Integrate IT with strategy, SMEs urged
by Ian Jester de Vera
Rapid development brought about by information technology is a double-edged sword. While technological upgrades continue to revolutionize the way people do business at a too fast and too furious rate, they have nonetheless claimed numerous casualties in the form of what used to be top-of-the-line computer software and hardware that have gone obsolete almost as fast.
Times are hard and ordinary entrepreneurs of small and medium enterprises would think a hundred times before they invest their hard-earned pesos. Why should they spend a lot for a technology that will soon get outdated?
Notwithstanding the drawbacks of IT, some industries are still giving it a chance. While it has its disadvantages, its advantages overshadow the drawbacks. Whoever has started to use IT is unlikely to let it go again.
IT and business
The market has become too complex that some SMEs no longer wholly depend on basic applications like word processing and spreadsheets for their computer operations. Some of them have outsourced almost all aspects of their IT needs from third-party IT firms called application service providers.
A vehicle testing service company, for example, put up a report generator and an accounting system software development with the help of an application service provider. The setup linked digital testing machines to PCs, capturing data, converting them into a common PC-readable format and storing them to a central database.
Another firm sought a software solution from the same ASP in putting up an inventory and maintenance management software to keep track of spare parts supply and maintenance schedules for each bus owned and operated by the company.
Choices vary from A to Z
The choices of SMEs for their IT requirements need not be limited to off-the-shelf applications like Microsoft Word and Excel. ASPs offer a wide variety of software solutions from accounting to warehousing.
Cerulean Software Company, Inc., for example, offers an events manager software, which is used to schedule events in one or more venues. Software tools like this will be helpful for party and art gallery organizers who need to keep track of new events that sometimes run almost simultaneously. A search form is provided in the software for filtering the database of the events. Rental, service and other fees can also be recorded for each event.
Another program, a recruitment and deployment software, can simplify the recruitment operation for human resource management. The qualifications of the job applicants, their interviews as well as their results are encoded in a searchable database. This software can be used by manpower placement companies and personnel managers for matching employees and their skills.
Meanwhile, another ASP, 25by8 of NewNet Holdings, Inc., offers a supply chain management solution called e-Supply, which covers a wide array of modules in finance, distribution, sales, and demand planning. Other solutions they provide include payroll system, Accounting Plus, a purchasing system and a post-dated check warehousing system.
With so many IT products and services available in the market, what is the best way to choose the most appropriate software solution for the company?
Making the right choice
Basing his recommendations on the results of a study on why IT projects fail (i.e., lack of awareness of organizational issues as well as lack of involvement and training of end users), Johannes Krauth of Bremen Institute of Industrial Technology and Applied Work Science at the University of Bremen, Germany, recommends, among others, that entrepreneurs integrate IT with their enterprise strategy.
Generally speaking, a strategy can be viewed as a means to achieve long-term success. Since every company wants to be successful, it follows it needs a strategy. Unfortunately, many enterprises, particularly SMEs, do not one. They are too busy solving everyday problems and seldom find the time to think ahead. This account for many failures of IT projects among enterprises, big and small
Ultimately, any change in the company should not have been dictated by a technological breakthrough but by customer demands. An innovation that will not matter to the customer is not important and should be disregarded.
IT adoption must always be geared toward intensifying the product’s appeal and value to the customer. After all, a strategy should aim at
strengthening the company’s distinguishing features (those that are most appealing to the customer) rather than following general formulas.
Since every major innovation should be linked to business strategy the starting point of IT introduction should always be a clear goal: In which area does the enterprise want to improve its performance for the customer, and how can IT support this improvement? Unless this goal has been defined one should not waste one’s time evaluating technical options.
Often, ASPs would approach the decision makers of the company to offer their software solutions. It is not always enough to ask these suppliers for a presentation of their products or services, as they will naturally choose a demonstration case that will highlight the power of their software. Every ASP should therefore be asked to demonstrate the application of their software to the company’s specific situation.
Finally, the management must make it clear that the aim of the project is not to remove jobs but to save them. The management must also continuously train the staff to maintain the new system in place.
Introducing IT in the workplace may present initial problems to the innovating entrepreneur. Only when it is integrated with the enterprise strategy can he see that he got his money’s worth.
