As the saying goes, “Technology is wonderful when it works, but when it doesn’t, it can be a disaster.” Technological applications are expanding across our industry. Using technology appropriately is simply another part of our tool kit. Businesses can spend a lot of money quickly for very little return on their investment unless an orderly plan is followed.
Successful companies, small and large, will manage technology and harness its power. Others will become bogged down in an expensive technological quagmire. Changing from paper to digital is challenging. Purchasing new computers or smart phones for individuals can easily become a confusing task.
One client of mine is currently investigating shop-management software to simplify and improve productivity. The initial investment is significant and some in the organization prefer to leave things as they are. They are experiencing the inherent paper-trail problems, including lost production and documents, illegible records and hours spent searching for information. Another business changed software and quickly discovered key reports were no longer available of a lack of planning beforehand.
In addition to business management systems, technology absorbs time as workers text, tweet and surf the Web.
Using technology effectively is like using your shop tools correctly. You don’t use a sledgehammer to drive a small nail and your business doesn’t necessarily need the latest software or computers. It’s a balancing act. Don’t lag behind, using old or outdated technology that hampers productivity. But don’t become so enamored with technology that you waste money on the latest and greatest toy when you don’t need it.
The goal is to make technology work for you, not against you. Avoid expensive lessons by considering these steps:
Set some standards
Purchasing decisions are often based upon advertising or personal relationships instead of research and this is especially true in smaller businesses. The owner, CEO or president might not be the best person to decide what is needed. Involve people who are actually doing the work and who will be using the technology to help define your needs. Talk to people in similar situations and learn from their past mistakes or successes. Determine two to three principles to base things on, such as work simplification, yield improvements and waste reduction as you begin charting your course.
Clearly defining requirements, desired outcomes and anticipated use are essential whether buying a smart phone, PC, laptop or other systems.
A client of mine with a 14-person shop has tried to force-fit off-the-shelf enterprise software to a business better suited to custom software. The owners decided the cost of the custom software was prohibitive even though key employees knew it would be more effective.
Customer-service issues have arisen and now the company is researching a new custom software package.
Some in our industry are not using technology in the quoting process and every quote becomes an adventure. Do not overlook the quoting process and quote reviews when setting standards.
Actual business needs should always guide the selection process. Think in terms of the processes and steps required for each order when setting up your requirements. Always keep customers in mind.
Understand your workload
People can become enamored with technology while overlooking the fundamentals of the work being done in a process. Depending on technology is fine, but you need to know the process.
For example, in a cutting operation, the cuts should be set up for optimum yield, so understanding the process is critical to the final cost. When quoting a new job using software, someone should review the quote and apply the “test of reasonableness” before it goes to the customer.
Technology is no substitute for understanding and judgment.
Keep it simple
Technological advances should simplify work rather than complicate it. Unfortunately, it sometimes works the other way. Focus on automating the repetitive tasks in your business, improving records and getting useful information from your processes instead of just having lots of unusable data. Overall scrap rates might be nice to have, but useful information is usually more detailed and can lead to a more streamlined operation.
Establish acceptable use policies
Establishing an acceptable use policy for the Internet, smart phones, social media or other technology available to employees is vital for preventing problems. It might not be practical to have a no-Internet or no-personal-calls policy, but rules and guidelines must be established, communicated, understood and enforced with appropriate consequences for violating the policy.
While flexibility can be inherent in your policy, it must be clear that work is more important than social networking updates and there are consequences for not following the policies. Certainly, “no pornography, no sexting and no bullying” should be included.
Training is essential. Asking employees to use new or different software or hardware without training is expensive in terms of lost time, errors and low productivity. Train people in what they need to know up front and offer refresher training to those who might need it.
Use technology for marketing
If your business is not on the Internet, you have been left behind. While you could have a modern shop with state-of-the-art equipment, the absence of a Web presence and company domain name sends the message that you are not up to date. The basic guideline is to create a functional, easy-to-use and informative website without it becoming a money pit.
Businesses in our industry are adding e-commerce options. One owner told me sales have increased significantly, but it was not easy to do. They learned that many items sold via the Internet required multiple phone calls and customer interactions. When considering how e-commerce could increase revenue, be aware that it might still require internal resources.
An e-mail newsletter is a simple way to keep your business in front of customers and potential clients. Small businesses can easily develop a contact list and publish a simple newsletter. Consider using a service like Constant Contact to help you publish a professional newsletter. Of course, the content must be written well, relevant and must make sense for your target market.
Many marketing experts say that businesses must be on Facebook, LinkedIn or other social networking sites. In our industry, the effect these sites will have on profitability remains to be seen. Certainly, it could be helpful as an overall part of your marketing strategy, but be sure it fits your business.
Be careful with smart phones
Smart phones are just pocket-sized computers with phone capabilities. Whether companies provide them or employees use personal smart phones for business, there are issues to consider. Wasted time, compromised company information (i.e. a lost phone) and deciding what to do when the employee leaves the company can have serious consequences.
Small businesses are particularly vulnerable since most do not have an IT department to provide security and controls. When smart phones are used for company business, it is essential to address their use and how company information is to be handled. For example: Is the contact list company property or employee property?
Following the steps outlined will help you use technology more effectively to meet your specific business needs. It is frustrating to hear “our system won’t allow us to do that” when a customer is asking for something special. Don’t fall into this trap.
“Never let your business systems dictate how you do business” is what I continue to tell clients. Insist that technology helps serve customers. Require it to conform to business needs — not the other way around.
Davis M. Woodruff is the founder and president of Management Methods Inc., a management consulting firm based in Decatur, Ala.
This article originally appeared in the June 2011 issue.