Advice for a small company owner

From the business aspect, Information Technology (IT) can automate many things, increases efficiency, effectiveness as well as reduce costs and increase profits for the companies, regardless of the size. But there is a misconception that IT is only good for large companies but not suitable for medium or small size companies.

Few years ago, a friend who owns a small company told me that his company of eight people was doing fine without computers. I asked him: “Do you call customers by phone? He answered: “Of course, we talk to customers about our services all the time.” I told him: “In that case, you can only talk to eight customers at the same time. If you use email to send information about your company, you can reach unlimited number of customers. Sending emails save you time by avoiding the need to make phone calls on individual basis and your workers can use that time to do other productive works.” Since he seemed reluctant, I continued: “What will happen when customers need your service after working hours? He explained: “We have phone answering machine for customer to leave us messages.” I told him: “In that case your customer has to wait until the next day when you check phone messages. Today many businesses operate 24 hours and 7 days a week, if you service is not available, your customers may contact your competitors and you will lose customers. But if you have an automated customer service system to handle customer calls, it will get the customers’ messages, then contact you or send a text message to you. You decide to respond or not depending on the urgency but an automated service software saves time and allows customers to reach you in case of emergency.” He seemed convinced but asked: “I do not want to pay a lot of money.” We began to put some numbers together and he was surprised to learn that the cost of establish a small information system, including eight computers with access to the Internet did not cost as much as he thought but can help his company significantly.

Few months later, he called and told me that due to the efficient information system, his company has grown to 30 persons and he wanted more advices on expanding his current information systems for effectiveness. I told him that he may want to install a Customer Relationship Management (CRM) system to automate his sales process. I said: “Your company has many customers, when you put all of them into the database, the software can automatically organize them into different categories. For example, which customers that workers should contact first to provide service; which customers workers should contact for sales; which customers workers should schedule for marketing calls; which customers have paid in full, and which customers have not paid yet etc. This will save a lot of time on data processing and avoid more paperwork. As company owner, you can access the CRM system and check how your workers are doing at any time which saves time on meetings and waiting for sale report.”

I did not talk to him for several years until he called again and asked for more advices. He told me that his business has growing and now has over two hundred workers. He was excited: “I did not know about automation and efficiency but thanks to your advices, it worked well but currently I have problem of managing too many things. After getting some information from him, I suggested that he may purchase a small Enterprise Resources Planning (ERP) to manage the business more effectively. I told him: “Although ERP is mostly used in larger companies but your company is growing fast, you can still buy a smaller version of ERP. This software contains different components designed to manage a particular part of the business. Basically the CRM application that you already used is one component in the ERP products. The other components are human resources, accounting, inventory, and distribution. Each component acts as a repository of information for your workers. Similar to the CRM with sales and customers data, the ERP organize everything in your company according to each function which saves time spent on database management and information sharing. When all of these components are fully integrated, you can collect, extract and analyze all data in your company and using business intelligence software to provide you a “Dashboard” of critical information to help you make decision based on statistical facts and data.”

“Today Information Systems is a critical part of any company, regardless of the size. As more businesses are conducted over the Internet in digital formats such as emails, fax, text, and scanned documents you need to have an information system to manage them. You need to hire an Information System Manager to manage these increasing volumes of data and organize them into valuable information for variety of purposes from decision making to risk management. You need manager who are specially trained to do that, someone who has both business skills and technical skills. The information system manager will be your advisor, your consultant on all technical aspects and plan an information technology strategy for your company in alignment with your business goals. The more businesses your company grows, the more you will need information systems and highly skilled manager to support you.”


  • Blogs of Prof. John Vu, Carnegie Mellon University