Strategic Value Of Business Processes For Tech Companies

By Hillel Glazer



Have you ever thought of your business processes as one of your company's most valuable strategic assets? Consider this: What makes you so different from your competition? Is it your level of personalized service? Your prices? Your experience? Whatever it is, you've come up with a way to make it possible, and your ability to be successful depends on how consistently you're able to deliver it.

Isn't it true that for you to convert a client engagement or purchase into profit, you need to know how much of your company's time and energy it takes to actually get it done so that you know how to price it and how long it will take to provide it? Isn't this "conversion into profit" another way of saying "process"? Then why is it that business processes are often among the most overlooked assets a technology company could have?

As the business process re-engineering (BPR) craze early in the last decade demonstrated, business processes were frequently seen as what keeps businesses from operating efficiently. These inefficiencies typically contributed to why the business had trouble flourishing. In fact, many companies jumped onto the BPR bandwagon because they saw their business processes as liabilities to their success.

Conducted properly, companies that underwent successful BPR efforts converted their process liabilities into corporate assets, so much so that many companies correctly see their processes as intellectual property and confidential, privileged information. Patents are awarded on corporate processes much in the way they are awarded on products. A term to describe the things a company knows, and knows how to do, is "intellectual capital."

Notice how little of the above discussion mentions business processes as a role in technology companies. The fate of many technology solutions companies rests in their ability to convert sales into profit, just like any other type of company. Yet, unlike other companies, small- and medium-sized technology companies seldom have formal processes they follow on each engagement.

Often, you will only find the processes of small- and medium-sized companies locked in the owner's head. This, then, makes the owner an integral part of the process which (if following the process is important) means that the owner is dragged into everything the company does on a daily basis. Being part of every detail of every engagement keeps him or her from going out and generating more business. More typically, however, is that these companies don't have any formal business processes in place and have no predictable, reliable way to estimate or execute projects.

So, what sort of business processes would be appropriate for small- and medium-sized technology businesses, and how can they use their processes as strategic assets? Processes appropriate for these types of companies would give the company executives the ability to manage customer expectations, define project scope, and ensure consistent results for their clients as well as for themselves. But more than that, Bob Ungaretti, president and CEO of Raven Technologies in Baltimore, said, "our processes build trust with our clients."

He added, "Our clients can know what we're up to and rest assured that we will address their needs and handle them smoothly. By having a process, even for simple tasks, we operate more efficiently, which means we save our clients money. And, by showing our processes to our clients, they can appreciate that we're not just winging it and see real value for what they're paying us to do."

He highlights other advantages to having formal processes, such as being able to make sure employees can pick up where others have left off and being consistent when communicating with their clients. Just as importantly, Ungaretti uses the processes in his 21-year-old IT infrastructure solutions company to allow him to handle more work as well as handle larger clients without always adding staff. They free him to win more business and build more relationships.

Without formal processes in place, executives have to rely on their own memories plus the memories and organizational skills of their employees to ensure that nothing falls through the cracks on client engagements. For an executive to be such a critical part of each engagement means that any time s/he is away for vacation, a trade show or tending to family needs becomes an issue for the business.

A mistake many technology firms make is that, if they have any processes at all, they put emphasis only on the technical side of what they do. They put processes on things like how to properly format the code, how to run tests, installation, and fixing problems. These processes are important, but they don't do much for the executive's ability to make business decisions or to ensure a profitable engagement.

In order for processes to be strategic assets, they must provide cost-effective benefits to the company. This means processes must be designed with the benefit as the primary purpose behind the process. The benefits described above boil down to: being able to know what's going on in the company and with clients, lower costs, relief of company leaders from day-to-day handling of everything, smooth overall operations, repetition of what works well and elimination of what doesn't work.

Processes in technology companies don't have to be complicated or overly burdensome. They just need to be enough of what the business needs for them to be a strategic asset. As a strategic asset, your company's processes help you build trust with your clients, stand out from the competition and grow your business.



Hillel Glazer is the principal of Entinex, Inc., a technology strategy company. He can be reached at 877-ENTINEX, hillel@entinex. com, or on the web at www.entinex.com.