The business environment of the 21st century is more competitive than anything we have seen in years gone by. In part, this is due to the rise of the Internet and ecommerce – for a web-based business, barriers to entry are low, and therefore it is easy for new entrants to join the fray in almost every industry you can think of, particularly in the service sectors.
A more competitive market might be good news for consumers, but if you are one of the suppliers battling away in the bear pit, it can be a real challenge to differentiate yourself from the rest, and any edge you can get will make a difference.
It is easy to get carried away by being too outward-looking. Of course, the product or service offering is absolutely vital, and you need to understand your customer needs and so on, but there are also internal considerations that can make a big difference, and this is where streamlined systems come in.
In short, by making sure your business operates as efficiently and effectively as possible, you reduce costs, increase productivity and deliver your product or service better, faster and at a lower cost. Let’s take a look at two fundamental ways to make it happen.
Systems integration
Every business is reliant on its IT systems, and we all know how much these have developed over the past few years. The problem for a mature business is this very evolution. The chances are, you started out with an accounting system, then over the years it was joined by a customer database, an ordering system, a stock control system and probably numerous others.
If this sounds familiar, you are not alone, but it is a hugely inefficient way to operate a business. The same data is logged on multiple systems, and this means trouble for a number of reasons:
- Duplication – you are entering the same customer data in every different system.
- Errors – the more info there is, the more likely it is for mistakes to creep in.
- Confusion – staff have to navigate multiple systems.
- Data decay – in the modern business environment data decays faster than you would believe possible.
- Systems admin – multiple systems mean extra work keeping them operating, backing them up and so on.
Having all your systems in separate silos can be like weeds around a ship’s propeller, and one of the most effective changes you can make is to streamline these into one integrated system. Suddenly, all your data is in one place, and every aspect, from customer orders to invoicing to stock management can be accessed from a single user interface. Even better, you can cross-reference the various aspects of your business to spot those interrelationships that might otherwise have gone unnoticed, and make better strategic decisions.
There are a number of different IT systems on the market, be they off the shelf, bespoke or a blend of the two. There is no simple, one size fits all solution – it very much depends on your individual business’s needs, but one thing that is important is to get the right advice and make the best choice. Once the infrastructure is in place, you do not want to have to change it again in a year’s time. Someone who has been there and done it with many businesses is Charles Phillips. As the CEO of Infor, he has provided the right software solutions to some 70,000 different companies, large and small, from a variety of industries in 164 countries around the world.
Outsourcing
The other major business efficiency you can leverage is by sticking to what you do best. Whatever your business, there are always certain specific skills and areas of expertise on which your competitive edge rests. Similarly, there are other processes and functions that are completely unrelated to these core attributes.
The best businesses are experts at telling the difference. Whether it is HR, finance, facilities management or systems admin, if it is outside your area of expertise, hand it over to someone who is a specialist. Invariably, they will do it better, cheaper and faster, because it is what they do for a living.
When you think about it objectively, it becomes a no-brainer. The question is brought into sharp focus by the story of a successful insurance claims investigator, whose wife asked him to look at a leaking pipe. He instead called in an expert, telling her he would not expect the plumber to start investigating insurance claims.
Focus and efficiency
To survive in the modern business world, it is, of course, important to understand the external factors, but businesses also need to take a good look at themselves. The methods that worked in the 20th century will no longer cut the mustard in today’s competitive environment.
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