There is no doubt that IT can generate value for your business. But having just a computer and software in your company does not mean that IT has generated enough value for you. To achieve maximum value of IT, a company would undergo various stages of IT transformation before achieving its full potential.
This article will explain the different stages of IT implementation maturity.
The first transformation of a company to use IT is the replacement of paper process with data keyed into computer instead. This would immediately bring benefits of data now being able to be retrieved easily from the system, instead of inefficiency to do with paper. However, this is just the replacement of work from doing it on paper to be doing it in a computer instead.
Most companies have reached this stage of IT implementation, as they have their computers and standard software for their daily operations. They would be able to generate their reports and print their documents from the system.
When the company grows, they would find that with the company will face the same problem as before, that there is more and more work that needs to be done by the same headcount. Many companies who are not able to transform, would have to slow down their growth and expansion because of this issue. However, companies that brings their IT to the automation level will fly high.
By having IT automate the work of the staff, companies are able to gain more productivity from each employee. Things which computers are good at, should let computers to do, allowing employees to work on higher business level need of the company.
Automation tasks which IT should do are like commission calculation, where if manually staff is to do, would take days to generate. This saves not only manpower, but by opening up the commission to be daily commission, this boosts sales for salesman striving to meet sales target.
There are many processes which businesses can automate on. Do you see anything in your company which is manually done by your staff which you think IT can help in? Transform it to an automation program and reduce staff work!
Computerization and Automation would help centralize your business process and makes it faster. However, your business process is still just a migration from the previous paper-based process. Businesses needs to shift to the next paradigm of IT and Internet system and process. This level would be Process Rationalization of your business with IT.
Rationalized process would take advantage of IT to enhance your current process. If your normal process is for managers to sign off in all purchases, a rationalized process could be for the system to only show the managers purchases above certain amount that need his attention. If you have to look at a aging and post-dated cheque reports to find which customers to chase payment, a rationalized process would be for the system to find out and email out to you the customers that need your involvement.
In the rationalization process, the existing flow is optimized to remove unnecessary steps, and enhanced to add in more control to align closer to your business flow. When a business has reach this evolution, your business process would be unbinded from your paper trail, and more on data flow.
Now with your department already optimized to the new age of IT, the next phase of transformation for the company is to have an Integrated Process between the departments or with external parties. This reduces duplicate work done by different departments, and communications and aligning of data as well.
The most common data integration in the system is between inventory and accounting module. More complicated integration is between invoices and orders between companies within the same holding company. Instead of needing to key in both company accounts, this is automated and saves 2-4 times duplicate entries for the same document.
Bank Statement and Credit Card Reconciliation also takes a lot of manpower to be read when it’s a paper-based statement sent to your company by the bank. Manually using the eye to view both results from the computer and the bank statement is prone to mistakes and is tedious for the accounting department. Computers can do the same logic again and again without being tired and complain, and with better result and accuracy. Integration your system with the bank’s system output enhance your company productivity further.
Other integration includes EDI, and automated import / export functionality which saves manual process by clerks in a company
The final step of IT transformation is for the company to be able to use IT to achieve Strategic IT advances. At this phase, the company would be able to make strategic decisions and benefits with information and recommendation provided by system and software.
Companies in retail use IT to transform their ordering process from manual centric calculation by buyers to an automated ordering system. The system would provide suggested order through product’s pareto ratio, movement and sales trend calculation, allowing store operations to scale easily. Strategic reports like product ABC reports allow users to identify and take action only on the important items.
Managers of the company which has reached Strategic IT maturity are freed up to think about any company initiative, without thinking of constrains brought by manual process or IT system. IT in the company is matured into a level that it can support any new company plans for growth and expansion.
With each IT maturity, it will bring a whole new set of IT benefits to the company. Which level do you think your company is in? How do you think IT can help you? Xeersoft can lead IT transformation in your company. Please feel free to contact us at email@example.com if you need more information.