e-enabling your Business

e-business is not as much about doing business on the Internet as it is about using Internet technologies and the Web to automate and improve the productivity of your business. e-commerce, or doing business on the Internet, is just a part of e-business.

Every business transaction can be broken down into a series of activities that require information or decisions to move from one part of the business to another. e-enabling the business is as simple as e-enabling the movement of the information and decision making. Such e-enabling can help the business act and react faster.

Basic e-enablement does not require buying of costly hardware or software. For emerging businesses, simple things such as e-mail for all relevant employees and simple workflow or collaboration systems, can go a long way in making your business more productive. So, what exactly does e-business enablement do for you? Well, it helps you achieve the following:

Avoid repetitiveness

There are many tasks in a supply chain that are carried out again and again. For instance, in a carpet manufacturing concern, there may be numerous entries in numerous registers after a product has been made and dispatched. And, with huge amounts of carpets being made everyday, using different materials, it is virtually impossible to keep a track of all these carpets and reconcile the stocks at the end of every week. 

Automating the tracking or even just the data recording mechanism will not only help the business have the stock records in a single place, but will also build in the required checks and measures. So, not only will it help the stock keeping, but will also smoothen the raw material ordering process. It will also help give more realistic schedules to customers. Over time, you could even build up customer preference and supplier track record information, which could help you negotiate better with them.

Avoid mistakes

This is a simple aftermath of the point we just made. Redundancy leads to mistakes is as simple as saying 2+2 = 4. 

For instance, when you would have a single application that keeps record of your stocks you would not need to reconcile between hundreds of registers to make sure your stock is in place. Reducing the number of mistakes helps you devote that time to more productive activities.

Save time

Consider a rice mill that has a single factory and five sales offices in different towns in the state. All the sales people need to have the approval of the sales manager for giving bulk discounts. This process could take days over courier, telephone or fax and also increase your communication bills. E-mailing will ensure that the communication is cheaper and faster.

The next stage is to put in business rules into the system, such as if the order quantity is in a certain slab, or if total orders for
the year falls in a certain slab then certain discount rates apply. Now, the sales manager need not personally attend every decision. Instead he can spend his time in getting newer customers. The system could be put up on the Internet, so that the sales executive can directly check on the allowable discount, and get an immediate answer to his query. 

Reduce costs

Time saved is money saved! We have already shown how time can be saved by even the simplest e-enablement. We just saw how switching over to e-mail could bring down communication costs.

Improve customer reach

The simplest and a cost efficient way to increase your customer base is to go through the Internet route. Today when the patient looks up for his medicine on the Internet, before even consulting a doctor, indicates the impact of Web presence.

Consider the previous example of the rice mill. Once an order has been placed, the same website could keep the customer updated on the status of his order. He need not make costly phone calls. There is software that can do it automatically, but how does it matter if the page is manually created at your end? It is the impression that counts!

Now that we have the reasons, let's have some rules in place. Though the list may not be exhaustive, it will give you a good insight into the basic problems emerging businesses face when transitioning to e-business

Three rules of shifting to e-business

Focus on people as much as processes It is easier to change processes, than people. People are the biggest challenge that you would face while automating your processes. Remember that the business revolves around the people doing it and not the other way around. The itch to put a perfect system in place has to be subdued at all times. Rather you need a system that works.

Automate only as much as you need 

You do not need to fully automate most of the times. Partial automation, along with some common sense and business
intelligence may prove to be a more cost-effective solution than full automation of the system. For instance, you may decide to give e-mail addresses to only senior managers. That is okay to start with. Customer and supplier facing processes are a good place to start. So, inventory accounting and inventory tracking could be your focus areas.

Change begins at the top

If the MD still checks his e-mail only after getting them printed out, then your e-enablement is as good as dead. The change has to be believed in, and lived by the top management, the owners, the partners and the senior managers before the rest of the business can adopt it.

Case study

Shingora Shawls has been automating various processes of the business for over two years, and still the implementation is only 90 percent complete. Shingora Shawls is part of the Swastik Enterprises group. The company is an export-oriented unit dealing in shawls and related products.

1. The organization started by implementing an MS Access database-based software in different parts of the company. This helped in analyzing if the specific process can be automated. 
2. After the feasibility of automating certain processes was established, a brief study was undertaken to see if any other processes would need a change as a result of the automation. This stage also included a detailed cost-benefit analysis.
3. Employees should be in sync with the organizational goals. And that is exactly what Shingora Shawls set out to get. The senior management held meetings with managers and employees telling them about the benefits of the system and making sure that the employees were a part of the organizational change. Also, employees were assured job security in return for supporting the changes.
4. Next came the trickiest part of the whole project-requirement analysis. While some of the processes were already identified, the company itself was not sure of what exactly it wanted from the system. This kind of a situation arises because of the typical way in which all the organizations work. For example, Shingora has more than 15000 designs of shawls that not only have a different way of weaving, but also have as many different types of threads needed to weave them. A good system would help them keep track of all the designs in an easier manner.
5. Implementation The implementation of the system was done in a phased manner starting from the inventory-management system. Next came manufacturing, followed by sales and finally accounts, which is still in the transition phase. 
   
   The biggest problem faced by the organization while implementing was of the people. There were many who wanted to continue the way they had been working all these years.
6. Transition Shingora took three months to commissioning each part of the system. For the first two months they followed the old manual as well as the new automated way of working, in parallel. During this period, they had to employ some extra workforce. 

Finally, the employees were finally trained in the software and at the end of the third month the module was fully integrated and commissioned. The longest transition was in the accounts process, which is still under process and is estimated that it will take a full year to transition fully to the new system. 

With Inputs from Anuj Jain, Director-Commercial, Shingora Shawls

Q&A

When do I do ERP?

By its very definition, ERP or Enterprise Resource Planning is organization wide, and looks at more than accounting and inventory. Different ERP modules cover aspects such as production planning, human resources planning, plant management and repair scheduling, and of course billing and cash planning.

Implementing an ERP system is a fairly intense process, and is generally not recommended for smaller businesses. A thumb rule is that you need to achieve a turnover of Rs 100-150 crore plus before you start thinking about it.

Everyone in the organization need not have access to the ERP system. Even in businesses having thousands of employees, only a couple of hundred employees need access to the system. Smaller businesses could opt for anything from five seats upwards.

You do not need to buy and implement all modules. If you were a manpower-intensive operation like a small call centre, then you would need only the HR module. A large transportation contractor working for similar BPOs would be interested only in the logistics-planning module.

What is CRM?

As the name suggests, it is an application for managing customer information and interactions with them. 

It stores things such as customer contact information, order history, complaint history, meetings with the customer by your people, calls you have made to them and so on.

Earlier, CRM products were sold separately. Now ERP solutions include CRM modules. So, you could have a CRM module only, without the rest of the
ERP.

Myths and reality

E-business is about selling on the Internet

No, e-business is actually about e-enabling your business. So you may or may not end up selling on the Internet. But you should leverage the Internet to reach your suppliers, customers and employees faster and cheaper. E-mail, an Intranet and a good website are all examples of how you can e-enable your business to begin with.

E-business means implementing ERP

ERP is an advanced stage of e-business implementation. Emerging businesses can automate many of their business processes without implementing an ERP system. You can start with e-mail, speeding up communication while reducing communication costs.

E-business technology is costly

Not correct. E-business software can be fairly cheap. Some software is even free. All large vendors have small business offerings of their solutions that are priced much lower than the regulation enterprise versions. You need not offer complete package to all employees, instead you can save on the costs by clearly defining who needs what and providing only that.

Automation should be total

Automation should be smart. You may begin by automating the most critical, most repetitive or the most outside facing processes of your business. 

You need an in-house expert to run your systems

Absolutely not! Many emerging businesses depute outside experts to manage their systems. And some other systems are so simple that almost any person can run the day-to-day operations.

ERP can be implemented quickly

Implementing ERP or any other process automation system takes time. Your bandwidth to take it on may vary. An advice: Do not unnecessarily speed it up. 

CRM is more important than ERP

Though CRM is the current buzz and an element of most ERP systems, implementing just the CRM part may not be enough if your internal processes are not geared up to use the inputs from the CRM system. So, businesses usually do CRM after the internal processes are ready and usually after some of the other components of ERP are implemented.