Business Coaching Blog
Use a business advisor who can help you get benefits from IT
Thursday, January 2nd, 2014
It is now possible for even the smallest business to deploy sophisticated business computer systems that only a few years ago would have been completely beyond their reach both technically and financially. A few pounds each month gives access to Customer Relationship Management (CRM) and even full Enterprise Resource Management (ERP) systems.
The potential benefits from IT fall into two categories: Firstly, internal benefits – reduced costs through fewer, more productive staff, efficient integrated processes, reduced stock and better asset utilisation. Secondly, external benefits – increased turnover through differentiation – speed, responsiveness, accuracy, pricing, marketing channels and reach, and information-enhanced propositions.
Why do SMEs struggle to achieve these benefits? Firstly, SMEs have access to powerful information technology but not the capability to realise all the benefits. The costs of the skills to benefit from IT are still high. Secondly, SMEs don’t understand data. Data doesn’t flow smoothly in small businesses. It is held in inappropriate formats and re-keyed instead of being re-used. Data quality is poor and is no-one’s responsibility. Thirdly, SMEs don’t think in terms of their business processes. They may not measure how well the business performs now except in general financial terms. They don’t have the skills or knowledge to redesign processes so that IT enables efficiency gains. Fourthly,SMEs lack technical understanding. Staff don’t understand how to use even basic office software properly and so gain only a fraction of the potential benefit. No-one has the knowledge or confidence to turn dissatisfaction with a larger system into a usable specification for a solution. Fifthly, SMEs have no technical strategy. They have no strategy to generate benefits from IT investment and no way to measure these benefits so they are unable to develop a roadmap. They may have no overall business plan or strategy and if they do it often fails to address IT.
What can SMEs do about this? First, start with a solid business strategy and plan, including key performance indicators (KPIs) for your main processes. Second, work with an external business advisor or business coach to understand how IT can enhance your competitive strategy and add these changes into your business plan. Third, select an IT provider that has the capability not only to provide the technology but also to understand your business and help you achieve business change in line with your strategy. Fourth, implement change in bite-sized chunks each of which has a measureable benefit. Fifth, train your staff to use IT properly and understand the value of data. Six, make someone responsible for the organisation’s data quality.