In my experience where I had the opportunity to talk to mid size Business in different verticals ( Manufacturing, Healthcare, Logistics, etc ), numerous times I have encountered the situation where I would have the customer say that their businesses are not enough big and investing in IT applications and systems would not be of too much advantage to their business. When I came across the same thing multiple times, I tried to do some critic analysis on this. The question that I was trying to answer was “What would make Customer undervalue their own business? “. Few things that I could think of are :
– They want to play modest and avoid committing to any investment ( best way to evade commitment ? )
– To them the IT applications are visible only in Big Business Houses ( What is IT enablement and what is the purpose? )
– IT systems are considered to be a risky investment ( Are all vendors doing diligence to do the ROI analysis for specific business and be transparent with the customer ? )
– Business owners are skeptical about not having technical knack and getting into an uncomfortable zone ( Do vendors stand high on their commitment of post sales service and support ? )
– Do they think that IT systems are used to manage the size of the business ( or is it about managing the processes of the businesses ? )
I have seen the flavor of all of above reasons in some instance or the other, but the last one where customer thinks that Softwares/ Systems are used to manage sizes rather than processes is the most prevalent one. This ambiguity sometimes lead to Business deferring the decision to a point which is too late in the game. Their competitors have grown much stronger than they were at some point. I feel that, in a country like India, where Businesses are going through a transformation phase where they are destined to compete on Global grounds, need to be much better equipped.
I think one of the major questions that need to be answered is “When is the right time to invest in technology and who is the right partner for my business” ?
If I’m a business and if I have to evaluate whether it’s time for me to go ahead and scale up on Information Technology, I might have a few questions to answer which would make my judgment more objective than otherwise.
a) Do I have enough control on the execution to maintain integrity in my organization on a day to day basis
b) Do I have enough governance around each area
c) Do I have capability/data to evaluate performance of individual areas and remain fair
d) Are the processes in my business optimized to suit my business need and areas of improvement reported regularly
e) Are the practices that are in place, controlled and in line with the Business Mission
f) Do I have required delegation management capability in the system
g) Do I get timely reports if there are any risks/issues that need my attention.
And the list can go on. But I think this set of questions sets a tone for the point that I want to make. It’s not the Size or scale of the business that matters, it’s the process that matters and needs to be governed. When organizations are small, generally ( Note, this is not a rule ) the processes they follow are simple and can be controlled easily. You can look at the complete details with human eyes. And when the business grows, there are processes that are introduced to manage and sustain the growth. This is the point that management starts losing visibility into things and governance starts getting weaker. That is where the need of having a system that can help you with a simple picture of the big thing, beat the complexity and help keep the required control on your processes.
If as a business owner if your decisions are not based on the data ( for ex. you do not have the details of the inventory handy, while you are requested to approve a purchase), I would recommend that to maintain a healthy business you need to have a system in place which is able to provide you with the required data. For this purpose there are ERP ( Enterprise Resource Planning ) systems available from different vendors, which if implemented appropriately can deliver high value for the business and make your processes very Lean. I see huge potential with ERP systems helping the Business practices in India, and enabling the businesses.
Next in the series would be “Who is right for me ? “ which would talk about my perspective on what should be the criteria while you are evaluating vendors and want to make a selection !!