Halftime report '09: How SMBs are staying on their game
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Competing in today's markets is akin to playing a contact sport. So which IT initiatives are midsized companies in the United States and Canada pursuing to get a competitive edge?
According to "Inside the Midmarket: A 2009 Perspective," an in-depth report released by IBM, technology is providing the tools to improve efficiency, create value and spur growth. And with non-stop change as the new normal, midsized companies in North America are tackling information management, IT infrastructure improvement and security to help them stay on top of the game.
Information management scores highest
The report shows that 75% midsized businesses are concentrating on data to whip their organizations into competitive shape. There's certainly no shortage of information in today's business environment. As people and systems become increasingly interconnected and more interactions between customers and companies occur, data is exploding everywhere. But many businesses realize that because their data is in various formats and locations, it can be nearly impossible to leverage for up-to-the-minute intelligence.
Companies recognize that information can be a vitally important strategic asset if it can be harnessed and analyzed—which is one of the reasons why those in the survey cited information management as a critical IT and business priority. One way these organizations are getting more out of data can be found in the today's business intelligence (BI) tools. These software solutions can help increase competitiveness by offering insight across the business. Unlike spreadsheets, which cannot provide company-wide, comprehensive information, BI software collects and aggregates diverse information in real time, whether it's internal productivity metrics and market trends or the profitability of particular goods and services.
At U.S. Lumber in Atlanta, Georgia, for example, management wanted a view of the activities across eight distribution centers—as well as line of sight into the profitability of each product. The building materials distributor's BI solution now runs 500 reports with thousands of relational views into various pieces of company data. As a result, the management team at U.S. Lumber can now review all types of data essential for making accurate daily management decisions. And because U.S. Lumber can view its key pricing performance indicators every hour, the company's management team can better understand how multiple factors can affect the direction of the business.
A more responsive IT infrastructure is part of the game plan
Connecting people, information and systems more intelligently involves more than BI tools. It means making IT more flexible—an initiative that 72% of companies surveyed listed as critical for competing. Many of these organizations are choosing service-oriented architecture (SOA) as a way to do just that, as reuse extracts more value from existing resources.
With the flexible approach to IT found in SOA, midsized businesses can easily share data and software tools across the organization, and eliminate redundant activities. What's more, companies can often use—and reuse—existing technologies already in place to streamline operations. By using Web services technologies such as XML, applications once disconnected can be cost-effectively reused for a variety of tasks within an organization. With an SOA approach to IT, midsized organizations can discover operational efficiency, without paying a premium to rip and replace long-standing business technology investments.
Take the case of Austin Energy. The Texas-based municipal utility sought to provide landlords and property owners with immediate access to energy use in their rental properties. By tapping into two legacy IT components—long-standing customer information systems and call-center middleware—Austin Energy was able to integrate siloed data into a Web-based energy tracking system. As a result, the utility discovered higher customer satisfaction and more employee productivity, thanks to the ability to share information across the organization.
Beyond SOA, midsized companies are investigating new ways to make their IT infrastructures as dynamic as the current business climate. And today, a dynamic infrastructure means one that can be managed on-site, remotely or totally outsourced. That's because the cloud computing model enables access to needed, standardized IT resources without re-engineering the entire infrastructure – or, in some cases, without having an infrastructure at all. For end users, cloud computing often means browser-based interfaces that allow IT to be ordered and accessed almost immediately. For businesses, the pull of cloud computing can be found in reduced costs.
Security measures prevent unnecessary timeouts
Security is another area North American midsized companies are making a priority in 2009, the report notes. While increased global connectivity improves access to information and collaboration, it can also result in additional IT security risks and exposure to data loss and theft. Despite pressure to reduce cost, the report notes, 72% of midsized companies continue to invest in information security to better understand, monitor, assess and respond to external and internal threats in near-real time. Plus, compliance requirements now call for proven security systems.
The good news is that there are a host of options to help protect data without adding to IT headcount. Appliances that automate critical backup activities are transforming time-consuming backup activities into automatic, behind-the-scenes functions. Other appliances now available combine data protection capabilities ranging from firewalls and virus safeguards to disaster recovery functions. Combined with services designed for worst-case scenarios, competitive midsized businesses arguably have more resources than ever to remain secure—and in business.
The whistle doesn't blow until the end of the year
Despite the economy, midsized companies recognize the business landscape is increasingly interconnected, intelligent and instrumented—bringing both challenges and opportunities. Competitive organizations are proceeding with critical IT plans to improve infrastructures and support smarter work.
By using information, relationships and technology in new ways to create greater value and efficiencies, organizations can improve the way they manage and run their own businesses for the rest of 2009—and beyond.
Content copyrighted by IBM Corporation.