C. 4. Almost 80% of the services rendered are offered in the two main Greek cities, Athens and Thessaloniki. 5. The need of setting up quality standards. 6. The lack observed in active demand, which is attributed mainly to the following reasons: a. The small size of Greek businesses b. Lack of ability to meet the expenses (necessary capital) for using support services. c. Lack of knowledge and goals on behalf of Small and Medium Sized Entrepreneurs (SMEs). 7. The SMEs rendering services are those which have a basic standard of organisation and management.
Study of Services Provided to SME 9 November 2000 SUMMARY EOMMEX
B. EXAMINATION OF THE SUPPLY FOR BUSINESS CONSULTANT SERVICES IN THE GREEK MARKET
During the examination of the Supply, we attempted, in general, the following:
1. Recording the services offered and the communication sources with the users (SMEs).
2. Defining the creation or even the determination of a quality standard level for the services provided. .
In the questionnaires, which were submitted to 350 Service Providing Companies – 58 of which are Chambers – and which comprise the sample of the primary research, the interest focused on questions about:
ü The services offered by business consultants to the SMEs, as well as the ways of promoting these services.
ü The difficulties encountered by business consultants, during the rendering of services to the SMEs.
ü The special significance in providing quality services.
ü The pre-determination of the quality level of the services provided.
ü The desire to create a quality standard for services rendered in all EU countries.
ü The way of payment for the services rendered.
Study of Services Provided to SME 10 November 2000 SUMMARY EOMMEX
The results as summarised by the research are the following:
1. The service providing sector has shown a respectable growth over the past few years in Greece as a result of the keen competition imposed on organised Greek enterprises.
2. The difficulties that SPCs have to overcome when providing their services to SMEs are: · the small size of Greek SMEs · the lack of knowledge regarding the specific role of SPCs and the benefits that SMEs can acquire by collaborating with them · financial difficulties for the payment of SPCs’ services · the fact that SMEs consider the services offered by SPCs nonessential and of a low standard
3. The frequency of use of consulting services and the effect of their promotion – advertisement are effectuated through: - the direct contact between SMEs and SPCs - visits to the business installations of SMEs
4. Lack of advertisement and promotion of SPCs’ services.
5. The creation of a quality standard related to the services provided for the whole of the E.C. is wanted both by SPCs and SMEs.
Study of Services Provided to SME 11 November 2000 CHAPTER I
ANALYSIS OF THE MARKET CONDITIONS FOR SERVICE PROVIDING COMPANIES
Study of Services Provided to SME 12 February 2000 CHAPTER I EOMMEX
1. ANALYSIS OF THE SME MARKET CHARACTERISTICS
According to the 1984 Census, in GREECE there are 740,000 enterprises operating in the fields of: MANUFACTURING, TRADE, and SERVICES.
Of these enterprises, in all Sectors of Economic Activity, the ones which, during 1997, had a Turnover > 10,000,000 drs., that is, > 30,000 EURO, were 231,199.
They are distributed by Economic Activity Sector, in accordance with Table I.
TABLE I: SME with Turnover >10.000.000 DRS. (30.000 EURO)
ACTIVITIES % CATEGORY ENTERPRISES PERCENTAGE MANUFACTURING 51190 22 WHOLESALE TRADE 40131 17 RETAIL TRADE 89965 39 SERVICES 49913 22 TOTAL 231.199 100
SMEs WITH TURNOVER > 10,000,000 DRS. (30,000 EURO)
22% 22% MA NUFA CTURE WHOLESALE RETA IL 17% SERVICES 39%
In order to make more clear the picture of the SME in Greece, always having as a comparison means the turnover reached, the enterprises which during 1994 reached a turnover > 250,000,000 drs. (770.000 EURO) were 13,250, that is, 1.8% of the total.
Research of Services Provided to SME 13 November 2000 CHAPTER I EOMMEX
Furthermore, enterprises that reached a turnover < 10,000,000 drs. (31,000 EURO) were approximately 500,000, that is, 67.6% of the total1.
Of the 509,000 enterprises in the secondary and tertiary sectors which present a turnover < 10,000,000 drs., 93.3% employed 0-9 individuals, 3.6%, 10-99 individuals and 0.2% employed over 100 individuals.
Indicatively2, we cite as a typical example, the stratification of Greek SMEs in the Manufacturing Sector (147,717) by classifying them in accordance with the number of employees per enterprise.
Table II presents this stratification according to the results of the Census carried out by the Greek National Statistical Service in 1988.
1 The statistical data comes from the processing of the financial data of the enterprises submitted for the calculation of the VAT. 2 In order to make clearer the small size of Greek SME. Research of Services Provided to SME 14 November 2000 CHAPTER I EOMMEX
TABLE II NUMBER OF EMPLOYEES PER ENTERPRISE MANUFACTURING SECTOR
NUMBER OF 0 - 2 2 - 3 3 - 5 5 - 10 10 - 20 20 - 30 EMPLOYEES
NUMBER 60911 37789 23923 12704 5140 1622
PERCENTAGE % 41.23 25.6 16.2 8.6 3.4 1.0
NUMBER OF 30-50 50-100 100-200 200-500 500-1000 1000> EMPLOYEES
NUMBER 1173 774 345 259 56 21
PERCENTAGE % .008 .0052 .00232 .0017 .0004 .00019
NUMBER OF EMPLOYEES PER ENTERPRISE MANUFACTURE SECTOR
1% 4% 9% 0% 0 - 2 2 - 3 17% 42% 3 - 5 5 - 10 Α 10 - 20 20 - 30 >30 27%
Research of Services Provided to SME 15 November 2000 CHAPTER I EOMMEX
TABLE II (WITH ROUNDED OFF NUMBERS) NUMBER OF EMPLOYEES 0 - 10 11 - 50 51 - 100 101 - NUMBER 135327 7935 774 1455 PERCENTAGE% 91,63 4,408 0,0052 0,00461
NUMBER OF EMPLOYEES PER ENTERPRISE -- MANUFACTURE SECTOR (ROUNDED FIGURES)
5% 0%
0 - 10 11 - 51 51 - 100 101 -
95%
Research of Services Provided to SME 16 November 2000 CHAPTER I EOMMEX
Ø Geographical Distribution
As far as the distribution of the enterprises is concerned – localisation – as derives from the following table as well, the large number of enterprises is concentrated in the wider area of Athens and Thessalonica (52.06%), except for theTrade Sector, in which most SMEs, for obvious reasons, are located in the Periphery of the country.
GEOGRAPHICAL DISTRIBUTION OF SMEs
48% ATHENS - THESSALONICA PERIPHERY 52%
CHART III DISTRIBUTION OF SMEs IN ATHENS, THESSALONICA AND THE PERIPHERY
FINANCIAL ATHENS - ACTIVITY THESSAL % PERIPHERY % GREECE % SECTOR ONICA MANUFACTURE 31134 66.7 20056 33.3 51190 100 WHOLESALE TRADE 23000 57.3 17131 42.7 40131 100 RETAIL TRADE 43278 48.1 46687 51.9 89965 100 SERVICES 22448 45.0 26465 55.0 49913 100 TOTAL 119860 52.06 110339 47.94 230199 100
Research of Services Provided to SME 17 November 2000 CHAPTER I EOMMEX
Ø Legal status
As far as the legal status of the SMEs is concerned, the percentage distribution is as follows: · Personal enterprises 75% · Partnerships (UC/GP. & LP.) 17.5% · Limited Liability Company. 3.8% · S.A. 3.6% · Associations – Joint Ventures, etc. 0.1%
LEGAL STATUS OF SMEs
0,1% 3,8% 3,6% PERSONAL ENTERPRISES 17,5% GP/UC &LP
LTD
S.A. 75,0% ASSOCIATIONS - JOINT VENTURES, ETC.
Research of Services Provided to SME 18 November 2000 CHAPTER I EOMMEX
1.1 DESCRIPTION OF THE SERVICE SECTOR
The Service sector is one of the most dynamic and rapidly growing sectors in the Greek Economy.
In the last few years, it has demonstrated impressive growth rates, satisfactory profitability and a significant contribution to the continuous structural change of the country’s economy from agricultural – manufacturing to a rendering services economy.
Business Consultants are included in the field of professional services, and along with IT Consultants comprise the two largest and most significant groups in the field.
1.1.1 Market Size
The total market size of Service Providing Companies for 1997 (the most recent year for which published data is available) is estimated at approximately 26 billion drs. The market has had a considerable growth of 53%, compared to 1996, when its size was approximately 17 billion drs.
Despite the large growth of turnover, the number of companies that are active in the field and the total of professional personnel employed remained approximately fixed. It is estimated that there are approximately 100 significant Service Providing Companies in Greece, which employ about 1,200 professional employees.
Due to the existence of many small companies, for which there is no reliable data available, the market size for Service Providing Companies is significantly larger than the one estimated.
Research of Services Provided to SME 19 November 2000 CHAPTER I EOMMEX
Another characteristic of the service market is the existence of many free- lance consultants, who are not employed by a certain firm, but they rather offer their services either directly to customers or in collaboration with other companies which are not always purely consulting firms.
During the period 1990-1997, the average annual growth rate is lower (30%) compared to the one of 1997, however, it is still quite high. The considerable growth of the Service Providing Companies market size is mainly due to the significant growth of productivity and to a lesser extent, to the growth of their size.
Today, it is estimated that Service Providing Companies exceed 1500, spread out throughout the country. Furthermore, they concentrate mainly in Athens and Thessalonica.
Research of Services Provided to SME 20 November 2000 CHAPTER I EOMMEX
1.1.2 Areas of Specialisation
The areas of specialisation of the above Service Providing Companies are the following:
[1] GENERAL BUSINESS & OPERATIONAL CONSULTING SERVICES
1.1 Strategy
1.1.1. Defining of business activities
1.1.2 Differentiation of business activity / products
1.1.3 Mergers and buy-outs
1.2 Business planning
1.3 Action planning
1.4 Control of administrative effectiveness.
[2] BUSINESS ORGANISATION
2.1 Organisational structure
2.2 Organisational development
[3] DEVELOPMENT & SUPPORT FOR PROGRAM IMPLEMENTATION
3.1 Project management
3.2 Plan management
3.3 Project evaluation
3.4 Plan evaluation
3.5 Expediency – feasibility – prospect studies
3.6 Regional development studies
3.7 Investment opportunity studies
3.8 Sectorial studies
3.9 Environmental studies
Research of Services Provided to SME 21 November 2000 CHAPTER I EOMMEX
3.10 Planning – support for the application of geographic information systems
[4] MARKETING AND BUSINESS COMMUNICATION
4.1 Strategy and marketing policies
4.2 Market research
4.3 Marketing plan
4.4. Sales plan
4.5 Promotion – advertising – of product and service
[5] HUMAN RESOURCES
5.1 Selection of personnel
5.2 Planning and development of human resources
5.3 Training programs
5.4 Employee evaluation systems
5.5 Employee reimbursement systems
[6] FINANCIAL SERVICES
6.1 Evaluation of the value of companies
6.2 Financing programs
6.3 Cost reduction plans
6.4 Investment advice
6.5 Management of asset – liability items
6.6 Evaluation of capital equipment expenditures
Research of Services Provided to SME 22 November 2000 CHAPTER I EOMMEX
[7] PLANNING OF OPERATIONAL AND INFORMATION SYSTEMS
7.1 Study, evaluation and general planning of systems and procedures
7.2 Planning and production control systems
7.3 Administrative – management systems
7.3.1 Costing system
7.3.2 Budget and accounting audit system
7.3.3 Cash planning system
7.3.4 Reserve management system
7.3.5 Provisioning system
7.3.6 Accounting systems (customers, fixed assets, etc.)
7.3.7 Marketing information system
7.3.8 Personnel information system
7.3.9 Control – quality assurance system
7.4 Integrated management information system
[8] COMPUTING
8.1 Computing consulting services
8.1.1 Strategy and computing studies
8.1.2 System evaluation
8.1.3 Computing project materialisation support
8.2 System design
8.3 Software development
8.4 Telematics Applications, EDI
Research of Services Provided to SME 23 November 2000 CHAPTER I EOMMEX
[9] OTHER AREAS OF SPECIALISATION
9.1 Quality control of raw materials and final products
9.2 Form, book and magazine design
9.3 Energy savings
9.4 Graphic Design
9.5 Technology
9.6 Organisation of the production of textile units
9.7 Studies in the health and social policy sectors
9.8 Product certification – Quality assurance
9.9 Applied & industrial research
9.10 Product improvement – Development of new products
Research of Services Provided to SME 24 November 2000 CHAPTER I EOMMEX
1.1.3 Categories (Company Classification)
The Service Providing Companies may be grouped into three large categories:
A) Large, exclusively consulting companies, B) Companies of Certified Accountants / Auditors which also provide consulting services and C) Small / medium sized Service Providing Companies
The companies which belong to the first two categories are over 15, and have an annual revenue of more than 1 billion drs.
The market continues to be cut up into many small companies, although, gradually, the very small players and free – lance consultants are either withdrawing or absorbed.
It is characteristic that in a sense, there is no medium – sized companies, that is, with a turnover between 500 million and 1 billion drs.
As indicated in TABLE IV, the income and profitability of the Service Providing Companies presented considerable growth during the last decade. This growth is mainly due to the improvement of productivity, as shown by the increased average income per employee, and the higher profit margin. Due to the little own capital and the satisfactory profit margin that the consultant companies usually have, the average company in the field achieves high capital yields for its shareholders.
Research of Services Provided to SME 25 November 2000 CHAPTER I EOMMEX
TABLE IV INCOME AND PROFITABILITY OF GREEK SERVICE PROVIDING COMPANIES SIZE OF 1990 1994 1997 AVERAGE AVERAGE ANNUAL COMPANY INCREASE 1990 - 1997 INCOME 47 131 282 29% (MILLIONS DRS.) OWN CAPITAL 11 36 73 31% EMPLOYEES 10.1 12.5 13.2 4% NET PROFIT 4.2 11.2 8 10% MARGIN (%)
OWN CAPITAL 18 40 31 8% YIELD (%) INCOME PER 4,640 10,521 21,350 24% EMPLOYEE (THOUSAND DRS.)
Source: KANTOR CAPITAL
The service sector is composed of seven large sub-sectors, each of whom has its own characteristics and its own dynamics and potential.
These sub-sectors are the following: 1. Management Consultants. 2. Selection and training of personnel (Human Resources). 3. Accounting and Audit. 4. Marketing 5. Organisation - Software (Information Technology) 6. Finance (Corporate Finance) 7. Consulting Engineering.
The boundaries between the companies that offer services of this type are fairly clear, however, they are not absolute, since most of the enterprises in the sector have activities in more than one sub-sector.
During the last few years, a further slight increase is noted in the average size of the companies, a fact that is mainly due to the increase in concentration and the departure of small, less profitable companies, as the sector is gradually maturing.
Research of Services Provided to SME 26 November 2000 CHAPTER I EOMMEX
1.1.4 Prospects
Despite the impressive course of the Greek Service Providing Companies in the last few years, the sector is quite behind compared to the European average. The consultancy market corresponds to approximately 0.06% of the GNP, significantly lower than the European average which is 0.28%. It is estimated that the average charges fluctuate between 35% and 50% of the respective charges in European Union countries. Respectively, the average income per consultant is approximately one half of the European average.
TABLE V COMPARISON BETWEEN GREEK AND FOREIGN SERVICE PROVIDING COMPANIES
COUNTRY NO. OF GNP CONS TURNOVER TURNOVER / CONSULTANTS (billion SECTOR (% GNP) CONSULTANT ΕCU) TURNOVER (000 ECU p.a) (million ECU) DENMARK 2,500 142 292 .21 116.8 FRANCE 13,000 1,235 1,162 .09 89.4 GERMANY 47,000 1,915 7,500 .039 115.6 HOLLAND 6,000 316 855 .27 142.5 SWITZERLAND 2,400 239 361 .15 150.4 GREAT 27,000 887 3164 .36 117.2 BRITAIN
AVERAGE 16317 789 2222 .28 136.2 GREECE 900 95 58 .06 64.4
Source: FEACO Management Survey 1998
It is obvious that the small size of the Greek Service Providing market is not only due to the small size of the Greek economy, but to the comparatively very little use of consultant services, as indicates the low penetration percentage (income of Service Providing Companies as a percentage of GNP).
Furthermore, in comparison with the global Service Providing market, which is estimated to have an annual revenue higher than 50 billion ECU and employs over 100,000 individuals, the Greek market is almost insignificant.
Research of Services Provided to SME 27 November 2000 CHAPTER I EOMMEX
The Greek Service Providing market presents positive prospects for rapid growth. The field is expected to continue its growth with more rapid rates than the average of the service sector, which will be decreasing, as the sector will be entering a maturation and rationalisation phase. The growth of the sector turnover is due to the large increase in demand, which is expected to continue in the near future.
The impressive growth rate of the sector of professional services in the last few years, is expected to continue more intensely in the next decade. The further reinforcement of demand for consulting services indicated, both by the public and by the private sector, will unavoidably lead to the growth of the size of the respective market, which is estimated that by the year 2001 will exceed the value of 114 billion drs. (in today’s prices), while in 1995, it was 85.7 billion drs. The future upward course, the evolution and development of the sector, will not be uniform, but each sub-sector will present its own particularities.
In TABLE IV, are presented the prospects for the Service Providing market evolution, as far as the areas of specialisation for the next few years are concerned.
Research of Services Provided to SME 28 November 2000 CHAPTER I EOMMEX
TABLE VI PROSPECTS REGARDING THE SERVICE PROVIDING MARKET EVOLUTION 1996 – 2001 (in millions of drs., 1996 prices) Total Private Public Internat Total Average Net 1995 Sector Sector ional increase margin Sector 2001(%) Management 16000 7659 15318 4377 27354 11.8 15 Consultants Human 7500 7048 1771 - 8819 2.6 13 Resources Accounting and 14500 12037 2465 - 14502 0 3 Audit Marketing 11000 11434 861 - 12295 1.7 7 Information 17500 5821 13692 587 20100 6.8 4 Technology CORPORATE 2500 4767 1589 - 6356 11 30 FINANCE Consulting 16500 4833 17805 2798 25436 7.6 20 Engineering Total 85500 53599 53501 7762 114862 4.8 15
Source: ΚΑΝΤΟR CAPITAL
It is evident that the most advanced and autonomous sub-sectors today will go through a period of restructuring, while those that are driven by the demand of the 2nd CSF will demonstrate a rapid ascending course and significant improvement of their profits.
Research of Services Provided to SME 29 November 2000 CHAPTER I EOMMEX
1.2 GREEK SERVICE PROVIDING COMPANIES
In Greece, there are Companies which operate and provide Information and Consultancy Services of different nature, form and intensity to: · Businesses under establishment. · Businesses already operating. · State bodies in its broader sense, for the execution of specific work.
Schematically, TABLE VII shows which are the most important bodies on a local and national scale, except for the Ministries of Development, National
Economy, Labour and Agriculture, which supervise policy execution sectors, regarding SMEs issues accordingly.
Research of Services Provided to SME 30 November 2000 CHAPTER IREGIONAL EOMMEX
ADMINISTRATIONS STATE PREFECTURES
ΕΟΜΜΕΧ/HOSMEH
ORGANIZATION FOR THE PROMOTION OF EXPORTS
MUNICIPALITIES SERVICE LGO RENDERING BDC BODIES
HANDICRAFT CHAMBERS SEMI-STATE MIXED INDUSTRIAL SERVICE COMMERCIAL CHAMBERS RENDERING PURE INDUSTRIAL COMMERCIAL CHAMBERS BODIES PROFESSIONAL CHAMBERS
FIELD INSTITUTES
INDUSTRIAL ASSOCIATIONS
EUROPEAN INFORMATION INCENTIVES
PRIVATE CONSULTING SERVICE BODIES CHAPTER I EOMMEX
1.3 STATE INFORMATION AND CONSULTING SERVICE BODIES
The following are included in state bodies which provide Information and Consulting Services to SMEs:
¨ Regional Administrations established in the 13 Regions of the country, within which units for the provision of consulting services operate, mainly, however, to enterprises, or are implementing various European programs, such as e.g. LEADER.
¨ First and second level LGOs (Local Government Organisations), within which operate Offices of the Ministry of Development – INDUSTRIAL ADAPTATION OFFICES – which provide, apart from other things, information on subjects that concern enterprises, their relations with the Government or its organisations, national or European programs, etc. ¨ In the 350 from the 900 municipalities in the country, development companies were established and are operating, which implement various national or European Union programs that are relevant to the development of various Municipality activities or assist the Municipalities in the resolution of their internal organisational and other problems.
Research of Services Provided to SME 32 November 2000 CHAPTER I EOMMEX
1.4 S.P.C. IN THE BROADER PUBLIC SECTOR
This category includes bodies which provide Services, Information to enterprises and directly or indirectly implement national or European Union programs to the benefit of the enterprises. These bodies are:
Ø Chambers of Industry: - ATHENS - PIRAEUS - THESSALONICA
Ø Chambers of industry and Commerce: - ATHENS - PIRAEUS - THESSALONICA
Ø Chambers of Industry, Commerce and SMEs, which are based in the 52 capitals of the country’s geographical Departments and also cover the needs of SMEs.
Besides any other responsibilities, these agencies provide information in matters of the establishment of enterprises, personnel training, etc. In some of the Chambers, BIC (Business Innovation Centres) operate as well.
Ø Professional Chambers of Commerce of: - ATHENS - PIRAEUS - THESSALONICA
Research of Services Provided to SME 33 November 2000 CHAPTER I EOMMEX
Ø Field institutes for: - Clothing - Marble - Αargil mass - Fur (Kastoria) Field institutes, besides information, also provide specialised Consultancy Services to the enterprises in the field in which they belong.
Ø Exporters Associations Provide information to their members mainly regarding matters of exporting and help them in their export efforts.
Ø Associations of Industries These associations, apart from promoting the interests of the enterprises that they represent, have also established a series of Development companies or institutes, whose activities range from the provision of consultancy services to their member – enterprises, to the implementation of various European Programs to the benefit of their member – enterprises.
All the above mentioned bodies provide Information and Consulting Services on issues which concern the establishment of enterprises or equipping enterprises with informational material for their participation in various national and European programs, as well as in training, etc.
The Development Companies of bodies usually have a life span equal to the length of the program or programs they are implementing.
Financing Sources All the above bodies are financed both by the bodies for which they are acting, as well as by the programs that they are implementing for their behalf.
Research of Services Provided to SME 34 November 2000 CHAPTER I EOMMEX
Ø The Euro Info Centres (EIC) The total number of EICs that are operating in Greece is 14, and they are spread out all over the country. They are staffed and operated by the Chambers of:
- Small Industries of Athens - Athens Chamber of Commerce & Industry - Heracleon / Crete - Volos / Magnesia - Kavala / Kavala - Ioannina / Ioannina - Kerkira / Kerkira - Tripoli / Tripoli - Kozani / ΚΟDE (Kozani Development) - Athens / ΕΟΜΜΕΧ - Larissa / ΕΟΜΜΕΧ - Patra / ΕΟΜΜΕΧ - NORTHERN GREECE EXPORTERS ASSOCIATION / Thessalonica - Thrace Region / Komotini
The purpose of the Euro Info Centres is to provide information and informational materials to enterprises in issues of Community programs and policies for the SME, European Programs, Scientific Research and Technology, Foreign Markets and Collaborations.
Financing Sources
The operation of EURO INFO CENTRES are financed upon agreement, both by the EUROPEAN UNION as well as by their bodies in which they are located.
Research of Services Provided to SME 35 November 2000 CHAPTER I EOMMEX
Ø ΕΟΜΜΕΧ3 It was established as a Legal Entity under Private Law (Law 707/1977), by which the National Organisation of Greek Handicrafts (EOEX) merged with the Centre for Small Industry Development (KEBA), for the purpose of promoting and advancing in all appropriate ways, the development of the domestic small industry and handicrafts within the framework of the Government Policy implemented at the time. The activities that have characterised EOMMEX during its first seven years of operation (1977- 1984), concerned the development of Handicrafts and Carpet Manufacture, as well as the provision of technical - financial consultant services to SME, focusing on the provision of free technical assistance, during the period when the respective offer of such services by the private sector was still on an infantile stage in Greece.
In 1984, new activities were included within EOMMEX, mainly of a financial credit nature. At the same time, during the period 1984-1990, EOMMEX developed the policy of establishing and operating subsidiary companies, either as Technical or Developmental Field Institutes or as Innovation Centres, for the purpose of specialising the services provided to SME of the specific field, and with the ultimate purpose of transferring the responsibility of operation to the bodies that had to do with the subject of their activity, with the participation of EOMMEX in their Boards of Directors.
Recently, under the Presidential Decree 159/97, which was issued in application of Law 2414/96, EOMMEX was transformed into a Societe Anonyme (S.A.) of public benefit that operates for Public interest, based on the private economy rules, and with the purpose of promoting, developing and supporting by any suitable means, Small – Medium sized Enterprises in Greece in the secondary and tertiary sectors of the economy, within the framework of the policies exercised by the Government.
3 ΕΟΜΜΕΧ, besides its Central Service in Athens, also maintains 9 Regional Directorates with 28 Offices. Research of Services Provided to SME 36 November 2000 CHAPTER I EOMMEX
EOMMEX’s development mission, which was deemed to be successful and was recognised by all (having supported the development of approximately 40,000 SME in the manufacturing sector), may be characterised in many cases as pioneering and has successful applications to show in:
v The technical and financial assistance of the SME, so that they can import in their day to day operations, new technologies v Development of the institution of Subcontracting v Support for the creation and development of New Enterprises v Organisation of the SME into Joint Ventures in order to handle successfully the execution of large orders or the achievement of economies of scale v Support of the marketing operation of Greek SMEs (creation of company identity, ways of presentating Greek SMEs in international markets, specialised market research, support of SMEs for their participation in special exhibitions abroad, etc.) v Preparation and implementation of special educational and training programs v Organisation of national and international conferences relevant to SMEs v Entry, development and support of the entrepreunerial spirit in the broader socio-economic environment The strategy and the role of EOMMEX – Law 2702/99 for the next decade at least, is directly or indirectly determined by the needs and prospects of the SME themselves, as these are shaped within the framework of the constant changes and developments of the business environment where they are active, and by the strategy and the directions of the State regarding the SMEs.
Research of Services Provided to SME 37 November 2000 CHAPTER I EOMMEX
Ø The Hellenic Organisation for External Trade (ΕΟΕΕ) Its purpose is to inform and support enterprises in their exporting efforts, through exhibitions, delegations, training, etc.
Ø Within the framework of the 3rd Community Support Framework (3rd CSF), the Ministry of Development plans BUSINESS DEVELOPMENT CENTRES (BDC) to be established in the Regional and/or Departmental seats by local agencies, Municipalities, Chambers, Credit Institutes, Universities, etc., which are foreseen to be constituted into a network. In this effort, EOMMEX is foreseen to undertake the role – since it has the necessary know-how – of supporting and coordinating the project.
The purpose of the BDCs is to provide SMEs at a local level, Consulting Services, the formation of Support Structures and observation of SMEs in the form of an observatory in their respective area of responsibility. The philosophy and operation of the BDCs will be based on proven schemes of similar organisations in other E.U. member states, as well as in non E.U countries. It is expected that the BDCs will gradually replace the existing schemes in the country, which are considered to have fulfilled their mission.
Financing Sources
The above bodies are financed by the State budget and by the programs they are implementing. Specifically for BDCs financing, comes from the 3rd CSF (2000-2006) and from the state budget.
Research of Services Provided to SME 38 November 2000 CHAPTER I EOMMEX
1.5 PRIVATE SERVICE PROVIDING COMPANIES (S.P.C.)
In Greece, the profession of Business Consultant is not safeguarded. If an individual has the substantial qualification of a UNIVERSITY degree or even a COLLEGE degree and the application for a professional licence to the Tax Revenue Service are sufficient in order to practice the profession of business consultant, while it is the “market” which will reject or acknowledge him as a Service Consultant.
Since the 1970’s, branch offices by large international consultant offices from the USA and EUROPE were established in Greece, which provide since that time, either by themselves or in collaboration with Greek consultants, their Consulting Services in the fields of organisation – management, reorganisation, establishment, extension, etc., to the Greek Public Sector, Public Organisations or large, industrial and commercial enterprises, or even to large Hotel units.
As mentioned previously, it is estimated that in Greece, operate approximately 1500 Business Consultant offices of all sizes with respect to the turnover reached, personnel employed and specialisation. Up to this date, only one collective body, which represents 41 companies, mainly large ones, has been created for the purpose of promoting the interests of the large Consultant companies, the Association of Management Consultant Companies (AMCC).
The creation of more collective bodies is deemed desirable, which will represent the interests of small and medium sized S.P.C. all over Greece.
ΕΟΜΜΕΧ has created a registry of Service Providing Companies where 273 independent Consultants and Business Consultant Offices from all over Greece were registered, evaluated and included.
Research of Services Provided to SME 39 November 2000 CHAPTER I EOMMEX
This catalogue is available to any interested enterprise, when it wants to hire a Consultant. The criteria taken into account in order to be included in this catalogue, which as mentioned earlier is open to every Consultant or Service Providing Company, are:
· That they have one of the existing legal status · That they have the adequate infrastructure for the provision of consultancy services to SME (equipment, know-how, personnel, etc.) · That they have proved, adequate experience.
The characteristic data of the existing SERVICE PROVIDING COMPANIES REGISTRY include 9 activity sectors and 62 specialisations. The registry is supported by a data processing system, which includes the basic facts about the consultant, as well as his areas of specialisation.
TABLE VII EOMMEX CONSULTANT REGISTRY
No. REGION NUMBER % 1 East Macedonia & Thrace 8 2.9% 2 Central Macedonia 51 18.7% 3 West Macedonia 7 2.6% 4Epirus72.6% 5 Thessaly 11 4.0% 6 Ionian Islands 0 0% 7 Western Greece 4 1.5% 8 Continental Greece 10 3.7% 9 Attica 156 57.1% 10 Peloponnese 2 0.7% 11 Northern Aegean 0 0% 12 South Aegean 3 1.1% 13 Crete 14 5.1% TOTAL 273 100
Research of Services Provided to SME 40 November 2000 CHAPTER I EOMMEX
EOMMEX CONSULTANT REGISTRY
24%
ATTICA CENTRAL MCEDONIA REST OF GREECE 57% 19%
Special National, Local or European Union programs that DIRECTLY address business consultant offices for their creation or development or for the promotion of the Services offered toward the SMEs, do not exist.
The assistance provided to firms from the State is INDIRECT. More specifically, through the existing business consultant registries, enterprises which intend to submit a proposal for a program, National or of the European Union, e.g. for the entry of an investment into the Development Law for financing or subsidising, have the ability to select a Consultant if necessary, who will assist them in drawing up their proposal – program, as well as in its implementation.
Therefore, the enterprise is the one that is subsidised, and through this subsidy, a part of the cost of the Consultant services is covered. Assuming that the submitted program – proposal has been approved.
In European Programs, as well as in national ones, the use of a consultant by a SME is financed in the form of a subsidy up to a specific amount or percentage of the budget of the program submitted.
Research of Services Provided to SME 41 November 2000 CHAPTER I EOMMEX
1.6 RESEARCH METHODOLOGY
1.6.1 Selection of the Sample for the SMEs Sector
The Study Team, in order to achieve effective research and to attribute reliable results, deemed, and based on the available data, that the SMEs that would become part of the sample must be those which would have the following common characteristics:
1. Age equal to or greater than 3 years 2. Turnover of at least 50 million 3. Number of employees (depending on the sector)
1.6.2 Special Criteria
In order to conduct the Research for the SMEs sector and to have representative results, the enterprises selected were to meet the following criteria:
ü MANUFACTURE: Fields 15-37 Employees: From 5-50 individuals Turnover >50,000.000 drs. Length of operation:>3 years
ü TRADE: Fields 51-52 Employees:>2 Individuals Turnover FROM 30,000-300,000 thousands of drs. Length of operation:>3 years
ü SERVICES: Fields 55-63 Employees: From 1-150 individuals Turnover From 50,000-750,000 thousands of drs. Length of operation:>3 years
Research of Services Provided to SME 42 November 2000 CHAPTER I EOMMEX
Based on the above special criteria, the number of enterprises among which the sample was taken is limited to 14,500 of which the sample (273 enterprises in the entire country) represents 1.8% of the total.
This sample of enterprises is distributed proportionately to the three Economic Activity Sectors, that is:
Manufacturing Sector 160 58.6% Trade Sector 69 25.3% Service Sector 44 16.1% TOTAL 273 100%
ECONOMIC ACTIVITIES SECTORS
25% 16%
SERVICE SECTOR ΜΑΝUFACTURE SECTOR COMMERCE SECTOR
59%
The proportionately distributed sample by Economic Activity Sector was further distributed proportionately to the thirteen regions of the Country, in accordance with the degree of concentration of SMEs in each Sector.
Researchers visited these enterprises at the location of their establishment, interviewed the businessmen and completed the respective questionnaire regarding the SMEs.
Research of Services Provided to SME 43 November 2000 CHAPTER I EOMMEX
1.6.3 Selection of Sample for Service Providing Companies (S.P.C.)
The primary research for the materialisation of the present study was based on the EOMMEX S.A. CONSULTANTS REGISTRY, which is comprised of 273 consultants nationwide. Of these, 156 operate in Athens and Piraeus (57%) and 51 in Thessalonica (18.7%). The remaining 66 Consultant companies (43%) operate in the rest of the country.
To all Service Providing firms included in the EOMMEX Consultant Enterprises registry, (cf. respective table), to the local Chambers (40), as well as to various other bodies which provide information to SMEs, questionnaires were sent by mail (total 320).
Of these questionnaires, 80 were returned completed, a proportion of 25%, which is deemed to be satisfactory.
Research of Services Provided to SME 44 November 2000 EOMMEX
CHAPTER II
ANALYSIS OF THE POSITION OF SERVICE PROVIDING COMPANIES
Research of Services Provided to SME 45 November 2000 CHAPTER II EOMMEX
2. THE SERVICE PROVIDING COMPANIES (S.P.C.) IN THE GREEK MARKET
2.1 SERVICE PROVIDING COMPANIES (S.P.C.) At the beginning of the 1990’s, there appeared the need from the part of the enterprises, mainly large ones, for external assistance, that is, for the use of consultant services.
The fact that most businesses are located in the areas of Attica and Thessalonica and the regions around them, led to the creation of business consultant offices mainly in these cities.
As time went by, more businesses joined in the road of development and modernisation, causing the first firms to be developed and new ones to be created in all the regions of the country.
Ø Geographic Distribution
Geographically, these consultant offices are distributed in Athens and Thessalonica at a proportion that reaches approximately 75.8%. This large concentration is due to the fact that in these two cities – regions, there is a large concentration of SME, as well as to the fact that in these areas there is a superfluous number of scientific personnel with graduate studies and extensive specialisation.
The level of demand for consultancy services in Greece is relevant: Quantitatively, it shows a significant increase in the last few years, even though it continues to be quite behind the respective level of demand in other countries of the Community (cf. Tables IV, V). Qualitatively, the level of the services provided varies.
Research of Services Provided to SME 46 November 2000 CHAPTER II EOMMEX
More specifically:
- In the Public sector, there is a method of evaluating and selecting consultants, delimitation of their work and quality control of the services offered.
- In the Private sector, the consultancy services demanded for, meeting specific needs of the businesses (clients) are at a relatively good level and the client controls the quality in relation to the result achieved.
Consultancy services vary in accordance with the type of business (client), specifically: · Public sector · Private self-financed · Private with Community financing.
- In the field of self-financed private sector, the areas where the businesses (clients) have the greatest need for consultancy services are:
· Strategy and operational planning · New financing sources - subsidies · Organisation of the operational poles of the enterprise (sales, marketing, production, ISO 9000, etc.).
- In the area of the private sector with European Community financing, consultancy services are determined by the Community programs, which to the largest extent express the policies, per activity sector (primary, secondary, tertiary) of the country.
As mentioned in the “introduction”, the sector of consultancy services has grown significantly in the last few years in Greece. This development is directly linked to the changes in the Greek entrepreunerial environment, which is the
Research of Services Provided to SME 47 November 2000 CHAPTER II EOMMEX result of the unification of the European market, and consequently, of the increased pressure of competition that Greek businesses are now experiencing.
Within this framework, the need for new services - such as electronic commerce, ISO 9000 and 14000, data processing systems, setup of networks, communication of the network with the commercial department, etc. - has arose.
These services usually address SMEs of the secondary sector and are financed according to Development Law 2601/1998.
2.2 SMES (SMALL & MEDIUM SIZED ENTERPRISES)
The particularities in the market of the S.P.C., as far as the SMEs are concerned, create a framework, which on the one hand is not favourable for the SMEs and on the other hand, focuses on services of traditional nature, which have been offered so far.
Contemporary and modern services, such as those developed and rendered in other countries and markets are not present and rarely are they met in the Greek service market. Something that can be considered as the exception to the rule.
2.2.1 Types of services
Consequently, the types of services rendered in Greece can be divided into 3 categories in accordance with their use.
1. Most common · Specific strategic measures for SME. · Specific training. · Immediate advice and support.
Research of Services Provided to SME 48 November 2000 CHAPTER II EOMMEX
2. Common. · Informational services at a professional level. · Financing.
3. Rare. · Environment and installations. · Facilitations, reception and basic information.
2.2.2 Geographic distribution
The study proves very clearly that the service market (in its present form) in Greece, concentrates around the 2 largest cities (Athens – Thessalonica).
In smaller cities, the types of services mainly rendered are: α. Accounting services and β. General information to the SME (question 7 – Questionnaire for SMEs)
The cause for this significant gap is the size of the clientele (few companies and even fewer organised companies), as well as lack of interest on behalf of the SMEs. Something that finally justifies the lack of offer of other kinds of services as well, and therefore, the existence of S.P.C.
Local authorities (Chambers – Prefectures – Municipalities – etc.), can cover this gap somehow, only on the basis of providing basic information. However, the service of this kind and the quality of the information are at a low level, since these organisations operate with the philosophy and attitude of the Public sector, which means slow reactions to changes, bureaucracy, lack of in-depth knowledge in the field of service and the needs of the SMEs, etc. (questions 1,3,4,11,17 – Questionnaire for SMEs).
Research of Services Provided to SME 49 November 2000 CHAPTER II EOMMEX
2.2.3 Practices in order to overcome the gap
Finally, it is evident that there is a tendency towards improvement in rendering the existing services and the offering of new ones. This is mainly due to the rapid changes that are taking place globally in business, as well as to the competitive environment that has been created following the introduction of the INTERNET. The businessman now has the opportunity of direct access to many alternative information sources and solutions that are not locally available.
2.2.4 New services
Technology also brings services of a new kind, which are mainly rendered by private Service Agency companies. The Public sector practically does not participate. A typical example is the introduction of ISO, Logistics and Reengineering. The study clearly shows that SMEs are not satisfied with the present situation, and demand improvement. For this reason, they classify S.P.C. as follows (in the order of importance): ¨ Private Service Providing Companies ¨ Semi-Public organisations ¨ Public Sector (Questions 3,5,6 – Questionnaire for SMEs).
Nevertheless, the study also pinpointed some contradictions, which are related to the following characteristics: v Lack of information flow toward SMEs with respect to: - the role of the S.P.C. - where they can be found - what they offer - how and how much they charge for their services - what working system they use, etc.
Research of Services Provided to SME 50 November 2000 CHAPTER II EOMMEX
v Lack of willingness from the part of SMEs to cooperate with S.P.C. v Financial difficulties for the payment of services (even though the SMEs pay for accountants and lawyers, they are reluctant to pay for marketing, promotion, quality, etc. services). v Lack of knowledge regarding the specific role of consultants and the advantages that the SME can enjoy by collaborating with them (questions 4,7,8,9,10,13). v New type of services appearing in Greece are still on an infant stage, however, they have great prospects for improvement. The consoling thing is that SMEs realise more and more the need for external assistance, something that makes the role of the consultants easier.
The many programs offered by the EU and the Greek state are aimed at developing and modernising SMEs, and require the specialisation of S.P.C. Because these programs in their majority offer financial assistance to the SMEs through subsidising the cost of the SRB, a favourable environment is created along with an increase in their work.
Research of Services Provided to SME 51 November 2000 CHAPTER II EOMMEX
2.3 CONCLUSIONS
From the above facts, the conclusion is that:
ü The main volume of S.P.C. is concentrated in large cities (Athens – Thessalonica).
ü The quality of services rendered is improving continuously, mainly by the Private sector in contrast to those of the Public sector.
ü The penetration of new technologies in the services rendered is on the increase.
ü New services are emerging, covering the existing gap.
ü SMEs prefer to cooperate with private S.P.C.
ü A difficulty in the cooperation between SMEs and S.P.C. is noted, due to the high cost and the lack of knowledge from the part of the SMEs regarding these services.
Research of Services Provided to SME 52 November 2000 EOMMEX
CHAPTER III
ANALYSIS OF THE DEMAND
Research of Services Provided to SME 53 November 2000 CHAPTER III EOMMEX
3. DEMAND FOR SERVICES IN GREECE
3.1 SERVICE PROVIDING COMPANIES (S.P.C.)
The results of the study with regard to the question that concerns the various types of approach and policy of the consulting firms so that they may get new clients, proved that cooperation in groups of clients, gathers the highest percentages, and more specifically:
- 46.53% of the consulting firms believe that there is a high influence toward the clients. - 38.09% of the consulting firms believe that there is a moderate influence toward the clients, and - 14.28% of the firms believe that there are losses due to dispersal.
WAYS OF APPROACHING SMEs BY S.P.C.
14,44% HIGH INFLUENCE 47,05% MODERATE INFLUENCE
LOSSES DUE TO 38,51% DISPERSAL
Research of Services Provided to SME 54 November 2000 CHAPTER III EOMMEX
In order to locate the difficulties encountered by the consulting firms during the rendering of their services, the following were noted in order of significance:
Ø 26.70% of the firms deem that SMEs do not have the necessary funds available for the support services rendered. Ø 23.60% of the firms deem that SMEs do not understand the usefulness of support services. Ø 18.01% of the firms deem, however, that the enterprises are too small to fully understand the services provided, and Ø 16.77% of the firms deem that SMEs believe that support services are not necessary to them.
DETECTION OF S.P.C. DIFFICULTIES IN THE PROVISION OF SERVICES
5% 19% 30%
20% 26%
SMEs DO NOT HAVE FUNDS AVAILABLE FOR SUPPORT SERVICES SMEs DO NOT UNDERSTAND THE USEFULNESS OF SUPPORT SMEs ARE TOO SMALL TO FULLY UNDERSTAND THE SERVICES PROVIDED SMEs BELIEVE THAT THE SERVICES ARE NOT NECESSARY THE SERVICES PROVIDED ARE NOT ADEQUATELY DEVELOPED
Research of Services Provided to SME 55 November 2000 CHAPTER III EOMMEX
3.2 USE OF SERVICES
The study showed that SMEs which use S.P.C. are those that have: v A satisfactory level of organisation and administration. v Are actively concerned with administrative actions. v The management is active in receiving information from various sources in Greece and abroad. v Have more than 10 employees. v Are open-minded. v Have clear-cut aims and plans. (questions 10,13,14,17,20 – Questionnaire for SMEs)
3.3 THE OPINION OF THE SMES REGARDING S.P.C.
In general, SMEs consider that the level of services provided to them is low. The phenomenon is more intense when we are discussing semi-Public bodies.
This is evident from the results of the study as well. To the question of whether information is provided to the SMEs, the response is negative (over 55%). This means that they do not have information regarding matters that concern them. 30% responded that they receive some information from private S.P.C. and 2-5% responded that they received information from the Public Sector, that is, local Chambers, to which SMEs apply for a certificate or other bureaucratic procedures. (The same results are extracted for other types of services as well – question 3 in the Questionnaire for SMEs)
Direct provision of advice / services Over 55% responded negatively. Less than 30% responded that they have some kind of cooperation with private companies. This is mainly due to the programs financed by the E.U. Here too, the Public Sector is almost non- existent.
Research of Services Provided to SME 56 November 2000 CHAPTER III EOMMEX
Training is another broad sector for providing services. Lately, with assistance from the E.U. programs, many training seminars have begun. However, their importance and their final results on a qualitative level are doubtful.
In relation to financing programs, the percentage changes significantly, in accordance with question 3. The responses received show that the semi- Public and Public sector play a primary role. This is due to the facts that: ¨ Most SMEs apply to the State for financing. ¨ They follow development programs, financed by the State. ¨ They have no other choice but to turn to the State (loans, guarantees, etc.). (questions 3,4,6,11,13 – Questionnaire for SMEs)
3.4 UNDERSTANDING THE NEEDS OF THE SMES
The study shows that there is a lack of understanding of the true needs of the SMEs on behalf of the S.P.C. This is correct, since the S.P.C. focus their interest on: Ø Information (the Public sector). Ø E.U. programs (private bodies).
The reason is that SMEs do not want to or cannot pay for other services, because they do not believe in their effectiveness. Here, it must also be noted that the majority of Greek businessmen are technicians or originate from technical fields, with only basic knowledge of the market. They are usually concerned about the daily work flow and do not have time or a clear mind to think or to act as true businessmen that are interested in the growth of their enterprise with objectives and plans.
Research of Services Provided to SME 57 November 2000 CHAPTER III EOMMEX
3.5 GAPS AND PRICING POLICIES FOR SERVICES
A very significant point of reference in the gap that exists between SMEs and S.P.C. is the cost of services, and therefore, their payment. SMEs either expect free provision of services or they do not want to pay. The respective questions of the study show this attitude clearly (questions 4,6,8,18,19 – Questionnaire for SMEs).
The responses to these questions statistically show that there is no standard method of charging and naturally, there are no payment criteria or procedures that the SME could follow.
3.6 SERVICES WITH THE HIGHEST DEMAND FROM THE PART OF THE SMES
The 5 most significant types of services, as recorded by the study and mentioned in Table 1 of the questionnaire (questions 1,2,3,4 – Questionnaire for SMEs) are: 1. Consulting services on specific subjects (ISO, sales, marketing) (40%) 2. Financing sources (36%) 3. Subsidies (34,6%) 4. Financial issues (34%) 5. Promotion – Product design (18,6%)
SERVICES WITH THE GREATEST DEMAND
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% CONSULTING FINANCING SOURCES SUBSIDIES FINANCIAL ISSUES PROMOTION - SERVICES ON PRODUCT DESIGN SPECIFIC SUBJECTS
Research of Services Provided to SME 58 November 2000 EOMMEX
CHAPTER IV
ANALYSIS OF THE RECOGNISABILITY OF SERVICES
Research of Services Provided to SME 59 November 2000 CHAPTER IV EOMMEX
4. VISIBILITY OF SERVICES 4.1 SERVICE PROVIDING COMPANIES (S.P.C.)
The primary data research proved that there are no services, provided by business consultants that are not recorded in Table 14 (questions 1, 3, 5 – Questionnaire for SMEs) of the questionnaire. In the same table, services provided, as well as the participation percentage of each service in the Service Providing Company turnover are noted. Furthermore, in the same table, the services that advertise themselves more or less are noted. It is noted that there are no limits to the advertisement that would restrict the capability of S.P.C. to obtain new clients. From the results of the study, as these appear in the same table, it is concluded that the services provided most often are, in order of priority:
ü New financing sources and applications for subsidies ü Operational planning and services in functional areas of the business activities (marketing, planning, financial services, production, accounting, etc.) ü Business strategy / restructure / reorganisation ü Consultant services in specific areas (general management / administration, quality, health & safety, etc.) ü Follow – up.
In the second column of the same table, the participation percentages of each service in the turnover are indicated, which in order of priority are:
ü Consultant services in functional areas of business activities (marketing, planning, etc.) ü New financing sources, applications for subsidies ü Consultant services in specific areas (general management / administration, quality, etc.) ü Business planning ü Follow - up
4 See annex page 16. Research of Services Provided to SME 60 November 2000 CHAPTER IV EOMMEX
In the fourth column of the same table, the services provided that advertise more or less are shown. The greatest promotion – advertisement is done for:
ü New financing sources and applications for subsidies ü Consultant services in functional areas of business activities (marketing, planning, finance, production, accounting, etc.) ü Operational planning ü Consultant services in specific areas (general management / administration, quality, health & safety, etc.) ü Business strategy / restructure / reorganisation ü Manufacturing installations, perfection of production, ensuring quality – Conferences, Seminars.
Service offices, in order to inform and attract prospective clients, use advertisement and communication methods relevant to the services they provide.
Regarding the frequency of use, the following evaluation values were used: · frequent use 1 · occasional use 2 · rare or no use 3 (see Table 2)
Regarding the effect – results of the various communication sources, the following evaluation values were used (see Table 2): · high client impact 1 · medium client impact 2 · large diffusion 3
Research of Services Provided to SME 61 November 2000 CHAPTER IV EOMMEX
TABLE 2: FREQUENCY & RESULTS OF COMMUNICATION MEANS
Frequency Effect
Result
% %
Direct contact (in writing, by phone…) 1 90 1 75
2 10 2 25
3 0 3 0
Visits to the business installations 1 62 1 87
2 38 2 13
3 0 3 0
Advertisements in the daily Press, phone catalogues, etc. 1 17 1 12
2 43 2 52
3 40 3 36
Advertisements in technical newspapers 1 5 1 9
2 29 2 55
3 66 3 36
Advertisements is specialised magazines “catalogues” 1 4 1 13
2 26 2 39
3 70 3 48
Specialised subscription magazines, conferences, etc. 1 14 1 25
2 33 2 40
3 53 3 35
Internet 1 32 1 11
2 16 2 17
3 52 3 72
Presentations in fares, specialised exhibitions, etc.. 1 18 1 39
2 29 2 28
3 53 3 33
Other 1 20 1 33
2 40 2 33
3 40 3 33
For Public services – Promotion in Governmental issues / publications, television, 1 14 1 14 advertising in the mass media, etc. 2 29 2 29
3 57 3 57
Research of Services Provided to SME 62 November 2000 CHAPTER IV EOMMEX
The results of the study regarding the frequent use of promotion and advertisement and their results are shown in Table 2.
The greatest percentages for service use frequency and effect – result of advertising and promotion means are gathered by: v direct contact with the clients, & v visits to the business installations.
Research of Services Provided to SME 63 November 2000 CHAPTER IV EOMMEX
4.2 SMES
Ø Communication and promotional tools
The Support Service Market is a relatively new field in Greece. Furthermore, it originates mainly from the Public sector, which made use of S.P.C. on a certain scale. Therefore, the corresponding tools for the promotion of services (like those used in Europe and the USA) have not yet been a matter of top priority in the Support Service Market.
Furthermore, the indifference of the Public sector (regarding advertising and promotion) and the size of the large Service Providing Companies create a grey image and consequently, affect smaller companies in acting accordingly.
The main advertising method used widely in Greece is that of verbal contact (mouth to mouth) through acquaintances and already existing clients.
Question 4 shows that SMEs believe that the services provided to them are very expensive. If one adds to this their ignorance as to what kind of services they truly want, then we have a clear picture of the reason that SMEs do not take advantage of the services provided.
The S.P.C. are free to publicize, advertise, and generally to make use of any method they consider good for their work. The service sector in Greece in the last 10 years has been developed drastically and consultants are now considered part of the business activities of the SMEs (questions 8, 9, 10 – Questionnaire for SMEs).
Since modern methods of promotion do not have widespread use, their effectiveness in not significant. However, the tendency to use such methods is increasing, since competition is growing and the issue of survival is raised for the S.P.C.
Research of Services Provided to SME 64 November 2000 CHAPTER IV EOMMEX
Another weakness demonstrated by the study is that S.P.C. act without clear aims or direction. This means that transparency does not exist. Each one claims that it can offer qualitative services with practical results, but it does not mention specifically what those results are or how they can be measured in quantitative or qualitative levels.
Generally, the tendency of S.P.C. is to attract clients by the method of personal contact or through their already existing clientele, and to a lesser degree do they make use of modern advertisement and promotion methods for their company.
The use of the INTERNET and the WEB SITE is a new method for promotion. However, it is still at an infant level. SMEs especially, need time in order to become accustomed to the use of these methods.
Research of Services Provided to SME 65 November 2000 EOMMEX
CHAPTER V
ANALYSIS OF THE QUALITY
Research of Services Provided to SME 66 November 2000 CHAPTER V EOMMEX
5. QUALITY OF SERVICES OFFERED
5.1 SERVICE PROVIDING COMPANIES (S.P.C.) 5.1.1 Pricing Policy
The way consulting firms render their services to SME is either personally, at a percentage of 43.66% or in various other ways, corresponding to the service provided at a percentage of 30.98%. The rest of the percentages are distributed: 15.49% in cooperation with other S.P.C. and 9.85% as subcontractors.
WAYS OF PROVIDING SERVICES
PERSONALLY
OTHER WAYS CORRESPONDING TO 9.9% THE SERVICE PROVIDED 15.5% 43.7% IN COOPERATION WITH OTHER SERVICE BODIES
31.0% AS SUBCONTRACTORS
Research of Services Provided to SME 67 November 2000 CHAPTER V EOMMEX
Consulting firms provide their services to SMEs mainly upon request by the SMEs, at a percentage of 33.76% and in combination of various cases at a percentage of 36.36%. Furthermore, they render their services on a regular basis for certain business activities (accounting, legal matters) at a percentage of 18.18% and 11.68% within predetermined deadlines, in accordance with the project contract.
SERVICE DEMAND (TIME/METHOD)
11,7% 33,8% 18,2%
36,4%
UPON REQUEST
IN COMBINATION OF VARIOUS CASES
ON A REGULAR BASIS FOR CERTAIN ACTIVITIES
WITHIN PREDETERMNED DEADLINES IN ACCORDANCE WITH THE PROJECT CONTRACT
Research of Services Provided to SME 68 November 2000 CHAPTER V EOMMEX
The existence of a predetermined pricing policy for calculating the cost of the support services that the consulting firms provide is preferred up to the percentage of 27.45%, upon agreement between the Service Body and the SME on the price – cost is preferred up to the percentage of 42.55% and the remaining 29.78%, in accordance with the type of support provided.
PRICING POLICY
29,8% 27,7%
42,6%
PREDETERMINED PRICING POLICY UPON MUTUAL AGREEMENT ON THE PRICE IN ACCORDANCE WITH THE TYPE OF SUPPORT
Research of Services Provided to SME 69 November 2000 CHAPTER V EOMMEX
The determination of the prices and the services provided by consulting firms is made: ¨ on the basis of a mixed system of regular fees and on the basis of a percentage according to the results (33,89%) ¨ on the basis of a fixed amount (22.03%) ¨ on the basis of a price list for rendering the various types of support services (18,64%) ¨ per occupational hour of the Service Body (10.16%) ¨ other ways (15,24%).
DETERMINATION OF PRICES
15,2% 33,9% 10,2%
18,6% 22,0%
BASED ON A MIXED SYSTEM BASED ON A FIXED AMOUNT BASED ON A PRICE LIST FOR THE VARIOUS SERVICES PER OCCUPATIONAL HOUR OTHER WAYS
Research of Services Provided to SME 70 November 2000 CHAPTER V EOMMEX
Individuals that usually contribute to the provision of services are employees and executives of the Service Providing Companies (42.42%), individual employees (13.63%), professionals from other companies (12.12%), and others (31.81%).
INDIVIDUALS PROVIDING SERVICES
SERVICE PROVIDING COMPANIES' EMPLOYEES & EXECUTIVES 31,8% INDIVIDUAL EMPLOYEES 42,4%
PROFESSIONALS FROM OTHER COMPANIES 12,1% 13,6% OTHERS
The location where meetings take place for direct provision of advisory services is: · Enterprise offices (48.57%) · Enterprise installations (44.28%) · Other locations (7.14%).
LOCATION FOR SERVICE PROVISION
7% OFFICES 49% ENTERPRISE`S INSTALLATIONS 44% OTHER LOCATIONS
Research of Services Provided to SME 71 November 2000 CHAPTER V EOMMEX
The quality standards applied by consulting firms in the provision of their services are: ¨ Standards developed by the consulting firm itself (58.49%). ¨ Standards established by the professional association of Service Companies (22.64%) ¨ ISO standards (13.20%) ¨ Other standards (5.66%).
QUALITY ASSURANCE SPECIFICATIONS
STANDARDS OF THE FIRM ITSELF 5,7% 13,2% PROFESSIONAL ASSOCIATION OF SERVICE COMPANY STANDARDS ISO STANDARDS 22,6% 58,5%
OTHER STANDARDS
Research of Services Provided to SME 72 November 2000 CHAPTER V EOMMEX
5.1.2 Qualitative Criteria
In order for the consultant offices to offer qualitative services to the SME, they take into account the following criteria in order of importance:
ü The satisfaction of the real needs of the SMEs (16.46%) ü The Service Agency’s professionalism during its communication with the SMEs (14.85%) ü The reliability of the consultant offices (12.85%). ü The respect of deadlines in the provision of services (12.04%). ü Determining the quality of services (10.84%). ü The availability of the consultant offices during the period when the work for the provision of services is in progress (9.63%), as well as the support from the part of the consultant offices in the follow – up phase, after completion of the provision of services (9.63%). ü Upholding the previously agreed upon budget for the services (8.03%), and ü Flexibility in the execution and delivery of services (change of time schedule and content of the services provided) (5.62%).
5,62% 8,03% 16,47%
9,63% 14,86%
9,63%
10,85% 12,86% 12,05% SATISFACTION OF REAL NEEDS PROFESSIONALISM RELIABILITY RESPECT OF DEADLINES DETERMINATION OF QUALITY OF SERVICES AVAILABILITY OF CONSULTANTS WHILE THE WORK IS IN PROGRESS SUPPORT IN FOLLOW-UP PHASE UPHOLDING BUDGET FLEXIBILITY
Research of Services Provided to SME 73 November 2000 CHAPTER V EOMMEX
Upon completion of the service rendered, the consulting firms often converse with SMEs regarding their degree of satisfaction from the services provided and more specifically:
Ø Conversation is a constant element of the provision of support services (56%) & Ø Conversation is held on a case-to-case basis (40%) Ø No conversation – as a tradition (4%).
FOLLOW-UP OF SERVICES PROVIDED
CONVERSE CONSTANTLY WITHIN TE 4% FRAMEWORK OF THE SUPPORT SERVICES 40% CONVERSE ON A CASE- TO-CASE BASIS
56% DO NOT CONVERSE
Research of Services Provided to SME 74 November 2000 CHAPTER V EOMMEX
5.1.3 Level of Quality
To the question whether the pre-determination of the quality of the services provided would increase their demand from the part of the SME’s, of the 42 responses, 17 replied in the negative (40,5%) and 25 in the positive (59.5%).
INCREASE OF DEMAND / PRE-DETERMINATION OF THE QUALITY OF SERVICES PROVIDED
41%
59%
THE PRE-DETERMINATION OF QUALITY WOULD INCREASE DEMAND THE PRE-DETERMINATION OF QUALITY WOULD NOT INCREASE DEMAND
Research of Services Provided to SME 75 November 2000 CHAPTER V EOMMEX
Furthermore, they would prefer that the quality be in relation with the following: ¨ Model brands (11%) ¨ Trade Marks (6%) ¨ Agreed upon quality criteria for the services provided (20%) ¨ Specific pricing (13%) ¨ A code of ethics for the entire E.U. (50%)
QUALITY CRITIREA FOR INCREASE OF THE DEMAND FOR SERVICES
11% 6%
50% 20%
13%
MODEL BRANDS TRADE MARKS AGREED UPON QUALITY CRITERIA FOR THE SERVICES PROVIDED SPECIFIC PRICING ETHICS CODE FOR THE ENTIRE E.U.
The creation of quality standards relevant to services provided for the entire E.U. is desirable at a percentage of 82%, it is of minor importance at a percentage of 10%, and it is undesirable at a percentage of 8%.
CREATION OF QUALITY STANDARDS FOR THE E.U.?
8% 10%
DESIRABLE OF LITTLE IMPORTANCE UNDESIRABLE
82%
Research of Services Provided to SME 76 November 2000 CHAPTER V EOMMEX
5.1.4 Service Demand
The responses to the study on whether there are some areas for which the consulting firms would especially desire the creation of standards in the entire E.U., are the following and concern: v The sector of Consultants and direct support (determination of strategy, exports and globalisation) (25.40%). v Information (15.57%). v Services linked to Technology (13.93%) v …and Education -- Training (13.93%). v The financial sector (13.11%). v Logistics, machines – equipment (10.65%). v Environmental issues (7.37%).
CREATION OF SPECIAL QUALITY STANDARDS FOR SERVICES PROVIDED
7.4% 10.7% 25.4%
13.1%
15.6% 13.9% 13.9%
AREA OF CONSULTANTS & DIRECT SUPPORT INFORMATION TECHNOLOGY EDUCATION - TRAINING FINANCE LOGISTICS ENVIRONMENTAL ISSUES
Research of Services Provided to SME 77 November 2000 CHAPTER V EOMMEX
5.2 SMES
5.2.1 Pricing Policy
Questions 11 and 12 show that for the SMEs there are inequalities among the S.P.C. They believe that S.P.C. provide general services and that these services are provided only upon specific request and less on the basis of a steady relation.
They also believe (question 13 – Questionnaire for SMEs) that they cannot find the appropriate Service Body for their needs or that Service Bodies don’t have the qualitative foundation that the SME expect to find.
The services rendered by the Public sector are usually for free. Private bodies charge for their services on a per case basis. Question 18 shows that the preferences of the SME as far as payment is concerned are the following, in order of significance: · Fixed monthly salary and % on the results (26%). · Based on a price list (23%). · A percentage on the results (21%). · Previously agreed upon fee, payable either at the beginning or at the end of the project (15%). · Other methods of payment (6%).
WAYS OF PAYING SERVICE BODIES BY SME
30% 25% 20% 15% 10% 5% 0% MONTHLY SALARY & BASED ON A PRICE PERCENTAGE ON PREVIOUSLY OTHER METHODS OF PERCENTAGE ON LIST THE RESULTS AGREED UPON FEE PAYMENT THE RESULTS
Research of Services Provided to SME 78 November 2000 CHAPTER V EOMMEX
The relationship of cost to quality is classified as follows: ü Reasonable (40%). ü High (24%). ü Not clear (10%). ü Other (6%).
EVALUATION OF THE COST/QUALITY RELATION OF SERVICES RENDERED BY SMEs
45%
40%
35%
30%
25%
20%
15%
10%
5%
0% REASONABLE HIGH NOT CLEAR OTHER
Research of Services Provided to SME 79 November 2000 CHAPTER V EOMMEX
5.2.2 Who does what
Specialisation is the main issue. S.P.C. usually provide their services through specialised executives who originate from all the scientific fields. The majority are engineers and economists. State S.P.C. use their employees for rendering of services and that is one of their weak points vis a vis the private companies.
There is no certification for specialisation. Any University graduate (at least and not only that) who has been involved in a consulting project of any kind and form, may consider himself as a specialist and provide services.
5.2.3 Qualitative Criteria and Services
The responses to questions 14 and 15 (Questionnaire for SMEs) show that the qualitative criteria for the services rendered, according to the SMEs, should be the following, in order of significance:
· The professionalism of the firm (50%). · Punctuality in deadlines (45%). · Satisfaction of true needs ( 43%). · Pinpointing of true needs (35%). · Availability of the Service firm (26%). · Other.
Research of Services Provided to SME 80 November 2000 CHAPTER V EOMMEX
CRITERIA CONSIDERED BY SME FOR THE SELECTION OF A SERVICE BODY
60%
50%
40%
30%
20%
10%
0%
S S S D INE ILITY B THER NALISM A O L O EADL D VAI A ON ROFESI Y ING TRUE NEE P Y F INTING TRUE NEED O ATIS P S IN P UNCTUALIT P
On the subject of increased demand of services, the qualitative criteria in the order of significance are: · Predetermined level of quality (48%). · Existence of a code of ethics (43%). · Trade marks (35%). · Creation of quality criteria (26%).
THE MOST SIGNIFICANT SMEs CRITERIA FOR SELECTING A SERVICE BODY
60%
50%
40%
30%
20%
10%
0% PREDETERMINED EXISTENCE OF A TRADE MARKS CREATION OF LEVEL OF QUALITY CODE OF ETHICS QUALITY CRITERIA
Research of Services Provided to SME 81 November 2000 CHAPTER V EOMMEX
The responses to these questions show clearly the existing problem, that is, that there are no predetermined work criteria for S.P.C. This is reasonable, since the service market in Greece is relatively new. Its rapid growth created a need for specialists that had to be filled quickly. Consequently, quality criteria were not of the first priority in order to get the job done.
Now, however, the market is entering a new phase of maturity. Quality criteria are the next phase of creation and the market is moving to that direction. Competition is intense, and only those who can provide high quality services will remain alive in the market. SMEs recognise the fact that in order to have results, they must cooperate with the S.P.C., which will support them through their entire business course.
5.2.4 Communication, Strategies, Follow – Up
Having understood the need for certification, S.P.C. use various methods and strategies, which are based on their specialisation, their field and the client they have to do with. The most common strategy is application for ISO for the operation of internal organisation, so that they can minimise their cost and increase their effectiveness.
Another common strategy and method is the continuous update on developments, seminars, conferences and other professional events that are relevant to their work.
Communication with the client is common for everyone. All contemporary forms of communication are used by S.P.C..
Usually, contact with the client is made in the offices of the latter. This is reasonable, since most S.P.C. do not have meeting rooms available.
Research of Services Provided to SME 82 November 2000 CHAPTER V EOMMEX
Usually, S.P.C. do not follow a policy of following up on the results after the end of the project, unless the client requests it. This is true for the majority of small SMEs. This, also, is a contradiction and grievance from the part of the SMEs, as far as the services provided by S.P.C. are concerned.
5.2.5 Common Quality Elements for SMEs in the E.U.
SMEs are willing to increase demand for services if quality criteria for S.P.C. are set. They believe that in this way, the good will be separated from the bad and that they will have only benefits from that. Most of the responses to question 16 are YES.
SMEs also want to have quality criteria set to the following fields of specialisation (question 17 - Questionnaire for SMEs). Ø Financing. Ø Technology. Ø Equipment – Advice -- Specialisation. Ø Training. Ø Computing.
Research of Services Provided to SME 83 November 2000 EOMMEX
CHAPTER VI
CONCLUSIONS
Research of Services Provided to SME 84 November 2000 CHAPTER VI EOMMEX
6. CONCLUSIONS
The new circumstances that have arisen in the international economical environment due to the opening of markets are producing new situations in which businesses have to react quickly and efficiently in order to face new challenges (opportunities and dangers). The utilization of information is the tool for achieving progress and development for businesses. The incomplete structure of Greek SMEs renders their need to collaborate with Service Providing Companies imminent, since they are the ones who posses the necessary experience and know-how, following methods and practices that are capable of ensuring the growth of SMEs. During the course of the market research in SMEs and SPCs and by comparing their views we observed the following.
ü The service providing sector has shown a respectable growth over the past few years in Greece as a result of the keen competition imposed on organized Greek enterprises. Modern services such as those offered in other countries and markets are provided only by some SPCs in the Greek service providing market.
ü The fact that most Greek SMEs, especially the organized ones, as well as most specialized consulting offices are located in Athens and Thessaloniki, creates an accessibility difficulty to the service market for enterprises on a Regional level and as a result the range of products (services) offered is restricted to the most common and recurring (accounting, etc.)
ü The problems that appear in Regional Greece are brought about mostly: - by the size of SMEs (small – non organized) - by the lack of interest of SMEs for the service market - by the lack of knowledge of SMEs on modern business and its needs, in order to survive in a competitive environment, national and/or international.
Research of Services Provided to SME 85 November 2000 CHAPTER VI EOMMEX
ü Local authorities (Chambers – Municipalities - Prefectures etc.) can supply basic information and not in depth diagnosis, analysis and help for SMEs.
ü In Regional Greece the type of services offered are mostly: - accounting services and - general information for SMEs (primarily from local Chambers)
ü The difficulties that SPCs have to overcome when providing their services to SMEs are: a. the small size of Greek SMEs b. the lack of knowledge regarding the specific role of SPCs and the benefits that SMEs can acquire by collaborating with them c. financial difficulties for the payment of SPCs’ services d. the fact that SMEs consider the services offered by SPCs nonessential and of a low standard
ü SMEs that use SPCs and their services quite often are those that show: - a satisfying level of organization and management - a large size for an SME (more than ten employees) - planning and goals for the development of the enterprise - administrative provision / action on information, development and matters related to the market etc. - knowledge of the market - use of modern methods and tools (Internet, Ensuring Quality, etc.)
ü The services usually offered by SPCs concern: - new financing sources / subsidies - operational planning - business strategy - follow-up - restructure - developmental programs - quality
Research of Services Provided to SME 86 November 2000 CHAPTER VI EOMMEX
ü It should be noted that there are no restricting measures for advertising – promoting of services to constrain the ability of SPCs to attract new customers.
ü The areas that attract most of the interest for advertisement and promotion are: - new financing sources and subsidies - services in functional areas (marketing, production, accounting, reorganisation, etc.) - operational planning - services in specific areas (quality, health & safety, etc.) - business strategy - perfection of production, ensuring quality, etc. - training
ü The frequency of use of consulting services and the effect of their promotion – advertisement are effectuated through: - the direct contact between SMEs and SPCs - visits to the business installations of SMEs
ü Nevertheless, the lack of advertisement and promotion of SPCs’ services is evident. One of its causes is the lack, on the part of SPCs, of interest regarding the promotion of their services for SMEs. Puclic and semi-public SPCs make no effort of advertising and promoting the services they provide apart from the measures enforced on them by the state. The lack of interest and competition makes these organisations inflexible and restricts them to services of a purely bureaucratic model. On the other hand, private SPCs try to survive through personal contacts and acquaintances. Only a few and rather large Service Providing Companies, which are linked to similar companies abroad, publicise their products and profile allocating sufficient funds towards this end. Such companies however are mostly directed towards large clients (SMEs).
Research of Services Provided to SME 87 November 2000 CHAPTER VI EOMMEX
ü Quality standards that SPCs apply when providing their services are: - standards developed and applied by the SPCs themselves - standards established by the professional associations of SPCs
ü The criteria that SPCs take into account when supplying their services and SMEs when demanding them are: - the tracing and satisfaction of the real needs of the SMEs - the professionalism and reliability of SPCs - the availability and the support of the SPCs during the application – realisation of the undertakings and business plans of SMEs ,as well as the respect of deadlines of such undertakings. - the determination of the quality of services (a predetermined quality level of services would increase their demand).
ü The creation of a quality standard related to the services provided for the whole of the E.C. is wanted both by SPCs and SMEs.
ü The pricing policy applied by SPCs upon agreement with SMEs is a mixed system of regular fees and a percentage according to results. This of course does not exclude other types of pricing that satisfy both parts since reluctance towards SPCs is a given for SMEs.
Research of Services Provided to SME 88 November 2000 CHAPTER VII EOMMEX
CHAPTER VII
ACTION PLAN - PROPOSALS
Research of Services Provided to SME 89 November 2000 CHAPTER VII EOMMEX
7. PLAN OF ACTION FOR INCREASING THE EFFECTIVENESS OF SERVICES PROVIDED - PROPOSALS
The study team, after taking into account the above mentioned, proposes a series of measures that can be taken and deal with the problems encountered, as well as strengthening the supply and demand of the services provided.
Specifically, these measures are aimed at: A. Improving the services rendered by SPC (SERVICE PROVIDING COMPANIES) B. Increasing the demand for services and creating a competitive environment C. Improving the visibility and the quality of Services provided D. Providing financial tools to SMEs for the services provided by SPC.
1. Information – Dissemination – Promotion
ü Dissemination of the results of the research to SPC located in the various Regions.
ü Publishing in the Daily Financial Press of the conclusions of the Research.
ü Organising meetings to inform SMEs at a Regional level regarding SPC.
Research of Services Provided to SME 90 November 2000 CHAPTER VII EOMMEX
2. Common European Policy
ü Defining European quality standards for all types of services provided.
ü First approach attempt to define a common price list for the services provided.
ü Designing of a European program for assisting enterprises (SMEs and Micros) in accordance with the criteria of the research in order to facilitate the access to the Services rendered by SPC.
3. Common Advertisement and Promotion of the Services Rendered by the Service Companies at a Regional Level
ü EOMMEX will take the initiative, in cooperation with the collective bodies of the SPC to draw up a Code of Ethics.
ü EOMMEX will restructure and enrich the SPC Registry.
ü Entry of the Registry into the Internet and creation of a web page in Greek and in English.
ü Creation of a database at EOMMEX that will contain informational material necessary to SPC. The Database will be linked with a common European Database.
4. Common One Stop Information and Service Units
ü Examination of the possibility of a linkage among the existing European One Stop Information and Service Units.
ü Informing and training the executive force of these Units for the improvement of the level of Services provided by them and the exchange of best practices.
Research of Services Provided to SME 91 November 2000 CHAPTER VII EOMMEX
5. Comparative evaluation of the results of best practices ü Best practice for SMEs ü Best practice for SPC ü Comparative evaluation for SMEs ü Comparative evaluation for SPC
6. Within the framework of the National Conference for SMEs, organised by EOMMEX, the level of cooperation between SMEs and SPC should be examined, as well as the prospects for the qualitative improvement of their cooperation.
Research of Services Provided to SME 92 November 2000 BIBLIOGRAPHY EOMMEX
BIBLIOGRAPHY
¨ KERDOS, “Business Consultants”, Special Annual Issue 1998 ¨ KERDOS, “Business Consultants”, Special Annual Issue 1999 ¨ EXPRESS, “Business Consultants”, Special Annual Issue. 1997 ¨ EXPRESS, “Business Consultants”, Special Annual Issue. 1998 ¨ Study of the Greek Business Consultant Service Market, Ministry of the National Economy – UNIVERSITY OF PIRAEUS – INTERACTION S.A., 1990 ¨ Hellenic National Statistical Services 1988, 1998 ¨ EPILOGI MAGAZINE, “The Departments of Greece”, 1998 ¨ FEACO MANAGEMENT SURVEY, 1998
Research of Services Provided to SME 93 November 2000 EOMMEX
ANNEXES
Research of Services Provided to SME 94 November 2000 EOMMEX
Research of Services Provided to SME 95 November 2000 EOMMEX
Research of Services Provided to SME 96 November 2000 EOMMEX
Research of Services Provided to SME 97 November 2000 EOMMEX
Research of Services Provided to SME 98 November 2000 EOMMEX
Research of Services Provided to SME 99 November 2000 EOMMEX
Research of Services Provided to SME 100 November 2000 EOMMEX
Research of Services Provided to SME 101 November 2000 EOMMEX
Research of Services Provided to SME 102 November 2000 EOMMEX
Research of Services Provided to SME 103 November 2000 EOMMEX
Research of Services Provided to SME 104 November 2000 EOMMEX
Research of Services Provided to SME 105 November 2000 EOMMEX
Research of Services Provided to SME 106 November 2000 EOMMEX
Research of Services Provided to SME 107 November 2000 EOMMEX
Research of Services Provided to SME 108 November 2000 EOMMEX
Research of Services Provided to SME 109 November 2000 EOMMEX
Research of Services Provided to SME 110 November 2000 EOMMEX
Research of Services Provided to SME 111 November 2000 EOMMEX
Research of Services Provided to SME 112 November 2000