The Benefits of Extending “Best Practice” to IT

Over time, I’ve heard many family business leaders (and consultants) espouse the benefits of best practices in manufacturing, distribution, finance etc.  Whether your business manufactures, distributes, or in fact specialises in any field, then you are likely always looking for ways to improve efficiency and deliver more effective outcomes. Likely, you want your business to be seen as an industry leader. Assuming you are a domain expert in your field, you aim to remain current on trends, or even set the trends.

Yet, while most family business leaders understand “best practice” as it applies to their own field of expertise, many overlook the role which IT plays in that mix - neglecting to consider the broader impact that any plan of action can have on the business as a whole, regardless of how well that plan addresses a specific issue at hand.

Why is this important?

Often when we engage with new SME clients, we see recurring issues that limit the success of their IT strategy. The advice they have historically received focused almost exclusively on the application of technology to address a very specific pain point or need - usually the most pressing one at hand. While there is immediate gratification from an investment that resolves a specific issue, applying that solution without taking a broader view of potential implications down the track often causes trouble.

The most prevalent consequence is a poor investment. Less common, but still unfortunately frequent enough, is an adverse business impact that takes months or even years to recover from.  The challenge is to resist fixing the immediate problem at hand, step back, and take a more holistic view. It’s far more costly to correct the mistakes associated with a poor technology investment than to prevent it by extending best practice to IT.

So how should it be done?

Family businesses that consider their entire enterprise when making IT decisions, achieve great outcomes.

• They look holistically at their overall plan;
• they consider their 12-month, two-year and five-year timelines;
• they chunk the masterplan into consumable segments;
• they work to understand all the underlying factors;
• and then, like pieces of a puzzle, start placing them together in order to achieve a cohesive, well-thought-out approach.

By considering the bigger pieces of the project through planning and analysis, they end up with a better outcome when they eventually invest, receiving a far more significant return, as well as minimising risks. It’s like the old saying “measure twice and cut once” – the same thing applies in a technology context.

Steve Jobs encapsulated the need for an IT strategy in one sentence. Technology is not a solution in and of itself. If not applied strategically, it can no more solve a business’ problem than randomly waving around various power tools do in house construction. Before investing in, and implementing an IT solution, the business that operates at a best practice level really understands what its expectations are.

Does your business –

• Focus on business objectives and needs first?  All too often, we encounter a lack of emphasis on the development of a requirement definition. It may not be something you are comfortable with, and it may be tempting to short-cut the process.

1. Don’t be tempted to immediately jump into looking for solutions and then attempt to reverse-engineer your requirements based on inspiration. 
2. Don’t fall into the trap of comparing your planned investment to an identical technology implementation at another business.

You cannot "baseline" the project before you start and then travel back in time with the data to justify your initial choice.

• Consider the Return-On-Investment (ROI) from technology spend?  Identify the benefits and costs, assess the likelihood of them occurring, and determine how far they can diverge without losing money. You can apply some key criteria to assess a project and the likelihood of a positive ROI:

1. How many people will be helped by the technology?
2. How often will people use the technology?
3. How costly is the current task or process?
4. How many manual hand-offs between teams are there at present?
5. How can the potential solution be reused?

Evaluate the payback period - this is the time it takes for benefits returned to equal the initial cost of the project and is a key measurement of risk. Ideally look for payback periods of less than 1 year. This will make it easier to discard the solution in favour of a better one for continuous improvement.

• Test, continuously?  Testing, if done at all, is almost always only completed when changes are completed, either through the implementation of new solutions, or upgrades to existing ones. Testing, however, should be a continuous process because change is the only constant in any situation. Even if the technology stack doesn’t change, your business, your people, your customers, and other external factors are changing. Through testing, you can identify inefficiencies and risks and have a chance to address or amend them before they become problematic.

Periodically, ask: 

1. What was expected benefit?
2. Was the solution deployed successfully?
3. Is it being managed well now that it’s live?
4. Were the desired outcomes achieved?
5. What could be done better next time?
6. Have any changes occurred since design or implementation?

Doing this on an ongoing basis is imperative, in order to achieve the maximum outcome from your technology investment and to ensure that you ultimately drive towards best practice.

What is the benefit?

Operating IT according to best practice means that you are at minimum considering:

• the stakeholders;
• the budget;
• the current culture and future direction of the business;
• the baseline architecture landscape;
• the current processes used for change and operation of IT; and
• the skills and capabilities of the people within the business.

I’ve previously written about the staff retention benefits that come with a solid operational strategy because most people are obviously happier to work where everybody knows exactly what’s going on. But operating at this level has an equal, if not greater, amount of impact on customer acquisition and retention strategies, because your customer is getting far greater value out of their association with, and investment in, your products or services. The reputational and financial impact that comes from this, of course, results in great benefits for the business over time.

by Tal Evans, CEO – Majestic Computer Technology

Majestic Computer Technology is an Australian Family Business that has been successfully building and delivering IT solutions in Australia for decades. Established in 1992, Majestic provides advisory, outsourced IT and business automation services to various small and medium-sized clients across multiple industries, including manufacturing, professional services, construction and engineering, health and life sciences and NFP sector. In addition to being a partner and member, Majestic is also the IT service provider for FBA.   www.majestic.com.au