The IT function of your business shouldn’t be seen as a cost – indeed it could be one of your most profitable investments.
Here’s a question. How do you view your IT function of your business? Is it like something out of the IT Crowd, stuffed down in a basement to do whatever it is they do without bothering the rest of the company, or is it at the heart of your business strategy? In many cases the answer is the former, but it really should be the latter. Indeed, the health of your business could depend on it.
Technology is already transforming businesses, but that’s nothing compared to what’s to come. Digital technology, data management, cloud software all have enormous potential to reduce costs and make businesses more efficient.
Paddy Power and Micks Garage
Paddy Power and Micks Garage provide two great examples of how two Irish companies have embraced IT as a source of competitive advantage. The latter, a company selling car parts and accessories now generates most of its revenues outside Ireland shipping to 50 countries every month. All thanks to a digital-first strategy. IT is now the bedrock for their inventory control, e-commerce platform and marketing. Or, take Paddy Power a business which 20 years ago was operating in a business sector which was mature and stagnant. However, thanks to the strategic use of IT, the company metamorphosed from a chain of betting shops into a global betting giant. In 2017 alone, it generated £330 million in profits.
APIs, CMS, DNS, CDN, DMZs and Cold Sweats
Even so, many SME owners don’t feel comfortable dealing with IT, and that’s perfectly understandable. Plenty of people come out in a cold sweat at the thought of dealing with APIs, CMS, DNS, CDN or DMZs. They don’t understand it and so don’t have the confidence to take control of how the department operates.
That attitude encourages a limited view of the IT function – one which views the entire role as an area of cost.
SME owners should embrace IT as the engine room of business growth
There is another way. Rather than viewing the IT function as a necessary evil, SME owners should embrace it as the engine room of business growth. Doing so can have dramatic results.
A study by the Harvard Business Review found two things. Most companies were not making full use of their IT function and those that were scored a 40% bonus for their returns.
Almost every function of your business can benefit from IT
In a digital world in which technology governs almost every part of our lives, the IT function should be central to operations. Almost every department can benefit. Effective use of an advanced customer relationship management (CRM) tool, for example, can streamline administration and deepen the engagement between sales agents and potential customers. Enhanced knowledge of a customer’s buying history can help companies to up sell and increase their revenue per customer.
The benefits grow even more with the transition to cloud CRM. Employees can log into the central system and update information as they go ensuring up to date sales information can be viewed instantly in real-time.
Indeed, the cloud is taking on an increasingly significant role in businesses of all kinds. After years of viewing cloud computing with a mixture of fascination and trepidation, businesses are now beginning to make the move. A study from Gartner predicts the cloud computing market to grow at more than 20% year on year to surpass $300 billion by 2021.
Financial reports in minutes as opposed to weeks
This could have a dramatic impact on the way in which businesses handle data. The cloud helps an organisation to significantly boost its data management capacity. It can store and analyse structured and unstructured data to deliver enhanced analytics of the current state of the company.
For example, this could be crucial in fiscal management. Using the latest technology, firms can compile financial reports in minutes as apposed to weeks. The data is accurate in real-time rather than being days or weeks out of date.
Better IT leads to happier more productive employees
Perhaps the most significant change, though, could be the impact on the happiness and wellbeing of your staff. Across the board, technology is reducing workload and freeing up employees to work on more profitable areas.
This firstly has a benefit to business performance. Your accountancy team can spend less time on administrative jobs which have to be done, but add little to the business, and more on strategic visions which help drive you forward.
It will also make staff happier in their roles, encourage them to stay and develop with the company and will also enable you to boost recruitment. Multiple studies show that happier staff are more productive such as a University of Warwick study which revealed people were up to 12% more productive when they were content. Ever wondered why so many cutting-edge businesses and corporations embraced the iPad and Mac with such haste – primarily it was to attract and retain the best staff. They realised the important role a good IT strategy plays in having satisfied employees.
Strategic-Fit and Implementation
Unfortunately, all these benefits only come if new systems are implemented properly and this doesn’t always happen. Moreover, many IT firms over-sell solutions to their clients or sell solutions that are not a good strategic-fit for your business.
On a less dramatic scale new tech implementations often fail to deliver the expected results because businesses aren’t getting the best out of them. A shiny new CRM tool could increase revenue, but only if there is a strategic-fit there and employees know how to use it.
Adapt or Die
To harness technology to its fullest extent, therefore, you should ditch your pre-conceptions that IT is a cost. It’s understandable that SME owners have a phobia of technology. Everyone has their own strengths and specialisations. But if your company isn’t getting involved, it creates an opportunity for your competitors. Embracing technology, therefore could be a case of ‘adapt or die’.