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1. Executive Summary

What we don’t often hear is how business owners are using technology as a competitive advantage to propel them ahead of their competitors. Why is that?

With all that’s being written and spoken in the media today about technology, why are these business owners so unaware?

The report will try to answer these question and examine the use of process technology in businesses. It will evaluate how businesses used technology for Information Processing it as a competitive advantage. It will ascertains use of Customer Processing Technology in Customer Relationship Management (CRM) and its importance in the more informed customer environment.

The report identifies current strategic opportunities that firms should be thinking about if they are not doing so already. It discusses the benefits and challenges of getting into these areas with new technologies, new partners and new business processes.

The report covers the some of the issues like;
ú Increased or improved use of ICT helped to expand business activities?
ú Increased or improved use of ICT resulted in the development of new services and/or products?
ú Internet usage has helped to create new networks – inside and outside the company?
ú The adoption of ICT solutions has lead to the restructuring of working and communication methods in the enterprise?
ú The business now understands better the need for staff training?
ú How Customer relationships become a strategic asset among corporations?


2. Introduction and Objective

The future is not some destination; it’s our own creation. The paths to it are not discovered, they are forged, and the process changes both the path maker and the destination.
Peter Fingar

Most business owners still see computer technology as an efficiency tool rather than an investment in the future success of their businesses, and that’s a critical mistake. You can’t afford to think like a traditional business owner any longer. Continuous advancements in computer technology have opened up new customer and geographical markets for many small businesses. But in creating a more accessible and integrated global economy, technology has also exposed a business’s current customer base to competitors located thousands of miles away.

2.1 Information processing technology?
Information processing technology in the past decade has transformed the way that information is produced, managed, manipulated, transferred, and received. Many ICTs have zero or declining marginal costs. There has been increased adoption of all categories of software, from databases, CAD-CAM and presentation packages, to spreadsheets and communications software. There is a perceived lack of expertise in the planning process as well as the technology itself.

2.2 Customer processing technology?
Customer processing technology or Customer Relationship Management (CRM) is currently one of the most important technologies available to any company. It enables a business to improve its understanding of its customers. It has proliferated with use of the Internet, as electronic communication is integral to an effective CRM strategy. CRM is a tool with which an organization can collate the information it has regarding its customers. It is both an ideology and a technology.


3. Technology for Businesses Development

The growing complexity of science, technology, and organization does not imply either a growing knowledge or a growing need for knowledge in the general population. On the contrary, the increasingly complex processes tend to lead to increasingly simple and easily understood products. The genius of mass production is precisely in its making more products more accessible, both economically and intellectually to more people.
Kuhn, Thomas. 1962

Key findings:
Information and Communication Technology (ICT) Activity of UK businesses, 2004
The value of Internet sales rose by 81 per cent between 2003 and 2004, from £39.3bn to £71.1bn, while the proportion of businesses selling on-line rose by 24 per cent from 5.4 per cent of businesses to 6.7 per cent of businesses.

Sales over other ICTs, for example, via non-Internet Electronic Data Interchange (EDI),
automated telephone systems and e-mail, fell slightly from £200.6bn in 2003 to £198.1bn in
2004. Sales over ICTs other than the Internet were still nearly three times the value of sales over the Internet.

Internet sales represented just under 3.4 per cent of the total sales of non-financial sector businesses in 2004, compared with just under 2 per cent in 2003 and marginally over 1 per cent in 2002.

Internet purchases represented nearly 4.4 per cent of the total purchases of non-financial businesses compared with just under 2.8 per cent in 2003 and just over 1.3 per cent in 2002.

Just over 42 per cent of businesses reported using broadband for their Internet connection, a rise of 65 per cent on 2003. Nearly 34 per cent of businesses had a website in 2004, up by 10 per cent.

The number of businesses using the Internet to interact with public authorities rose from 19.4 per cent to 20.9 per cent between 2003 and 2004.

Source: Office for National Statistics, 2006

Globalisation provides both opportunities and challenges. Expanding markets and access to knowledge and technology produced throughout the world provides an opportunity for substantial increases in standards of living. But competition from abroad can provide significant challenges. The competition from abroad has become particularly keen in recent years, as those in developing countries have learned how to produce and market the kinds of goods that are demanded in the advanced industrial countries. Unless countries respond to that competition, jobs will be lost and living standards reduced.

Education and technology are the keys to a successful response to the challenges of globalisation. The only way to compete against the low wages in the developing countries is to improve skills and productive efficiency, and to respond more quickly and effectively to what consumers want.

The most successful of the advanced industrial countries have done just that; they have relied on improvements in technology and education to respond to the challenges posed by globalisation. Larger fractions of the population have gone on to college. There have been more investments in research and development. They have also shown flexibility in restructuring the economy. Part of that restructuring has entailed a strengthening of the service sector and a growing importance of small and medium size enterprises.

3.1 Competition Trade liberalisation and a rapid fall in communication and transport costs mean that the UK has increasingly to compete against countries with significantly lower labour costs and reasonably well- educated labour forces. At the same time, technology and scientific understanding are changing our world faster than ever before. These new developments and innovations are producing many opportunities for entrepreneurial businesses to gain a competitive advantage, as even a cursory glance through Process Engineering demonstrates.

3.2 Competitive Advantage
When business owners asked, what their competitive advantage is, they usually respond with at least one of the following advantages:
· Niche market
· Customer relationships
· Unique product
Why not technology?

3.3 What technology can do for you
As a competitive advantage in a growing entrepreneurial business, technology can be used to
· Compete with huge companies by marketing on a nearly level playing field – the internet
· Build ongoing, loyal relationships with customers
· Link with strategic partners to speed up processes like product development and manufacturing
· Link everyone in the company with everyone else, as well as with necessary sources of information within and outside the company
· Provide real-time information on pricing, products and so on to vendors, customers and manufacturers.

3.4 Why Information processing technology
Information processing technology lead to new industries and innovative approaches to business and eliminate process cost. Throughout the world ICT is changing the nature of information dissemination, communication patterns, business practices and economic development. Industry in the UK lives or dies by its innovation and technology. This is true of every sector, and perhaps particularly true for process engineering. For years, the UK has enjoyed pole position in the all sectors.

3.5 Why Customer processing technology
The increased importance of strategically leveraging the customer relationship management (CRM), which has been growing since the mid-1990s. Many industries were experiencing increased demand from their customers for higher quality and easier access to service. Corporations and top managers started to rethink their traditional ways of providing service. Customer relationships started to become a strategic asset among corporations.

4. Use of Information processing technology
“Over the last 20 years use of technology for information process has increasingly been identified as a major contributor to the process of business development and improvement and it has been identified that ICT is responsible for around half of productivity growth in modern economies. It drives improved efficiency and better services and products across the entirety of the private and the public sectors.” (Debra, 1997).

The Information technology industry encompasses telecommunications, hardware (computers), software (computer applications and programs), and services. ICTs are pervasive, cross-cutting efficient, and global. They foster the creation of networks and sharing of information (Slack, 2004).

Business Development is the process of improvement that enables a business to become more efficient, profitable, and thereby creating or safeguarding jobs. Business development therefore does not only concern marketing and sales departments, but all parts of a business which constitute its value chain and requires effective communication and co-operation within a company.

The use of ICT and technology has affected every aspect of business, transforming not only the way that business is conducted but also creating new business sectors and jobs. The creation of companies like Google and e-Bay which did not exist 10 years ago, was only made possible by advances in technology and the changes that this has created in the way that people behave (currently Google is valued at £44billion – Source BBC 5th June 05). Some examples of the nature of this change include:

4.1 Marketing
The use of websites has allowed companies to develop new and cheaper ways of reaching new markets, offering customers the opportunity of buying goods and services whenever they want and often at reduced cost, whilst also enhancing the level of customer service. This has been coupled with the expansion and use of e-mails which again has been used by business to market their goods and services directly to potential customers, as well as communicating with existing customers and suppliers.

4.2 Finance
Practically all companies now use software programs e.g. Sage or Excel to manage their accounts. This has allowed them to look at financial information when required, monitor and respond to their customers purchasing patterns by e.g. offering discounts and overall improve the management of their finances. The result of this has been for many companies a reduction in their accountancy fees.

4.3 Out of office working
For many businesses the need for staff to be away from the office attending meetings etc. or to be based in another geographical location has grown alongside employee demands for more flexible working patterns. However effective communication and ability to access information etc. remains critical to the productivity of these staff members. Therefore through the use of technology many companies now use a range of technologies to enable this. These include mobile phones, e-mail, broadband, laptops, etc. Thus ensuring that companies are able to be flexible and adaptive depending on their business needs.

4.4 Networks
Virtually all businesses now have or have access to a computer. The existence of two or more computers in an office almost always leads to the creation of a network. The main advantage of doing so is that resources can be shared e.g. printers, internet access, files/information can be managed and shared amongst workstations and the security of information can be better managed through a network. Increasingly networks are not just confined to the office but are being adopted so that they allow home/remote working that supports changing business needs.

4.5 Businesses and Internet
It has become a cliché to say that technology is moving very quickly. However, with the proliferation of new applications on the Internet, it is a difficult assumption to avoid.

The Internet has become a feature of many peoples’ lives. It is already difficult to define the average “Internet experience”: for some it has become a necessity at work, for others an occasional leisure activity, others an essential communication device. So far, it is in the business world that the Internet has had the greatest penetration and impact.

The business community is quickly finding applications for these new technologies, as they become available. Each new technology that is developed has significant implications for one industry or another, but the establishment of the world-wide web has changed the laws by which all companies must operate.

The Internet provides businesses with a global audience. This means that, presuming a business can fulfil the order or requirement of the customer, it has audience that is infinitely bigger than before. However, the company must compete for that audience with competitors from anywhere in the world. From the perspective of a consumer this competition means that he will be able to be sated quicker and cheaper than ever before. The comparability of vendors will mean that product offering will become more transparent and hence pricing will become more transparent.

5. Use of Customer processing technology

Customer relationships have been moved to the top of the corporate priority list :
Technology provides customers and employees faster and more useful information surfaced. Once a CRM strategy and technology for customer service was in place, it became vital to develop processes for measuring and monitoring performance. Metrics created to measure customer retention; acquisition and market share have been implemented and used as a key management tool (Emerald Insight, 2006).

Going forth with understanding the customer by segment and implementing CRM processes and applying software tools. Continually monitoring of customer satisfaction and behavior and measuring successes with benchmarking and more will make sure the processes continue to evolve in the best method.

Why some organizations have almost completely ignored the need to adopt new technologies or they are being too slow to decide and start the respective adoption processes. Many medium sized enterprises seem to be reluctant to adoption due to some factors, namely, owners’ mentality, lack of technical qualification, resistance to change, and fear of being possible to face new technologies as a source of organizations’ insecurity. To protect organizations, a good level of knowledge on risk controls, incident response, and disaster recovery should support the implementation of a security policy and its consequent program.

Companies across a wide spectrum of industries have to contemplate and position themselves with respect to the following four strategic opportunities. R&D outsourcing may seem attractive from a cost perspective but appropriate safeguards have to be negotiated so that a company’s intellectual property does not get appropriated. Digital convergence requires firms to think creatively about complementary products and services without straying too far from their core competencies. Identifying customer needs and emerging markets needs new tools and techniques to be embraced for gathering market intelligence. Finally new technologies and business models should stimulate companies to develop policies on digital rights management after balancing stakeholder interests and assessing the threat of disruptive innovations.

5.1 Bring business closer to customers
As companies have grown in these times of international business, so they have grown further apart from their customers. Where once a business could be counted upon to know both its customers and their demands, the scale of today’s companies has made this significantly more difficult. However, the reason so many organizations barely know their customers is not due to lack of contact or interest but rather the lack of a system to collate and analyze the information.

5.2 Reduce the costs of custom
The cost of both attracting new custom and retaining customer drops as a business implements a CRM strategy. Adopting a CRM strategy is not, however, an easy task, some of which require the business to re-examine the methods by which it does business.

The “Integration of customer data across the company”, for example, requires a sophisticated IT strategy combined with the determination to bring together all customer facing departments of an organization.

However, although each of these stages carries a significant cost, they also confer a benefit to the client and hence an advantage to the business which can outweigh any cost.

5.3 Assess the profitability of customers
Beyond reducing the cost of custom, CRM can also be an invaluable tool to recognize the value of custom. The traditional rule of business is that custom equals profit and thus is good for business. But this is not strictly true.

Customers can be segmented by profitability. Each customer is distinct, with individual tastes and habits, which determines their profitability. By determining which customers are the most profitable, a business can significantly increase its total profitability.

5.4 How can CRM aid my business?
There are several key elements or goals of CRM. An effective CRM strategy involves offering improved levels of customer service, which differentiate you from your competitors, and add value through better knowledge, and use, of customer relationships. These benefits would be achieved through increased sales and marketing efficiency, coupled with efficient delivery of information from customer facing staff to management. The customer will benefit through improved levels of service.

In simple terms, CRM facilitates the identification and retention of the most profitable customers and then ensures that they are handled appropriately. But what does that mean in the fleet industry? It means setting prices at a level that will ensure that each contract will remain profitable throughout its duration.

Successful CRM strategies must be underpinned by advanced IT solutions. The key challenge that CRM systems must respond to is the need to consolidate data stored in product-focused systems into a single customer view and make “added value” customer data accessible to both decision makers and customer-facing staff.

The interaction between business processes and the underlying IT infrastructure as part of a CRM-driven IT strategy is vital. The CRM components transform back office product-based information into customer-based information which can then be leveraged at the point of interaction. Additionally, the data warehouse assists in providing sales and marketing information, as well as management information for product development and profitability analysis functions.

5.5 CRM and IT systems
The principal IT requirement imposed by CRM-driven IT strategy is the integration of disparate systems to optimize the flow of customer intelligence throughout the enterprise. This involves leveraging product-focused legacy systems, while at the same time requiring closer integration of all IT systems associated with customer handling. The complexity of product-focused legacy systems, which typically only interface with distribution channel technology while offline, presents significant obstacles to achieving these goals.

6. Lesson Learnt

This transformation has really taken place over the last 20 years and continues to transform the way business is done. No business today can ignore the use of technology as its effective use helps businesses to remain competitive and profitable, thereby creating or safeguarding jobs.

New technology can seem a threat to few business owner-managers and there is a link between business growth and the use of IT. Few hurdles recognised are; IT may be associated with growth, and some may resist growth. A strong need for impartial advice, independent from computer vendors, most business did not consider maintenance and training costs when purchasing technology. Organisational factors such as staff skill levels, familiarisation time, and the impact on jobs, were rarely considered prior to purchase. More complex IT-related business and organisational changes may require integrated technical and managerial training, so that SMEs can become more strategically oriented and benefit better from IT.

During implementation of new process, often throw’s up many unforeseen issues, especially when you are dealing with technology, which are a result of internal and external factors. This then leads to lesson’s learnt which can range from better ways to manage a resources through to innovative approaches to providing support etc.

The increasing future forecast for online marketplaces, business has become 24-hour operators as electronic transactions become commonplace and vendor and consumer will be able to facilitate their interactions utilizing the new communication channel.
Sources: Emerald Insight (2006)

The future of the business is less clear than ever before. The repercussions of eCommerce are likely to be felt throughout the businesses for the next decade. The shape and scale of the industries at the end of this period cannot be predicted, however the first steps that the businesses needs to take are clear. The adoption of customer relations management, closer interaction with both customers and suppliers, and the adoption of new technology as it becomes available, will be prerequisites of a success.

The winners will be those who display innovation. The scope for creativity will be wide, the formation of alliances, new services for clients, new methods of utilizing the Internet and as well the usual devises to outwit the competition!

The speed with which the business environments are changing, few have moved swiftly whilst others have been slow to recognize the significance that new technology. Those that delay further will quickly find themselves unable to offer services that clients will soon expect as standard, and with little time to catch up.

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