This section discusses the power of information and communications technology (ICT) when used to initiate integrated business information.
Changes in ICT
Advances made in IC technologies over the past few years have transformed them into essential business tools that, used appropriately, can provide significant competitive advantage. Every two years, the cost of ICT systems has halved and computing power doubled, making it increasingly easy to justify expenditure and secure the potentially high commercial returns for your company from implementing these systems.
In many companies, over 90% of people in managerial, technical, administrative, commercial and purchasing roles have good computer skills and over 80% of these employees use them routinely in carrying out their job roles. These figures have increased considerably over the past five years to a stage where computing skills are becoming a mandatory requirement for new employees.
ICT Investment Levels
Spending on integrated e-business remains a significant item for most companies. Where a company has developed an integrated e-business strategy it is usually committed to spending between 2 and 6% of its operating revenues on ICT. This expenditure comprises five main elements: -
· Computer hardware and peripherals - (20-25%)
· Communication networks - (12-18%)
· Computers software and operating systems - (20-25%)
· Training and learning packages - (12-18%)
· ICT systems support, maintenance and repair - (20-25%)
Investment in ICT systems will be governed by the attitude and conviction of senior management. However, in all instances, investment decisions should be based on building a sound business case for the expenditure, rather than a fascination with the latest technology!
Everyone who will be expected to use, manage and/or maintain the system should be consulted and encouraged to contribute to establishing an appropriate ICT strategy they feel able to accept and implement.
The continued development of software systems has resulted in ICT support tools being available for most business activities. Functionality and ease of use, however, must still be critically assessed when seeking to purchase or upgrade such systems. The aim is to integrate activities and share common information, not necessarily implement a mammoth, all-embracing company wide solution. The important feature is to understand what activities the business has to undertake and find the appropriate ICT tools to support them.
A significant failing of many ICT systems is their tendency to adopt the same process to cover all requirements, making them too complex for 80% of the applications and inadequate for the other 20%. Your managers, therefore, will need to identify how different processes should be implemented based on the volume and complexity of the tasks, and then determine the most appropriate support tools and training needed to secure the benefits.
Benefits to be gained from ICT investment
Integrated e-business systems and the ability to exchange information electronically, both within an organisation and externally, with customers and suppliers, is becoming the norm for many businesses. This means that more companies and more people within the companies are requiring access to ICT tools. Many of the people who bought ICT tools before they had been fully developed experienced considerable difficulties when attempting to demonstrate the predicted benefits at audit reviews. To-day, although the functionality and ease of use of these systems has improved considerably, achieving real benefits still requires considerable skill and experience.
The key benefits to be gained from today’s ICT systems include the following: -
· The ICT systems allow and support the integration of your key business processes
· Modern ICT systems translate masses of computer-held data into the meaningful information that your people need in order to take good decisions
· With the help of ICT systems, your people can perform complex tasks and calculations more accurately, quickly and consistently.
· As ICT systems make information easier to both access and exchange, your business activities can be linked together and your people can use a common set of data
· Using ICT systems, your suppliers and customers can be given access to current information using secure internet connections
Preparing for ICT implementation
If you were painting your house, you would expect to prepare carefully if you were to achieve a good finish. In the same way, you will need to prepare your business before implementing an ICT tool. Many companies expect that the tools will solve their problems without any investment of thought or effort on the part of the company. This is a naive view. If your business processes are dysfunctional, ICT tools are likely to simply highlight the problems by exposing weaknesses more quickly and clearly.
If you want to get the most out of your ICT systems, you will need, before you begin to think about ICT, to review and simplify the areas which will be involved in the ICT. Once the manual systems in the area of focus are running reliably, you can think about automating.
If the ICT system you are considering is a wide ranging one, for example, MRPII or ERP, you will need to look at and simplify your: -
· organisation structures
· core processes
· material flows
· information flows
It may also be appropriate to group people in multi-disciplinary teams which will carry out and take responsibility for key activities.
Obviously, there is a lot of work here, but the benefits can be extensive.
Selecting ICT systems
Selecting the appropriate soft-and hardware for your business will need thought and, a good knowledge of both the way that your (now improved!) company systems work and of the offerings available on the market for this kind of ICT product.
Ideally, the software should work exactly the way your business does. Achieving this, however, inevitably involves bespoke changes to the software. This is expensive initially and almost impossible to maintain over any period. You will also lose the opportunity for any updates to the software. For this reason it is advisable to select software as close to your way of working as possible, then amend your working processes (as little as possible) to suit.
Some smaller companies or companies tied to a large customer, may find that their choice of ICT system is restricted to the system used or recommended by the customer.
Similarly, you may need to be sure when selecting ICT systems that they will be suitable to link with those of your customers and/or suppliers. This often occurs with procurement systems and CAD/CAM, for example. If this is the case, standards may help you. A range of national and international standards are available to facilitate computer communication and data exchange. You will need to do a little research and discover which Standards are used by the companies important to you.
Implementing ICT Systems
Most companies need help from IT professionals when it comes to implementing the soft- and hardware of even a moderately complex ICT system. Again, this will need careful thought. You will need to decide how best to: -
· Train your staff – many companies initially employ an expert to train a small group of company employees quite intensively. This group can then train the other employees with the support of the experts.
· Support the start-up period: Your people will also need quite a lot of support as they begin to use the system. Your expert users will be invaluable at this point.
· Organise the handover from your old systems to the new.
o Some companies try the ‘big bang’ approach, fixing a date and time to transfer everything to the new system. This is risky in the sense that if things go badly wrong, customer deliveries could well be adversely affected.
o The alternative approach is to run the old and new systems alongside each other, gradually phasing out parts of the old system as you gain confidence. This protects you from possible catastrophic failure of the new system, but involves your staff in running two systems at once, inevitably causing confusion and extra work.
Having implemented and deployed your new ICT system, you will still not be able to sit back. A limit on effectiveness for all ICT systems remains the accuracy of the data, particularly for manufacturing planning and control systems. Data on ICT systems must be verified at regular intervals to ensure it is accurate. Once the level of data accuracy falls below 95% the information generated becomes questionable and is in danger of becoming ‘garbage in’ and ‘garbage out’. This is a fundamental requirement of all systems which is not automatically corrected when investing in new ICT systems.
If you are going to take full advantage of your ICT systems you will find that your company soon becomes heavily dependent them. This means that you will need to ensure that your systems are both well protected and available.
When considering security, most companies focus on resistance to hacking into their corporate systems by using a firewall or such. It is also, however, important to also protect mobile data held on laptops, PDAs etc. This is often overlooked, but can be more vulnerable than the corporate systems. Government/defence customers may well have additional, special security requirements.
Having generated accurate data, you will need to ensure that you do not lose it! You will need to set up a system of backups, rigorously enforced, with copies held off-site.
If your business is heavily dependent on the systems being available, you will also need to think about either hot- (running alongside your systems, immediately available when your system goes down) or cold- (take a little time to start up) standby systems.
If all of this is outside your company’s area of expertise, it is possible to buy ICT services from companies specialising in it. You could buy a service where the computer systems are run for you, all backups are carried out and the capacity can be flexed at short notice. It is even possible to ‘pay as you go’ using a system via the internet.