By James McCusker Business 101
Technology is changing businesses … again. And this time smaller businesses aren’t being left on the sidelines.
Nothing changes as fast as computer technology and information systems. Some of the same problems still hang around but the systems change and business changes with them.
From the outset, business has led in adapting computer technology to the workplace. Initially, only the large corporations could afford computers.
Their first target for automation was payroll, and this was significant because it put responsibility for the computers on the shoulders of finance officers, and this affected business organizational structure for the next 50 years. To this day, chief financial officers, from top corporate executives to a restaurant’s bookkeeper, are often key decision-makers when it comes to information systems.
In the early years, most financial analysts could and did write their own programs. As computer systems became more powerful and more complex, however, the technical side of information systems became more and more a world of its own — more and more distant not just from finance but from the businesses they served. They were part of the organization but, at the same time, they were outsiders. The terms “techie” and “alpha geek” arose to describe the people who knew stuff, spoke a different sort of language, and kept the computer systems running. They weren’t compliments and they weren’t meant to be.
Things stayed that way for a remarkably long time. Then, a series of market and technology changes put smaller businesses in the same league with the big guys. Once more the reason was simple: money.
Both computer hardware and software producers were running out of gas. Their primary market, big business, was becoming saturated, a process aggravated by the improved reliability and longer useful life of hardware. Suppliers were facing slower growth and lower profitability.
Their decision to target smaller businesses coincided with technology improvements that dramatically changed the cost picture, driving equipment prices down to levels affordable by small businesses. Improvements in hardware and software gave small networks a level of reliability that only huge corporations enjoyed in the past.
The net result was that many smaller businesses found themselves operating with information systems that in terms of sophistication and reliability were the equal of those that had recently been the pride of corporate America.
The explosion of broadband communications made possible “cloud computing,” a system in which businesses are able to outsource their information systems’ processing and storage, providing access through the Internet. This was the fulfillment of many corporate dreams of getting out of the computer business entirely and letting someone else worry about its techie problems.
Cloud computing was different from other technological changes because its potential for small businesses and even individuals was recognized almost immediately — certainly by firms like Microsoft and Amazon that began offering data storage then broader information system support to their small-business clients and individuals.
Cloud computing is an ongoing process, complete with unanswered questions, but it is already bringing about big league changes in businesses, large and small.
In today’s awakened big companies, the chief information officer is less of an alien presence in the organization and more of an integral part of the business. He or she is less likely to show up at a meeting holding an odd-looking piece of failed equipment that kept the IT staff up all night — and more likely to be bringing a report on how the database can be used to focus customer service. And top management is listening.
How will all these changes affect smaller businesses? They will be running hard, of course, but they’re used to that. This time they will be running with the leaders, not just struggling to keep up, since they now have much the same hardware and software options.
One major difference, though, is that most smaller businesses do not have a chief information officer, and usually have no one “in house” to turn to for advice on how to make best use of today’s information technology to do a better job for the customers, the business and the bottom line.
The biggest difficulty confronting small business owners and managers will be to find someone who is knowledgeable and looking out for your interests and not always trying to sell you something. Finding the right person or support company won’t be easy, so the smart business should get started searching early and keep at it.
Today’s changing small-business environment is more competitive than ever, and good decisions about information systems can make the difference between success and failure.
James McCusker is a Bothell economist, educator and small-business consultant. He can be reached at firstname.lastname@example.org.