The challenge of IT for start-ups & high growth businesses
So you’ve come up with your great idea for starting a business. Through hard work and personal investment, you’re starting to get the business off the ground. The vision that you’re painting and plans for growth are attracting outside interest and investment.
To start with, you could run the business on spread sheets, in your spare time, but as you grow you quickly appreciate that this could take up more and more of your time. Taking you away from where the real value is, your customers, your proposition, your product, your employees, your “whatever”. You’re aspirations tell you “we’re going to need a bigger”… office, warehouse, software development team, IT systems.
‘IT “systems”? We develop applications/make widgets/distribute whirligigs. We don’t do “IT”!’ Where do you start?
The range of options for implementing IT systems to support your business is overwhelming. So many choices. So many vendors after a slice of your hard-earned finances. How do you know which is the right one? Well there probably isn’t a “right” one. There are certainly “good” choices and “bad” choices, but one absolutely “right” IT system? Probably not.
Before you get too stressed, take a step back and consider a few things that history, academic research and practical application have taught us about the effective use of IT and the delivery of business benefit.
IT systems must serve the business
If you’re going to invest in IT, it needs to support your business and improve business performance, not add unnecessary cost, inefficiency or detract from “performing” business. So, the first step is to understand how your business delivers value to your customers; the capabilities that requires; how your employees do their work to provide that capability to deliver that value. Once you understand the value-capability-organisation linkage, the next step is mapping IT enablers to this “value stream” representation of your business.
IT should be used only where it delivers benefit
Technology is not the “silver bullet” that many vendors would have us believe. Sometimes, it seems like they’ve got a solution looking for a problem. Other times, introducing or over reliance on systems, actually destroys the business benefit by adding unnecessary complexity; removing important personal interaction; neglecting a critical business flow or compounding the integration of information.
Take a step back. Don’t jump into providing “point solutions” that end up as disembodied limbs or organs within your business, which work perfectly in isolation but do nothing to service the greater good of delivering business value. Look at the whole business system; the flow of information and product; the customer-employee-supplier interactions, and identify the options to deliver both functionality to a particular business area or process, and the overall integration and flow of the business.
Developing a business case, a rationale for the investment is widely regarded as essential, if you’re to remind your employees and yourself as to why you are implementing a change. Clearly state the benefits in cost avoidance; enhanced customer service; ability to be more responsive or ability to exploit an opportunity, whatever the purpose is to support your business operations and growth. And if the IT solution(s) doesn’t help you achieve those benefits, deliver against that purpose, then don’t do it or at least re-evaluate your approach to maintain focus on the benefits, outcomes and purpose that originally motivated your decisions.
Well perhaps not “everyone”, after all this is a “benign dictatorship and not a democracy”! Seriously though, the effective design, selection and implementation of new IT enablers for your business is dependent upon them being “fit for purpose”. That means satisfying both “what“ the system does and “how usable” it is. That means understanding how the systems will be used, how they will fit into the organisation, and encouraging participation throughout the life-cycle of requirements-definition-selection-implementation. You’re probably not going to be the one that primarily uses the new IT systems, so it’s important to engage those that will. That includes engaging customers and suppliers as well, if the processes and systems are likely to touch them in any way.
Now you’re likely to be a smaller organisation, closely knit and bonded as a team. You hopefully don’t suffer from one of the major challenges that larger organisations face when they are defining or implementing new processes: middle management. Research has shown that the support, cooperation of middle managers (or not) is key to the success of the implementation of business change be that organisation, process or technology or all three. If you have got a “middle management”, or even if you haven’t, engage key senior stakeholders from the outset. If there is any resistance, or persuasion required, then address it. Address it head-on and address it quickly. If managers, supervisors or team leaders are not “with the programme” then it will only make things harder.
It’s all about the individual
A common problem with the implementation of IT systems is that there is often a mismatch between the wider business needs and expectations, and the requirements, desires or behaviours of the employees who will be expected to use the systems. Now it’s generally not possible to offer individually tailored systems for each employee, but it is essential that systems effectively serve the needs of the user community. Actually, it’s probably not just about the individuals alone, you need to consider the team, the integrated organisation, the hand-offs and flow of information and work between individuals. The effectiveness of the overall business is as dependent upon interactions between individuals and components of a business, as it is about the performance of an individual aspect. This in turn leads us on to “ways of working” and individual or collective behaviours, as much as the technical execution of processes and operation of IT systems. Which leads us on to…
It is not sufficient to simply define the business process and requirements for IT systems and plough ahead with the implementation, without considering the impact on and changes required by the organisation. New processes, new IT systems will undoubtedly affect your organisation not just because it’s a new set of tools or procedures to be learned, but potentially new responsibilities, new skills and new behaviours as well.
Too often organisational change is considered as a bolt-on to process and systems implementation. Too often its tackled in an ad hoc manner. Identifying and tackling these changes requires a proactive, planned programme, integral to the business and technical activities of any project. A structured programme that is however flexible and can be tailored to changing organisational requirements. After all, your business is dynamic, and isn’t going to stand still, even for a few weeks and certainly not months.
Your employees have got to be willing to use the systems.
One of the key outcomes of this structured and proactive change programme, is preparation of the organisation and employees for the introduction of new ways of working, new processes and new tools for them to do their jobs efficiently and effectively. This means that any IT products that you implement need to help them with their daily activities; help them do “meaningful” things to service your customers, to deliver your products, to run your business efficiently and effectively. The employees need to be able and willing to use them. Not by-pass them; have to devise a cunning work-around; print things out and retype them into a different system, or blame the system for poor performance.
This means, not only understanding what employees do to deliver value to your customers, and involving them in the definition, selection, design, but also, training them in the use of the systems. Whatever applications you implement, or cloud service that you buy, don’t squander that outlay by scrimping on education and training.
Finally, evolution and growth
No process, system or service is going to be perfect on Day One. It’s also highly unlikely that what you implement now is going to remain unchanged indefinitely. You’re business will continue to grow; continue to adapt and mould itself around new opportunities; respond to market intelligence and feedback from customers. These changes, potential future requirements, the need for additional capacity, capability or functionality need to be anticipated and progressively planned. Actually they need to be identified upfront, before you select or implement anything. You need to make sure that you have an evolutionary path, and are not going down a cul-de-sac with your initial investments.
As importantly, you need to anticipate the problems that will occur post-implementation. There need to be mechanisms for capturing and responding to issues and suggestions from employees, with the ability to fix things that aren’t working and make rapid changes to ways of working and/or systems. You will need indicators that processes, systems and people are working, as you would expect; that customers are getting the value that you need. If something isn’t working, or needs a little tweak, then change it. Don’t become a slave to the “as-designed”, “as implemented”, “must make it work” mentality. If you’ve done your groundwork in the initial stages of the design and selection, then the issues shouldn’t be fundamental. Fixing them quickly, responding to feedback and making improvements, will ultimately enable you to get the benefits and business value from your new systems and processes that you had originally envisaged.
Investing in IT systems for any business is a significant activity and event. Too often the selection of good solutions is compromised and the implementation fraught with difficulties. By adopting the principles described above, which originated from Socio-Technical research and practical application over the last 20-30 years, organisations no matter what size or stage in their life-cycle can improve the likelihood that those investments will deliver the benefits and value required by you as a business owner or senior manager and that expected by your customers.
LIBA Consulting and Advisory Services believes in providing clients’ businesses with robust, practical advice grounded in sound academic principles. To that end, we have developed a strong partnership with Professor Neil F Doherty and Dr Crispin Coombs from Loughborough University School of Business and Economics.
This post is a great example of connecting practical application to academic study and the structure was extensively informed by a research paper – Doherty, N.F., The role of socio-technical principles in leveraging meaningful benefits from IT investments, Applied Ergonomics (2012), http://dx.doi.org/10.1016/j.apergo.2012.11.012 (or direct from the authors)
For further information about current benefits realisation management research projects at Loughborough University visit: http://www.lboro.ac.uk/departments/sbe/research/centres/cim/