Survival Kit of Business
Traditional means of running business without or with the minimal aid of technology tools and corresponding services is still predominant in most companies locally today. These companies tend to look at technology as the last resort to improve their business as it is seen more an expense rather than a strategy to increase revenue, especially in times of economic difficulties. Due to lack of investment capital, increasing prices and lower sales, companies allocate their budget in areas that produce more tangible results. Further, most companies are satisfied with their traditional technology infrastructure set-up as long as this still works for them. So much so that the utilized equipment still meets the minimum expected output.
However, the business strategy to adopt more advanced technology tools and services to support and bring business to a better form in the long run is set aside. Things like Total Cost of Ownership (TCO) and Return on Investment/Information (ROI) are not seen clearly in the advent. Most often than not, companies decide to purchase and replace an existing technology tool when it is damaged or is no longer working. This move is done repeatedly when the problem occurs. These companies fail to see the considerable effect of solving problems piece by piece, ending up to a more expensive TCO in the future. Also, the whole picture to address technical problems that may have indirect effect on the entire business is concealed. As a result, the expected ROI is far from reality.
Information Technology (IT) plays a vital role in today’s fragile state of economy - a survival kit of business. For a business to survive and cope up with pressures brought upon by financial instability, it must be both economical and competitive. In order for companies to withstand the challenges and stay in the mainstream, different strategies are drawn up and implemented. Some of these are cut expenses, improve sales forecast deviations, create cross-functional roles, freeze hiring, lay-off personnel, integrate planning, centralize decision making, and many more. All these are suitable business remedies. But, one way or the other, an activity and process deviated from familiar operation must be complemented by a corresponding aid or support to meet the desired objective. Otherwise, the output may be below standard. An example is in Retail, cutting expenses by means of reducing inventory level due to lower customer demand may have ill or good effect. To formulate correct projections that the supply meets the demand, competent and complete product and customer information, including buying patterns and behavior are needed to achieve sales forecast more accurately. Another scenario is in Manufacturing, where cross-functional or diversified roles are implemented to minimize hiring and lay-off of personnel. This approach may lower down operational cost but may sacrifice efficiency and extend the time to accomplish work. The skills set and proficiency of one person differ from another, aside from the outcome of performing several tasks at the same time. In this case, the availability of a knowledge base, unified operating system and peripheral devices are needed to maintain continuity and proper execution of work. Specialized skills that are not the company’s core competency are outsourced from third party suppliers or service providers bringing in lower cost and more efficient result. Last example is in Banking, where integrated planning and decision making are indispensable to align and standardize the processes and systems of one or more branches and affiliates nationwide. Greater challenge is manifested on acquired or merged banks having heterogeneous systems. Integrated application systems and centralized information are needed to sustain the bank’s operation. All these scenarios boil down to require a means to support the business strategy implemented that is IT.
Information Technology should be recognized as an aid that can provide both savings and value in today’s business rather than expense. Companies must enrich their understanding of the benefits of IT in business on a wider perspective, most importantly amidst financial strain, to see the measurable value. Employing the appropriate technology and services to address business pains and carry out strategies can be the turn key to attain each company’s goal. In response to the changing market condition, IT can help provide simple, integrated, reliable, secure and automated infrastructure to achieve higher level operational efficiencies, reduce risks and produce rapid cost saving strategies. The availability, integrity and completeness of information allow decision makers to have a well-based and more reliable plan to gain competitive advantage and better value proposition in the market.
With the present economic condition, competitive business environment and advanced technology innovation, IT must be considered a vital element of the business structure. IT serves as the survival kit of business that can generate cost savings and competitive advantage by means of having a clear objective, well-defined and documented process, and the right technology provider that translates business requirements into reality. Further, companies should focus their attention on the business value IT expenditures can deliver rather than dwell on how much money is spent on IT to perceive and appreciate the advantages.
By: Jay Anthony M. Agosto
December 07, 2010
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