New Years IT Resolution

Every new year's day, people make New Years Resolutions for themselves. While some are successful and others may not be, should we be looking at doing this for our business?

This year, in particular, it may be more important than any other, with the state of the economy.

When business is good, we focus on selling and satisfying our customers needs. We seldom have time to do anything else. What do we do when business slows down?

There are two things that we can do:

• Look at ways to increase sales.
• Look at ways to reduce costs.

Often both actions are taken, but not effective.

If we look at increasing sales in areas that are not profitable, we lose. Yes, we have increased sales, but perhaps at a high cost.

If we look at our current customers, those that are the most profitable for us, and see how we can increase their sales, we get a double benefit. How do we do that? We need better information about our customers and the quality of service that is being delivered. Where do we get this? We get it from our computer systems. Many businesses don't look at this information, sometimes because it is hard to retrieve. But it is there and if we dig into it, we can find a lot of information. Because sales are down, you have more time to look at improving serice. If you get better profitability from your customers, the extra cost may be worth it.

One of the first things most companies do to reduce costs is to cut staff. While that may provide some short term relief, it also weakens your company. You lose the skills that they have developed, you can provide the additional support to improve quality of your most profitable clients, and you have no basis for competing with those who do. There are many ways to reduce costs and cutting staff, although perhaps the easiest, is the least effective. If you delve into your business processes to try and improve productivity, you get a double benefit.

• You reduce cost in a way that stays with you. You are able to take advantage of it when business picks up.
• You get more time to focus on improving the quality of service and therefore you can compete more effectively, perhaps even increasing sales during a recession.

How do you get the information to do all of this? Again you get it from your computer systems. We all use software to run our business. This software is typically used only at an activity level to manage transactions. We use only a small percentage of the software that we own. There is a tremendous opportunity to increase the value that we get from this software, without buying more.

So your New Years Resolution should be to increase the return on investment from your existing software. Your company will be more profitable, not just today, but for years to come.

Should software installation be profitable?

When an organization installs software, they do so for many reasons. They want something that they currently can't get from their existing business software. In large businesses, they assume that a lot of investment is required in order to gain the advantage that they are looking for. In small businesses, they want to minimize the investment, yet want to gain the advantage as quickly as possible.

Which approach is better? While many small business projects are underfunded, many large businesses overfund their projects and are willing to wait too long for results. This is the primary reason why business units often abdicate their responsibilities to the IT project team. They get tired of waiting for results, and there are too many technical discussions that have nothing to do with improving the business.

Every project to make significant changes to a business can be improved if there is a focus on the bottom line. They should have an interest in making the project profitable for the business as soon as possible. There are at least two benefits of this approach. The first is that less money will be spent before money starts coming back in. This means that the business will be more willing to spend time and effort on the project. Second, because there has been a return on investment already, business people will look to get results and won't get fed up waiting. Because business people are more involved, there will be pressure to drive more results.

I think that the half life of a project is about 3 months. There are too many distractions in running a business to keep someone's attention focused on something that doesn't produce visible results.

So, you should plan to deliver some results from your project within three months. You can incrementally add to the project as it makes progress.

Whether in a small or large business a lack of short term results leads to a lack of interest.