How to use technology to improve your profits
Information technology can be an effective way to make your company more productive and profitable.
Whether it's integrating your processes, enhancing your marketing abilities, better managing receivables or improving supply chain management, the right technology can dramatically improve how you run your business.
While technology often requires a significant investment, the long-term advantages usually far outweigh the initial costs.
Here are several commonly used tools to boost a business’s bottom line.
Accounting systems can help you keep track of all your transactions, billing and general ledger.
For most businesses, basic business accounting software will probably meet your needs. If you do business in more than one country, or if you want your accounting system to integrate with functions other than accounting, then you might require more complex, higher-end systems.
Supply chain management
Supply chain or inventory management software helps you automate your processes and track information about orders and deliveries. This helps you forecast supply and demand more accurately and ensure that your inventory can cover client orders.
Other benefits include reducing errors by automating transactions, speeding up deliveries to customers, reducing warehouse space requirements through improved inventory control and decreasing administrative costs by introducing automated systems.
Advanced systems can integrate with your accounting and invoicing systems so that all your systems use the same set of data. Using bar codes can speed up your data entry, but more and more companies are now using radio frequency identification (RFID) to automatically track their products using sensors throughout the supply chain.
Customer relationship management
Customer relationship management (CRM) software improves your insights into customer needs and behaviour as well as the management of your relationships with clients.
Benefits include an improved ability to anticipate clients' needs based on historic trends, targeted marketing that reaches specific audiences and increased sales through better client relationships.
Human resources management
Electronic HR systems can help you manage your personnel records, automate your payroll and benefits and help you schedule your employees. These applications can also help with recruiting and retention strategies as well as with employee development.
Enterprise resource planning
Enterprise resource planning (ERP) systems are a suite of integrated applications that allow companies to automate, manage and analyze many of its business processes.
Company activities that are typically covered by such a system include:
- sales/marketing/client management
- inventory control
- human resources
Because ERP systems offer different levels of sophistications and features, many entrepreneurs end up frustrated with their ERP.
Before you invest in an ERP system, it’s important that you create a detailed list of your requirements and shop around for the right system for your needs. Consider getting the help of a consultant to guide your system selection process.
Enterprise social networks and collaboration platforms
Enterprise social network platforms and collaboration platforms help employees engage with one another, collaborate and exchange information. This, in turn, allows them to be more productive and innovative.
However, for these systems to be used and effective, company leadership need to take the lead in showing their value.
Before you invest in any of these technologies, do a careful assessment of what's available to determine which systems are best suited to your company. (Most of the time, you should be able to find industry-specific solutions.)
All of the above tools are readily available today and are affordable for small and medium-sized businesses. Each product and vendor has its strengths and weaknesses. Some systems provide rich industry-specific functionality but lack fundamental features. Others provide a broader feature set that can be customized to meet the needs of different businesses and industry requirements.
When considering software applications, you need to consider your expected growth, the viability of the vendor, the stability and functionality of the product and the availability of third-party add-on solutions. Other key considerations include the total cost of ownership and the potential return on such an investment.