The power of technology: Leveraging IT for business efficiency.
When a mid-market business runs efficiently, it’s more profitable. Customers are happier and employees enjoy their jobs more as well. So how does IT help? We spoke to our experts about using IT to increase business efficiency—to add value, lower costs, improve service, and ultimately grow a mid-market business without growing the headcount. The sectors we discuss include professional services, manufacturing, wholesale, and more.
Are you on your “A” game? Keeping yourself up to date has never been more vital…
FACT: The CIO/CTO position is the only Board position where the necessary knowledge and skills need constant updating. Just like Moore’s Law has seen the exponential increase in computing power, so has the IT expert’s need to stay abreast of technology. It can be a nightmare. CEOs want their teams to be on their ‘A’ Game, and for us that means constantly updating our knowledge and our ability to handle new tech.
And the stakes are high. IT increasingly underpins all strategic business objectives—no department can deliver them without IT. It’s our team that increasingly underwrites the strategic objectives and enables the CEO to deliver them and to provide shareholder value. So we absolutely must understand the latest technology and being able to discuss options, ideas, and principles with department heads.
We don’t have to know everything. I’m not talking about in-depth ‘build-a-layered-network’ type of knowledge. I mean having enough technical knowledge to be able to innovate, to make informed strategic decisions, to keep the business ahead of the competition, and to know what the technicians are talking about.
This means that a fundamental part of knowledge acquisition is deciding what to learn, how to learn and when to learn. So, how do you choose?
We use a simple diagram:
The idea then is to figure out where each bit of technology falls on the continuum. Here is what I suggest:
1. Think about your current situation and the needs. You might even make a list:
· What do you need?
· What does the company need?
· What does your team need?
2. Once you have the needs in front of you, prioritise:
Where is the most urgent need for knowledge? Concentrate on that area, but don’t ignore the others—make sure they have an appropriate place in the order.
3. Work out how best to gain this knowledge. There are a number of ways to learn:
· The traditional route. Websites, books, magazine articles, etc. Many CIOs we know set up Google Alerts on topics they want to stay on top of. This method is useful for finding new knowledge or innovative ideas.
· The on-the-go route. Podcasts, TED sessions, audiobooks and the like—sources that you can learn from when you’re driving or exercising. This method works well for topic assessment or getting under the skin of a specific technology.
· The planned attendance route. These are occasions when you’ve signed up to a training session, a conference, or a webinar, because the topic is interesting and useful, but it’s not an immediate priority. It’s also useful for ‘large topic’ learning.
· Just-in-time. This is when you’re just a few pages ahead of those you’re working with. This sort of knowledge can be gained from peers, colleagues, or even the technical teams. You just need to know how to ask the right questions. This is not a substitute for the other routes; it has to be ‘as-well-as,’ not ‘instead-of.’
· ‘Find an expert who knows.’ Look within your network for someone with an in-depth knowledge of the subject. Buy them a coffee or lunch and find out the salient points. Also: ask the expert how he or she acquires their knowledge; they may know a website or seminar you haven’t heard of.
Remember that for the most part this is not about monolithic knowledge. It’s about distinguishing which pieces of knowledge will be useful to you and the business. Prince2, for example, is all very well. But if you try and implement the whole thing you lose credibility. Instead, implement a few useful parts as the basis of sensible project management. The key to knowledge acquisition is knowing which bits to leave on the cutting room floor.
CIOs and CTOs have a complex job, and their knowledge base reflects that. It’s not just the functional IT knowledge they need to keep improving, there’s all the IT leadership knowledge as well. Not to mention the business and commercial skills, like forecasting and budgets. Whilst these other areas of knowledge don’t change at half the speed functional IT does, they do move on. So you need to constantly review the diagram above, adjusting your learning objectives accordingly.
A successful CIO or CTO will be the one who invests time and energy in judiciously updating their knowledge and skills. If it’s not yet a priority for you, it damn well should be! The fundamental point is don’t let it become something that you look back on and realise you should have done more of. Regret can be a painful thing to have in a career.
Improving Business Performance: 5 Key Areas for the Mid-Market
An economic cycle is over. We’re entering a period wherein war, commodity shocks, worker shortages, and calamitous politicians have made a global slowdown very likely. Static or shrinking markets make good business performance harder, and yet business leaders need to deliver against the odds.
We believe that the right systems and digital strategy can help any mid-market business navigate the coming slowdown. So in 2023, we recommend focusing on five key areas below. (And when you’re done reading, get more information on improving business performance here.)
1. Data and information management
Many businesses are now drowning in data and struggling to meet compliance regulations when they could be drawing value from this asset. There is an increasing gap between organisations with up-to-date, accurate management information on-demand, and those who do not.
No business improvement initiative will be successful unless there is clear data to measure and monitor the changes. Of course, in many cases significant systems, process, and organisational changes are necessary to enable improved reporting, so it can be a complicated journey.
Clear data both drives improvement and supports effective business-as-usual processes. In one recent example, we helped drive information improvements that enabled a healthcare products provider to increase revenue from £25 to £150M!
2. The digital customer experience.
Since the pandemic, any aspect of business that can be online is now expected to be so—engagement, sales, service, and fulfilment. And since most businesses are aiming to avoid pure price competition, then the online customer experience is crucial—effectively, the business’s brand becomes defined by their customers’ experience online.
Many companies want to excel in terms of customer service. Ironically, their efforts are hamstrung by their IT, rather than enabled by it.
One the other hand, one of our clients—a mid-market, high-value homewares company—relies on their IT and technology for customer service excellence. They stay ahead of the competition by providing quick and accurate updates on manufacture and delivery through their online portal and telephone support—which is enabled by the streamlined systems and processes below the waterline.
3. Staff experience and engagement.
This is another situation in which IT can create problems or solve them.
Great businesses prosper because their staff are highly engaged and able to do great work! Unfortunately, in many businesses, people are bogged down by frustrating, time-consuming issues created by IT and systems. IT seems to get in the way rather than guide the way.
Across the world it’s increasingly difficult to attract good people, and broken systems and processes can be a source of attrition, which is a hugely expensive distraction. Any business leader can tell you that when key people are leaving it’s very difficult to make progress.
People deserve modern IT and systems that enable them to do rewarding work and to adopt office, home, or hybrid working as appropriate.
Increasingly RPA (software robots) and machine learning allow each person to be backed by multiple automated agents, reducing drudgery and amplifying their efforts.
4. Integration up and down, inside and out.
Systems integration dramatically impacts company performance, internally and with customers, suppliers, and partners.
As above, too often staff spend a considerable amount of time rekeying and wrangling between systems, either to fulfil process requirements or to provide reports and analysis. In the past, the frequent remedy was to roll out an ERP solution. But the challenge is becoming more complex, as businesses increasingly rely on SaaS services to provide everything from financial systems to line of business and offline analysis and optimisation.
Many subscription services are cost-effective and of high quality. But they are often purchased ad-hoc and used by individual departments in a disconnected way, creating ever-greater integration challenges. Vendors described this strategy as ‘best of breed’, but it can rapidly begin to feel like an ugly mutt.
Your systems strategy needs to enable strong internal integration and to allow for integration up, down, and across the value-chain. This makes your business easier to work with and stickier. It also enables you to work with corporates who expect systems integration as normal.
5. Transaction readiness.
The fast beat the slow. For many mid-market businesses, opportunities to acquire, merge, or exit come unexpectedly and with a brief window. The businesses who can capitalise on these opportunities are ‘transaction-ready’ all the time.
This means you need important things available on short notice: access to capital, of course, as well as the skills and capabilities to conduct due diligence, make purchases, and efficiently integrate systems between companies. Or it means being ready to come under scrutiny from a potential purchaser when you come into their sights.
IT and technology are often-overlooked aspects of transaction readiness. But in every economic climate, we’ve helped our clients find and deliver on transactions and value opportunities by focusing on their IT, systems, and processes.
If there’s one point we want to make here, it’s that a business is only as good as the choices its leaders make, no matter what’s happening politically or economically. Our advice has always been to first get clear on which aspects of business performance you need to focus on, and then design your systems and technology accordingly.
It’s undeniable that the past few years have been uniquely challenging. But we’ve been through several downturns, and we’ve seen our clients weather them—and even thrive—when they got clarity on these five key areas of their IT and technology.
In good times and bad, systems and digital strategies are an absolutely critical part of mid-market success.
The year is still young. Set your business priorities now
New Year’s resolutions are a common way to set goals for a year. Unfortunately, they’re seldom achieved. Back in 2007, a University of Hertfordshire study found that 88% of people who made New Year’s resolutions failed to achieve them, and there is no reason to believe the situation has improved.
If you make the shift to reconsidering your priorities, however, you’re more likely to see results—especially in times of uncertainty. An unachieved resolution creates a sense of failure; focussing on priorities, in contrast, helps you to remember what’s truly important whilst allowing for flexibility.
It seems likely there is another difficult year ahead politically and economically. In our experience, mid-market businesses can still enjoy stability and growth if they focus on some or all of these priorities.
This is not an issue to consider occasionally; it should be a priority you revisit regularly. Because research shows that lack of job satisfaction is one the main reasons people leave their jobs. Replacing people is more difficult than ever, so in 2023 prioritise job satisfaction issues before they become…an issue. Here is what to focus on:
First, job satisfaction can be significantly boosted by providing efficient, easy-to-use systems and processes. Automating energy-sapping and repetitive jobs allows your best people to spend more time on things that matter and to enjoy their work more. It’s not something that can be done overnight; it’s a process in and of itself. For guidance, see our CEO’s briefing on creating an IT strategy for growth. See also our report, Do you actually need an ERP project?
Second, consider whether your people would favour more hybrid working. Here is a straightforward, three-step plan to ensure you’re taking into account the employee’s point of view.
Third, be realistic about pay. In 2023, your key people may be struggling with the cost of living. People will start quitting jobs, even jobs they love, simply because they have to pay the bills. So ensure your best people are appropriately compensated before they complain by resigning.
We prefer not to have a doom-and-gloom outlook. But the evidence does show that an average company is affected by a serious calamity every three to five years. And if you’re not prepared, it could have a major reputational impact—or even spell the end of your business.
You should be revisiting your business continuity plan at least once a quarter to ensure it still makes sense. Is it absolutely clear who is responsible for what if (and when) there is a problem? Does it contain all the elements you need to keep your business up and running?
If you don’t yet have a business continuity plan, you’d better get started. Here is our tried-and-tested advice on how to objectively assess the risks to your business and plan accordingly. [CEO’s Briefing: IT Risks, Compliance, and Security]
Look after yourself and your team
The term ‘self-care’ can suggest incense and chanting, but the fact is that taking care of yourself and those around you must be a priority.
In the aftermath of the pandemic, the physical and mental health of CEOs has become an area of interest and study—see these informative articles in the Harvard Business School Journal and Sweden’s Institute for Management Development. So it makes sense to look after yourself, both for your own health and that of your company. You simply can’t run up a business when you and your leadership team are run down.
If you want to make your priorities stick, they need to be other peoples’ priorities as well. Create your list, commit yourself, and communicate it widely and often.
How does it work to engage a Freeman Clarke Principal?
What happens when you hire a Freeman Clarke IT leader, or ‘Principal’? How do we actually work with our mid-market clients to drive growth? Our own CEO Graeme Freeman explains what to expect.
A Chief Information Security Officer is a senior-level executive responsible for protecting your data and intellectual property and your information systems and processes. They understand your business strategy, your legal and market requirements, and your business’s risk appetite, and they ensure that these are all met.
They are also responsible for planning and implementing a business’s IT security strategy, to make security decisions, to assess risk, and to keep the Board apprised of risk and risk management.
More broadly, they provide leadership and management throughout the business at an IT, process, and cultural level.
The fact is that security has become an enormous concern in our lives, and we need to keep our eyes open.
In a business the problem is magnified ten- or a hundred-fold. Aside from email and phone scams, which target businesses as well as individuals, there is a security risk every time your business hires a new employee or vendor, inks a new contract, connects your network to a new device, outsources any task, even makes a simple financial transaction. The risk is bigger when you take on investors or merge with or acquire another company.
This is why many companies hire a CISO. This is not the person who will help your company streamline its systems and processes or guide it through an ERP project. Nor is it the person who will setup the firewalls or install anti-virus software. Instead, a CISO is a strategic hire to put security at the heart of your business systems and processes.
CISOs become especially valuable as businesses become larger and more established. The job of security and risk management will simply become too big for the CIO or CTO. Another way to look at it is that the CISO frees up the CIO to implement the IT and technology that will help the business grow.
Why does it need to be someone on the Board? Because security is not simply a matter of clever tech. Many of the highest-profile hacks have affected companies with highly expert teams and the most sophisticated security technology. Good security requires a commercially minded leader who fully understands the detailed technical issues rather than just a technical expert.
A serious security lapse could cause your business catastrophic financial and reputational damage. A minor security lapse will cost you time and money. Any kind of lapse may have legal implications, resulting in lawsuits and fines.
On the other hand, addressing security concerns can provide a marketing advantage. In many industries, companies select suppliers who have impressive cyber security and compliance certifications. Thus, having a credible leader like a CISO enables you to gain new clients, or secure funding, or generally raise your business’s profile.
CISOs are highly specialized and in-demand, so they command high salaries. Many mid-market businesses simply can’t afford to pay another executive’s full salary. Or they may be in an in-between stage where the security concerns are too time-consuming for a CIO but don’t yet merit a full-time salary. That’s why we often suggest a ‘fractional’ or part-time CISO.
If you have questions about CISOs, or any other aspect of IT and technology, feel free to get in touch. We’re always up for a no-strings conversation about cyber security or any other aspect of running a mid-market business.