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Posted: July 12, 2011

The small business technology challenge

IT should be part of strategic decisions

Marty Koenig

The IT function continues the challenge of becoming a strategic player in small companies. I've been an advocate of small companies using technology for their strategic advantage. However, most small biz owners aren't all that tech savvy, and if they are, they don't hold IT in high regard. Times have changed. Today's IT function no longer consists of young geeks wearing funny glasses and talking a funny language (IT speak).

If used right, IT can be a competitive weapon for small biz owners. Even if you're a software company, don't make the mistake of using those same people to manage your information infrastructure - it's not in their domain. I've had software biz owners tell me those people are their tech department, and I have said "No, it's not. The skills and experiences of software developers are so different, it's like equating a bank teller to a loan officer. And just saying, 'give that loan restructuring issue to the teller.' "

Small business owners have so many options on how to leverage information technology. From a CFO's perspective, many companies still look at IT as a cost, a necessary cash outflow that must be paid for the company to operate. Especially small businesses.

But in so many industries, IT can have such a great impact on growth and success and profitability, a biz owner would be remiss to NOT focus on how much IT can cause them to out-compete in their market. For example, how does the marketing department prepare programs to do deep dives into the results of their campaigns? The latest tools are phenomenally inexpensive even for small companies, yet so powerful. If the small biz owner is afraid to spend the money on IT, and only focused on selling or marketing their products/services, they'll continue with less than stellar financial performance, in most cases.

These days "the cloud" is a big buzzword. Who cares? As the trusted advisor and CFO for multiple companies, I care. But first because it can save a small/mid business lots of money. If used right. And my client's companies don't have to buy/lease, design, install, configure, operate and troubleshoot new systems when they leverage the latest in IT deployments.

Unless you're an IT vendor, then IT is not a core competency that will enable you to compete in your targeted markets. So why have the headaches when you can get peace of mind knowing a company that does IT every day? One that becomes a partner with your company and collaborates to help you make strategic decisions that will help your company be more successful and make more money.

I was amazed a couple months ago when I went into a new client's building, and found the servers and desktops/laptops were so old they could barely do their work. They certainly couldn't do the books very fast, and collaboration of the 40 employees was old school - just phone and email.

In the year 2011, there is so much productivity improving technology it can make your head spin. What biz owner wants to keep up with all that? A CFO at a small business should help drive the top line and competitiveness, not just focus on cost savings. The small business owner can open up his/her mind and see what's possible to focus his/her time on the things that will grow a company, and let the advantages of IT become part of the strategic decisions.

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Marty Koenig helps business owners who are struggling with their company's growth, so they can build the company of their dreams...one that makes them a lot of money and gives them more time with their family and friends. See his recent books at http://www.buchananpublishing or visit http://www.cxotogo.com. Read his professional blog at http://www.martykoenig.com. His private email is mkoenig@cxotogo.com. Call 888.745.8516. 

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Readers Respond

Marty, I don't disagree with you. The term "Cloud" has been overused. You can thank Microsoft partly for that. When their marketing machine gets a hold of something, they really make it pour. And that fact is that software solutions delivered over the internet on a subscription basis are not really "cloud" solutions but rather hosted. At any rate; most business owners could care less, like you said. They just want IT to work without worrying about it because technologies like email, collaboration software, etc. help them do more with less, be more productive, and can save them money. I only use "Cloud" services because it IS the buzzword right now. Ultimately, it is just a way to deliver IT solutions cheaper and easier; which benefits the customer as well as the solution provider. By Mike Webb on 2011 07 15
Thanks Robert. See you this morning! By Marty Koenig on 2011 07 15
Mike, the word "cloud" is so over-used these days. "CLOUD" is the "WHAT". See the nice picture here: http://en.wikipedia.org/wiki/Cloud_computing. What really matters is the "WHY". Competitive advantage, increased collaboration with customers and others, the reduction of headaches for the biz owner and employees, and peace of mind. Not to mention the potential cost savings, capital expenditure reductions, and more stable, predictable cash outflows. I want to start calling it "RAIN" instead. That's what the cloud creates for businesses. That's the WHY. Biz owners/entrepreneurs don't really care about the WHAT or HOW. By Marty Koenig on 2011 07 15
Nice article Marty. My company uses the "cloud" which is really just hosting in most instances to help companies utilize the latest business software to make them more productive and efficient. You are right that many small business owners don't see the big picture when it comes to utilizing information technology. With the latest hosting technologies, virtualization, Saas, subcription based IT offerings, they can utilize IT like never before and for less money. By Mike Webb on 2011 07 13
Great overview on an important business imperative! Thanks Marty! By Robert on 2011 07 12

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