Hidden Profits Blog

Finding the Gold in Your Business

Hidden Profits Author:

Lynda J. Roth

As the president and founding partner of Woodland Hills-based LJR Consulting Services, Lynda advises clients on ways to improve profitability and productivity through both technology and business processes. She also works with companies and private equity firms on the role of information technology in mergers and acquisitions.



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IT Strategy Embedded In Business Strategy

Google alerts are Great!  I found a great blog by Steven Romero at CA Technologies on the importance of IT Strategy. 

I have discussed IT strategy here based on the concept of aligning the IT Strategy with the Business Strategy.  Steve discusses embedding IT into the business strategy discussion.  This is a subtle yet a very important difference.  When an IT Strategy is merely aligned with the business strategy it implies that the IT Strategy comes after the business strategy as support.  While just creating an IT Strategy is a major step forward for your company, it is still only a partial solution.  By embedding IT Strategy and thus the CIO in the Business Strategy process, you now are in the position to take advantage of advances and trends in information technology to influence your Business Strategy. 

So how does that help you? 

Well let’s look at some companies that have used Information Technology to change their industries.

  • Amazon.com completely changed the book retail industry by making technology the business focus. 
  • Dell is another example of a company that embedded technology in their business strategy to completely change an industry. In fact it so changed the industry that many people don’t even realize how difficult it was to purchase computers before Dell.   They leapfrogged over some of the biggest competition in the world, IBM and HP. 
  • To a lesser extent, Vistaprint has changed the printing industry.  You no longer have to find a printer to create business cards and stationary.  You go online create your look and the products are printed and shipped directly for a fraction of the cost. 

All of these examples are focused on the internet but that is not the only way that technology can be a game changer. Other technology options might include:

  • Mobile devices for customer facing applications, executive dashboards, and source data entry
  • Document management to reduce paper and copies
  • Electronic workflow to replace manual routing of paper forms, such as PO, expense reports, capital authorizations etc., for approval
  • Electronic marketing

 By including the CIO in the business strategy process, you open your business to experiencing significant leaps in productivity, profitability and customer loyalty!  And just as importantly you reap tremendous value and success from your investment in Information Technology.

For more information on this topic read Steven Romero’s blog    Read Steve’s blog 

Prior posts on IT Strategy

How an IT Strategy helps control IT Spending  http://www.hiddenprofitsblog.com/how-to-manage-it-spending

What is IT Strategy  http://www.hiddenprofitsblog.com/what-is-an-it-an-it-strategy-or-it-roadmap-and-why-do-i-need-one

If you would like  help with your IT Strategy, contact me at 818-709-6583 or email info@ljrconsultingservices.com

Real Value of IT - The Role of Business Intelligence

Financial puzzle piece

Are you frustrated because you have to wait until after the financial month end close to obtain any information about your company or departments operating results?  This happens in too many companies today!  In my last post, The Real Value of Information Technology, I reviewed the 4 critical areas to create value in Information Technology.  The first was real time information for better decision making.  

Jack Welch retired Chairman of General Electric said   ’An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.’ 

So how can you as an executives learn fast and translate that learning into action rapidly? 

First, you need to have critical information at your fingertips in real-time.  So what is critical information commonly known as KPI’s (Key Performance Indicators).  Every company is different, however, KPI’s are generally financial or statistical values or percentages/ratios that indicate to you when critical operations are moving in the right direction. You know what your KPI’s are and once those are defined then we can define what is required provide them instaneously.  

Information Technology is critical to obtaining KPI’s on a real time basis. 

1.  Use technology to load data at it’s origin.  This can include mobile devices and/or internet to process sales in the field, receive products and inventory, load information from vendors, transfer data from manufacturing equipment or monitoring equipment, load agriculture data, etc. It can also include direct file transfer from customers, vendors and partners. This data is generally then loaded into an ERP system and optionally into a Business Intelligence system. 

2. ERP systems today process data from sub-modules (sales, manufacturing, purchasing, AP etc.) directly into the general ledger and/or job cost system on a real time basis.  An ERP system is a key component to process data and prepare/present information instantly. Processing data instantly is one of the key reasons to upgrade an old ERP system to a new system.

 3. A final puzzle piece in the technical stream to provide instantaneous information is the Business Intelligence system.  These systems provide functionality to dynamically process data into information and present it in numerical, graphical or text format into MS Office products and/or feed directly to mobile devices or web-based applications.  Data can be displayed in numerical or graphical formats and you can drill to detail transactions. Business Intelligence systems and mobile devices are the key components in transforming data into information immediately that enables you to learn, make decisions and act rapidly to make corrections.  As Jack Welch indicated this provides a distinct competitive advantage and the value of the technology used is invaluable!

For more information on how to define KPI’s and implement a fully integrated Business Intelligence system contact LJR Consulting Services at 818-709-6583 or info@ljrconsultingservices.com.