E-commerce threatened by funded bodies
Currently, there is a lot of consternation amongst local IT businesses here in Lancaster. In fact, they are extremely angry. They have realised that the local university is actually in direct competition with them. The programme is called ISIS and it offers help to businesses for software development, websites and web-based applications, amongst other things. http://www.infolab21.lancs.ac.uk/business/isis/
Clearly, as businesses, we have competitors and competition from many places. So one more competitor, why worry?
Well, in this case, the anger of the local digital and IT business community has been awoken due to two key factors. Firstly, the university has a high profile in the local business community, has worked in conjunction with local IT businesses as a facilitator for many years and has benefited from funding with a clear remit to involve local businesses in its IT strategy. For companies previously involved with the University they see this as a betrayal.
More importantly, the services the University offers are provided using funding. Many digital and IT businesses are small in nature, typically with less than 10 employees, founded by entrepreneurs who have worked hard to market their IT services and win business in a cutthroat commercial world. Is it right that they also have to compete with an educational establishment with vast resources? Not only that, they are competing with a university offering the same kind of services as they are but the Uni has the benefit of government funding for this particular initiative to offer and provide the services in the first place!
It’s clear that calls of “not fair” would seem to be justified. But to further add insult to injury, the university are offering their services - which include e-commerce websites, software development, prototype development amongst other things - for free. How can a commercial business offering similar services complete with a funded institution offering the same things at no cost?
It does seem a contradiction that millions of pounds are provided by government and the EU offering funding to stimulate business, to support new and growing companies and to encourage innovation and growth in the business sector, but at the same time funding is also provided to educational establishments to compete directly with the same businesses on what appears to be a very “unlevel” playing field.
In the past, our business spent a considerable amount of time developing and marketing educational software and extranets. We learnt to our dismay that the BBC had been allowed to compete directly in the same market. It was galling to learn that an institution funded by the TV licence fee payer was allowed to compete directly with companies such as us - what chance did we have? This decision was referred to the EU for consideration as to whether the BBC entering the marketplace was just competition; the decision was made in favour of the BBC nevertheless. But this made us more determined - we focused on what we did well and on our strengths. Even though we eventually reduced our efforts in this market, our focus on the benefits of our service rather than concern of unfair competition meant we still won business. This still contributes to the business today several years on.
Back to today. What initially was perceived as a threat form the University could actually be beneficial for us directly which seems a more positive way of looking at the situation. Our business is of the size whereby we may actually be able to take advantage of this new offering from the University. So, whereas I can see the viewpoint of local business and can totally understand their anger, two thoughts come to mind.
Rather than worrying about which customers may be lost to the University, is it not just another reason to focus on our own offerings as companies? Should we not take this opportunity to make sure that we are delivering customer value and customer service whilst also scrutinising our own unique selling points, marketing and sales strategies in order to strengthen our position? Initiatives from universities in the commercial world always lack a certain experience and finesse, and this one doesn’t appear to be promoted aggressively. With limited places for businesses to take advantage, the threat is at worst a temporary one.
When you read the University offering more closely, it is directly linked to performing a transformational ICT role and projects lying outside its remit would not qualify for their help. Even though this may represent a threat to certain projects which commercial companies would hope to win, it would seem that any project would need to tick this “transformational ICT” box and as such, contracts under threat from the University offering may be significantly less than perceived.
Furthermore, any business with five or more employees may be considered under the university’s project. For local IT businesses of that size, why not consider using their funding to help strengthen your own position?
The wider point here is why does the UK government fund educational and public bodies to compete with small and medium businesses. It seems a total contradiction. Nevertheless on a local level, the University here does engage well with local IT business and the threat of their offering is probably not anywhere near as great as perceived. This company favours continued engagement and partnership, as the benefits outweigh the negatives.
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