Business Tech Guide

by | Jun 4, 2020 | Entrepreneurship, Technology | 3 comments

Businesses rely on technology more than ever before yet many small businesses don’t have a tech system that meets their needs. This comes from the fact that most business owners aren’t IT professionals and don’t have time to learn complex jargon. The goal of this business tech guide is to help business leaders understand the systems they need in plain English. In general, businesses use technology to help them make money or save money. As a result, we can assume all business technology fits into one of these two categories.   

Most businesses divide their business into: the front office and the back office. Traditionally the front office is responsible for revenue generation. While the back office handles non-revenue generating activities. This traditional model can be applied to business technology where there are front office and back office systems. These systems need to work together in order for a business to run smoothly. 

Front office systems and back office systems are designed to solve different business problems. Often business leaders attempt to use a back office system to solve a front office problem, which generally fails. Tools designed to save you money, aren’t meant to help make money.  

Business Tech Guide VIsualization

Business Tech Guide Chart

At a high level, you have one “business tech system” but in order to analyze a system, we need to break it up into parts. Generally, systems support either making money or saving money. I call these systems the office level systems. Then below office systems, there are functional systems to support different activities like marketing. These systems are built on top of your “office systems” and inherit features from them. Now, let’s take a look at “master systems” which form the foundation of business tech.

What is a master level system?

It is a system that your business needs to run and that doesn’t have a specific functional role. For example a master system in most businesses is email. Since every part of a business needs to send email it is a master system since our entire business relies on it. Other master systems are things like telephones, internet access, and computer operating systems. These are the essentials your business needs to run.

In addition to the systems, we’ve explored business needed communication software. These services aren’t part of CRM or ERP solutions and must be purchased separately. The two main providers of communication solutions to small business are Google and Microsoft. Google offers solutions in the form of G Suite and Microsoft in the form of Office 365. These are critical systems that allow businesses to communicate. When you buy either system make sure it integrates with your other tech!

What is a front-office system?  

A front office system helps you build relationships with customers. The classic front office system is a Customer Relationship Management System or CRMS for Short. In theory, a CRM  provides a 360 degree view of client relationships and helps companies generate revenue by building relationships. A complete CRMS provides tools to manage sales and customer service processes. All other front end systems will interact and build on your CRMS. Salesforce provides a full CRMS solution that easily integrates with other front end tools. Before adding tools to extend your CRMS make sure it is fully implemented. 

  Please note most CRMS systems don’t offer web development/digital marketing features out of the box. You will need to build a website separately, but it’s critical that you integrate it with your CRMS. 

What is a back-office system?   

Back office systems are designed to help run your business operations. These systems handle operational tasks like inventory tracking and supply chain management. Back office systems are commonly known as Enterprise Resource Planning, ERP for short. Large businesses traditionally use ERP systems, but many medium-sized businesses don’t. Instead, they rely on poorly integrated tools to mimic a true ERP system such as SAP.  

Salesforce brought CRM to the masses by introducing its cloud based solution, but a similar revolution hasn’t occurred in the ERP market. The lack of a true mass market ERP means small businesses need to build their own system. ERP enables businesses to understand their business data and provides a major competitive advantage from process improvement.   

What’s a functional system?

It’s a system you use to do a specific job like sales or marketing. Many businesses think of CRM as a functional system for the Sales team when in reality only part of the CRM supports sales in many organizations. This confusion leads to systems that don’t support other teams that use them such as marketing and customer support. As a business leader it’s critical you understand the scope of tech projects. Projects meant to change functional systems shouldn’t impact the systems above them.

3 Comments

  1. Greg Timpany

    Excellent coverage on a sometimes tricky topic. If you are in marketing or sales the concept of an ERP is often foreign. On the other hand, accounting, finance, and operations live and play in the ERP, but generally don’t have a clue about the types of customer data held and processed in the CRM. When they can cross the bridge, shake hands, and exchange data, good things can happen.

    • Michael McGuigan

      Thanks for the input Greg, I’m working on expanding this piece more to hopefully be a comprehensive tech guide.

  2. Gauri

    The recommendations are to the point and certainly beneficial for small business owners and managers.

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