Asking the right questions

Too many small businesses purchase technology without asking a very important question: just what benefits I am getting from all this stuff?  Sure, desktop computers give you word processing so you can print off letters, basic accounting (really bookkeeping) and access to email so you can communicate with your customers. But these are all base-line business activities: essential requirements, not added business benefits.  Think of it this way. If technology was drink, most people would be swigging down tepid, stale water from the communal swimming pool. A few people would be smarter and add some cordial to the mix. And a very few would be sipping Champagne.

This was driven home to me recently when a received a called from a specialist wholesale grower, and not a small one at that. The young manager of this company had realised that while their existing technology was adequate for keeping things running, his business was stagnant. The changing climate, the lessening of gardening activities from consumers, and the increasingly challenging economics of agriculture were all conspiring to place pressure on the business. He recognised that his business needed to be smarter in how it reached customers, how it found new markets, and how it could secure itself a new niche in the changing world of horticulture. Thus he began to wonder about the role of technology. Could it do more than simply ‘run his business?’  Could technology actually ‘drive his business?’

The first step in answering this question is to identify your most prominent business challenges. A simple way of addressing is to break down your business into three broad areas: Financial Control, Production Processes, Sales & Marketing.  

  • Financial Control: At the most basic level, how automated is your book-keeping? What would be impact, both in terms of accuracy and time, of automating the book keeping process with your banking? At a more sophisticated level, do you have an accurate picture of where your revenue comes from, and where your expenses go?  Do you know, by both product and customer type, where are your biggest profits and margins from?
  • Production Processes: Do you know which plants sell when, and why? Can you plan stock months or even years in advance? Can you organise orders and packing in such a way as to minimise work?  Do you know the size of lost or damaged product by individual lines? In short, can you do a better job of getting your investments in production out as sales?
  • Sales & Marketing: Do you have a growing or shrinking customer base?  If shrinking (which is not always a bad thing), are these people buying more or less product?  Do you know what your customers want, even before they do?  Can you explore new market segments without incurring significant risks?

For the purpose of identifying the key areas where technology should be most urgently applied to generate a business benefit, you can simply prioritise each of these three areas.  This is not simply an exercise in navel gazing for managers. In fact, it is important to seek everyone’s input.  Discuss each area with your staff and get their honest feedback about what works and what don’t in each area. Keep an eye open for areas that could be improved – even if you don’t quite know how to achieve the improvements, just knowing that there is a need to improve is an important first step.

Once you have complete examining these areas of your business, prioritise the three areas in terms of ‘importance to fix.’  For example, if you feel your accounting practices are relatively strong, and your manufacturing is ok, but you have dwindling sales, then it’s clear you would prioritise sales and marketing other production processes and finance control.  Of course,  these three areas do not stand in isolation of each other, but by ranking them in terms of importance you will begin to get a clear idea of where you should look to most urgently apply new technology.

If Financial Control is your BIG issue

If you most urgently need to address financial control, then you should consider rethinking your accounting solution and indeed your accounting practices.  Too many organisations in Australia run MYOB simply because they always have. While MYOB is fine, it is certainly not the most innovative solution on the market. New cloud-based accounting packages provide better analytics and dashboards so you can see the status of the most important performance measures of your business. They also integrate with banking systems, virtually eliminating the traditional book-keeper position. Finally,  cloud-based accounting solutions can enable close integration with customer relationship management (CRM) solutions, which means you can analyse your customers’ worth.

However, simply putting in a new accounting solution will only go so far. You need to be sure that your accountant is familiar with the new solution. In addition, I’d recommend investing a little time and effort in having a financial advisor or consultant work with you to improve your entire accounting practices and help you identify what measures matter to your business, and set up your financial control dashboard to present this information to you in an simple graph. This is where accounting technology really starts to become a new benefit to your business: by letting you track and focus on what matters, not get bogged down with financial administration.

If Production Processes is your BIG issue

If you know that orders are getting screwed up, or stock is dying or being damaged or simply unsold, then you need to consider technology that can improve your overall management inventory and of the nursery overall.  Unfortunately, there are not a lot of solutions in this space that are both affordable and ‘cutting edge.’  Specialised nursery management solutions may assist with stock management, but rarely integrate with accounting or customer information.  Thus, rather than looking for a single solution to address production issues, it may be more wise to look at a collection of smaller ‘apps’ that solve just the critical areas.  For example, can orders be printed from the sales and marketing solution as ‘picking lists’ to improve the accuracy of order processing?  Can you use barcoding solutions and scanners to enhance stock management and ensure that the right stocks gets the right care at the right time?

If Sales and Marketing is your BIG issue

If your business is suffering a sales slowdown (and let’s face it, many of us in the horticulture industry are) then it is time to invest in a customer relationship management (CRM) and sales automation product. In the past five years, there has been a revolution in CRM solutions, with cloud-based systems providing rich capabilities for identifying and taking care of your most important customers in highly automated, yet personalised ways.

However, having a new shiny new CRM solution and knowing how to get the most from it are two very different things.  Rather than looking to purchase a CRM directly, my recommendation is to look for sales and customer relationship management consultants who can work with you to develop new ways for your business to attract new customers and keep them. Of course, these consultants will usually have a preference (or even represent) a specific CRM solution – let them guide you through how to use that new software to improve your marketing and communications with clients.

In summary, if you are just ‘buying an upgrade’ without dramatically improving some part of your business, you are wasting time, money and, more importantly, missing a business opportunity.  Any new investments you make in technology should be aimed at improving at least one of the above business areas.