The FASES Methodology - Foundation

Foundation – It’s Not About Computers

You don’t need to be an IT geek to understand the stuff in this book any more than you need to be a mechanic to drive a car. Computers are just tools that you use to do a job.

BUILDING YOUR FOUNDATION

Foundation is about one simple concept: building a base that will support you in whatever you want for your business. That’s it. Nothing more. Just that.

For some of you, an elephant will suddenly have appeared in the room. Have you just realised that you’re not actually sure what your business plan is? And there’s the rub. Unless you know the needs and wants of your business, how can you possibly go out and get them?

Building a foundation requires that you understand where your business is today. More importantly, it requires you to know where it’s heading so that your IT can enable it. If you intend to double your turnover in the next five years, you’ll likely have thought about increased marketing exposure, staffing requirements, more office or manufacturing space, additional warehousing, vehicles, shops and whatever else you may need. But can your systems cope with double the amount of data? Will your web storefront buckle under the strain of the increased demand? What’s your plan to ensure continuity? Extra hands are going to require keyboards and PCs. They’re going to need tools so they can do their jobs. Networks and servers may need upgrading. Who are you going to buy all this stuff from, and who’s going to keep it running smoothly?

Imagine it’s five years from now. Your business plans have come to fruition and you have indeed doubled your turnover. So what’s the plan now that you’re here? Do you know who you have been selling to? Has your profit per person increased or are you working harder for your money?

If you’d thought about these questions five years ago, you could have taken the time to ensure that your systems were recording enough about your prospects, customers and interactions for you to be able to glean important market data. You could also have recorded some metrics so that you could assess the performance of your systems and teams, getting a sense of staff productivity and effectiveness. 

Building an IT foundation demands that you know what you want from your business. To be able to make the right decisions, you need to know everything there is to know about your clients, team, transactions and interactions. Why? Because knowledge is power. Data is the new gold, and guessing has been proven to lead to less than desirable results.

Artificial intelligence

Artificial intelligence is on the rise. Machine learning is all around us, and while today the big end of town is the main beneficiary, the landscape will undoubtedly be different tomorrow. Wonderful opportunities will soon abound for those organisations that have built a solid foundation and recorded as much data as they can, regardless of how trivial it may appear.

Foundation is the most fundamental part of FASES, so I’m going to devote quite a lot of time to covering it. It’s a rip roaring read, though, so let’s press on. 

Your foundation is built on three core tenets – systems, solutions and strategy. 

Systems

There are many different businesses, offering many different services and products, and it’s easy to think that the IT landscape will be markedly different for each one. You might consider that companies in the same vertical niche would have similar systems, but surely a marketing company would be different to a manufacturer. However, if you take a closer look, you’ll find an enormous amount of consistency. Systems generally fall into two groups – production and back office.

Production systems are those that businesses use to make whatever product it is that they sell and to support the staff as they interact with customers and prospects. They are also systems that customers may themselves use to interact with the business, such as an online portal or app.

Back office controls the administration of the business. It covers human resources, accounting, payroll, and so on.

As systems become more complicated and integrated, it’s highly likely that the line between the two will become a little blurred. The McDonald’s point of sale is a perfect example of a system serving two distinct purposes. Firstly, it records the order and sends the data through to the kitchen so that the food can be cooked, making it a perfect example of a production system. Then, the same data is consumed by the finance and accounting systems, which is a back-office activity.

When it comes to your systems, it’s imperative that you understand the pieces you have, the purpose they serve, and how they interact. The details of precisely what they do and the engines that run them are best left to those whose job it is to manage them, but unless you know what looks after what, you’re going to find it difficult to determine a best path forward.

Solutions

The systems in your business are your big foundation stones. They provide the fundamental processing capabilities such as CRM, accounts processing, ordering systems and so on. The mortar that binds them together are your solutions. These are the myriad of activities that manage the multitude of requirements in a typical organisation, for example the reporting tools, spreadsheets, data analysis packages, graphics packages, communications tools, and many other bits of software that don’t form part of your major IT infrastructure, but without which your organisation would simply grind to a halt.

There is of course a grey area between solutions and systems. For example, email has a foot in both camps, serving the customers and internal users. For many years I regarded solutions as being no different to the major systems; just another bit of the IT landscape to manage. However, they have a different focus, and tend to be bought in a different way, being regarded as a little more disposable. This is what has led me to differentiate between the two.

Systems tend to be large value, requiring a major capital outlay, perhaps even some significant tailoring. Solutions are often shrink-wrapped off-the-shelf packages to serve a specific purpose.

Strategy

If systems and solutions are the ‘what’ of foundation, strategy is the ‘how’ and ‘why’. Much has been written over the years about the need for a comprehensive IT strategy, but the more time I spend in the IT industry, the more I’m inclined to think that we require a new approach with a slightly lighter touch. The little evidence I’ve found strongly suggests that businesses are basically playing the IT equivalent of whack-a-mole. In its SME Research Report 2017/18, HLB Mann Judd found that only 20% of SMEs have a business plan. This is a startlingly low number. The reason behind this is interesting, and it fits in well with my narrative about IT.

The issue isn’t that owners and CEOs are short of ideas, but rather that they simply don’t know how to go about writing a plan. One might conclude, following the same logical path, that the reason they have no clear thinking on the use of their IT is because they don’t know anything about that, either. If management and owners haven’t formulated a policy for the whole business, what chance is there that they’ve given any thought to how their IT funds are best deployed?

Strategy documents used to be written over many months by IT directors and managers, outlining complex technological behemoths. They were then presented to the board members, who turned to the page containing the expected costings, made the sucking noise beloved of mechanics, then had a long conversation about how they could get the same for half the price, or buy half as much and wring twice the output from it.

Thanks to the speed of technological change, though, a thorough strategy document now has a chance of becoming obsolete long before it’s signed off by anyone. Given this fact, it would make sense to keep it relatively simple and high level.

IT was once thought of as a separate strand of a business, but today, in the newly democratised technology world, that is no longer the case. IT is simply part of the business in the same way as all the other business assets, and this means that your IT strategy needs to focus squarely on implementing the needs of the business as identified by the business and marketing plans. 

But only if you have them.

Quick show of hands. Who’d hire a couple of new staff members with no real idea about what they’re going to do? Who’d rent some warehouse space with no idea what problem it’s going to solve? IT is an enabler, just like staff and warehouse space. It is there to help you do whatever it is that you’re planning to do in your business and its marketing. Your IT strategy therefore has one primary requirement: it must be absolutely and unequivocally aligned with your business plans. Work out what they are, and your IT needs will quickly become apparent.

This article was taken from my book "Doing IT for money", available December 2018

MarshallFloyd – People and Technology – Join our mailing list for updates on the availability of "Doing IT for Money" and to download our free guide with over 100 tip, hints and ideas you can use to improve your IT.