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Improving your company's profitability by increasing productivity in today's global market is paramount. After all, you're competing with countries such as China and India that are getting better results with lower costs.
Whether it's integrating your processes, enhancing your marketing capacity with a customer database, better managing your receivables or improving supply chain management, the right technology enables you to dramatically improve how you run your business. Although it sometimes requires a significant investment, the long-term advantages ultimately far outweigh the initial costs.
Some typical applications
The best way to improve your business performance is to target internal processes that are managed individually and aim to manage all processes in an integrated way. These could be payroll, accounting, customer relationships, inventory control, production control, and communications to employees or clients. Here are some of the most common applications that you will find on the market:
ERP and accounting system
ERP stands for Enterprise Resources Planning. This type of application was developed in the 90s and it has been used by small and large organizations around the world. ERP enables companies to break down traditional business silos, replacing them with tightly integrated structures including processes, human resources, technology and organization strategy. Typical application modules of an ERP are accounting, sales-marketing-client management, purchasing management, production management, costing, inventory control, and human resources management.
Supply chain management
The supply chain basically refers to all of the steps involved in getting a product or service to your customer. Apart from making sure that your own company is operating efficiently, you also have to ensure that other aspects of your supply chain, such as outsider suppliers, are also performing optimally. Supply chain software helps you automate your processes, and track information about orders and deliveries. For example, you could forecast demand and supply more accurately and be sure that your inventory can cover client orders.
Some of the benefits include:
- Reducing errors by moving away from manual transactions
- Speeding up delivery to customers and tracking their orders
- Reducing warehouse space by improving inventory control
- Lowering the costs of administration by using electronic means
Customer relationship management
A term often used in e-business is customer relationship management or CRM. CRM basically uses technology to give you more insight into customer needs and behaviour and to better manage your relationship with clients. For example, some companies use it to create personalized call centres where technology recognizes in-coming phone numbers and automatically calls up customer information for the representative taking the call. A CRM system could also allow travelling sales and repair personnel to use mobile wireless transfers to punch up information about customers.
Some of the benefits include:
- Better anticipating needs of clients based on historic trends
- Targeted marketing that effectively reaches specific audiences
- Increased sales through better client relationships
If CRM technology is not within your budget, then you can simply apply the basic practices. For example, in most businesses, entrepreneurs contact and deal with customers through a variety of different means including email, faxes, phone calls and letters. Putting this information together can help you improve customer service:
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Keep track of how you're dealing with your customers (who said what to whom and when) with a simple spreadsheet.
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Identify your top clients so that you can offer them special promotions.
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Use the information to customize your products to the specific needs of customers.
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Use the information to target value-added newsletters to specific clients.
Web 2.0
This is the evolution of the Web and electronic commerce; Web 2.0 is a concept supported by new technology. It includes networking, blogs, podcasts and online social networks. SMEs can tap into technologies that enable them to communicate with customers and partners and encourage collaboration internally.
Peer-to-peer networking also known as P2P
Business owners can use this tool to share files with other companies and suppliers. This could be used to improve your supply chain and procurement process. For example, a company and its supplier could communicate using web services and update each other's inventory and respective catalogues that can then be integrated with their respective ERPs. This type of integration reduces cost of operation, increases productivity and reduces human errors.
Podcasts or video recordings
Entrepreneurs can rely on this medium to communicate to employees or specific customer groups and promote new products or features.
RSS (Really Simple Syndication)
You could have customers subscribe to online news, blogs or podcasts and deliver up-to-date information on what's going on in your business.
Social networking systems
These can be set up internally to enable employees to exchange information, skills and knowledge. You could use this type of technology to design, develop and innovate with your business products and processes.
Database management
Databases enable you to manage information in a systematic and controlled way. The simplest example would be a customer mailing list, which you might need to update on a regular basis. A common term used today is the relational database management system, which electronically links various aspects of your business. For instance, a customer could be associated with a specific product or service that they regularly purchase. In turn, your business could keep track of customer behaviour and ensure that specific marketing targets this client.
Some of the benefits include:
- Getting closer to your customers by understanding their needs
- Processing more information about your business such as client sales patterns
- Analyzing data in different ways that may shed light on a specific aspect of your business, e.g. marketing techniques
- Spending less time managing your data
Your choice of database management software should be based on the complexity of your business.
Shop around
Before you make that investment, be sure you do a careful assessment of what's out there in the market. Known as "technology watch", your goal is to gather and analyze information to determine what technology or equipment is best suited for your company. (Most of the time, you should be able to find an industry specific solution) Here are some common methods used:
- Research techniques such as subscribing to specialized information sources: electronic journals, databases or research services.
- Trade shows are another invaluable source of information on technology. Software vendors readily make information available to attendees.
- Networking with organizations in your industry who may have already tried and tested new innovations. Finding out what your competitors are doing can help you narrow down your search for solutions that are specific to your industry.
- Web is also an excellent source of information; you can try universities, which publish the results of studies on technological innovations. Or, simply typing "technology watch" on any search engine will also give you access to a wealth of data on the latest trends.
All these technologies are available today and priced adequately for SMEs. Each product and vendor has its strengths and weaknesses. Some systems provide rich industry-specific functionality but lack fundamental accounting features. Others provide a broader feature set that can be customized to meet the needs of many different manufacturing methodologies and industry requirements.
When you make your decision about your software application, you need to consider:
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your future growth
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vendor viability
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product stability and functionality
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the availability of third-party add-on solutions
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total cost of ownership
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potential return on investment
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