Information System Management in small company
Today Information Technology (IT) has become part of every business and a key driver for the economy. The Digital Revolution is changing everything just like the Industrial Revolution has changed the world a century ago. However, in developing countries many small businesses are still operating the same way for hundred years without applying technology. Many owners do not see the need of using technology and some do not think they can afford it.
With globalization, competition is fierce and often happens quickly. In the past few years, many small businesses were being wiped out by larger and more powerful global companies. A small company owner complained: “I have been doing business for 35 years, I know all of my customers and have good relationship with them but I cannot compete with Wal-Mart, the largest retail company in the world. They move here and pushed out all local companies.” The evident is obvious, when fast food chains like McDonald, KFC, Taco Bell, Burger King, Pizza Hut or Starbucks came, most restaurants and coffee shops went out of business. According to a global report, millions of small businesses have filed for bankruptcy because they could not compete. As their business was no longer profitable, they could not pay off their bank loans. This situation also pulled down many banks into bankruptcy too and put a lot of people out of work.
To survive, small businesses need to use technology to be more efficient so they can defend themselves. It means they need to hire people who are trained in information technology to help business owners and managers understand the capability of technology in supporting the company’s business. The role of the IT manager is to develop and deploy an IT strategy to leverage technology for competitive advantage. In this business competitive environment, every company needs to have an IT strategy as part of the business strategy.
The majority of IT managers are coming from the Information System Management (ISM) or Master of Business Administration in Information technology (MBA-IT) where they are trained in IT strategy development and execution. According to the industry report, the demand for people with these skills is very high especially for small companies in developing countries. Implementing information technology in a small company is much easier than large company because of the small size which makes communication and collaboration across business units easier. IT managers must be able to explain technology actions in business terms so business managers can understand. (This is why computer science or software engineering graduates are often NOT suitable for this job.) For example, by automate the business process, the company can do things faster and better, reduce bureaucracy, and redundancy; by using database, managers can store and retrieve information faster and reduce costs; by having IT system to process all data, it is easier to expedite information from one place to another in variety of forms; by using business intelligent, managers can make decisions based on facts rather than intuition and eliminate errors. Since ISM graduates are trained in both technical and business skills, they can make this translation relatively easy. Today ISM graduates with these skills are highly sought after and often eligible to move up faster within the company.
To leverage technology for business efficiency, IT managers must start with an “architectural view” to avoid high integration costs and expensive future deployments. By having the knowledge of cloud computing, a good IT manager will consider this option rather than buying expensive equipment as the first step to deploy technology. In the past, company owners often make mistakes by buying sophisticated IT systems which require expensive maintenance therefore do not achieve the expected value from their IT investments. The same idea can be applied to in-house development and outsourced applications too. In the past, company owners often hire IT workers without understand what should be done in house and what could be outsourced and incurred expensive IT costs. By having knowledge of IT deployment, good IT manager will make decision based on an outsourcing strategy to help companies to improve efficiency, reduce costs, and be able to remain competitive in this globalized world.
ISM students are trained in the business value of IT and how to execute the IT strategy to support the business. They learn how to plan IT strategy, build applications, define processes, develop infrastructure to prepare the company for the challenges ahead. Successfully implementation depends on their skills to develop IT strategy as it must be aligned with business objectives and closely linked to everyday activities. Their skills in architecture will allow them to design a flexible information system where some parts can be placed in cloud computing area and some can be placed in-house. ISM students learn how to organize a competent IT group that can support the business of the company. When all of these factors are integrated, small company can achieve their business success and be able to compete with larger competitors.
Small business must plan for long-term goals and adopt IT to increase efficiency, reduce wastes, redundancy and establish the necessary processes to achieve business goals. By NOT consider the adoption of IT at this time or delay until they are forced to in react to a market change is costly, and impossible to do well. Today small business has a choice: Adopting IT for competitive advantage or fail to compete and ready to file for bankruptcy.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
