Efficient IT Planning is Key to Recession Survival

By David Whitehead

The financial crisis may not be the only thing putting a strain on your business. If your IT upgrades didn’t keep pace with your growth during the boom years, chances are expensive inefficiencies are starting to get noticed. Surviving a tough economy requires all of us to be as efficient as possible, which means it’s time to take a hard look at productivity problems created by poorly planned IT systems.
I have worked for several companies that allowed their IT to become grossly inefficient because systems were allowed to grow haphazardly with little or no planning. Let’s just say newspaper and magazine publishers are the poster children for bad IT systems. During the course of my career, I have seen some amazing debacles.
The saga usually went something like this: An off-the-shelf system is purchased on the fly without taking growth or changing needs into account. When deficiencies inevitably occur, management hastily opts for quick fix add-ons instead of upgrading thoughtfully with the future in mind. This results in redundancies, unnecessary procedures that could be consolidated and all the other problems and mistakes that pop up when systems don’t share or use the same information.
Case in point: I once worked for a fast-growing company whose accounting issues grew beyond the reach of QuickBooks. The CFO refused to dedicate time or resources to properly upgrade the IT to keep things straight as we grew. He addressed everyday issues by instructing his staff to create a web of individual spreadsheets to manually reconcile what the main system couldn’t. As a result, it was impossible to know where the company stood in real time, and it was always a major research project to find out. This company eventually collapsed due to unexpected cash flow problems that often shocked the CFO. He was also amazed how difficult it was for the company to operate profitably. But none of this surprised me after spending several years working for him.
On the operations side, the company heads also planted too many IT seeds that bore incompatible fruit. They had to manage projects and ongoing information for client servicing, which in many cases held the same information used on the sales, accounting and finance sides. When they were very small, they used Microsoft Project to manage production issues and ACT, which is really a sales contact management software, for client servicing. When they formed a business development team, they started a separate ACT database for sales. And to make matters more complicated, they serviced customers by keeping the contact information on spreadsheets. This happened because different managers picked their off-the-shelf solutions of choice rather than forming an IT team to create a consolidated system that made sense not only for what the company did, but also for how it planned to grow.
Their disjointed systems worked just fine for a number of years when the company was small. But when they grew substantially, the information in all of these databases grew unwieldy. Staff laboriously inputted the same information in different systems that not only couldn’t communicate with each other, but were often not even accessible to the very people who needed it. Even if you had access to the system, it was a chore to find anything if you didn’t work for the department that maintained it.
They eventually began to transfer production and client servicing from spreadsheets to a custom-designed Filemaker system, but the CEO refused to allow this type of comprehensive IT system to be devised for the various departments that needed to keep and share much of the same information. The result was a disillusioned staff that got buried in muck, not to mention enormous expense to the company that could have been avoided. Individuals also made frequent mistakes because they didn’t have the right information when they needed it.
I realize that during a booming economy, companies get too preoccupied with their core business to notice the monsters they often create with their IT management. Bad feelings and finger pointing result when these kinds of problems lead to horrible mistakes or create a productivity gridlock. And when the economy gets bad, you simply can’t afford to put up with it any longer. But the Catch 22 is that by this time, you may not be able to afford to do anything about it. It’s cheaper and easier to build and maintain a system correctly on the front end than it is to fix a badly conceived one. I remember how difficult it was to consolidate two ACT databases from different departments. When our IT pro finally did it, we still had duplicate entries all over the place that couldn’t be fixed with an automated procedure.

Avoiding Gridlock and Problems
The best way to avoid these kinds of problems is to implement integrated IT from the start. Evaluate and select software solutions that serve the broadest range of your IT needs. If similar information is shared between accounting, sales and other administrative staff, make sure you are not creating redundancies and ensure that specific individuals only have access to information related to their jobs that they are authorized to see. Most importantly, make sure the entire integrated system is secure from the outside.
I always had the impression that tech-resistant managers were afraid sensitive information would get into the hands of the wrong people if they integrated their systems. Ironically, there is actually a greater risk when the system is screwed up. The best way to handle the situation is to hire IT experts with in-depth experience at creating the kind of secure system you need—an industry specialist if possible. If you believe your company will grow to a substantial size, you’ll probably need either a custom system or high-end software that is easily customized to your specific needs. It’s definitely worth the investment.
Be careful how you put together a management team to make vendor and product selections. Remember that it is natural for managers to feel territorial about their own departments. This often leads them to focus on areas of the company they feel are important rather than on the company as a whole. The whole idea of integrated IT is to make the entire operation work in unison. Don’t let company politics sabotage this process, leaving you with an unbalanced or fragmented system.
Whatever you decide on, don’t expect everyone to be happy with everything about it. You will need to make some compromises of course, and you will need a system that can grow with the changing demands of your company.
Although smart IT people know how to effectively program your system, they don’t know your company as well as you do. Pay attention to how they create user interfaces for your staff while taking an interest in the way they create database fields and how those are displayed.
Much of the information will be accessed behind the scenes in a consolidated relational database. However, make sure your staff gets a presentation they will understand as easily as the people who create the system. Think ahead to the information they will need on a regular basis. This comes first. While keeping like information together, make sure staff can access any information they conceivably might need without having to disrupt the work of others. Make sure there are secure sign-ons for sensitive information and ensure only people authorized to change the information in specific fields are able to do so.
What you want to avoid is forcing people to search for things, which is one of the biggest productivity killers in the 21st Century workplace. Also, you want your employees to feel they are accomplishing something rather than jumping through the same hoops over and over again. The structure of your company’s IT system is a morale issue as much as a technology issue. Creating an integrated IT system from the get-go will save yourself a load of time, money and aggravation as well. And it may be the key to your survival during a down economy.
David Whitehead is the publisher of Business Insider Magazine. He can be reached by email at www.BusinessInsider.us.