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.
In challenging times, how can mid-market businesses save money while improving service to customers? Our experts discuss manufacturing in this clip, but the lessons apply to all sectors. [Watch the full Leveraging IT for Business video here]
Part 2: How do you Grow a Mid-Market Business Without Constantly Growing the Headcount?
Let’s start with a definition. For us, digital transformation means using IT and technology to dramatically change your business for the better.
That may mean a custom or bespoke software product. Or it may mean integrating your systems on the back end, or a complete overhaul of your IT systems and suppliers. Whatever the tech issues, it means focusing on your customers, your market, and your risks. Every choice is to ensure that the internal operation of your company is not limiting its growth.
Another important point is that the transformation is individual to your company. There is no one-size-fits-all solution, and anyone telling you so is after your wallet.
That doesn’t mean we won’t see big changes in the next few years. Again and again we’ve watched as what used to seem like extraordinary technologies—such as voice recognition, complex mapping and routing, and software robots—quietly become a part of the everyday life of a mid-market company.
Similarly, though the excitement about drone deliveries and artificial intelligence seems to have faded, we still think they’re coming. Whenever I see such innovations being tested, I think they’re important guides to what will gradually come to our sector, the mid-market.
How the Pandemic Transformed Digital Transformation
Before we get into what’s coming, it’s useful to look back. The pandemic changed digital transformation in two fundamental ways.
First, everything went online, and faster than we had thought possible. Everyone now expects online sales, service, and support. Business and domestic consumers rapidly adopted online channels for finding and buying a wide range of products and services. This also extended to after-sales and re-ordering, which are online now in a way that seemed unlikely in 2019.
Similarly, paper is on its way out. Cash has been side-lined by electronic payment. Printed brochures and catalogues have disappeared from many sectors. (In fact, if your business is still reliant on paper, that would be the place to start a digital transformation of your company. More ideas here.).
Second, we saw a rapid shift to remote work. Not that it was a simple process: we saw business struggle when their systems and processes were badly integrated and ill-defined. But everyone, whether they liked it or not, quickly got used to collaborating online.
In every situation above, old-fashioned managers were saying, “It will never work.” Which leads me to conclude that often digital transformation is driven by attitude rather than what is technically possible. And attitudes have changed irreversibly.
What’s Coming to the Mid-Market
In the near future, for many mid-market businesses the next phase of digital transformation will focus on the following:
Data, data, data. It’s never been easier to accumulate data. Companies will leverage these new assets for smarter use by humans and AI. Combining data from different sources is now far easier, and cloud-based processing allows for rapid insights that would have been unthinkable even quite recently. The businesses that adopt data visualisation technologies, simple machine learning, and process automation will have a competitive advantage.
External integration. Internal integration and adoption of the cloud should be in the rear-view mirror. (If that doesn’t describe your situation, that’s the first step to transforming your company.) Businesses should only select tech products that support integration and should gravitate towards suppliers, customers, and partners who form integrated communities. Because integrated communities will out-perform those that are not.
Points of difference. As cutting-edge technology becomes more widely available, companies will have to work harder to distinguish themselves by their actual product or service. Their brand really must mean something, and they really do need a competitive edge. For example, now any company can stream movies like Netflix; Disney+ has surged ahead on the strength of its content.
Environmental, social, and governance concerns. Both regulators and consumers will insist upon more transparency when it comes to data use and environmental sustainability. Traceability of products, optimisation of materials and energy consumption, privacy, security, and justifiable decision-making will all become part of the digital transformation agenda.
Virtual currency. Products and services will be increasingly virtual and paid for with virtual currency. It remains to be seen which form of digital currency will prevail. But mid-market companies need to tune into this accelerating change and invest in new types of virtual storefronts and virtual branding. Though I hate to use the term, this is the metaverse.
What Hasn’t Changed—and Likely Never Will?
Most mid-market businesses are deeply concerned about supply chain issues, recruitment, and energy costs. New technologies—and the judicious application of existing solutions—can ease all these issues, but only if you successfully meet human needs at the same time.
Zoom and shared docs are no substitute for real face-to-face collaboration. You cannot have a real creative discussion, shift entrenched opinions, or lift someone’s spirits online. Digital transformation can drive everyday productivity. But for most people, an enjoyable job also means human contact.
Most people also want their company to have a vision beyond profit. They want to draw more from their work than just their salary. Digital transformation can absolutely make a difference in a mid-market business—but only when you include the human factor.
No matter what your sector or the size of your business, a digital transformation won’t take unless your staff feel included and valued.
With all that in mind, now it’s time to think about your company. If you redo your IT and technology with a magic wand, how would you do things differently? What barriers to growth would you remove?
For more guidance on digital transformation, see our free, plain-English guides here. And for a no-strings, no-pressure conversation about the digital transformation opportunities within your own business, get in touch.
How technology Can Help Your Food & Beverage Business Grow
The Food & Beverage sector is experiencing a major surge. The best performers are seeing strong demand and solid cash flows — and a real opportunity to scale up significantly in the coming months.
This can be a permanent change. If they do it right, Food & Beverage companies will see a consistent increase in market profile, profits, and company value.
But it won’t stick unless they get their IT right. If your Food & Beverage company is to grow and thrive, you need to improve IT, systems and digital strategies.
In our experience, there are 5 areas to focus on:
Streamline processes. Often this means simply ensuring that existing ERP systems are fully exploited: a. Reduce time wasted on manual processes like rekeying and tinkering in Excel b. Rollout unused or underused features (you may already have paid for!) c. Retrain staff to ensure technology is properly used and processes followed
Reduce product wastage – especially for perishables. But maintain quality and quick response to retail demand by: a. Improving demand forecasting and business intelligence b. Enabling intelligent trend analysis c. Efficiently controlling inventory, production, and warehousing processes d. Utilising AI and machine-learning where practical
Take an agile approach to online direct-to-customer sales. Focus on flexibility and foresight: a. Look for simple, low-cost entry points, perhaps based on Amazon as well as your own website, with minimal capital outlay b. When cost-effective, integrate to ERP system to minimize rekeying and to provide accurate stock availability c. Create a roadmap for warehousing and delivery options as the online business grows
Optimize promotions and ramp up marketing. Improve promotion ROI and establish brand with: a. Wider use of marketing tools like social media and an email database b. Better analysis tools to optimize planning, execution and analysis of promotions (investments in retail price reductions) c. Improved integration and sharing between technology and marketing d. Well-implemented CRM and data-driven marketing systems
Seize new opportunities. Keep testing new products and new markets! a. Combine new and existing data to identify capacity and market demands b. Combine costs and sales forecasts to model ROI
Our Principals are often asked to help scale up companies in the food and beverage sector, they’ve got the commercial and technology experience to help your company grow. If you’d like to know more about what we do, or even if you just have questions about Food & Beverage and IT, get in touch!
Learning from Travelex
Due to a cyberattack, Travelex, the world’s largest foreign exchange bureau, has been paralyzed for weeks. The reputational and financial impact on the company and its senior leaders will be severe. New laws and regulations, like GDPR and NY Shield, mean that such breaches can no longer be swept under the carpet, and the business losses will be compounded by huge fines.
Travelex is a wake-up call to all businesses. In today’s cyber-risk environment, maintenance of your basic IT infrastructure and services is critical to remaining profitable and even staying alive. You may be concerned that if a giant like Travelex gets hacked, how can a mid-market company protect itself? It’s actually pretty straightforward.
When we engage with clients, we talk about “getting the basics right.” A fundamental part of that is making sure the IT infrastructure and services are fit-for-purpose and up to date. If the basics aren’t right, then there’s no hope of looking at ways to use technology to grow the business and get ahead of the competition.
To provide you with a head-start, here are your first nine priorities:
Prioritize systems maintenance. All systems and services, particularly those that are connected to the outside world, must be kept up to date with the latest software patches. The IT team or your Service Provider must review and update systems in a regular, controlled manner.
Review your backups. Many malware infections encrypt your data and hold it for ransom. Frequent backups mitigate the chance of you losing everything. A regular complete backup of data stored somewhere with no connection to your systems – what’s called an air-gap – will greatly limit the damage of an attack.
Get a penetration test. Get a reputable security company to undertake an external penetration test of your systems and services. Resolve all the concerns raised in the results. Find your vulnerabilities and patch them before hackers find them for you!
Get certified. Spend some money, usually less than $12k on earning the Cyber Essentials Plus certification. The process involves making your technology secure, and we’ve seen clients win new business after being certified.
Lock down your data. Each individual in your business should only have access to the data they need to do their job. This minimizes the risk of data loss should they leave with it or accidentally click a malware link. Allowing employees wide-ranging access to data is asking for trouble.
Invest in protection. Keep the bad guys out with well-configured firewalls, anti-spam email systems, malware detection software, and pro-active Day-0 protection systems.
Get some insurance. Cyber insurance covers the losses resulting from a cyberattack. It can also aid with the management of the incident itself, particularly reputational damage and regulatory enforcement. Crime insurance covers the loss of money due to theft, fraud or dishonesty and includes theft of money by hackers. Add cyber insurance and crime insurance to your portfolio as separate policies, not just add-ons to existing business insurance.
Train your staff. Your employees are the most vulnerable security point in your business. The more they know what to look for and what to do, the better your chances of avoiding an attack. Training is essential for all new staff, and it needs regular refreshing for the whole business – including you!
Plan for the worst. Even with all the above nailed down, you still need to be ready for the worst. Sit down with your top team and discuss potential disasters and plan your way out of them. Who would be in charge? Who is authorised to make major decisions on the spot?
Will Travelex survive this attack? Who knows – the reputational and financial damage may be terminal. But by following these nine steps, you can avoid that fate for your own company.
Freeman Clarke is the UK’s largest and most experienced team of part-time (we call it “fractional”) IT leaders. We work exclusively with ambitious organizations, and we frequently help our clients use IT to beat their competition. Contact Us and we’ll be in touch for an informal conversation.
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Graeme Freeman Co-Founder and Director
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