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Peer Perspective. IT Leadership. Business Results

Profiting from IT

By Tom S. Noda
Computerworld Philippines
Published in the CWP October 2009 issue

Ironic as it may seem, small-and medium-size businesses (SMBs) don’t necessarily become high-tech just because they have all the latest technologies and solutions in place.

As some well-known IT companies put it, a “real” high-tech SMB is one that realizes the positive impact of technology to the business.

For instance Emerson Network Power, Microsoft and Oracle say a technology-enabled SMB uses the power of technology or systems to run and grow their businesses more effectively, efficiently and productively; while IBM defines high-tech SMB as someone that uses technology to become more intelligent, instrumented and more interconnected.

“You can only become truly IT-enabled when you see the benefits of technology in optimizing the processes within the company and effectively complimenting the work of the people,” says Nicky Eala, server business group lead of Microsoft Philippines.

Eala adds for an SMB to become high-tech, it must make the right investments in terms of software, solutions and infrastructure, and consequently maximize those technologies to enable the workforce in achieving good results for the company.

And although mid-size companies bear the same “SMB” tag, the implementation of technologies vary from the company’s scale, type of commerce, and more importantly business goals.

In this special report by Computerworld Philippines on the High-Tech SMB, executives from Emerson, IBM, Microsoft and Oracle share their strategies on how they enable mid-size firms to achieve a legitimate high-tech status.

HIGH-TECH CHALLENGES
According to Katrina Tirante, marketing manager of Emerson Southeast Asia, in order to identify the correct IT infrastructure for an SMB, one should understand the company’s business objectives as well as the challenges that would go along the way.

Suraj Pai, senior sales director of Oracle Singapore, says that some of the usual challenges that an SMB face in being automated or high-tech are IT complexity and cost.

“Highly customized systems for example are expensive and difficult to maintain,” Pai says. “With limited resources, midsize organizations cannot afford IT solutions or applications that are complex and those that require extensive work to customize, deploy and operate.”

Generally, midsize companies have the same business requirements to that of large enterprises, Pai says. Yet the big difference is that midsize businesses have limited resources and they have to maximize their IT budgets while also aiming to achieve the IT value quickly. “They really need solutions that are easy on the pocket and easy to implement.”

Eala observes some SMBs would rather put their investments elsewhere but once they become aware of what technology can bring to the business, they will realize that the advantages far outweigh the cost of investment.

Chestnut Andaya, IBM Philippines’ country manager for general business, notes that “data overload” is one of the biggest challenges SMBs are confronted with today. She says it is important for businesses to have the information they need when they need it, as it results to better decision making and improved financial performance.

Andaya cites a 2009 midmarket study by IBM, which claims that midsize companies are currently “drowning in a flood of data.”

“SMBs want desperately to use that data to gain insight into new opportunities, customer wants and needs, marketplace trends, competitive threats, and, of course, their finances,” she says.

IBM’s survey shows 75% of all respondents listed “information management” as their top concern. The most pressing business challenges include increasing efficiency and productivity (80%), improving customer care (74%), and better use of information (72%). Similarly, the impact of the economy on IT budgets has caused 53% of those surveyed to actually increase or re-prioritize their spending, with 37% reporting a decrease.

Corroborating IBM’s study, Pai points out that information spread across the business processes remains to be a challenge to SMBs. “While IT solutions are in-placed, fragmented and un-integrated technology systems remain to be a concern,” says the Oracle executive.

ENTERPRISE CLASS IT
For Emerson, SMBs can achieve successful IT implementations through appropriate infrastructure choice and best practices. Claiming to have a strong IT enterprise experience, the company aims to bring the enterprise-class data center among SMBs.

Russell Perry, director for marketing and customer insights at Emerson, explains that like any other full-size companies, SMBs depend heavily on technology and most of them are faced with issues on choosing the right solution to answer issues such as: “preventing downtime, rising energy consumption and costs, increased computer capacity within the same facility, and system reliability.”

To overcome such challenges, he says SMBs need to understand their current business requirements and explore how this requirement can change in the next year or so. Knowing this, they are able to make informed IT choices and initiatives at the best total cost.

Perry identifies two technology approaches of Emerson to SMBs, and these are the Energy Logic approach and the holistic approach. The former seeks to enable an SMB to have a “green” and efficient data center, while the latter aims to establish working relationship with the company to find solutions to its problems.

“Our approach to the SMB market is not all about the IT equipment side but also on how to maintain their infrastructure and manage it to their advantage,” Terante says, claiming that with Emerson’s energy logic approach, SMBs can save up to 50% of power reduction rate in their data centers.

“Anything we learn in the enterprise space, we bring into the SMB market. We have a highly skilled group of partners and we take some of that DNA, virtually carved it out with Emerson and implant it into these SMBs,” says Perry.

He notes that compared to its competitors, Emerson tends to commoditize the problems of customers.

“We want our customers to get to the point where they are extracting optimum value out of their IT equipment,” Perry says. “We have a portfolio of cooling products, telecoms, DC power, encroaches, racks, monitoring, servers and others. You tell us about your business goals and we’ll dig down on what’s the best solution for you.”

Only last year, Emerson upgraded its energy logic framework with a new study that put forward a universal metric for quantifying the cost and emissions savings from using more efficient equipment and infrastructure. Like calories in a diet, the new metric can be used in any facility to balance the investment in new technology against the return in savings.

EXPRESS TECH
IBM addresses the IT challenges of SMBs by providing them with tools via its Express Advantage scheme supported by a network of local IBM Business Partners that understand one’s marketplace and resources.

Andaya says big blue’s express advantage has tools to help SMBs use technology to turn visions into reality. It brings IBM’s business, industry, technology knowledge and experience through a network of local business partners. Their local perspective gives them the ability, backed by IBM, to work hand-in-hand to provide total solutions with enhanced value.

“IBM considers mid-sized and small companies as the engines fueling a smarter planet, creating roughly 65% of the worldwide gross domestic product. Such nimble, entrepreneurial businesses provide much of the products, services and innovation that create new market opportunities,” says Andaya.

Express Advantage is built on the core components of medium business insight and industry expertise, where IBM engages directly with business leaders at mid-sized firms to identify the specific challenges they face.

“We conduct regular global CEO and CIO studies to spot trends, based on in-person interviews with business leaders worldwide,” Andaya shares, adding IBM’s mid-market advisory network is one of Express Advantage’s thought-leading and collaborative program designed to foster an ongoing interaction between senior IBM executives and medium business and technology leaders.

“Our local solutions are built by people who understand SMBs and they are developed and supported locally by IBM and IBM Business Partner experts who know local market conditions and the unique requirements inside and out—from initial consultation to implementation, to ongoing and hands-on support,” says Andaya.

She says right now, IBM is working with thousands of mid-sized firms globally to help them compete in a smarter world—utilizing our comprehensive portfolio of hardware, software and services offerings specifically designed and priced for their unique business needs.

GROWING WITH THE BIZ
Bearing in mind SMB needs especially in these tough economic times, Microsoft reports that it continues to develop products and create opportunities that will enable its customers to use technology to their full advantage.

Reaching out to customers and working closely with its partners are also some of the ways Microsoft is doing to help SMBs see the value of technology, implement solutions effectively, and provide technical support and training if needed.

“We recognize that the current economic climate is also a challenge that business owners face in terms of making investments. This is why last May, we launched Windows Server 2008 Foundation, the most cost-efficient Windows Server product available in the market today and an ideal platform for small businesses,” Eala says.

The upgraded Windows Server reportedly has mix of capabilities relevant to SMBs such as file and print sharing, remote access and security, and other general server purposes.

“Another good thing about Windows Server 2008 is that it suits small businesses since it can grow with the business,” Eala says, noting in the event that a company expands, there is also an option to upgrade to higher versions of Windows Server which can provide additional functionalities.

Earlier this year, Microsoft launched a program called Bizspark in partnership with the Commission on ICT (CICT). Through Bizspark, Microsoft offers startup businesses fast and easy access to current full-featured Microsoft development tools and production licenses of server products with no upfront costs and minimal requirements.

Eala says what most distinguishes Microsoft in its SMB offering is the users’ familiarity with its products. “Windows is still the most widely used operating system and all our products feature that familiar user interface. This makes it easier for businesses to adjust and familiarize their workforce with new technology. Cost efficiency is also something that we focus on.”

However, besides Windows 2008, Eala adds the Microsoft Dynamics product line for different business management solutions are also designed to meet the needs of small and midsize businesses. He says there is a variety of products in the market that will suit every business need and the key is to make the right investment and use it to its fullest.

TAILORED-FIT
Yet for Oracle, providing low-cost, low-risk, industry-specific and faster-time-to-value IT solutions are the ways in which SMBs can be empowered for them to realize the value of technology.

Pai reports that Oracle has introduced a strategic approach called Oracle Accelerate. It is designed to help organizations maximize IT investments and gain business value quickly as it delivers a broad set of applications, rapid implementation tools, and an extensive partner system.

He explains Oracle Accelerate solutions empower organizations to become more effective, efficient and profitable since the solutions are enterprise-caliber and not the typically stripped-down midmarket versions where organizations get to leverage on the same applications being used by big and successful enterprises in the world.

“Oracle Accelerate solutions are industry-focused providing organizations with tailored-fit functionalities,” he says. “These solutions are also upgradeable allowing our users to scale without investing in entirely new applications.”

The solutions are implemented by Oracle’s qualified partner or Oracle Consulting to ensure that systems will be up and running quickly and properly. To date, Pai says Oracle Accelerate solutions are available across a variety of industries including aerospace and defense, automotive, consumer products, engineering and construction, financial services, high-technology, industrial manufacturing, life sciences, media and entertainment, natural resources, oil and gas, professional services, public sector, retail, travel and transportation and utilities.

Pai adds the solutions are also easy to own since part of the Oracle Accelerate initiative is the Oracle Business Accelerators (OBA) – known as the rapid implementation tools provided to Oracle partners.

“OBAs enable customers achieve more quickly the benefit of using Oracle applications than other conventional offerings,” Pai claims.

According to Pai, one key differentiator of Oracle’s strategy is that its midsize solutions are based on standard Oracle products and is not a separate product line. Partners can create Oracle Accelerate solutions leveraging all of Oracle’s applications including the Oracle E-Business Suite, PeopleSoft Enterprise, JD Edwards EnterpriseOne, Siebel and Agile, among others.

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