“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” – Bill Gates
Whenever I think about the application of technology (hardware and software) I follow a specific thinking process – something which might also be of value to other business owners.
1. Assess your needs
It is good practice to start with the end in mind. This means that you need to understand what business outcome you want to achieve. You can then proceed to evaluate which technological application will support you in achieving the business imperative.
- You want to record client information: MS Excel might just do the job for now, but a more robust Customer Relationship Management (CRM) system might be the ultimate solution.
- You have shrinkage of stock in your business: Electronic stock control will give you a handle on stock levels, as well as movement of stock into and out of your business.
- You want to publish a weekly article/newsletter: Depending on the volumes involved and the graphical presentation of the article or newsletter, you can use MS Word, or MS Publisher, or customise the information in HTML (requires programming skills).
2. Take stock of what you have
Do you have a gauge on the hardware and software applications used in your business? I have seen equipment standing around in businesses having no productive use. It is even worse with software applications. Different versions of standardised software applications are used in the same business. Knowing if technology is functional and compatible will go a long way toward avoiding challenges that lead to inefficiencies.
Do you know what the use of each piece of technology in your business is? (E.g. lead management, financial reporting and sign-off, HR admin, safekeeping of information)
3. What is available?
There are infinite solutions available for technology enabling and advancement. If you are not tech-savvy, I propose that you identify someone who is. Pay them a consultation fee, if necessary. It is important to note that you are still the person responsible for verbalising the business outcome that you want to achieve with the application of technology. It is not wise to delegate this responsibility to someone else.
4. The cost of ownership
Sometimes you do not need outright ownership of software or even hardware components. A licencing right, leasing agreement, or “pay as you go” utilisation might be the right option for you. In this way you only pay for usage and always have access to the latest version or development.
If the application is business critical or very unique, it makes sense to consider developing it in-house, or have outright ownership thereof. Bear in mind that the redundancy cycle of technology is short. Most technological applications and equipment have no or little second hand value.
Let me conclude with another statement by the ubiquitous Bill Gates: “Information technology and business are becoming inextricably interwoven. I don't think anybody can talk meaningfully about one without the talking about the other.”
To support business owners with the important task of business planning, Sanlam gives you free access to the book Your Annual Business Game Plan for Success, which provides an easy and straightforward framework needed to draft a well-crafted game plan that will create the positive change and growth necessary for business success. Go to www.sanlam.co.za/gameplan to download your free copy.
The content in this article was written and provided by Jannie Rossouw, Head: Sanlam Business Market.
Copyright © Sanlam, 2016