Never develop non-customer facing software from scratch. There is no business case for developing software from scratch unless it is for applications that face the customer and impact your competitive advantage. About 80% of all software development projects fail, even in the largest companies with nearly unlimited resources. I define "failing" as projects not coming in on time; projects that go over budget and projects that don't the desired functionality. Software development for non-customer facing applications is a no win situation. Save your efforts for the right projects.
Never modify a non-customer facing software package that you've purchased. A common trap: You buy a package and immediately realize it's missing functionality that someone demands. Don't modify it! Either you have bought the wrong package or you are trying to force the software to fit your internal business processes instead of modifying your processes to meet the capabilities of the software. If you do a sound and thorough job of software application selection and you are flexible in modifying your businesses processes, you can find a package that works. This trap leads to being out of step with your vendor and unable to take advantage of new releases and new functionality. Keep your efforts on your customers, not your internal systems.
Never look for a competitive edge in your infrastructure. For any SMB, infrastructure technologies should work just like utilities such as electricity. When you use the network, you should not have to think about bandwidth, security, file sizes and transmission speeds. Your infrastructure should be properly sized and built, preferably by independent, external integrators. Have one person manage the relationships and delivery of services and forget about it. It should just work. Infrastructure really does nothing for your competitive position with your customers.@15328
Never look for a competitive edge in your back office. Just like infrastructure, this is a cost of doing business. Back office applications include accounting systems, payables and receivables, financial reporting, sales force management, payroll, commissions and e-mail systems. These are the predominant software-based systems and applications that you need to do business, and they should work "out of the box." You don't want to sacrifice your time, energy and opportunity cost by reinventing the wheel. As with infrastructure, these applications need to provide the required functionality. There is nothing here that benefits your customers that the competition is not already doing. Look outward, not inward.
Always align your technology model with your business model. Your model should include marketing and sales processes; delivery of products or services; and receivables and revenue. Most businesses have strikingly similar business models. You can then map your technology model over your business model and thereby identify the technologies that are critical and relevant to your business. A technology model is simply a view of the software, hardware and networking components of your company. It is the way your IT team has constructed their technology solution to meet business needs. By comparing these two models, you can identify the most important technologies.
Identify and document your IT strategic areas of focus. These are the areas of focus are the core technologies that you identify when you map your technology model to your business model. These are the fundamental building blocks of all your customer-facing applications. You must identify and document them. Then you can build on them and decide which techonology projects are best for your company. You'll also be able to select from the proper technologies and identify which projects can be done and what they will contribute to the business. You will no longer be doing the wrong projects.
Always remember your IT strategic drivers. Within your strategic areas of focus, you must have rules and regulations about how you select your technology. Without strategic drivers, you have nothing to use to evaluate your options or select solutions that fit with your long term strategy. Each solution will then be weighed against your other drivers. These drivers will guide you in selecting technology and provide a yardstick to measure your selections. The right drivers lead to the right choices.
Always establish IT strategic teams. IT strategic teams are teams composed of business leaders and IT professionals, which are chaired by a business leader. You cannot leave the management of technology or technology projects solely to IT. There are no IT projects, just business projects that have a huge technology component. At the very least, you need a business owner and an IT owner with the IT person reporting to the business person. These strategic teams are generally responsible for one strategic area of focus (see above) like workflow or call-center technologies. The team is tasked with project identification, project selection, project scoping, project sequencing and execution of projects that fall out of the strategic area of focus. The strategic challenge is to deliver on the focus area and ensure that the technology dollars are spent on the right technology. The tactical challenge of the IT strategic team is delivery.
Always establish an IT council. An IT council is responsible for overseeing strategy implementation. The IT council provides direction to the IT strategic teams. The business needs to manage and control IT as well as the IT strategic teams. The IT council needs to be firmly entrenched in the decision making process. The council needs to set the priorities, manage to the milestones, evaluate the deliverables and make tough choices. The council also needs to fund and support all initiatives.
Know the strategic trilogy. Given successes with strategy execution, growth is inevitable, and you will face different challenges. You will need to elevate your game and focus on three broad focus areas that will challenge you the most as you grow:
From a process perspective, you will grow to the point where your technology will not be an impediment but your processes will. It will become necessary to develop a process focus. You will need an improved organization structure. From an architecture perspective, you need to focus on the bigger picture. You will need to get into architectural considerations and how best to structure your larger solution sets. You will need to refocus your technology considering an architecture approach. This strategic trilogy will become critical.
Read Richard Skinner's predictions for SMBs in 2006.
Richard Skinner is author of the book, "IT is about strategy," and a consultant at Columbus, Ohio-based consulting firm Strategic IT Associates. The firm provides strategic technology consulting services to SMBs. To learn more about his book and services, visit www.itisaboutstrategy.com.