How can SMBs use IT more strategically?

How can SMBs use IT more strategically?

Martin Koval

Small and medium-sized businesses (SMBs) are the engine room of the Australian economy and are required to operate in tough and volatile markets. The day-to-day operations often create enough pressures on their own, making it difficult to take a more strategic view of information management and technology.

A biannual survey of SMBs reports that businesses of 20–100 people spend on average US$1,500 per person per year on IT and this is increasing by 10–15 per cent annually (State of SMB IT Report  H2 2012. Global biannual survey carried out since 2009 by Spiceworks, a provider of IT management software). The same report quotes that small and medium-sized businesses are embracing technologies such as cloud, mobile and social media more aggressively than larger companies, yet a quarter of the 900-plus organisations surveyed do not use a strategic planning process.

Since the cost of information management and technology is a significant and growing area of expenditure for SMBs, it is important that the value and profile of IT is raised to support business decisions and align to business plans.

Being more strategic about information management and technology enables businesses to better manage complex activities, fosters sound decision-making and streamlines processes. Returns on investment are maximised and information becomes a competitive advantage, rather than a headache to manage.

In this article, we challenge SMB decision-makers to think more strategically about information and technology, and provide some practical tips to IT planning. The first part is about thinking differently about the information you need for your business; the second part is about considering fresh technology options; and the last part is about making it happen.

1. How to think more strategically about your business information

Most businesses are awash in a sea of data, whether stored in a structured way in a financial system or unstructured in emails and social media platforms such as Twitter. The challenge is in distilling and structuring the raw data into information that is easily accessible, timely and meaningful. Investing in intelligent information can shed new light on business problems, create different perspectives and actionable insights.

Some strategic thinking questions to ask yourself:

Business management performance 
o How can I use key performance indicators (KPIs) to drive business outcomes and operational efficiencies?
o How can I integrate or consolidate information sources into dashboards that can be used to generate insights and visualise trends?
o How can I use client feedback that is now available in real-time to improve product offerings and service lines?

Innovation prompters
o Are there data sources that are underutilised, but could add value in a creative way (eg. new geospatial information, social media, and market research)?
o Are there mobile data that can be leveraged to reduce lead times or better locate and communicate with my staff?
o Am I exposing the advances in digital infrastructure enough (or as much as my competitors) to increase information flows with my customers and suppliers?
o Am I using system upgrades, technology refreshes and product selections as an opportunity to think differently and leverage best practices from technology providers?
o Am I participating in industry events or subscribed to posts and forums to generate ideas and resolve problems?

2. How to think more strategically about technology

If the goal of information management is to gain business insights and support decision-making, then the technology that underpins it must not be pigeonholed as an operational expense. Rapid developments in cloud technology, mobile, social media and analytics, coupled with increased speed and reduced cost of data has created an abundance of opportunities for businesses to exploit.

Some strategic thinking questions to ask yourself:
- Is my existing technology environment generating business value or is it a barrier to business growth?
- Do I have the right business intelligence tool to create valuable insights?
- Am I leveraging managed services providers as a means to cut IT costs, manage risks and increase performance?
- Am I leveraging mobile solutions in such a way that reduces travel time and manual data entries?
- Am I leveraging cloud technologies to enable my business to scale up and down in the midst of a volatile market?
- Should I invest in social media analytics to better understand my customers and trends?

3. Practical tips to strategic IT planning

Turning IT into a source of competitive advantage requires a conscious decision to step away from the day-to-day issues and fire-fighting, and invest in strategic planning. An IT roadmap need not be overly complex, but can be just the tool your business needs to create clarity on the connection between business and IT for as the next six to 18 months.

In practice, how is it done?
- Engage with the business at appropriate levels through surveys, interviews or workshops
- Identify and prioritise the strategic initiatives by challenging your thinking on business information (from Point 1)
- Explore how technology could best be exploited to support business initiatives (from Point 2)
- Review your existing systems and identify gaps to meet business demand
- Perform a cost/benefit analysis to prioritise IT investments
- Look for ‘quick wins’ to generate momentum and create business value and support
- Leverage a current project or overdue system replacement to drive change
- Educate and communicate the IT roadmap and commit to a project plan
- Setup a steering group to ensure appropriate governance is maintained and for decision-making (can form part of an existing committee)

 

How can SMBs use IT more strategically?
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Martin Koval

Martin Koval

is a Principal Consultant at Pitcher Partners IT Consulting working in new technologies for SMBs in the retail, financial services, not for profit and professional services sectors.

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