SPECIFIC CHALLENGES FOR SMALL AND MEDIUM-SIZED

ENTERPRISES (SME) IN M-BUSINESS

A SME-suitable Framework for Mobile Services

Michael Decker, Gunther Schiefer, Rebecca Bulander

Institute AIFB, University of Karlsruhe, Englerstr. 11, 76 128 Karlsruhe, Germany

Keywords: Platforms/frameworks for mobile and wireless services, value added mobile data services, Small and

Medium-sized Enterprises (SME).

Abstract: It seems to be a widely accepted notion that Small and Medium-sized Enterprises (SME) play an important

economic and social role and often contribute to innovation. But at the present situation the development

and operation of a service to be used with mobile and wireless terminals (mobile service) is not bearable for

most of them due to technical reasons and the market structure. In this article we will discuss the SME-

specific obstacles in m-business. We will also propose a technical framework as remedy for this situation.

1 INTRODUCTION

Small and medium-sized enterprises (SME)

represent 99 % of all enterprises in the Europe

Union (European Union, 2006) and play thus an

important role in the economy as well as in society.

But at the current state-of-the-art and market

situation in many European countries it is very hard

for them to set up data services to be used with

mobile and wireless terminals like cellular phones,

PDAs or smartphones.

In our opinion this is one of the main reasons for

the absence of success of mobile data services in

Europe. This phenomenon is called the “European

Mobile Data Service Dilemma” (Steinert & Teufel,

2005) or “Advanced Mobile Services Paradox”

(Blechar, Constantiou & Damsgaard, 2005); the

appellation as “paradox” stems from the fact that

despite of the high penetration rates of mobile

terminals and the success of simple data services

(e.g. SMS, download of ringtones and logos)

advanced mobile services generate only a few

percent points of the revenue of mobile network

operators (Brücker et al., 2006).

In the article at hand we discuss special

characteristics of SME and the special challenges for

them when they want to develop and operate mobile

services, may it be for own use (e.g. support for

mobile workers) or for customers of the SME. As

solution we propose a technical framework, which

offers a comprehensive runtime environment for

mobile services.

The remainder of this article is organized as

follows: in the second section we discuss definitions

of SME and their characteristics; section three

covers our comprehension of mobile services. SME-

specific challenges when dealing with mobile

services are covered in section four. Our proposed

solution approach — a technical framework for

mobile services — is sketched in section five.

Section six gives an overview about related work,

before we summarize and conclude in the last

section.

2 CHARACTERISTICS OF SME

According to the European Union (2003) SME are

defined as enterprises which have at most 250

employees and an annual turnover not exceeding 50

million Euros. Further there is the distinction of

small enterprises — they have fewer than 50 staff

members and less than 10 million Euros of turnover

— and micro-enterprises (less than 10 persons and 2

million Euros of turnover). But this is by far not the

only quantitative definition of SME: other sources

define SME as businesses with fewer than 500

employees (Audretsch, 1999) or even give different

values for different sectors (Marwede, 1983; p. 45):

a industry firm is small when it has 50 employees,

169

Decker M., Schiefer G. and Bulander R. (2006).

SPECIFIC CHALLENGES FOR SMALL AND MEDIUM-SIZED ENTERPRISES (SME) IN M-BUSINESS - A SME-suitable Framework for Mobile

Services.

In Proceedings of the International Conference on e-Business, pages 169-174

DOI: 10.5220/0001427701690174

 SciTePress

but a trade business is medium-sized with more than

2 employees. Using quantitative measurements

seems at least to be easy manageable, but how do we

count employees with different level of productivity

or part time workers?

There are also definitions based on qualitative

aspects like legal form, the role of the firm’s owner,

their position on the market, the organisational

structure or economic and legal autonomy

(Marwede, 1983).

Although there is no uniform definition of SME

the notion that SME play an important economic and

social role seems to be well accepted (OECD, 1982;

Acs, 1999). This is supported by surveys which state

that 70 % of all labour relations and over 80 % of

apprenticeship training positions in the German non-

public sector are provided by SME (Günterberg &

Kayser, 2004).

While SME are not able to exploit economies of

scale at the same order of magnitude as big

enterprises can do (Audretsch, 1999) they have the

advantage of flat hierarchies and thus being very

flexible. There are many examples of SME that

contributed to major innovations (OECD, 1982, p.

12; Almeida, 1999; Audretsch, 1999). In some cases

inventions that were rejected by major firms were

later brought to market by small start-up companies.

Also SME don’t change their managers as often as

big enterprises and thus can concentrate on long-

term strategies.

SME often have high-specialized know-how in a

certain area which could be utilized for mobile

services. But they have limited resources and cannot

afford to employ highly specialized employees.

Since innovations always go together with risk big

firms have several innovations running at the same

time to diversify risk, but SME cannot do the same

(Geschka, 1997).

3 MOBILE SERVICES

3.1 Definition

The core business of mobile network operators

(MNO) is the provision of wireless communication

capacity for both voice (telephony) and data

transmission (“bit pipe”) to be used with mobile

terminals like cellular phones, PDAs and

smartphones. In the article at hand we only consider

data transmission. Mobile terminals (MT) in our

sense means “handheld device”; devices like

notebooks or tablet PCs are not considered as real

mobile terminals, because one can’t carry them

along in a ready-to-receive-state most of the day.

Examples of standards for basic wireless

communication services for data are GPRS, WiFi or

UMTS. If a service provider (in our case SME) uses

these basic services for supplying additional

information we talk about a “value added service”.

An example for such a value added service would be

a navigation service, which guides the user to

facilities in his nearer surrounding, whereas a

GPRS-connection (basic service) is used to provide

the actual navigation hints in form of WML-pages.

For the sake of simplicity we use the term “mobile

service” in the remainder of this article if we actual

mean “mobile value added data service”.

4 SPECIFIC CHALLENGES FOR

SME WHEN DEVELOPING

AND OPERATING MOBILE

SERVICES

There are some specific challenges when developing

mobile services (see also Chittaro, 2006) which are

faced by big enterprises as well as by SME:

Display quality: MT have only a small display

with low resolution and reduced colour-depth, there

is no real keyboard or a “mouse” available for user

input.

Limited Resources: MT have limited resources

like memory, cpu-power and battery capacity; the

available bandwidth for wireless data

communication will be not as good, cheap and

reliable as for wired data communication.

Data protection concerns: Wireless data

communication is more vulnerable with regard to

security threats and could be eavesdropped. There is

also the danger that a MT with sensible data on it is

lost or stolen.

But there are more challenges, which are

particular hurdles for SME because of their limited

personal as well financial resources:

Different types of mobile terminals: There is a

plethora of different types of mobile terminals. The

estimation for the number of different types of

mobile terminals in the European market is several

hundred. They all have different capabilities and

support different formats for data exchange and

programming platforms. While for Personal

Computers several minimum capabilities can be

assumed (resolution of at least 640x480, HTML-

ICE-B 2006 - INTERNATIONAL CONFERENCE ON E-BUSINESS

170

browser and keyboard/mouse available), there is still

a lack of standardization for MT. The WURFL-

project (WURFL, 2006) tries to compile a list with

the capabilities of many different types of mobiles

devices and therewith demonstrates the

heterogeneity of mobile devices in an impressive

way. So it is no wonder that Schlickum (2005)

mentions that the effort for adapting a mobile

application/service for different devices often exceed

the effort for the actual implementation of the

application. Further the cost for the acquisition and

maintenance of the required arsenal of MT shouldn’t

be underestimated and could especially for SME

impose serious problems.

Heterogeneity of underlying networks: There

is also a great heterogeneity of underlying wireless

networks and it is likely that news standards will

emerge in the next few years. A mobile service has

to be adapted for many wireless standards, which

requires more resources than SME can afford.

Dominance of the MNO: Nowadays the market

for mobile services aimed at customers is dominated

by the portals of the mobile network operators, e.g.

the i-Mode-portals available in several European

countries. It is at the disposal of the portal operator if

a service gets into their portal or not. The

negotiations with the portal provider often take

several months. We heard reports that some portal

providers seem not to be interested in working with

SME. But in most countries there is more than just

one single portal: there is one portal for the

subscriber of each mobile network operator, so the

SME has to negotiate with all MNO and adapt the

service for all portals (the portals use different

technical standards and infrastructure) to reach all

mobile subscribers in one countries. Things get

worse if a mobile service should be made available

in different countries.

Lack of expertise: Developing mobile services

requires highly specialized experts, but SME cannot

afford such experts. Also the operation of a mobile

service is still a full-time job because of the great

complexity. SME often rely on the expertise of

external IT-consultants, but they are expensive and

are only called when there are problems concerning

the IT-infrastructure required for the day-to-day

business (Marmaridis & Unhelkar, 2005).

Decision process in SME: While in big

companies decisions about new technologies are

made by special departments with experts, in SME it

is often the owner of the firm who makes such

decisions. Without technical knowledge it is even

harder to assess the potentials of new technologies.

R&D Landscape: Research and Development is

mainly aimed at the needs of big enterprises, so

there is often a lack of know-how about latest

technologies in SME (DIKMU, 2006).

Brand-Building: For success in m-commerce

(customer services with direct revenue) a well

known brand is important, but it is very difficult do

build one for SME (Strüker et al., 2003).

Our proposal for a solution to tackle these SME-

specific hurdles is the development of a special

technical framework called M

ODIFRAME

for the

provision of mobile services, which will be

introduced in the next section.

5 A SME-FRIEDNLY

FRAMEWORK FOR MOBILE

SERVICE

5.1 Architecture

The proposed framework (see figure 1) provides a

comprehensive runtime environment for mobile

services and consists of several modules:

Application router: All incoming requests are

first handled by the application router, which

analyses the service requests and forwards it to the

corresponding service provider (SME). The data

communication between the MT and the framework

may be transmitted using several standards for

wireless data communication like GPRS, EDGE,

UMTS or WiFi. During a session the

communication standard used be can changed

(“seamless roaming”).

Transcoder: A transformation module is

responsible for the adaptation (transcoding). The

actual service provider (SME) delivers the content in

a generic format and the transformation module

transcodes it to a target format that can be displayed

by the MT that submitted the request, e.g. cHTML

(for devices with i-Mode-capabilities), (X)HTML or

WML. But binary content has to be transcoded as

well: for bitmap pictures and animations it might be

necessary to reduce the resolution or colour depth,

animations could also be deanimated or have the

frame-rate reduced.

„MODIFRAME“ stands for „Mobile Dienste Framework“

(„Dienste“ is the German word for „services“)

SPECIFIC CHALLENGES FOR SMALL AND MEDIUM-SIZED ENTERPRISES (SME) IN M-BUSINESS - A

SME-suitable Framework for Mobile Services

171

Context: According to our understanding

context information for mobile computing is any

information that is available in explicit form at

runtime of a service (or application) and is used

deliberately to support the user when interacting

with his mobile device (see also Dey (2001)). Since

MT have ergonomic limitations like mentioned

above (small display, cumbersome data input) it is

especially import to have context-aware mobile

services. The framework thus provides context

services which can be used by individual services

hosted by the framework, e.g. the current position of

the user (“Location based services”), the weather

(services like tourist-guides shouldn’t recommend

outdoor-activities when it is raining all day long),

user profile or the available technical resources

(bandwidth, profile of MT, etc).

Authentication: For some services

authentication of the user might be necessary and

maybe even age verification. Unlike in the fixed-line

internet many standards for wireless communication

demand an authentication of the MT (e.g. using the

information on the SIM-card of a GSM device). This

network authentification can be used for service

authentication, so the user hasn’t to enter a username

and password like for many conventional internet

services.

Anonymisation/Pseudonymisation: The

framework can mediate a service request between

MT and SME without revealing the identity of the

originator of the request and thus acts as anonymiser

(for single request service) or pseudonymiser (for

multi-request sessions).

Billing: Some services for customers are thought

to generate direct revenue (e.g. a navigation service

with a fee for each session). For these services the

framework will provide interfaces to several billing

systems. Billing means that telecommunication

services are paid over the telephone bill. (M-

payment also covers the case of non-

telecommunication-services that are paid with a

mobile device, e.g. send a SMS to a premium

number to buy a chocolate bar from a vending

machine).

Whitelabel-Content: Whitelabel-Content is

content provided by third parties to be used by

service provides (SME) for enriching their own

services. For example a service aimed at soccer fans

may include latest sport news or a mobile event

guide might resort to a navigation service provided

Figure 1: Overview of the framework.

Framework

Context-Provider

Location

Weather

Transcoder

Authentification/

AVS

SME 1 SME 2

SME n

…

Whitelabel-

Content

Context services

Network 1

…

Network 2

Pseudonymisation/

Anonymisation

Mobile

terminals

……

Provider 1

Provider 2

…

Application-Router

…

Interface to

Billing-Systems

Different networks with

different standards,

Operated by different

operators

Different types of mobile

handheld devices

Wrapper for

legacy service

Web service connection

Overlay network

ICE-B 2006 - INTERNATIONAL CONFERENCE ON E-BUSINESS

172

as whitelabel content to show users how to get to the

locations of the recommended events.

Migration-support: So called “wrappers” help

to operate legacy services developed for other

platforms with the framework. Wrappers are a well

know instrument for the migration of software.

The communication between the framework and

the SME as actual provider of the services is realized

using webservice technology (Cerami, 2002).

Webservice are a popular and reliable technique for

the realisation of distributed application: the call of a

remote function is transparent for the developer,

which means remote functions can be invoked like

local ones. The whole process of encoding and

transmitting the data over a network is encapsulated

by special libraries. Based one a machine-readable

description in form of a WSDL-file (Web service

description language, a XML-grammar) the

developer generates so called stubs, which can be

invoked like local functions and perform all the

“remoting” behind the scenes.

It is also easy to bundle different mobile services

hosted by the framework to get a compound service.

The framework follows the “All-IP-Approach”:

all communication is realized using the Internet

Protocol (IP); the different standards for wireless

communication are used to transport IP-packets.

When an IP-layer can be build upon a given standard

for wireless data communication this standard can be

used for communication between mobile terminals

and the framework.

6 RELATED WORK

6.1 Industry-Solutions for Hosting

Mobile Services

There are many gateways for sending SMS/MMS or

receiving (premium) SMS. These gateways only can

be used for simple forms of mobile services like the

delivery of digital content (ringtones, pictures, etc)

and messaging-based services (e.g. delivery of

advertisement messages, information services etc.

controlled with SMS-commands). Many gateway-

operators ask for high setup-fees (four-digit-number

of Euros) and/or even a guaranteed turnover each

month, so setting up a mobile service is a very risky

venture for SME.

As part of UMTS the IP Multimedia Subsystem

(IMS) is an architecture with three service platforms

— SIP, OSA and CAMEL — and aimed at the

provision of IP-based multimedia services like Push-

to-Talk in packet oriented networks (Licciardi,

Moiso & Palama, 2003). Since IMS is operated by

the mobile network operator as part of his

infrastructure he will control access to the IMS

platform and will not allow every SME to set up a

mobile service.

There are solutions like those from Extended

Systems/iAnywhere or Mobileframe to bring the

data from the backend systems like ERP to MT, but

these solutions aim at bigger enterprises and focus

on B2E-scenarios.

6.2 Empirical Studies Concerning

SME and Mobile Services

There are not many empirical results concerning

mobile services and SME:

A study by Villanen et al. (2004) is concerned

with mobile B2E-services in SME: Their findings

are that one third of the companies with mobile

employees but without a mobile solution to support

them state that they see a need for mobile support.

There are also short descriptions of seven case

studies that demonstrate how SME from different

industrial sectors use mobile technologies to support

their workforce

A qualitative study by Harker & Akkeren (2002)

tried to explore the perceived needs concerning

mobile data technology of SME in Australia across

three levels of adopters of new technology (non-,

partial-, and full-adopters). Another study by this

group (Akkeren & Harker, 2003) concentrated on

SME that already used the internet for e-Mail and

had an own website; it was found out that 60 % of

these full adopters were “very interested or

interested in acquiring” mobile data technology.

7 SUMMARY AND OUTLOOK

We discussed the special characteristics of SME and

the hurdles that keep of most of them away from

participation in m-business. In our opinion this is

one of the major reasons for the lack of success of

mobile data services on the European market. Our

solution-approach is a technical framework for

hosting mobile services developed by SME. The

framework hides the heterogeneity of the underlying

wireless network infrastructure and mobile

terminals. Even the MNO would benefit from the

framework, because they hadn’t to support multiple

SME while developing mobile services and the

SPECIFIC CHALLENGES FOR SMALL AND MEDIUM-SIZED ENTERPRISES (SME) IN M-BUSINESS - A

SME-suitable Framework for Mobile Services

173

services hosted by the framework will generate

additional data volume and thus revenue for the

MNO.

REFERENCES

Acs, Z. J., 1999. Are Small Firms Important? Their Role

and Impact. Kluwer Academic Publishers, London,

U.K.

Almeida, P., 1999. Semiconductor Startups and the

Exploration of new Technological Territory. In (Acs,

Z. J., Ed) Are Small Firms Important? Their Role and

Impact (pp. 39-50). Kluwer Academic Publishers,

London, U.K.

Akkeren, J. & Harker, D., 2003. The Mobile Internet and

Small Business: An Exploratory Study of Needs, Uses

and Adoption with Full-Adopters of Technology.

Journal of Research and Practice in Information

Technology, 35(3), pp. 205-220.

Audretsch, D. B., 1999. Small Firms and Efficiency. In

(Acs, Z. J., Ed) Are Small Firms Important? Their

Role and Impact (pp. 21-37). Kluwer Academic

Publishers, London, U.K.

Blechar, J., Constantiou, I. & Damsgaard, J., 2005.

Seeking answers to the advanced mobile services

paradoxon. In Mobile Information Systems II,

Springer, New York, pp. 311-318.

Brücker, S., Bulander, R., Herrmann, M., Horster, B.,

Kölmel, B., Porak, A., & Schiefer, G., 2006. Leitfaden

„Geschäftsmodelle und Verwertung“ — Ergebnisse

der gleichnamigen MobilMedia-Task-Force (in

German), mobilmedia, Germany.

Cerami, E., 2002. Web Service Essentials, O’Reilly, Upper

Saddle River, USA.

Chittaro, L., 2006. Visualizing Information on Mobile

Devices. IEEE Computer, 39(3), 2006. pp. 40-45.

Dey, A. K., 2001. Understanding and Using Context.

Personal and Ubiquitous Computing Journal, 5(1), pp.

4-7.

DIKMU (German Institute for SME), Website, 2006.

http://www.dikmu.de, last accessed: 09.04.2006.

European Union, 2003. Commission Recommendation of

6 May 2003 concerning the definition of micro, small

and medium-sized enterprises.

European Union, 2006. SME Definition.

http://europa.eu.int/comm/enterprise/enterprise_policy

/sme_definition/index_en.htm, last accessed:

06.04.2006

Geschka, H., 1997. Innovationsmanagement (in German).

In (Pfohl, H.-C.) Betriebswirtschaftslehre der Mittel-

und Kleinbetriebe, Erich Schmidt Verlag, Berlin, 3.

Auflage, 1997.

Günterberg, B., & Kayser, G., 2004. SME in Germany —

Facts and Figures 2004. Institut für

Mittelstandsforschung, Bonn, Germany.

Harker, D. & van Akkeren, J., 2002. Exploring the needs

of SMEs for mobile data technologies: the role of

qualitative research techniques. Qualitative Marketing

Research: An International Journal, 5(3), pp. 199-

209.

Licciardi, C. A., Moiso, C. & Palama, P., 2003. Service

Architecture for UMTS IMS: how to use it? Exp, 3(4),

Telecom Italia Lab.

Marmaridis, I. & Unhelkar, B., 2005. Challenges in

Mobile Transformations: A Requirements modelling

perspective for Small and Medium Enterprises. In

Proceedings of the 4th International Conference on

Mobile Business (ICMB 2005), Sydney, Australia.

Marwede, E., 1983. Die Abgrenzungsproblematik

mittelständischer Unternehmen — Eine

Literaturanalyse (in German). Institute for Economcis

of University of Augsburg, Germany.

OECD, 1982. Innovation in Small and Medium Firms.

Organisation for Economic Co-Operation and

Development, Paris.

Schlickum, F., 2005. Erfahrungen in der

Applikationsentwicklung mit J2ME (in German). In

Perspektiven des Mobile Business, DUV, Wiesbaden,

Germany, pp. 131-134.

Steinert, M. & Teufel, S., 2005. The European Mobile

Data Service Dilemma. In Mobile Information Systems

II, Springer, New York, pp. 63-78.

Strüker, J., Sackmann, S., Eifert, D. & Pippow, I., 2003.

Location-Related Services for Mobile commerce — an

analysis of the potentials for small and medium-sized

enterprises. In Proceedings of the International

Conference on Mobile Business (ICMB 2003), Vienna,

Austria.

Villanen, J., Modée, K., Koivula, J., Pousttchi, K. &

Gumpp, A., 2004. Mobile Enterprise in Germany —

State-of-the-art, Expectations and Perspectives for

Mobile Business Processes in Small and Medium-sized

Enterprises on the German Market. Joint Study by the

Finnish Foreign Trade Association (FINPRO) and the

University of Augsburg (Chair of Business

Informatics and Systems Engineering), Munich,

Germany.

WURFL, 2006. Project webpage:

http://wurfl.sourceforge.net, last accessed: 1 April

2006.

ICE-B 2006 - INTERNATIONAL CONFERENCE ON E-BUSINESS

174