Jimmy McGuire looks at the problems caused when a business outgrows its own systems
The last few years since the global economic downturn have seen slow but steady growth for many businesses, with organizations bouncing back with expanded services, more customers and a greater overall offering. For the majority of these businesses, SMEs in particular, business growth, unfortunately, goes hand-in-hand with outgrowing the business systems that often lie at the very heart of the organization, especially if they haven’t been changed or updated in the last five years.
Add to this the fact that businesses are operating in an increasingly digitalized economy, a business world where Gartner predicts every company will be IT-led by 2020, and you can see why yesterday’s systems aren’t keeping pace. As growth continues, businesses find themselves part of this digitalized economy, where it’s no longer a case of if you embrace the digital world, but when, with the most forward-thinking companies acknowledging that the right technology is now as intrinsic to growth as employing the right people.
One of the main challenges faced by businesses who have outgrown their systems is the excessive reliance on manual processes, an issue which can rapidly become a costly and risky problem for the business as a whole. The new economy is reshaping markets and transforming the way people interact and expect to interact with organizations. As such, it’s increasingly taken for granted that businesses can access the right information at the click of a mouse. However, in reality, many organizations are working with disparate, fragmented systems, a great deal of which are highly customized. To extract meaningful, company-wide data from such systems requires the amalgamation of information and the pulling together of separate departmental reports, usually involving the re-keying of data, an often time-consuming and error-prone strategy.
This reliance on manual processes is inextricably linked to another challenge for businesses where their systems aren’t fit for purpose, and that’s the extra time and resources spent on bridging the technological gaps, time and effort that could be well utilized elsewhere in the business. Not only do you have to take into account the time spent on compiling vital business information, but the very act of then using this amalgamated information to derive some real business value is greatly impeded by a lack of up-to-date business software.
Without the right systems in place, information needs to be manually analyzed and reports need to be generated to enable decision-makers to use this data to inform their business strategy. The time taken to do all this could be better used elsewhere in the business, identifying new opportunities for the organization and focusing on more value-add activities. Also, such is the fast-paced nature of the markets in which we all operate, the very data underpinning a particular decision could well be out-of-date by the time the resulting action is taken.
The technology is out there to solve these issues, automatically connecting, collecting and presenting the information to the right people, at the right time, in the right format, to quickly and effectively support decision-making, adding real value to the business. Many businesses are making-do for far too long, with sometimes inaccurate reports taking inordinate amounts of time to generate and decisions being made based on yesterday’s data. Those who insist on sticking to the status quo, will find themselves spending more and more time and effort bridging the ever-widening technology gaps, at the very expense of the business they should be developing.
This new digitized economy in which we all operate, a global economy that’s not without its share of volatility for a whole host of socio-political reasons, is reshaping markets and transforming the way we interact with organizations. It’s now more important than ever for businesses to have full visibility across their operations. Silos of information, disjointed reporting, disparate systems and disconnected processes have no place in the future and it’s these very issues that lead to poor operational visibility and ineffective decision-making based on limited, inaccurate business information. This lack of visibility can only lead to dissatisfied customers, which obviously affects reputation, reduces cash flow and ultimately, dents profitability.
A lack of visibility goes hand-in-hand with an inability to forecast accurately. Often limited by their own insistence on rigid forecasting processes, with set timeframes and specific deadlines in place, businesses do not (and cannot) adjust forecasts on a rolling basis. This leads to a lack of business agility, something which is vital for success in the ever-changing, fast-paced market of today, and limits growth by stifling the ability to quickly and effectively respond to changing customer needs. The need for full operational visibility has a direct impact on forecasting - the ability to take into account all significant factors, internal and external, from all areas of the business, is the only way to guarantee fast, accurate forecasts.
Information is key, and by investing in solutions which consolidate all business information, organizations can benefit from a 360° view of their own operations and the wider supply chain, adding real value to the business and underpinning decision-making with reliable, concrete data. The availability of the data and the ability to not only access the data but to also analyse it quickly and easily, adds a newfound rigour and diligence across the business, leaving nothing to chance and providing employees with the right tools to make the best decisions for the organisation, in full possession of all the facts.
With this comprehensive view of the business in place, forecasting becomes a more value-add function too. The linking together of all business processes and departments guarantees efficiency savings. For example, by linking inventory directly to production, the right solution can provide automated replenishment functionality alongside accurate order forecasting. This optimizes stock levels, reduces waste and over orders, and saves money. The ability to carry out rolling forecasts based on real-time, business-wide information guarantees greater efficiency all around, optimizing operations and maximizing profit.
By investing in the right systems now, growing businesses are putting down the foundations for further long-term growth, establishing a platform from which to constantly monitor and review operations. Technology is as important as hiring the right people, or buying the right machinery or launching a new sales drive. Now, more than ever, technology is the primary driver of profitability, particularly for those businesses for whom recent growth has seen them enter new markets or the competition has changed considerably. For these growing business, with the right systems in place, business leaders can ensure full oversight of the business, putting them back in control and clearing the path for continued successful growth.
To find out more about how technology can be used to help growing businesses, contact us.
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