Small Business Information Technology

The Information Technology (IT) bubble is anchored on large business. Small business, on the other hand, is anchored on a local technology and peripheral store. When large business needs software there are two options: build or buy. When small business needs software its the strip-mall. In other words, there is Microsoft Office, Quark, Adobe, Quicken, etc. So in a sense, its all about large business and expensive software crafted for large business. What then, are the other options?

These days of online bookstores and metal shops obviously intimate the diverse creativity of people in unexpected business domains producing or consuming software services on the Internet. Using the Internet can entail a web store, or it can entail remote use of a database, documents, graphics, or perhaps other software over the Internet. Some examples of the ways small businesses use software include tracking software - sometimes a spreadsheet, graphic arts, document archives, accounting, publishing.

Effectively, small business is categorized by the industry as a private consumer. There is often no or small advantage between being a small organization versus being an individual. Small business generally doesn't get very far down the pricing sheet. However, unlike private consumers, software that small businesses use often requires specialization and could cost tens of thousands of dollars in licensing with significant annual maintenance and update fees. Even the simple case of spreadsheets requires someone to purchase a manual and dig in. Its time and effort that is paid either in sweat or cash.

Generally project budgets are summations of direct costs for software but don't include indirect costs of software maintenance over time. The omission is common for large business, small business, and all shades of gray. Indirect costs come from maintenance updates of supporting software, the task of installation, and solving user issues. In other words, the maintenance and administration of software is often time consuming beyond expectation. Then there are unexpected costs. Every small business owner knows about unexpected costs.

Unless there is a mortal requirement small businesses usually pass on the cost of specialized software in favor of more practical solutions - Microsoft Office often comes with a computer purchase and budget friendly utility software for example. It is a favorite contingency that often becomes the de-facto standard because it is approachable and familiar. There are templates for many types of spreadsheets shipped with MS Office, iWork for Mac, and some ship with Open Office 2.x (Open Source for most platforms including Linux). The trade-off is the time and effort to create specialized spreadsheets, further specialization of existing templates, maintaining data integrity and data input, provide data access and developing reports; common daily tasks. Translucent future tasks will involve both capacity and capability.

There's a fascinating category of small business that does not fit well into the preceding generalization. The environment changes when business stakeholders have IT experience. The economy model is different because savvy stakeholders can add sweat equity in creative ways. Clearly having IT experience is an advantage but doesn't come without risk and cost. The fulcrum is the team's breadth of experience relative to the technical landscape - in other words, whatever the team has to work with is the team's foundation. The risk is limited breadth, vision, and experiences that can lead to simple oversights and incomplete estimates. People in this circumstance become The IT Department, no matter the first intentions. A presumed part-time concern that becomes a full-time task. Ces't la vie? The problem compounds if too much attention is subsumed for tech problems versus running the business. The tech problems become the focus and business operation becomes an annoyance. Its easy to get wrapped up in technology and loose perspective of the business. Too easy - some tech problems are made of dark chocolate and are magnetic. This is demonstrable by the obvious difficulty of finding a chocolate Easter Bunny having both ears within three feet of a unrestrained child of four years. -- QED.

The most challenging group of small businesses are small private medical practices including veterinarians, dentists; in fact, all health care practices. The software for dental offices is expensive and complicated. Imaging software is coming into the private practice as the industry is shifting to digital images versus film. There are very few options in this case. For those in this situation, you may be interested in becoming a supporter of Open Source. There are several projects supported by the US Department of Health. A Google Search will find Medical Open Source and AAFP information on Open Source Medical projects. Support and community interest in these ideas is one way to influence this up-and-coming option.

This makes it sound like IT for small business is high-risk or sketchy and some people may want to avoid a dependence on specialized IT altogether. Its hard to avoid and in many cases its high-risk for a small business not to use IT. The risk level is in part related to how business critical the software system is. Perhaps business processes are dependent on IT and the risk must be assumed - there's was no choice. If the software is critical there is a propensity to accept higher risk.

If this risk can be mitigated for all these situations, there would be fewer false starts and fewer bad endings. The problem itself suggests a hypothetical which is if small businesses had access to someone with direct experience building commercial information systems, then the team's breadth of knowledge is enhanced significantly. Why experience in information systems instead of information technology? Because information systems as a focus, doesn't assume specific information technology. Information systems are processes that specify the flow of information through an organization and can be described without implicating computer technology but is most often implemented with information technology. In a manner of speaking, this is the same thing as understanding environment and surface options before choosing paint and tools.

How does this provide a solution? First, its practical knowledge, it takes advantage of greater breadth and depth of experience, and reduces the risk of re-validating historical mistakes. Metaphorically, you would be traveling with someone who has been down the road quite a few times and has seen the caveats.

How can small business afford this resource? Obviously this is a senior information system person that is also a technician. Large corporations title this person as the Chief Technical Officer, Chief Information Officer, or Chief IT Architect. This is someone who has built information systems, several times, and has a broad swath of IT experience. The role is not required full time, just when needed and as needed. It becomes an affordable proposition when the rates are pragmatic - meaning everybody wins. The initial question is then incorrect. In other words, How can small business afford this resource?, overlooks a more practical question. Economics suggest that the question begging to be asked is What is a reasonable rate that small business can afford? The first question is skeptical of the existence of solutions. The second question assumes solutions exist based on a fundamental notion in Economics that if there is no interference, the market will balance on a reasonable cost for reasonable expectations.

An answer to the question requires a straw-man business model. The model must constrain the search for individuals who are local; limits travel and commute expenses. Because the individual is local, rather than base rates on existing rates of consultancies, base rates on cost of business plus reasonable margin. Also, because the role is not full-time, there can be no expectation of matching corporate salary scales for IT Professionals. People near or transitioning to retirement make good counselors, they have the requisite experience and are often in the process of simplifying their life style. Depending on these variables, its conceivable the rate could be very practical and affordable.

The independent CTO provides counsel under an hourly rate. The benefits are similar for most small business situations. For example, (a) a business seeing a transition beyond spreadsheets can explore solution options; (b) a business with IT experience can brainstorm strategies for increasing scale and/or reduce maintenance efforts and costs; (c) and under a or b or any shade of gray, knowledge share and solution research for IT challenges and future proofing - preparing for the future.

Assuming a hourly rate for an independent CTO can be reasonable, a small business can afford benefits of insight and planning as do large corporations. The same solutions used by large corporations can contribute to small businesses with some independent and forward thinking. It is most often the case that having seasoned counsel about information management and information technology can springboard solutions, define options, avoid pitfalls, and inhibit indirect costs. Absent residual beliefs and assumptions about corporate rate sheets, this model could work.