Why only some companies dominate with software

I recently read an article in the Harvard Business Review about large companies using software to dominate their market places. HBR:How Software Is Helping Big Companies Dominate. The article seemed to say that while software enabled some companies to really grow, it didn’t have nearly the same effect for others. The difference was in how well defined the company’s goals and processes were. Companies who lived and breathed their company mission were able to make huge advancements with technology while companies who didn’t, had much poorer results from the same investments. That’s all fine and well for the Fortune 500 companies, but I think this applies to small business too. I think many small businesses have been burned by this.

Businesses with software

Even in a small business, having a strong mission and purpose makes a big difference on how well your company will do. I think the reason for this is alignment. As soon as the business is more than just one person, you need to align everyone to a shared goal. This shared goal ensures that customers are cared for in a consistent way that reflects the values of the owner. This goal also ensures that everyone is working together in the most efficient way. Disputes are easier to resolve and organizational order becomes a staple. Things are moving fast, but everyone knows their part and does it because we’re all working towards the common goal. In a business like this, things run smoothly. Why? Because there is organizational order. There are hiccups, but they are resolved quickly and efficiently.

This business is prime for software integration. “Why?” you might say. “They’re clearly at their pinnacle, adding software would only complicate and slow things down” you might say. Exactly the opposite. This company knows where their business is and where they are going. They’re organized and efficient. They’ve already maxed out the efficiency for human-to-human interaction. What’s left now, is to create software tools that align with the company’s mission and empower the employees. As was cited in the HBR article, Walmart has a mission to deliver “every day low prices” and react quickly to changing trends. So, they built custom software the whole way through the company that would help them deliver on that. The software enabled them to do a better job of fulfilling their mission. I think if you look at any Walmart, you can see just how well that system is working.

Other competitors to Walmart haven’t had nearly the same success with similar technology investments. As the HBR article points out, those companies are nearly as well managed. I think this makes perfect sense. If your company doesn’t all breathe the same mission and objective, if people aren’t working for the same goals, how can you build a system that will produce great results.

I think this affects small business too and leaves the feeling jaded about software. I think often a small business is still feeling it’s way along. The management team is too busy fighting fires and trying to paying to pay the bills to think about “airy fairy” things like vision and company mission. Then along comes a software vendor. They tell the owner that all his problems will go away if he just uses this new accounting software. The owner looks at the fires around him and says, I’ll do anything to fix this. He buys the software and pretty soon finds out that software doesn’t fix the problems that keep cropping up. Understandably, he will have trouble trusting any software person again. He really didn’t need the software, he needed to do some business development - he needed to work on his business, not in it.

There are definitely pre-packaged software vendors who have good product. Some of those products will even help the fire-fighting manager make a bit of headway. But where the real pay off comes, is when a well managed business who knows where they are and where they’re going, invests in software tools that align with their mission. That business will reap the reward that all the others missed out on.

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