Seamless IT and Communications Networks are Key to Global Business Expansion
AT&T says that the integration of communications and IT networks is critical to making global expansion work, according to the results of a global survey conducted by the Economist Intelligence Unit (EIU) on behalf of AT&T.
The worldwide survey of 497 senior executives reveals that 42 percent of firms will be deriving half or more of their revenue from foreign markets within two years, compared to 30 percent of firms that can claim this today. Emerging markets such as China and India figure prominently as the overseas destinations of greatest interest, but developed nations -- especially the United States -- also continue to be of focus for companies aiming to expand in the global marketplace.
Key findings also show that mergers and acquisitions (M&A) are highly favoured as a growth vehicle by respondents -- 40 percent considered this part of their company's international growth strategy during the next two years. However, the difficulty of integrating communications and IT networks is identified as a common M&A pitfall by 13 percent of those polled. IT and network integration can indeed make or break a cross-border merger.
Overall, the survey exposes the centrality of IT and network capabilities to successful globalisation. Companies today realise their growth abroad must be supported by corresponding IT and network investment. To enable expansion, one in five companies plans to increase investment in its network during the next two years by more than 25 percent, and another 43 percent of surveyed executives say their companies will boost spending between 10 percent and 25 percent.
"It is clear from this research that globalisation is really hitting its stride," said Geoff Webster, AT&T vice president, Global Ventures and Business Development. "Where global expansion is concerned, M&As seem to be particularly favoured by senior executives. And a crucial part of an M&A is how the technology is put together. The advanced IP networking technologies available today make possible a level of visibility and control of disparate global operations not available a decade ago, and these make it much more effective for transition and integration and, ultimately, a successful M&A."
"The potential rewards of global expansion are immense, from revenue windfalls in high-growth emerging markets to substantial efficiencies from the use of overseas suppliers and services providers," said Denis McCauley, director of Global Technology Research with the Economist Intelligence Unit. "But in order to harness this, companies need to think not only about using clear management thinking and flexible structures but also the right technology for the job."
The full results of the survey are published by AT&T in a white paper entitled "Meeting the challenges of global expansion". Copies of the white paper can be downloaded from the AT&T Web site at http://www.att.com/emea/insights/whitepaper/s5_globalization.html (free registration required)
Posted to the site on 3rd October 2007
