It is easy to see why an information technology strategy matters to large organizations. In these environments IT staff is often saving millions of dollars and enabling large-scale national and even international trade. They are also dealing with a requirement that their world is automated. For example, imagine how many accountants it would take to manage the transactions that General Motors manages. In their world, automating their financial systems really is a requirement to continue doing business at that scale.
What I have seen in many small and mid-sized businesses is both a reluctance to spend money on technology solutions and a willingness to stick with older manual approaches. In some cases this is an appropriate path. However, there are many reasons to reconsider.
Expertise – when automating a process, expertise in a specific area is captured and can then be reproduced through the new process. This allows us to reduce the amount of training we provide and reduce the risk found in employee attrition
Scale – even if people can handle a process manually, will they be able to do it if your business grows by 25%? Automated solutions will scale much better than manual ones and will allow you to grow your business without growing your workforce.
Quality – automated solutions can be tested. Once they are proven to work properly, they can be relied upon to follow the same steps every time they are executed. Computers simply don’t think for themselves so they won’t have a bad day or get distracted.
Speed – today’s customers expect quick turnaround that manual processes don’t always provide. When throughput matters, the value of automation increases.
Insight – modern processes and technology generate vast amounts of data. This data can be turned into information that empowers faster and more accurate decision making. Business intelligence solutions that empower decision support systems (DSS) allow business leaders to identify new risks and opportunities.
The primary argument against IT investment is the cost. This is understandable when you see single solutions that can run from thousands of dollars to millions. While this is a very real concern, imagine what is being spent in the absence of technology. Before you consider technology too expensive, consider the costs of not investing in it.
Salary, Benefits and Labor Compliance – This may seem obvious but any comparison between automation and manual solutions needs to include all costs of labor. The true cost of labor is typically far greater than just the wages or salaries of the workers.
Rework – The cost of quality in technical solutions is primarily absorbed upfront in the testing process. In manual processes the cost of quality is spread over time. In manual processes you do spend some time in the beginning on training but quality issues will be found throughout the life of the process so you could potentially be performing rework for years. This can be costly and is also more difficult to plan for.
Training – Automating business processes allows people to accomplish more with less training. They are not required to have a detailed understanding of all of the things the software will do. They just need to understand how to operate the software.
Loss of Sales – Our customers have expectations and if those expectations are not met then they will simply move to a competitor. Technology solutions assist in meeting those expectations whether they are high quality, low cost or quick turnaround.
Loss of Market Appeal – By ignoring data that we have access to, we risk missing out on important business opportunities. These could be new product segments, potential features or new leads. Technology allows us to aggregate and analyze data in ways that were not even imagined years ago.
At the end of the day, what matters is that we have chosen the right path for the right reasons. In order to do so, we must consider a wide range of dimensions. After considering all relevant dimensions, technology solutions become much more appealing to small businesses. While the solutions for small and mid-sized businesses will not look the same or cost as much as those for Fortune 500 companies, they are no less relevant.