On the Go

Western Europe is charging ahead in the mobile phone business. IDC reports that in the third quarter of 2004, mobile phone shipments jumped 24% over the previous year, to more than 34 million units. Furthermore, even low-end handsets now offer upmarket features. More than 80% of mobile phones sport color screens, compared to just 49% in 2003, and 72% include digital cameras, a giant leap from the 11% recorded over a year ago. IDC expects 1.3 megapixel cameras to show up in mobile phones and smartphones in 2005.

Under the Influence

For small and medium-sized businesses, word-of-mouth tops the list of information sources when considering IT vendors, reports a study of 1,197 execs conducted by Forrester Research Inc. Sixty percent ask for help from their peers first. Next in line are trade publications in print, cited by 47% of the respondents. Consultants are increasing in popularity — back in early 2004, only a third of SMBs employed this resource, whereas 46% do so today. And a sizable number of SMBs (45%) also use trade shows and conventions to get IT vendor information.

Culture Shock

You can travel overseas in a jiffy, but your documents may not make the trip so readily, warns World Trade magazine. Marketing and other materials often do not survive translation into foreign languages, so vet your documents carefully for slang, jargon, and cultural gaffes (for instance, the color purple has a negative connotation in many cultures). It’s also wise to forego obscure fonts and complicated artwork, since desktop publishing software isn’t as advanced outside the U.S. And even if you don’t know a kilogram from a millimeter, always use metric measurements for overseas markets.

On the Waterfront

European Union expansion has sparked the growth of large distribution centers all across the Continent, reports ProLogis Research Group. In particular, major seaports are developing warehousing and distribution facilities near container terminals. Third-party logistics providers favor large gateway seaports such as those at Rotterdam, Hamburg, and Antwerp; in southern Europe, the Port of Marseille is building a new “distriport” at Fos-sur-Mer, close to the container terminals.

The China Syndrome

First there was India; now there’s China to worry about. As high-tech jobs move offshore in droves, India will yield its IT supremacy to China, reports The Outsourcing Institute. Just consider China’s alluring stats: 82% literacy, $50 billion in foreign direct investment in 2003, wages 40% to 50% lower than India’s, and 400,000 IT professionals. Plus, robust infrastructure gives China the edge over India — the former boasts 175 million phone lines, compared to India’s 34.5 million, and bandwidth of 7.5 gigabits per second versus India’s puny 1 gigabit per second.

Law and Order

You know that you must collect taxes for online sales in U.S. states where your company has legal nexus. But do you know that the penalties for noncompliance may include back-tax assessments for up to eight years? And don’t forget export compliance — if you deliver more than $100,000 worth of online digital products into the European Union, you must register and pay the value-added tax on your EU sales. To deal with these complexities, e-commerce businesses should invest in real-time systems that calculate tax liability, according to CyberSource Corporation.

Thanks for Sharing Collaboration isn’t just for friends these days — it’s the trend in most industries to collaborate not only with clients but with suppliers, distributors, wholesalers, outside contractors, and sometimes even rivals. The third-party logistics business leads the way in innovative deal structures, according to a Georgia Tech study of 400 companies. Respondents’ business models include alliances based on cost sharing (47%), risk/reward sharing (38%), revenue sharing (10%), and joint ventures (8%). The Outsourcing Institute reports that small businesses are more likely to share risks with partners.

Rupee Rising Thinking of shipping out work to India? Be prepared to pay more. Workers in the Indian IT industry earned the highest wage increase — 14% — in the Asia-Pacific region last year, reports a survey by Hewitt Associates. By contrast, salaries rose a mere 2.1% to 2.4% in Singapore and just 3.3% to 3.5% in the U.S. Still, the top location for global sourcing is India, cited by 60% of 500 respondents to another Hewitt survey. Other favored countries include China (36%), Mexico (32%), Canada (15%), and Ireland (14%).