Working in the margin
Friday 9 July 2010 - Filed under Business and Technology
Turn technology into a competitive advantage
For more than six decades now we have been using technology, specifically computer-based technology, to drive costs out of the business. Quaint hardly describes those now sepia pictures of serried hoards of clerks, stamping, signing and sorting multi-part documents in vast open-plan offices. Typewriters on every desk but phones only on the manager’s. And over the last 60 years we have slowly replaced those jobs with technology solutions and those people have moved their skills into different fields. Maybe you are one of them.
Today there is not much automation that is left to be done. Indeed most people in the computer business spend their time trying to replace the systems they put in 10 or 20 years ago and we are even replacing systems we put in only one or two years ago. And we are doing this now because we are desperately trying to drive cost out of IT.
With the way the economy has been for the past 10 years everyone is completely focused on cost containment.
But that is not the only way to keep increasing the margins in your business. Mr. Micawber once reflected; “Annual income £20, annual expenditure £19 19s 6d, result happiness. Annual income £20, annual expenditure £20 0s 6d, result misery.” Profit is the difference between income and expenditure. We have already driven out all the significant and unnecessary expenditure we can: the pips are squeaking, there is no more juice in the lemon!
Businesses that can turn technology to their commercial advantage will be the Glaxo’s, the BP’s, the British Airways, the Sainsbury’s of the future. It used to be, in 1935, that if you made it to the Fortune list of top companies you’d be on that list for 90 years. Today companies on the list last only 15 years there on average.
Look at FaceBook, Microsoft bought by a 1.5% stake for $250mn, or Amazon, worth over $50bn, these are companies that could not exist without technology to create markets, create products and deliver revenues.
So what does this mean for your business? Look to turn technology into a way of creating new revenue.
Maybe you can deliver your product and services to your customers through technology that gets it there faster, cheaper, safer. Do kids want to go shopping in the High Street? No, they want to surf the web, from their iPhone and get a package on their doorstep the next day. And kids have a lot of money these days.
Can technology help you understand your customers better? Help you with detecting trends, buying behavior? Can technology help you discover why customers don’t buy from you? Or why they start to buy and then stop.
Is the customer experience with your company better because of technology or worse? What can you do to make your customers become your best sales team because your technology makes them love doing business with you? What can you do to make your competitors look un-cool, out of date, not in tune with the customer?
If you have an idea for changing your business model does your technology allow you make those changes? Or does it hold back and force you to do things the old way? Can you model what effect your ideas might have if you implement them? Or do you have jump and hope?
How do you know that you are being successful? Does your technology tell you, give you feedback on how you are running your business? Does your technology monitor your competitors?
There are as many ways of turning technology into a competitive advantage as there are business people with ideas.
In this series of postings I want to explore ideas on how we start to use technology to drive sales, how we enable business owners to run their businesses proactively and how we Empower Change that increases the margins in your business.
Tell me how you turn technology into a competitive advantage.
2010-07-09 » Kevin Parker
22 July 2010 @ 9:32 am
Hi,
Enjoyed reading the article above. Technology is certainly transforming the way the majority of organisations do business and creating scalability to smaller companies which they could never have achieved 15 years ago.. or probably even 3 years ago; going forward this will only increase.
Technologuy has a massive impact on our business… firstly, looking beyond the internet and the myriad of online networking sites or opportunities to take costs out of the business through automation, for me Contact Management Systems are a fantastic use of technology if used correctly. With a few simple clicks we can access information on clients, set reminders, follow up on meetings, schedule calls etc etc.
We have been using Social Media in our business DNG Financial Services and DNG Mortgages for about 5 months now and it has had a very positive impact. It has allowed us to increase our Brand Awareness for little more than an investment of time, reach out to customers in geographic areas that traditionally would have been very difficult for us to do so and most importantly build rapport and engage with current clients and potential customers of the future in a way that could never have benn achieved before.. at least so easily.
In the 3rd quarter of this year, with a little.. ok a lot of help from individuals much more experienced than I which is not hard.. in Web Development, Optimisation, Social Media and marketing online we hope to significantly move our business forward in terms of branding and awareness.
Technology has us excited and our challenge will be to keep pace with it.
It was interesting that you mentioned the relatively short periods of time companies spend on the Fortune 500 list as compared to years gone by. Personally I think that will become shorter and shorter for the next few years (10-15~) and then there will be a reversal to how it was before but that’s a different conversation.
I also think that technology offers a very real opportunity to the youth in society, they have grown up with technology and can adapt much quicker and I can forsee that the number of millionaire’s under 25 will increase significantly in the coming years if they can match their skills to commerciality.
Additionally, for business owners, new challenges will arise in how these savvy young technlogy driven individuals should be managed. In the past if you were caught on FaceBook in work it was a wrap on the knuckles, in 5 years will it be a wrap on the knuckles if you are not on it?
Best wishes
Daniel McVicker
23 July 2010 @ 10:59 am
Daniel, thanks for your comments. You hit a very important point.
Technology doesn’t have to be expensive to help you run your business and you often have the technology you need in the software you are already using. As you say CRM (Customer Relationship Management) systems are great for providing the structure for ensuring the sales cycle is followed and tracked. Even MS Outlook or Gmail can give you this if you have the discipline to enter the data.
Today’s post is about the Millennials entering the workforce. Take a look when you can.
And, as always, feedback is very welcome.
Kevin
25 July 2010 @ 8:45 am
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Yup pretty much. Datasentiment
http://www.datasentiment.com and made in Northern Ireland.
Shameless plug I know but you did bring it up. Glad someone else is thinking about it.
Regards
Jase
25 July 2010 @ 8:47 am
I did quote part of the article in my original comment.
Can technology help you understand your customers better? Help you with detecting trends, buying behavior? Can technology help you discover why customers don’t buy from you? Or why they start to buy and then stop.
10 August 2010 @ 2:43 am
If you need proof look at the current retail powerhouses in the US. In the 1990′s Wal-mart built the largest intranet (second only to the US military) because they understood the power of providing real-time data to suppliers. Surely, they took a risk but in the end, they created a competitive advantaged that is unmatched even today.
Here in the US, examples are endless… Netflix killed Blockbuster, zappos.com killed DSW, Flickr killed Kodak.
What’s the moral…think about a business strategy that is healthy and functioning. Now apply the latest internet/cloud-based IT trends and think about how to reinvent the industry.
Unsure what IT trends are out there? I think I know of a free workshop worth attending…