Business owners the key to a successful technology initiative

22 June 2011

Last month, Small Business Minister Nick Sherry warned that small businesses need to get online and embrace digital technologies if Australia’s economy is going to prosper.  

The warning came on the back of a study which revealed that while small businesses make up 40 per cent of Australia’s workforce, 11 per cent operate without a desktop PC, almost a quarter don’t use standard mobile phones and 45 per cent don’t have smart phones.*

While these statistics suggest that Australian small businesses may be slow to embrace some types of technology, a recent industry survey conducted by Macquarie Relationship Banking showed a high level of focus on using technology to improve operational performance.^

More and more, we’re seeing businesses use technology to automate processes and streamline operations.  This means that increasingly we’re witnessing businesses look for ways in which they can invest in technology to improve business performance, or make better use of existing technology to drive efficiencies.

But while the importance of technology is well recognised across Australian businesses, the element of embracing technology that is often overlooked, and that in some cases can even make or break your business, is the business head needs to champion and drive the entire process. This includes the planning and implementation phase.  Get this right, and your business may prosper, but get it wrong, and you could be in for a rough ride.

There are a number of factors to consider to ensure you have identified the right technology to support your business growth and that you have the right resources and plans in place for a successful implementation.   

One of the decisions facing business owners is determining which services to outsource. From a technology perspective it may make financial sense for business owners to outsource some of their IT requirements. If the right outsourcing model and vendor is selected, business owners can benefit from saving on upfront infrastructure costs associated with software and hardware.

Outsourcing can be a good solution, but to maximise the benefits business owners must consider all the risks and put in place the right outsourcing model to suit their particular needs.

Expert insight

Neil Roderick, Chief Operating Officer of Macquarie’s Banking and Financial Services Group, provides his insights into how to successfully implement new technologies, starting with the buy in from the top: “Responsibility starts from the top down. The business head has to have their mind around the project so the enterprise gets the most from it.”  

According to Roderick, before starting a technology initiative “you need to be clear about what you want to achieve – it’s not about doing something for the sake of it, or doing something just because one of your competitors is doing it.”

It’s important to involve those in the business who will be using the new systems right from the design stage. “It’s not just about training people to use the software – it’s about engaging the people who will use it from the start and getting feedback periodically as the project develops,” Roderick explains.

Roderick says to ensure a successful technology implementation, it’s critical to review the system six months after its implementation. “It’s useful to do a ‘realisation review’ to see whether you have achieved success,” he says.

“And if it’s a project that is expected to pay for itself over three years, don’t wait until three years is up to find out if you’ve achieved what you wanted to – you need early, simple measures of success or failure to indicate whether you are on the right track.”

Integrating for efficiencies

One business owner who values the improvements technology can bring to his operations is Doug O’Mara, Managing Director of Ray White, Canberra. The business is one of the leading real estate agencies in the ACT. It has a 40 per cent share of the strata market, is the fifth biggest property management business in the territory and at the moment is focused on aggressively growing its share of the residential property market.

Having bought and integrated three separate businesses in the last three years, O’Mara is concentrating on making sure the different elements of his IT system genuinely increase efficiencies in his enterprise. He says “we’ve had to change and embrace technology to support the growth of the business.”

“Since the day we started with Macquarie we’ve used its payment systems. The underlying reason we use these systems has been to replace human capital with software – it’s allowed us to reduce staff headcount by four and has produced an annual saving in wages costs of $300,000,” says O’Mara.

The catalyst to start using payment technology was the acquisition of a strata management business, which, says O’Mara, “had developed its own software, which we immediately shelved when we bought the business. The challenge of doing this was huge from a client and from a staff perspective – training 10,000 clients on a new payment system is immense – but outsourcing this took a lot of that pressure off us.”

Latest research

We’ve recently released the latest Macquarie Relationship Banking Best Practice Benchmarking Surveys – which explore what a profitable business looks like across a variety of industry sectors and benchmarks businesses against their peers – and discovered that Australian businesses have a high level of focus on using technology to improve operational performance.^

• An overwhelming majority of legal, strata and commercial real estate participants believe technology is critical to the success of their business.
• Higher revenue businesses value technology more than lower revenue businesses.
• Leading businesses recognise the importance of remaining up to date with technology, with most not deterred by cost.

Lawyers
• 52 per cent of lawyers intend to make a significant IT investment during the next three years.
• 78 per cent of lawyers agree or strongly agree using new technology has significantly improved back office efficiency.

Commercial real estate agents
• 90 per cent of commercial real estate agents agree or strongly agree using new technology significantly improves back office efficiency
• Higher revenue commercial real estate agencies are much more likely to believe in the benefits of technology than their lower revenue peers.

Strata managers
• 89 per cent for strata businesses agree or strongly agree using new technology significantly improves back office efficiency.
• The majority of strata managers are planning significant improvements to their technology infrastructure.
• Higher revenue strata managers are more inclined to use software for a wider range of back office activities and as their major means of managing disbursements.

Technology can bring many benefits to a business, especially if the implementation is properly managed and staff are involved in the project right from the start. Given research shows that high revenue businesses are more likely to invest in technology than low income businesses, it’s worth exploring how your business could benefit from investing in technology.

Key points to consider

• Make sure you, as the business owner, play a key part in the project.
• Ensure there’s some flexibility in the project so that it can change as the environment around it changes.
• Define what success means for the project early on, develop some simple benchmarks to determine success and regularly assess whether the project is going in the right direction.
• Involve the people in the business that will use the technology in the project right from the start.
• Decide early what you need to outsource.