Driving profitable growth is the top priority for every business. Whether the route to growth is organic or through mergers and acquisitions, IT will play a critical role in helping small to medium enterprises (SMEs) achieve their key business objectives.
IT should not just be seen as a tool that enables the day-to-day running of the business. As a matter of fact, IT can help a business grow in a number of key areas, such as developing new revenue streams, streamlining processes, increasing efficiency, and increasing cost competitiveness. Furthermore, IT can enable the creation of a crucial network between partners, clients, or even employees.
With increasing economic pressures in the form of tax increases, rising manufacturing costs and inflation, SMEs tend to focus their strategy on cost reduction, rather than investing in growth. Undoubtedly, in challenging economic times, companies need to achieve more with fewer resources. But what do businesses need to consider so they can advance from the survival mode (saving for now) to the growth mode (investing for the future)?
Building The Foundation For Growth
In order to determine whether you are getting the maximum value from your existing IT operation, you need to understand what your company’s key efficiency factors are, and how you can evaluate the performance of your IT against these controls. These efficiency factors can be the ability to deliver the services faster or cheaper, for example, or to reduce any service downtime.
There are few key criteria that you need to consider when it comes to evaluating these factors. As a starting point, it is essential that you look at whether you have automated all the processes within your business wherever all possible, and especially those that can help to reduce any manual tasks that lower workforce productivity.
By streamlining your business and production processes in this way, you can vastly reduce the cost of your products and services. After all, a business that has lower operating costs can normally translate these reduced costs into their business pricing strategy, and thus help to gain a more competitive edge in the marketplace.
At the same time, the automation of manual processes that have low productivity, but which are necessary for your business (such as customer service), can also speed up production and free up vital resources that are often limited in SME businesses. As a result, these resources can be used to focus on business growth instead.
You also need to evaluate how you are currently delivering and managing the IT services that are required to support the business. In some cases, you may want to consider outsourcing your IT infrastructure, as this approach can often help to reduce costs and also free up in-house resources that can be focussing more on business growth.
Recent developments with cloud computing and business virtualisation can also help you to manage a number of business functions more efficiently. It’s also a good idea to assess whether your in-house IT support team has sufficient understanding of these new, rapidly evolving technologies, and to determine whether they have the knowledge required to implement and manage them.
In any case, it is crucial to sit down and analyse the split between your business spend for maintaining day-to-day IT operations, and then compare it with your spend on developing advanced IT capabilities and infrastructure that can differentiate you from the competitors. Developing new infrastructure and technologies can give your business a more streamlined and competitive edge.
Investing In Technology That Gives You The Edge
Investing in new IT technologies can allow your business to develop and support important new business streams, which are vital for growth. The latest internet technology can be utilised to conduct business between buyers, sellers and other trading partners in the form of e-business. For example, a retailer can use the internet as a platform for both domestic as well as international sales and marketing activity, either to other businesses or to the consumer directly.
In this way, IT can be used as a vehicle for the creation of high-value networks with business partners and clients that enhance communication and the exchange of knowledge. Furthermore, this network can allow you to outsource key business processes to your partners through a shared technology platform, which frees up in-house resources to concentrate on business-critical areas like supply chain activity and accounting. With this approach, remote working can also be achieved via collaboration and communications tools, such as messaging, video conferencing, and SharePoint.
In addition to the day-to-day running of the business, IT will also be an essential tool in supporting a wide range of sales and marketing activities, as it can help you to attract (and interact with) customers more effectively, and to create an online presence that fully supports and encourages customer engagement.
E-business strategies like these can also vastly increase the scope for potential sales and growth by allowing a business to enter into new geographies. A business whose activity takes place offline may ultimately have a more reduced audience, thereby putting them at an immediate disadvantage.
New Initiatives? Don’t Let The Costs Spiral
I’ve seen many large-scale IT projects that have gone sour or failed to deliver the desired results, even after millions pounds of investment. But how can businesses be sure that their new IT projects/investments deliver the desired outcome (and provide the enhanced capabilities that the company needs), without having the costs spiral out of control?
First of all, when planning any large scale IT project, you need to identify the desired business outcomes and benefits of implementing a project clearly, whilst also justifying the investment. There is no sense in implementing a costly and time-intensive project if the benefits don’t outweigh the costs involved.
You also need to be aware that it’s vital to involve your IT department or a specialist (if this expertise is not available in-house) in the early stages of the planning, in order to make sure that you get the IT elements right. These elements will include important factors like scope, pricing, and complexity.
It is also worth taking time to assess the risks involved when investing in a new initiative, these could be both financial (in the sense that costs can spiral) and operational(in the sense that there may be ‘downtime’ whilst the IT project is being implemented). There may also be the risk that the project does not yield the expected outcomes / benefits.
These risks can mitigated, but only when you fully understand the IT elements and implications of the initiative, and if you are able to secure sufficient expertise and resources (by freeing them up from the day-to-day operation) to focus on the new project). It will also be essential to have an efficient and robust operation that is able to cope with / reduce any likely disruption during the implementation.
The Benefits Of Outsourcing Are Evidenced
Without a doubt, efficiency in your IT infrastructure is a business imperative. If the costs involved with running your day-to-day IT operations are too high, you are likely to endanger your business growth by not investing in capabilities that will categorically put your business ahead of the game.
Furthermore, only by increasing the efficiency of your IT operation can you free up your resources for more strategic business initiatives, and create the foundation that’s needed for sustainable growth.
You will need to make sure that you have easy access to proven project management skills throughout this process; if you don’t, even (what seem like) simple IT projects can very quickly escalate out of control. Whether it is at a consultation, implementation or service managing stage, outsourcing can therefore be significantly beneficial, especially when an SME doesn’t have the in-house knowledge and resources to undertake such a project.
We have read many successful stories of IT outsourcing and over the years, it has become a strategic and validated option for managing and delivering core business services. Utilised rightly, outsourcing can help you to reduce costs, improve service quality and gives you the agility, scalability and even the specialised knowledge that you need for growth.