Growing for the Gold
Planning to Succeed
At Spyder, Smith says, the company opted for a vanilla implementation of a high-end system. That allowed Spyder to offer the information services that its vendors and customers expected without getting stuck with the high costs of a custom version, a luxury few small companies have. It also allowed Spyder's new system to explode out of the gate, without limiting future expansion possibilities. To keep control of the implementation costs, Spyder negotiated a fixed-cost contract from Deloitte Consulting.
"The easiest thing is to say, 'I have this one very specific problem, let me invest in something that will solve just it,'" says Ray Boggs, vice president of SMB and home office research at IDC, an analyst firm based in Framingham, Massachusetts. But what these managers need to do is take the next step and think of that problem in the broader scheme of where the business is going. Otherwise, they make the real mistake of buying one-off pieces that duplicate effort but don't communicate with each other, making IT a headache rather than a help.
The owner and senior managers need to take the time to come up with a plan for the business as a whole. "Then they should ask, 'On the road to accomplishing this, what will I need?'" Boggs says. In his research, Boggs has found that having a business plan is the single thing that separates companies that will last from those that won't, no matter how fast the companies are growing right now. It's hard to make the time in the press of everyday business, but that's what managers do. "Provide your business with some adult supervision," he says.
Michael Fritsch, CEO of Prometheus Performance Systems, which offers training and consulting on financial information systems to small businesses, says that a business should start by defining the goals for the technology investment as part of its business strategy. Is it to make the company look bigger, improve operating efficiency, or add staff without renting more office space? Each of these will lead to a different type of investment. "Figure out what you want before you go out for bids," he says. "Keep the wish list in functional terms. That way, the vendors can show you what their approach would be, leading to more creative thinking all around."
Boggs suggests that SMBs do some careful research before making a commitment. "You don't want to be the last person to adopt something, but you don't want to be the first," he says. As with so much of business life, he recommends networking, something entrepreneurs tend to be good at anyway. Business owners should ask questions at conferences, do online research, and ask peers about what systems are out there and what features make a difference in that industry. "Businesspeople in the local community who are not direct competitors are often great sources of information," he says. "You can learn a lot from them."