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Advanced
How To Guide
Formulating an IT/eBusiness strategy for SMEs
Step
1. ICT Health Check
Identify if there are any aspects of your current ICT
set up which poses serious risks to the company. Such
threats might for example include being highly vulnerable
to losing critical data, to fraud, or to viruses that
could bring down the computer system etc. Some weaknesses
may be sufficiently serious that they should be addressed
before proceeding further with strategy formulation;
others may be listed as priority issues for your strategy.
An SME should have an ICT policy document, which clearly
states what procedures and processes are in place to
counteract threats to the company caused by IT systems.
There should be procedures for business continuity,
data protection and so on. All pertinent company personnel
should be audited as to whether they have knowledge
of and adhere to the company ICT policy. At this stage
it is also worth reviewing whether you are making full
use of the capabilities you already possess. Consultants
familiar with Irish SMEs assure us that many of them
do not do so. In some cases, making better use of existing
systems may reduce or eliminate the need for new investment.
Step 2. Formulate your Business Strategy
Your ICT facilities are there to help you implement
your business strategy. You thus need to be very clear
on your overall business strategy, before deciding what
ICT facilities you need. If not, consider deferring
your ICT strategy until you are.
Bear in mind that the impact of eBusiness and IT may
be one of the factors that you should consider when
formulating your overall business strategy. For example,
the increasing power and cost effectiveness of ICT may
open up new business opportunities that would not have
been feasible in the past. An obvious example of this
may be selling over the web. A less obvious example
would be sending invoices by electronic data interchange
[EDI] to your customers. Equally, however, the way in
which customers, suppliers or competitors are applying
ICT may create new threats to which your business strategy
must respond. It is however, only one of the many factors
to be considered, so do take it into consideration,
but not to the extent of ignoring the many other critical
business issues.
Step 3. Identify Possible Opportunities
for Improvement
Identify possible ICT projects that could contribute
to your business strategy by for example, cutting costs,
making more accurate or timely information available,
speeding up order deliveries, reducing errors etc.
Step 4. Compare costs versus benefits
for each possible project
While it is not easy to be very precise, you should
attempt to estimate the true cost of each potential
initiative, in terms of capital cost, operating cost,
training, staff involvement, consultancy, consequential
extra upgrades that will be required, ongoing technical
support, license fees etc. These should be compared
with the likely benefits, which should, in so far as
possible be quantified.
In theory, a cost benefit analysis should give you a
clear indication as to which projects should proceed.
In practice, your analysis will indicate that some initiatives
are definitely worth doing, others are non-starters
but the justification for many will depend on which
set of assumptions you use. At this stage, intuition
and business judgement has to be applied.
Step 5. Prioritise
Most SMEs lack the money to implement all the projects
that they would like. Even if there is a pot of money
in the bank, staff and management often could not cope
with implementing several significant projects at once,
while also doing the "day job".
Choices have to be made, not only about which projects
to drop but also about the sequence in which they should
be implemented. This is not just a question of doing
the most important ones first, technical and other practical
reasons may dictate that certain project must be completed
before others can start.
Step 6. Plan you supporting actions
IT projects may require actions other than simply buying,
configuring and installing hardware and software. Additional
work may include for example recruiting, training or
redeploying staff, changing physical process, running
a marketing campaign for a new website, putting new
disciplines and procedures in palace and ensuring they
are adhered to etc. Your overall plan has to take account
of these.
Step
7. Set Times, budgets, responsibilities and Communicate
A strategy is only useful if it is implemented. The
first step in implementation is a detailed plan. For
each stage of the implementation process, including
the "supporting actions" mentioned above set
out: -
- Start
and completion Date.
- Cash
and staff time needed.
- The
name of the manager responsible for making it happen.
-
Risk Assessment and Risk Management Strategy.
In
reality, each stage of the implementation process will
be successfully completed if treated as a project and
if proper and recognised project management practices
are applied to each stage. It is also important to communicate
to people what you are trying to achieve and why.
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