In 2019, Digital transformation is driven by the growth of the following technology enablers: Big Data, the Internet of Things (IoT), Artificial Intelligence (AI) and Cloud Computing.
With many IoT devices connected to the internet, massive amounts of digital data have been collected creating mountains of information stored in Big Data repositories. Cloud applications empowered by AI-aided programs are analyzing and processing this data to make intelligent business decisions on who to hire, what to produce, how to market and where to sell products and services.
Facebook, Apple and Microsoft for instance use AI technology to store facial features from tagged images on their platforms and then recognize people automatically. They can apply this technological knowhow using security video cameras that capture video and more importantly recognize the people in these videos.
Leveraging this information results in hiring talented technical and management staff to give their companies competitive and unique advantages.
Automation Requires IT Resources, Embrace IT!
Smaller companies are not able to compete directly with companies like Facebook, Apple or Microsoft. They are however, leaner and more agile. They can compete in niche markets by adopting the same technologies to advance their own agendas.
There are many ways to involve IT resources. If they are strategic to your operations, you want to create an IT department and staff it on a full-time basis. IT can be instrumental in transforming your company digitally. But they are just an important part of the process. They should not dictate or drive it.
If however, your products and services do not require an IT core competency, you can hire part time IT staff, off-shore this work or outsource it.
Regardless, IT will play a central role in creating efficiencies and digitalizing your processes across all your functional departments. They will help with automation and integration tasks. They will also help secure your digital company assets from inside and outside threats.
1099 vs. Outsource vs. Offshore
Working directly with contractors has many values. You can engage them when needed and let them go when their work is done. Contractors usually assume all overhead involved with employee taxes, insurance and benefits, enabling you to pay a higher per hour rate. 1099 contractors can create a risk since they often work alone, not be covered by a liability insurance, and may not have the stability or security that a large firm can offer.
If you prefer not to deal with individual contractors, you can hire a company and outsource your IT projects to them. Companies are staffed with account managers, project managers and technical staff, so their overhead is higher and often command higher rates (unless you hire them offshore). You pay more, but you will have the professional support of a full organization that can commit to schedules, budgets and quality standards.
If your IT tasks are long term but not very critical to your operations, you may consider opening an Offshore Development Center (ODC). Here you can setup an overseas operation to hire and manage a full-time team. You can save about two-thirds of the costs incurred in the U.S. by offshoring to countries like Brazil, India, China, Russia and Central or Eastern Europe. This idea may sound farfetched for a small business, but it isn’t. With the advent of high-speed internet, they will be virtually present when you need them.
Millennials are very fond of the gig economy. This phenomenon is worldwide. Do you need a website designed or updated? Are you looking for a developer to help streamline your CRM processes or interface it to QuickBooks? Are you seeking help automating your billing or invoicing? You can find thousands of qualified and available resources to start working on your projects in a short lead times on Credo, Upwork & Freelancer.com. They squeeze out the middleman and facilitate identifying, qualifying, hiring and paying talent online.
Automate Mundane & Repetitive Tasks First
Identify the areas in your operation that require or can benefit from IT support. Then set your priorities. Start with easy wins. Look to automate mundane and repetitive tasks first. Are you spending too much time on data entry, filing, scheduling or bill paying, or, any other time-consuming mindless task? Look to automate these first. It will save you time and greatly help improve your workers’ morale. By automating mundane tasks, your employees will appreciate your consideration of their time, your commitment to automation, and your ambitions toward digital transformation.
Use Off-the-shelf Solutions & Subscription Based Software
Companies with internal development teams are at times tempted to develop tools internally to meet their very specific needs. Don’t fall for the “not invented here syndrome!” Software development is a substantial undertaking and requires tremendous resources and time to spec, plan, implement, test, and maintain code.
Purchase off-the-shelf software when available, or, better yet, lease it. Subscription-based software is now ubiquitous. You can pay for it on a monthly basis and get free updates and support in the process.
For instance, subscribe to Gmail, iBackup, MS Office 360, Google Suite and Google Drive, Adobe Suite, and other needed software. Save yourself a lot of time, money and headaches by fulfilling as much of your software needs with off-the-shelf leased solutions. Let well-established companies work for you, delivering and maintaining leading edge solutions and services.
Evaluate competing solutions extensively before committing to the one you want to implement. This is true when they require elaborate setups. Database-centered solutions like customer relationship management (CRM), enterprise resource planning (ERP) and Accounting provide a good example. Once you adopt a solution and customize it for your needs, enter your data. Keep in mind that it will become much harder to export the data and transport it to other solutions, once you commit a certain solution.
Use IT to Help Integrate Applications
After you’ve implemented the needed solutions and mundane tasks are automated within all your departments, you can divert your IT team’s attention to streamline your value chain. Here, you will be looking into interconnecting processes, solutions, and tools to create further efficiencies and minimize human error.
Consider connecting your ecommerce site with your CRM software, CRM with fulfillment, fulfillment with ERP, ERP and fulfillment with accounting. Many of these enterprise level solutions are very mature in features and functionality, where APIs and connectors are available for you to use. This will minimize development and debugging time leading to the comprehensive integration you seek.
Use Cloud Services Instead of Internal Servers
With cloud services offered by many major companies like Amazon, Microsoft, Google and others, there is no need any more for any small business to incur the effort and expense of acquiring, installing and maintaining in-house servers. You can lease all the data horsepower you need. They are reasonable in price, and most important, can scale with your needs. You will save on hardware and the energy needed to power and cool the servers. You will also save in maintenance and support of the hardware, backups and security measures needed to protect and secure your data.
Secure Your Data
Digitalization is a double edge sword. While it gives you the ability to access your data from any place around the world with an internet connection, it does open the door to the possibility of unauthorized access of your data by many bad actors.
Intruders will relentlessly try to access your servers and data. So, you want to protect your intellectual property and assets. You also must protect client and user information.
Institute effective measures to protect your digital assets. This may include a virtual private network security at your workplace, antispam, antispyware and antivirus software on all computers, and user password policies that give sensitive data access to only required personnel on a need-to-know basis.
Don’t Work for Technology, Have Technology Work for You
Unless technology is at the core of your competencies, you want it to work for you, not the other way around. This means that you will be using technology to serve your business purposes and goals.
As a small business, you can’t escape needing IT help. The ROI can be significant. You can outsource many of your IT functions. You can also minimize IT capital expenditures by subscribing to cloud-based hardware and software solutions.
If you must hire an IT team full time, look to opening back-office operations overseas. International IT staff can be hired at a fraction of the cost of their local counterparts. In the past, IT professionals had to be where the hardware and software was located. Today it resides in the cloud. Your IT team can be virtual as well.
Ubiquitous professional cloud products coupled with freelance IT staff hired only as needed will help you streamline your operations, reduce overhead and minimize down time disruptions.
Your goal should be to join the digital age by avoiding reinventing the wheel. Use IT to streamline your value chain and achieve digital optimization, then transformation.
Copyright © 2023 SCORE Association, SCORE.org
Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.