Technology in business has evolved
from being a tool to help master tasks,
such as basic communications and
record keeping, to serving as a critical success factor in a company’s productivity,
customer satisfaction, processes and profitability. Owners invest large dollar
amounts in information technology (IT),
and they expect a sizeable return-on-investment (ROI).
While companies spend considerable
amounts on IT, their ROI depends on
whether the owner has integrated technology into the business plan, rather than
making it an afterthought. “Business owners should ask how technology will impact
the company,” says Sassan Hejazi, director
of Technology Solutions at Kreischer
Miller. “Will it enforce their goals? What
value will IT generate both quantitatively
and qualitatively?
“Technology projects are really business
improvement projects,” he says.
Obviously, investing in must-haves like
billing or e-mail systems is critical. These
rudimentary “cost of doing business” technologies are baseline components that
must be upgraded. But innovative technologies that help a business become more
“lean” will separate a company from its
competition, Hejazi says.
Smart Business spoke to Hejazi about
how to align your IT investment with your
business strategy to realize a return
through improved profitability.
Explain the difference between ‘must-have’
and innovative IT.
There are certain technologies that are
essential to doing business, which should
be world-class in terms of uptime, reliability and accuracy. Without them, it’s comparable to not having power. A Web site that
isn’t functioning or e-mail that is down will
inhibit customer service and your ability to
communicate with vendors, customers
and employees. Outages and security
breaches are serious disruptions to your
business. You have to make sure this technology is updated, and doing so is a serious investment for most companies. Still, this
‘must have’ IT won’t set you apart from
your competition. That’s where innovative
IT comes in. This is technology that will
help you improve processes and profitability, and it should be closely linked with
your strategic business plan.
How can IT increase a company’s competitive advantage?
First, it’s important to recognize that no
two businesses are alike. When you consider ways to integrate IT into your business, you should evaluate the following
categories: customers, suppliers, competition, employees and processes. What type
of technology will enable your customers
to do business with you more easily? Can
you attract new customers by offering a
certain technology, such as a customer
service function on your Web site? What is
important to your suppliers? Supplier
transactions, shipping, receiving, accounting and other activities can be modified for
convenience and ease. What is the competition doing? Also think about your employees and what technology capabilities they
require to work productively. From there, review all of your processes and your operation. Are there areas where you could
eliminate paper, waste, downtime, etc.?
Finally, what ROI do you expect from this
technology?
How do you measure a technology ROI?
Before you invest in any technology, you
need to take a look at the current state of
your business. Figure out how long it takes
your company to complete a certain
process. Survey customers and employees.
Learn where the weak points are in your
business so you can decide how technology can provide an advantage. If, for example, your current technology enables you
to ship orders in two days, how much time
and money could you save by cutting this
shipping time in half to just one day? From
a customer service perspective, perhaps an
average service call takes one hour. Can
you provide an online tool for customers
so they can solve their own problems?
And, if so, how much labor, time and
money will that save you? This measurement process is tedious, but important to
determine the true ROI of technology.
What is the biggest mistake business owners
make when investing in technology that prevents them from realizing a substantial ROI?
Often, we forget to include people who
understand technology early on in the business-planning process. As I mentioned
before, technology projects are business
projects. Management has to be aware of
technology and include it in their strategies. If you devise a business plan and technology isn’t a part of it, you will put yourself at a disadvantage. Technology sets the
stage for your success.
SASSAN HEJAZI is director of Technology Solutions for
Kreischer Miller in Horsham, Pa. Reach him at (215) 441-4600 or
[email protected]