What You Don't Know Can Hurt You
By Ken Dickinson
Sam Renfro is the third generation leader of Granite Industries, a family-owned distribution company providing products and services to electric, gas and water utilities. He had just finished a call with Joe McDonald, CEO of InfoTek, a supplier whose product line accounted for more than 30% of Granite's business.
On the call, Joe told Sam that he wanted Granite Industries to be InfoTek's master distributor for the western region of the U.S. This would require the two companies to share inventory data in real time.
Sam was excited. He had been looking for ways to grow his business, take advantage of his multiple warehouse locations and unify his inventory and product management. He immediately prepared a list of questions for his CPA Linda Hollingsworth:
- Who does he call? His management team is great, but no one has any time to spare
- What will this cost?
- Software projects have historically gone over budget and have under-delivered on performance
- Consultants are expensive, and someone has to spend time with them to bring them up to speed on the company and the industry
- Can his already-taxed internal systems and IT staff handle additional requirements?
Using SaaS
When they spoke, Linda assured Sam that there were affordable options for sharing
inventory data. She had recently researched for another client the viability
of Software as a Service (SaaS), a software implementation option that has
matured significantly in the past few years. She recommended a firm to review
packages and services and recommend the best option for Granite. Her enthusiasm
about the low cost of implementation and the predictable usage costs encouraged
Sam to move forward.
This scenario is being played out every day – across a wide range of industries – as our economy becomes more integrated and more global. Like Sam's team at Granite, the most small or medium businesses (SMBs) have partnerships with a variety of suppliers. These partnerships extend the businesses' reach and leverage their assets. At the same time, the typical SMB lacks the financial and human resources to research options and implement the best software solution to fully capitalize on those partnerships.
In the end, many SMBs settle for incremental improvement instead of investing in the most current and sophisticated business management applications. These newer options can potentially improve an SMB's business by orders of magnitude – all for a reasonable cost. The key is to become educated on these options.
Software wish list
Ideally, companies like Granite Industries would adopt a business technology
solution that would provide:
- A 360-degree view of their business
- Simplicity in integration with clients and suppliers
- Automated tools for managing people, inventory, projects and partners
- A common look and feel for all functional areas that is intuitive for current staff and easy for new hires to learn
- Adaptability to organizational changes
- More than just ERP: full-spectrum business support including HRIS, warehouse management, service order management with warranty information, project and billing management, price quotes and proposals, manufacturing, accounting, budgeting and forecasting, and full order management under one umbrella
- Compliance with tax and management laws built in and updated regularly
- Centralized software version control and update
- Minimal implementation cost and effort
- No incremental IT infrastructure or staff
- No incremental software purchase
- No software maintenance and support costs
- Predictable, fixed monthly costs
- Worldwide 24x7 availability
- Full system monitoring and data protection
This has been the wish list for SMBs for the past decade. CEOs like Sam have been asking more frequently:
- Why can't I buy all of the software and processing for my business like I can buy other online services like SalesForce.com?
- Why do I have to settle for technology that has not changed in 20 years to
run my business, when I can experience full Internet functionality and integration
like I use in everyday life as a consumer?
- Why can't I expect the same up-to-date technology and functionality in the systems I can run my full business on?
Functionality for SMBs
The good news is that a few world-class vendors have heard the question loud
and clear and now offer products that answer this need. Vendors such as SAP
are using the experience and solution knowledge they have gained working with
global enterprises to provide rich but affordable and intuitive functionality
to SMBs.
Sam is now able to evaluate SaaS as a viable implementation option that will provide full data integration with InfoTek for the master distribution arrangement, and also will provide Granite Industries a platform to improve their business processes and management significantly with minimal investment and no incremental ongoing IT cost.
Ken Dickinson has spent more than 20 years working with businesses to evaluate business challenges and architect solutions for them. Ken attended University of New Mexico and earned a BBA and an MBA. Ken has worked for Deloitte & Touche, CGI, and Tatum, LLC. Ken now lives in Denver, CO and continues to serve the SMB space working for SAP supporting their Business ByDesign SaaS offering. You can contact Ken at Ken.Dickinson@sap.com.
