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Fiona McGuinness11-Sep-2013 20:57:2811 min read

What makes a business ‘smart’?

From the moment a potential customer contacts your business, the process of information gathering begins. The more up-to-date, accurate and complete the information, the more valuable it will be to your business. 

How you deal with this information will determine how successful you are in business today.

In my experience, businesses tend to fall into two different categories: they are either a ‘standard’ business operating no differently to their competitors; or one that values and uses the information they gather to gain a competitive advantage.

The latter also strive to be different, innovative and accomplished in the way they carry out their business to control margins and increase profits.  I like to call this kind of business ‘Smart’.

So, what makes a business ‘smart’?

In my opinion, a combination of these three attributes make a business ‘smart’:

•    A smart business model
•    Utilising smart processes
•    Smart people!

You may notice the words ‘software’ or ‘technology’ don’t appear here.  As unusual as this may seem coming from someone who co-founded a software company, it doesn’t mean I don’t think technology plays its part.

I believe all three ‘smart’ attributes need smart technology in place to enable them to happen.

Whatever business management software you choose to implement, it must be able to facilitate a smart business model to suit your company.

It must help you to execute smart processes that will enable you to be more efficient and effective.

And finally, it must also help your staff to become ‘smart’, utilising information in the best possible way to give you the advantage over your competitors.

Now, taking each attribute individually, I will explain them further.

 

SMART BUSINESS MODEL

The world is full of what I call “regular” businesses. It’s not difficult to have a business like these – most companies that you encounter are regular businesses.  Most software packages on the market are designed for such companies. In fact, using these software systems can make your company into a regular company in no time at all.

Our proposition is a simple one, “smart business” are different from “regular” ones and they need different software foundations to be smart.

A “smart business” is one that looks at the competitive landscape they operate in and figure out new ways to stay ahead. They explore new business models by enhancing existing ones or even creating new ideas.

Developing a business model that’s fundamentally different from your peers could be a difficult task but it is the source of innovation in business.

Some business gurus argue that it isn’t companies that compete with each other anymore – the real competition is between business models. A business model is really a collection of processes skillfully assembled in such a way that the output of the model is delivered as effectively and efficiently as possible. It is this sort of process thinking that is at the heart of business model change.

A now-classic example of a disruptive new business model is Amazon, which demolished the concept of a “bricks-and-mortar” shop, replacing it with an on-line shop that could be accessed from anywhere on the Internet.

One thing Amazon could not do is use standard software to support its business model. It had to create its own custom software to accomplish its purposes, as standard software packages were designed for standard companies, not a ground-breaking one like Amazon.

Of course, not every company gets to be an Amazon. But you don’t have to be on the scale of an Amazon to innovate with business models.

An example of this would be TileStyle in Dublin, a ceramic tile distributor & retailer, who changed their business model to capture the ‘batch or shade’ of each product on each sale. This gives them a competitive edge in their market on re-sales or replacements as they found that customers liked the idea that they could depend on TileStyle to deliver on continuity.

But the problem that smaller-scale innovators have is that standard software just does not work for them.

 

SMART PROCESSES

When we talk about business processes, we are talking about the various tasks and activities carried out by a company to make it run efficiently. In general these processes are the day to day activities, carried out by staff and in a lot of instances with the aid of a business software solution. They can vary from the setup of a new customer, entering a purchase order to replenish stock, to the loading of a truck for delivery.

Therefore it is important that companies understand how their current business processes work, both manual & system, only then can they begin to design & implement new & more efficient processes and begin to act like a smart business.

All businesses run on a numerous processes per day.  Some of these processes are of little value, some are potentially priceless but either way they all add value to the business. Unfortunately, many companies never examine these processes.  With proper analysis of these processes, however, companies can go the extra mile and become a “smart” business.

Smart business processes can drive up customer and employee satisfaction. They enable a business to scale up and drive costs down.  The challenge for managers is to assess which processes require attention, and which need to be prioritised for immediate attention.

A 2007 study by the Institute of Chartered Accountants in England and Wales found that 71% of all companies surveyed were intending to improve their IT systems, as a significant financial objective of the business. A European study found that 56% of the companies that introduced new processes ended up introducing processes that were new to the market.

Why do business processes, and their related technologies, need to change anyway?

They need to change for a number of reasons, some of which are internal to the organisation, and others of which are external.  Understanding what drives changes in the business environment is usually very useful in understanding how and why processes change.

I have identified four different business drivers that cause consequent changes in business process. Each of these four is at play in any organisation, though their relative strengths may vary from time to time. You must evaluate each of these drivers and consider how to address the changes they cause when developing your business processes and company strategy.

Moving from ad hoc to formalised processes

Small businesses are characterised by informal and ad hoc business processes, while smart businesses tend to have formalised processes, according to think tank M Institute. Negotiating this transition is critical in the life of the organisation which is looking to scale and grow. So as businesses get smarter, they tend to think about ways in which previously manual or ad hoc processes can evolve into formal processes.

Quite often, but by no means exclusively, this requires the application of technology to the process, to cement in the formal way of working, and to enable that practice to be shared / spread across the organisation.  In most businesses, the first processes which undergo a degree of formalisation relate to accounting and finance. This usually means that the technologies applied to accounting come up for renewal earlier than others in the organisation.

At first glance, this set of process transitions might only apply once to a business – after all, when a manual process becomes modernised, it will never be manual again, or so the thinking goes. However, in reality, a smart business operating in change will always be creating new processes to respond to changing opportunities, whatever its size. Flexibility is definitely required in the technology to constantly deliver the new business processes efficiently and effectively which is what we claim we offer with our Intact accounting and business solutions.

Natural changes to the working of an organisation

Natural changes to the working of an organisation are constant variables that need to be monitored and taken into account to maximise the efficiency of a smart business. There may have been a time when a business would have substantially the same processes from one decade to the next, but that day seems to be past. Now, the expectation among leaders of smart businesses is that their organisation would continually change to respond to movements in the marketplace, their own capabilities, and the capabilities of their business partners.

Each of these shifts usually works its way through the organisation via changes in business process.

Changes in technology

According to the European Commission, 40% of the productivity gains in European companies came from the use of IT.  Plus, a quarter of all European companies found that the organisation strategically depends on IT for effective innovation.

Information technology has broken down the traditional walls that existed between different parts of a smart business: sales, finance, manufacture, warehousing and so on. Now it is possible to enable a process such as order to cash across different parts of the smart organisation, or even across a range of partner organisations, in a manner that is seamless to the participants in the process.

It is a true to say that the Internet has changed everything which many business leaders in “regular” companies seem to interpret that to mean that they can now sell their goods and services on the web. Not true, as this process can get quite confusing and in fact can lead to double the work for a “regular” business. That is only one aspect of the digital revolution that has swept across business.

The wider impact of the digital revolution means that organisations can now break down all their activities into processes and use digital technology to deliver faster communications, easy access to information and the ability to scale up in the future. Processes that are manual or based on the movement of paper are truly limiting. Digital processes enable numerous participants to complete their work without compromising others or holding up an element of the process.

 

Smart people

Everybody agrees that the best companies make the most of their people. Which is why it is really surprising that so many companies do so little with their people.

Not so for a “smart business”, in fact, smart businesses owe their advantage to the people who work for them.  The employees who will assist the company are those who have finger-tip access to the information they need to make the best decisions they can. In a smart business, that information comes from making the most of the software in the business.

In such a mode, an organisation seems efficient, even effortless, in handling and reacting to events taking place around it. For example, we expect amazon.com to demonstrate expert skills when we seek to find a particular book, or author. In this situation, amazon.com provides expert input to us, responding automatically to our requests, and anticipating our next question by offering recommendations based on our previous choices.

Similarly, when employees have great information helping them do their job, they actually look really skilled to their customers and partners. In other words, they look smart and that helps them make skilled, smart decisions.

 

Being smart about information

Business processes are characterised by the flow of information: smart companies capture this information and put it to work for them. The ability to access this information wherever they are and use it to their company’s benefit by arranging and analysing it so as it allows the business to make intelligent decisions, is a key foundation to what we at Intact call a “smart business.”

Information is power; access to accurate information is vital. A lot of businesses today are unaware of the various parameters that are necessary for their success. if they were aware, they would proactively make decisions in their pursuit of a “smart business”.

While access to relevant information is central to the success of any business model, so too is the examination of the business processes and overall objectives of the business. One must examine the processes in any business and see how the software solution supports these processes in the business.

People talk about data in their business, data from their software solution, and data from the internet.  But does all this data offer any additional value to the business? The big question for any business today is to cut through all this data and decide what is important to the business, what gives it an edge over its competitors.

When a company examines its processes within the everyday workings of business, it needs to examine and analyse the information to enable intelligent decision-making, such as judging performance against targets, and so on.

We all know the typical information that is generated by a business: month end reports, balanced trial balances, all neatly stacked on a shelf gathering dust. Imagine having a system that allows any user to access the information which allows that person to carry out their work in a more educated manner. This is what is needed to support smart people in the business.

For example, does your software solution allow your sales team to examine their actual sales against their targets, or judge the performance of their customers, pinpoint the products that have the best margin, or identify customers who have fallen away and have not purchased anything from them in weeks?

As I said earlier, all of the processes conducted in any business are vital, from the information gathered at reception on the number of calls, to the information gathered on the products dispatched and their value. This is where Intact’s Smart Business idea can help you.  We examine your current business processes and through intelligent use of our software we can help you become a smart business.

That’s where Intact’s software model comes into its own: it combines top-flight standard software applications with tailored software to make sure your business model is delivered to market just as you had dreamed it would. The tailored application is designed and built by Intact’s own software development team to make sure that you have software that is designed to cater for your business model whatever that might be instead of delivering a set of standard functionality.

 

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Fiona McGuinness

I've been part of the Intact family for 16 rewarding years. After completing my Business Studies degree, I knew Marketing was a field I wanted to pursue. Prior to joining Intact, I primarily worked in the financial sector, focusing on marketing for credit unions. When I started at Intact, I handled all the marketing tasks by myself. Over time, as our team expanded, so did my role. Now, I specialise in crafting compelling content across various platforms, from blogs to video scripts. No two days are the same, and I thrive on the dynamic nature of my role. Whether it's diving into customer case studies or lead campaigns, I'm driven by the positive impact our solutions bring to businesses. In an age where AI plays a significant role, I remain a firm believer in the power of authentic content. When I'm not working, you'll find me enjoying quality time with my family, sewing, or watercolor paintings.