Where do SMEs often fall down in their business systems?
In my experience, many SMEs hang on to manual systems far too long. An example I've noted is the task of registering appointments or bookings for service - many are still using paper to take bookings and are not using historical data to prompt for future bookings for periodic services such as haircuts, tyre rotations or Warrants of Fitness for example.
What sorts of questions do you ask a client when you first come in to assess their needs?
As a general rule we ask company owners if they are committed to making the requisite changes to their business processes to yield the benefits technology can bring. The technology is of no use to anyone if the processes within the company operates doesn't change for the better.
At Stellar, we always ask this question: "Are you committed to making changes to your company as a result of enabling technology and if so, how much are you willing to pledge in benefits?"
What could your standard SME,a car garage, small cafe chain, chocolate manufacturer usually do with more of, when it comes to business systems?
Firstly, see what is available in the "cloud". There are already a of low cost, subscription-based integrated applications for typical core SME functions. Cloud-based applications reduce or eliminate the costs of buying centralised computing infrastructure and can scale seamlessly as the SME grows. At Stellar, we use cloud-based applications for email, general accounting, scheduling, resource planning, timesheeting, payroll, collaboration and to administer HR policies.
In cases such as your typical car garage and the small cafe chain, applications linked to their point of sale system or inbound telephony which automate establishment and management of customer loyalty, should be investigated. Our local garage and our cafe downstairs both manage these with paper-based systems and rely on people to recognise faces/voices and put names to them - not an ideal situation. As a reference, Air New Zealand does a good job of this with Airpoints and Koru Club membership.
In order to establish and grow a market share, a presence in social media is now pretty much mandatory.
For a small factory, think about things like supply chain optimisation to improve supply chain. Cost efficiency should begin immediately. Forecasting, resource planning and procurement decisions should be driven by facts rather than gut feel. There are a number of application suites that automate and support these disciplines and improve supply chain efficiency but they will only provide yield if the business processes change accordingly. For example, to get commitment to the new requirement to accurately forecast sales, compensation plans for sales people may have to be changed so that they are paid on the basis of the accuracy of their sales forecasting.
What sort of investment is an SME looking at to be more efficient in this area?
With the advent of subscription-based application services, investment in technology can start at surprisingly low levels - say, at the tens or hundreds of dollars per month for a small to medium enterprise. Also, growth-driven incremental increases in subscription fees are relatively predictable compared with when companies were reliant on older in-house systems that were often subject to expensive hardware re-platforms, storage upgrades, software migrations and ultimately total replacement.
At Stellar, our total spend on IT application systems is less than half a percent of our revenue.
Looking at the kinds of systems you have at Stellar, what do you think has
saved you the most grief as well as money? What could you not live without?
We can't do without email (Google GMail) - it's now become our repository of commercial record, reflecting pretty much everything that is commercially and legally important to us.
Our timesheeting and invoicing applications (WorkflowMAX, Xero) is the key to our receiving revenue so we can't live without that. Safari Books Online is used to store and retrieve all our technical documentation so that's important too.
iPayroll is used to pay our people - obviously vital to our continued existence.
All these are subscription-based cloud applications.
Next week we hear from NZ's SMEs involved in manufacturing. What are your challenges and achievements, what are the benefits of manufacturing in NZ?