Leveraging ICT in Entrepreneurial Ventures IV: Use ICT to Cut Costs

Unifying your inter-office Communications: The typical small business office today has about 4 computers, need a printer or two (in fact one CEO I spoke with last year had a grand vision of putting a printer on each of the 20 desks and PCs in his office!!!). There also is some kind of voice system … and Intercom or PBX. Not only does this complexity increase maintenance costs, it increases the chance of something going wrong and is more importantly from and entrepreneurs perspective an unfortunate waste of money.
For starters, with ensuring that your computers are networked will allow the organization to get a lot more from it. Over the network, the organization really doesn’t need more than 1 printer for 10 people. With a network in place, a single Internet connection can be share by all computers in the office, printers, document templates etc. Furthermore, you can completely leave out the extra cabling and PBX for your intercom and do chat, voice, video and even application sharing on your local network. The resultant cost-savings are non-trivial.

Automate Back-end Processes: Information about products and services can be put on a company website. Similarly forms and information brochures can be put online so people can access them rather than having to call every time and make inquiries. Any work that involves filling of forms by your clients can be automated and done online – not only does it reduce the opportunities for mistakes (as the computer can validate data on the fly)
Go Quasi-Paperless or Fully Paperless: And with a fully networked office, do we really need to print a document that we want to send to a colleague in another cubicle/table? Definitely not. Such things as interoffice communications, memos and reports can be done completely digital. But a caveat here … for this not to be a recipe for a business disaster, there must be proper backups in place so that the entire business does not come down because a computer failed.
Keep Physical Office Space as Lean as Possible: Probably my most disconcerting suggestion, if the infrastructure exists, using innovative management, consider the possibility of cutting out fixed and recurring costs relating to maintaining a physical office and run your venture predominantly virtually. Rather than office cubicles for each employee, why not just buy each employee a laptop and let them work from their homes? This way you will substantially cut your utility bills – power, cleaning etc. This is quite disconcerting because poor management has a huge need to control and micromanage people but to with a forward thinking management system in place, this will work out quite well because it gives employees huge flexibility. Obviously this can’t apply to all ventures and a critical amount of real estate in the form of office space and accessories will still be required. Even in manufacturing where people need to be on ground, there are some staff that can do the majority of their work without being physically present. This is however not without its caveats and so….. Proceed with caution.
Communicating with Suppliers and Distributors: Since no business operates in isolation, part of normal business administration involves contact with supplies and distributors to manage the supply chain end-to-end. Communication with these partners has come a long way from physical meetings to phone calls and now the rich messaging applications are a new and exciting addition to the mix. It is now possible to hold meetings online (GotoMeeting, WebEx) with full videoconferencing with nothing more than your Internet connection and a relatively cheap value computer. On the lower side, plain email and instant messaging can do a tremendous amount of work. These same multimedia communication technologies can also be leveraged to make product demonstrations to customers in different parts of the world.
Leverage e-Learning: As multimedia computers, networks and the internet become more commonplace; start-ups can leverage them to provide training to their employees at lower costs that traditional, consultant led alternatives. The idea is not to completely eliminate consultants and their workshops but to provide tools for employees to get more skills and knowledge from the convenience of their personal computers.
Use Freeware & Open Source Software: Legally acquiring the software that most business need for office automation can cost significant amount of money (See the article “The Simple Case for Free and Open Source Software” at http://ibiztech.wordpress.com for details). It is possible to shave off more than 50% of the acquisition cost for relevant business applications by using software that is free of charge. Examples include Ubuntu Linux instead of Microsoft Windows for your desktop computers, several variants of Linux for practically all your server applications, OpenOffice.org suite of applications (replacement for Microsoft Office). Some of these applications are the best in their class and very reliable.

Leveraging ICT in Entrepreneurial Ventures IV: Group Collaboration

Collaboration can be between people within your organisation eg sharing documents, ideas, leads and a single contact database. We could take it further and use the Internet to collaborate with partners, suppliers, distributors as well as clients with new web tools like Wikis, blogs, bookmarks and social networking sites like Facebook, Myspace and LinkedIn.
The emergence of the knowledge worker means increasingly that more and more of the key assets of an organization rest in the brains of their employees. So if there isn’t a platform that helps your employees share their knowledge, then they won’t collaborate well and teams will function sub-optimally and no synergies can be formed. As an example, suppose you have a 5 person marketing team. Each goes to different parts of the market and makes their own contacts independently. What happens the day one of them gets sick and is unavailable? – it means all critical information relating to the aspects of the market she was handling is lost to the organization. Worst still, what happens when she leaves the organization? She takes with her (in her brain so there’s nothing you can do about it) critical business information that can confer an advantage to your competitors. Sure you might not be able to do anything to stop an employee who wants to leave, however, with appropriate IT systems AND the supporting managerial systems in place that had let your employees share knowledge, contacts and resources, that information doesn’t need to be lost to the organization.
Collaboration doesn’t need to be done only by marketing department. It can also be done with partners in different locations around the world, with existing customers on product support and why not product-design? Picture this scenario … during a recent trip to Lagos, you meet a potential partner on the plane and exchange contact information. Later on getting back to base, you send him and email and arrange to chat using instant messenger. Even though you are in two different parts of the country or even the world, you can discuss the framework for a future collaboration, agree on specifics and then meet physically only to seal the deal. How much will that save you in travel costs and time lost being away from your base?
Similarly, amongst your staff in the office, it will be more cost effective to collaborate on documents digitally rather than having to print. Not only does this save you money in terms of not using paper but it also saves the environment (a key selling point to most businesses these days if you haven’t realized) and is faster once a good system is in place.

Leveraging ICT in Entrepreneurial Ventures III:Business Intelligence

As your business begins to grow, you will need to carefully keep track of key information relating to sales, your customer and business contacts. ICT offers many tools to help you with this, from simple contact managers like Microsoft Outlook and Gnome Evolution to sophisticated Customer Relationship Management software like SugarCRM. When you venture has been able to run for about two years, you need to know the answers to the following questions:
• What is the profile of my typical customer? (sex, age, income etc)
• Which industries give me the most patronage?
• What products or services sell most in what geographical locations?
• What products or services sell most in what seasons?
• What products or services sell most in which industries?
• What products or services sell most in what organizations?
• Of your product/service mix, which one brings in the highest margins?
• What are the worst performing products or services?
• What are the relationships between the performance of a product/service with respect to time of the year? season? etc?
• Who is my most profitable customer?
• Which customer do we need to focus more|less on?
• Breakdown of product or service performance per quarter.
All these are questions that except for the most trivial business, will rely on data analysis to answer – hence IT applications to the rescue. The answers to the above question can help with marketing strategy, product strategy and consumer targeting.

Leveraging ICT in Entrepreneurial Ventures II: ICT as the Product or Service of the Venture

ICT is particularly attractive for new entrepreneurial ventures because of the proliferation of the web and the increasingly complex things people have to do. The product options run from manufacturing to software services.

Here are a few of the opportunities that exist in the Nigerian and developing country market. Even though most of these are already crowded, with some creativity and innovativeness, an entrepreneur can find ways to cut down the price even further or even come up with high value products that they can sell at even higher prices to niche markets.

1. Provision of affordable computers: Even though the price of computers has fallen dramatically in recent years, there is still a large demand for computers especially by students and institutions of education. Businesses are also now using computers by default rather than typewriters. The secret is to find out how to make these computers even cheaper than most of the big manufacturers can.
2. Computer peripherals to help people get more value out of their computers. These include not just common printers and scanners but more specialized input devices like digitizing tables tablets for architects and artists, larger than ordinary printers and scanners, plotters etc.
3. Device Repair and maintenance: A lot of money lies in people’s offices in the form of equipment that is bad and cannot be repaired. These equipment can not be repaired either because there is no one competent to do the repairs and/or the parts needed for replacement are not available. This presents an opportunity for a technical services venture that helps people save money by repairing their bad equipment.
4. Re-furbished equipment: This builds on the last idea … you buy broken-down equipment from people and give-away prices (after all they haven’t been able to fix them), repair them and by cleaning them well, you could sell them at good margins.
5. Mobile IT Support – this would probably work best in middle-class and higher neighbourhoods – people with computer issues can call a number and have a technician be on ground within the hour to fix the problem.
6. Up-to-date demographic data for business intelligence. Suppose I want to start a new business or expand an existing business into a new geographical area. Wouldn’t it be helpful if I had some kind of data related to the demographics of the target market that would help me plan my strategy? But the reality is that such business data – demographics, updated directories etc.

Obviously, these ideas have not been explored deeply in developing countries as they have been in developed countries. So long ….

Leveraging ICT in Entrepreneurial Ventures I – Introduction

The ability to make use get business information from raw data in order to support business decisions is a critical ability of the information age. And the old saying in management that says …’what gets measured gets improved’ is still correct.
The value proposition of ICT to business can practically preach its own sermon: computers are at another level of speed, efficiency, accuracy and aesthetic quality above typewriters. The Internet provides via the world wide web, email, chat and newsgroups a means of communication that is richer, faster and more interactive than could ever be dreamed of via traditional snail-mail, printed brochures and whatever means of communication were available before the Information Age. In the same vein accounting software are another level of functionality and capability above traditional ledgers and so are databases with respect to paper files and filling cabinets. In a more central role, ICT supplies tools for decision analysis, market intelligence, sales and service support as well as operational excellence that lead to great savings in operational expenditure. However [and this is where the plot thickens] no single solution fits all – every business doesn’t need ALL of these technologies; they only need a subset of them and even then to different degrees. Thus while there are certain generic solutions for all organizations (- like the need for word-processing and communications via email), because every organization is unique, each one’s ICT solutions must also reflect this uniqueness for the solution to be effective.
For the entrepreneurial venture, ICT can either be the main product or service around which the venture hopes to create value or it could simply be the means to an end – in order words offer operational support for a different service or product.