Do IT or die

26 Feb 2007

Give John Purdy (pictured) a whiteboard and an hour of your time and he will save you money. He might even save your company’s life. That’s the bottom-line message to Ireland’s small firm community from the managing director of Ergo.

For some time now he has been banging the drum about cutting through the hype around technology and focusing on the nitty-gritty of what it can do for a business. Judging by the growth in the company’s revenues, more businesses are starting to listen.

His main message is about technology as a business enabler. “An SME [small to medium-sized enterprise] has to be able to compete with it biggest competitor so it has to use technology as an enabler. It has to learn to box clever because it can’t afford to compete on marketing spend,” he says.

Do it right and the owner-manager or financial controller will be inspecting spreadsheets that show reduced margins and improved costs. At the same time, the firm will be better equipped to retain customers and speed up its business processes. “Anything and everything a company can do to get smarter has to be done. And it’s going to be using technology to do it,” he says.

Naturally, it costs money and solutions don’t come cheap. All too often customers are put off by the prospective investment but that’s because they don’t look at the bigger picture, according to Purdy. He cites a solution that Ergo deployed internally. The company uses PDAs to bring up-to-date client information into the hands of engineers on customer call-outs.

“I was explaining the same solution to an SME customer who baulked when I told them it would cost around €100,000. But when the utilisation of engineers goes up by 40pc, which is what happened in Ergo, the return on investment is very easy to see.”

Not every firm will have engineers but they might have salesmen taking orders out on the road and the same efficiencies can be gained. “They have to look at how they get those orders into the system and at how they can check account and stock information. Instead of having a process of filling in docket books that have to be rung in for someone else to input into the system, what if they could do it all remotely?” says Purdy.

This is where the whiteboard comes in. “You show the people who run the business where the bottlenecks are and what it’s costing them. They have to look at what they can do to isolate that one cost. The solution will inevitably come down to technology.”

Most SMEs now have financial software, servers and desktops but are often reluctant to delve deeper into what IT can do for them. They have to start looking at more specific areas where it can enable the business, according to Purdy, be it in the warehouse or out on the road.

He sums up: “Ultimately it’s about giving the core employees the tools to do more. If you enable and invest in them, then you will get the return on the investment and the organisation will grow.”

The proof of his argument is his own company, a firm of 120 people with a €20m turnover that practises what it preaches. “We’re a small firm too so we understand our customers. We know about the benefits you can get from improving processes because we’ve done it internally.”

His no-nonsense approach is a long way from what he terms the “fluffy” solutions that come out of bigger service companies and consultancies that “know more about the M25 around London than the M50”. His argument is that Ergo is in a better position to meet SME needs because of an empathy with the customer that helps identify and then solve their pain points.

Purdy is also a realist and knows that however hard he preaches, some firms will not be converted. “There are two types of owner-manager: the one who says they know that technology is not their core competence and they need help; and the others who won’t spend the money. The first lot want someone to be their IT head and tell them how to get from A to B. The second don’t see the benefits and will regress and eventually find themselves going out of business.”

For the firms that do recognise the value in IT, Purdy has another piece of advice. “Give the IT responsibility to someone who can do it for you and sign a very tight SLA [service level agreement] with them. Get them involved in some level of remote managed services and make them an integral part of the team.”

“If an organisation looks at Ergo purely as an IT provider then they are missing an opportunity. We can help them enhance their business.”

By Ian Campbell

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