Understanding your business IT needs (video)
In this guide:
- Plan your business IT systems
- Carry out a technology needs assessment
- Align IT with your business strategy
- Develop an IT strategy
- Choose the right IT system for your business
- Implement new IT system within your business
- Integrate your back-office systems
- Checklist for planning and integrating IT systems
- Benefits of information systems in business
- Understanding your business IT needs (video)
Carry out a technology needs assessment
How to carry out a technology needs assessment and make IT purchases and decisions that support your business objectives.
A needs assessment is an organised way of determining gaps between where your business is and where you want it to be. It is typically the first step in any business improvement effort, and an integral part of any business systems planning.
What is a technology needs assessment?
A technology needs assessment is a systematic analysis of your business' IT needs. It's a way of looking at what technology, systems and processes you currently have and use, and what you might need in the future to support your business objectives and growth.
To avoid wasting time and money, and be able to make informed decisions, you should carry out a technology needs assessment before you make any IT purchases or changes in your business.
How to assess technology needs in your business?
The technology needs assessment process typically involves several steps. You should:
1. Gather relevant information
Audit your infrastructure, processes and current systems. Study your workflows and find out how employees use current technology and do their work. Carry out focus groups with relevant staff, or conduct surveys, interviews, etc to collect as much relevant information as you can. You can use many different business analysis tools for strategic planning.
2. Identify drivers for change
Review the strengths and weaknesses of existing IT systems and identify areas that are causing problems. Understand the reasons for change. For example, do you need new IT systems to satisfy new legislation, streamline processes for efficiency, meet customer needs or simply to remain competitive in the market?
3. Determine the requirements
Aim to identify all possible requirements. You can decide later which ones are critical, realistic and affordable. The key is to align IT with your overall business strategy. For example, if your objective is to improve customer service, do you need a new system to communicate with customers more effectively? If you're aiming to increase efficiencies, will the new system help you to simplify operations? If necessary, include your stakeholders in this process.
4. Consider your resources
If you establish a clear need for a new system, decide how much money and time you are willing or able to spend on it. Dedicate resources for the purchase, as well as the implementation of the system, staff training, change management, maintenance and support.
5. Review and prioritise results
If your resources are limited, you may need to prioritise your needs. Work out which system may deliver the most of your requirements for the least amount of money. Make sure to consider the alternatives - perhaps you can resolve your IT problems with adjustments in other areas of business.
Document the outcomes of your needs assessment, so that you can revisit them if necessary. Analyse the results and use them to develop an IT strategy for your business.
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Align IT with your business strategy
Find out why aligning your IT with your business priorities maximises the return on your IT investment.
Your information technology (IT) systems should effortlessly support your overall business goals and objectives. This alignment, however, is not always easy to achieve. Many businesses find that their IT systems are either too expensive to maintain, too cumbersome to use efficiently, or simply do not provide added business value.
What does it mean to align IT with business strategy?
Business-IT alignment simply describes a state where a business can use IT to achieve its objectives. In this state, IT is a valuable asset rather than a utility or an expense. The system functions across the business with optimal efficiency and is more likely to achieve a positive return on your IT investment.
Benefits of aligning IT with business strategy
Achieving business-IT alignment can help improve your business performance. It can also:
- boost efficiencies and profitability
- improve collaboration
- enhance customer experience
- improve supply chains
- achieve greater return on technology investments
- reduce the risks associated with business and technical change
How to align IT with business objectives?
To align your IT strategies with corporate goals, you must:
- know your business objectives and strategy
- know your current IT capabilities and gaps
- consider both priorities and investment within your IT strategy
Read about the key elements of strategic planning and find out how to carry out a technology needs assessment
If you are not sure where to start, focus on a few areas that may provide the greatest benefit. For example, you may want to:
- look for areas of underperformance
- engage with customers and suppliers to identify pain points
- benchmark to see how your business compares to others
- identify the key processes that matter most to your business (eg customer service, manufacturing systems, etc)
The next step is to decide what type of IT could make these systems work better. For example:
- Could a customer relationship management system help you identify new opportunities?
- Could enterprise resource planning help you control stock, cut waste, manage automated ordering and accounting?
- Could your e-commerce website link to your back-office systems?
- Could IT integration (eg of design and production systems) improve your manufacturing efficiency?
After you determine how IT can fit with your business priorities, you should develop an IT strategy. This is a long-term plan that defines how and why the business will use IT to achieve its business objectives.
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Develop an IT strategy
Discover the role of IT strategy in business and how to create an IT strategy that supports your business objectives.
Technology is capable of disrupting industries and businesses. To succeed long-term, your IT systems - and your business - need to be able to develop and adapt to the changes around them. This is where a good IT strategy comes in.
What is an IT strategy?
Information technology (IT) strategy is a roadmap of a sort, helping you to align your IT projects with business priorities. It allows you to carefully plan for the long term and evaluate your IT needs and priorities before making an investment.
An IT strategy also helps you to:
- plan for implementation of any new technology initiatives
- keep control over the costs
- mitigate the risk of IT failure and disruption to your business
How do you develop an IT strategy?
There are many approaches to developing an IT strategy for business. The main one involves a sequential process that gives you a detailed view of your IT requirements and a clear plan for meeting them.
Follow these simple steps to plan an IT strategy for your business:
- Outline your business strategic goals and objectives.
- Define the strategy's purpose, lifespan and stakeholders.
- Review existing IT systems and infrastructure for gaps or inefficiencies.
- Build an inventory and assess the life expectancy of your current technology.
- Carry out a technology needs assessment and define priorities for the next 3-5 years.
- Identify the technical capabilities you will need to support your business.
- Allocate budget, resources and consider how to align IT with your business strategy.
- Acknowledge your constraints and limitations - eg lack of skills or resources.
- Define exactly how you will implement new IT systems within your business.
- Set realistic timeframes and milestones for the technology projects.
- Create a framework for managing the system.
- Decide on key metrics and KPIs to monitor new technology over time.
Your IT strategy may need to change over time as challenges, opportunities and priorities shift. It's important that you review and adjust your IT strategic plan periodically.
Importance of having an IT strategy
An IT strategy, if done correctly, can drive growth and efficiency in your business. It can support your goals and your staff, ensuring that your technology investments deliver value for your business.
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Choose the right IT system for your business
Introduction to the different types of IT systems in business and tips to help you choose between them.
It is vital to take due care when choosing new business IT solutions. Some of the key things you will have to consider when choosing any IT product are:
- functionality
- compatibility
- skills and support required
- ability to scale up
- integration
- security
- management and reporting capabilities
You may want to carry out a technology needs assessment to help you consider what your business needs are today, and what they might be in the future. Technology moves quickly, so it's worth getting a future-proof system and keeping up with the latest developments.
Types of IT systems in business
Most businesses have several information systems in place. For example:
- executive support systems - typically involve data analysis and planning tools to help with strategic decision-making
- management information systems - usually work with internal sources of information and help organise, evaluate, manage and present data in a readable form
- decision support systems - typically rely on databases to produce 'what-if' type of analysis
- knowledge management systems - help businesses create, share and manage information, often collaboratively
- transaction processing systems - automate routine transactions, such as billing, payroll, stock control, etc
- office automation systems - enable processing of data and information in a productive, efficient way
With all these systems, there are options to suit every kind of business.
Bespoke systems
You can ask a solutions provider to build you a system tailored exactly to your needs. However, this can be expensive and smaller businesses often find that 'off-the-shelf' software may be more practical than trying to develop something bespoke.
Cloud systems
Cloud computing provides businesses with a way of managing data, hardware and software requirements by using resources on the internet that are stored 'in the cloud'. This makes them accessible from any computer or mobile device with an internet connection and web browser.
Linked systems
When you buy a new IT product, you may want to integrate it with your existing systems. For example, new accounting software with existing orders, purchasing and stock control systems. This allows you to continue using your existing tools alongside the new technology. However, compatibility issues are possible and you may need specialist support to set up the systems to meet your exact needs.
Networked systems
Networking your computers is almost always worthwhile. Networking allows you to share hardware, software and internet access. More importantly, it makes it easy for people to share information and work together. See more on computer networking.
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Implement new IT system within your business
Follow this process to help you embed and successfully implement new technology in your business.
Implementing new technology can be challenging. If not done correctly, it can create big problems for your business, causing delays, productivity losses and budget overruns.
Steps for successful systems implementation
Follow a well-tested information system implementation process to minimise disruption to your business. This process involves:
Communication
Staff need time to adapt to changes. Explain your reasons for the new system and the benefits you expect it to achieve, to get everyone's buy-in for the project.
Project kick-off
Good project management is key to ensuring that the implementation goes smoothly. Establish your project team, assign roles and responsibilities, and create and distribute a clear implementation plan.
System installation and configuration
Your IT supplier will typically install the system, but your in-house IT team (if you have one) may be involved. During installation, configure the system, set up the necessary outputs or reports (eg weekly sales reports, monthly debtor reports, etc), test them and have them ready to run.
Change management
Staff can struggle with change, get confused over new workloads or duties, or resist new technology. It is important to manage this carefully and follow best practices for change management.
Staff training
Your staff may need system-specific training to operate the new system. During their training, you may need cover for their regular tasks. You may also need 'top-up' training at a later stage to reinforce the initial sessions. You can run user acceptance tests as part of the training package.
User support
Staff using the new system will need ongoing support. You may choose an in-house helpdesk or an external solution. See IT skills and support for your staff.
Data migration
You may need to migrate data from your old system to the new one. Prepare this data as early as possible. Pay close attention to the format, content and volume, as all can cause issues with the new system. Depending on your project, you may want to keep two sets of data for a while (on an old and a new system), in case you run into any follow-up issues.
Contingency planning
IT system implementations don't always go according to plan. Prepare actions for possible scenarios of things going wrong to avoid disruptions. Learn about business continuity and crisis management.
Scheduling go-live
Plan to bring your new system live during a slow period for your business or, at the very least, take account of things like seasonality, staff leave, skill readiness, support available, etc. Make sure you have sufficient resources in place when you go live.
Monitoring risks during implementation
Work with the supplier during implementation, as well as when the system goes live to ensure that they quickly address any gaps and concerns.
Checking security
Evaluate any security concerns that a new system can cause. Carry out a security audit to check the system for weaknesses and, if necessary, consider encryption mechanisms to protect the system's data. Read more on cyber security for business.
Measuring outcomes and results
Set clear metrics to measure the success of the implementation. See how to measure performance and set targets.
To keep your IT project on track, evaluate the system carefully and carry out a technology needs assessment to help you choose the right IT system for your business.
Potential pitfalls of new IT system implementation
System implementations are often derailed because businesses:
- fail to plan the project realistically
- underestimate timescales to analyse, design, plan, test and execute the change
- manage the project poorly
- fail to support staff with training or change acceptance
- drag out the project and overspend
- fail to define roles and responsibilities of providers, stakeholders and key staff
Help with IT system implementation
Few businesses have enough expertise to implement new IT systems on their own. Suppliers of IT solutions can give advice, although they are likely to favour the solutions that they provide. In many cases, they can customise their solution to meet your particular needs. Alternatively, you can use an independent consultant to help you review, choose and implement an IT solution.
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Integrate your back-office systems
Link your back-office and online systems together to improve efficiency and increase customer satisfaction.
Linking your back-office and online systems together improves efficiency and could ultimately lead to greater customer satisfaction and cost savings.
What are back-office systems?
Back-office systems run all your business administration processes, such as accounts and customer relationship management. They are typically an automated set of processes run by a piece of software on your computer. A back-office system, using an accounting package or database, will:
- record all sales transactions
- record all purchases
- update inventory records accordingly
- generate all appropriate paperwork - ie invoices and receipts
Many back-office systems can also link into courier systems for printing shipping labels or producing reports that are invaluable in monitoring business performance and predicting future trends.
What is integration in IT?
In practical terms, system integration means connecting different IT systems together. For example, linking your online e-commerce system with your back-office accounts and database systems, so that when a customer places an order online, your web store and back office deal with the sale as one.
The online system accepts the order and then relays all this information back to the customer, while the back office records the transaction, adjusts inventory levels, generates an invoice and fulfils the order. See more on customer relationship management.
Benefits of system integration
Advantages of IT system integration include:
- greatly improved customer service
- faster response times
- enhanced capacity - automation allows you to handle larger volumes of business
- reduced costs in the medium and long term
- improved accuracy - fewer chances for error with two systems accessing the same data
- better use of staff time
Integration solutions
The three main options for achieving integration are:
- purchasing off-the-shelf software that includes built-in back-office functionality
- employing a specialist software firm to create an interface between your systems
- using an application or cloud computing service provider
When looking for software solutions, make sure they support open standards such as XML (Extensible Mark-up Language). You may also want to choose a flexible solution. For example, one that supports multi-currencies, as this can help you move into new markets more easily.
It is important to determine your requirements correctly and thoroughly. See how to carry out a technology needs assessment.
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Checklist for planning and integrating IT systems
Things to consider when assessing your IT system needs, planning and executing a systems integration project.
Upgrading your IT systems can improve communications and allow people to work together more efficiently. However, you should plan carefully before you start to make sure that your new system will fit your needs.
The checklist below has some quick and simple tips to help you achieve this. To choose and implement an IT system, you should:
- identify your key processes
- identify any bottlenecks in your current system
- find out your customers' and suppliers' requirements
- understand the different technical options
- seek independent expert advice if necessary
- assess costs and benefits of different options
- consider limitations, such as your employees' IT skills and your budget
- prepare a thorough brief for your potential suppliers
- plan for contingency, especially if you are tied to one particular a supplier
- formulate a clear agreement with suppliers on what the solution will achieve
- check if the deal includes ongoing support from the suppliers
- decide if you prefer gradual implementation or a 'big bang'
- create a realistic budget, including resources for training
- set a realistic timetable, including time for testing
- allow for unexpected costs and delays
- plan how you will involve employees and overcome resistance to change
- manage the project and track progress from beginning to end
If you'd like to learn more about the different processes involved in choosing and implementing an information technology system, detailed guidance is given on other pages in this guide.
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Benefits of information systems in business
Understand the ways in which IT can help boost efficiency, productivity and profit margins in your business.
Even the simplest use of technology can dramatically improve your business' productivity and efficiency. Arguably, the greatest benefit of information systems is their ability to give users the information they need to carry out tasks efficiently.
Importance of information systems
IT systems can produce:
- custom data to help with a specific task or decision-making
- custom format (eg list, chart, etc) which can be tailored to the user's need
- real-time data, particularly useful where fast action is needed (eg mechanical fault)
- archived data, particularly useful for reports, analysis and business planning
Other advantages of information systems
Technology systems can also benefit a business by enabling:
- operational efficiencies
- cost reductions
- supply of information to decision-makers
- better customer service
- continuous availability of the systems
- growth in communication capabilities and methods
To maximise the benefits of your IT system, you have to fully utilise all its features and functions. For example, you can:
- Use instant messaging, emails, voice and video calls, and even chatbot technology to improve communication with customers and suppliers. This could save you time, money and effort, allowing you to react quickly to new work.
- Integrate your back-office systems to reduce administrative costs. For example, you can link your online e-commerce shop front with stock control and accounting systems to streamline your processes.
- Use labelling products with unique numbers and scannable barcodes to boost your efficiency, and improve your stock control and supply chain management.
- Use different solutions, such as customer relationship management systems or mobile technology, to improve levels of customer service. These may help you record, organise and plan contact with customers, access customer details on the go and view customer interactions.
It is important to weigh up the benefits of new IT systems against the costs and potential challenges. One way to ensure that your new system delivers value is to align IT with your business strategy.
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Understanding your business IT needs (video)
This short video tutorial explains some key considerations when assessing the IT needs of your business.
IT can play an essential role in any business. But first, you need to know the aims of your business to see how IT can help. Then, you will be able to choose the right IT system and make the most of it.
Watch this short video tutorial to understand the key considerations when assessing the IT needs of your business.
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