Small Business Management MGMT5601 Workshop 5 Part B ...€¦ · guide management decision making....

© Mazzarol 2018 all rights reserved

Small Business Management MGMT5601

Workshop 5 Part B: Using

Technology

Professor Tim Mazzarol – UWA Business School

UWA Business School MBA Program [email protected] MGMTG5601

©Mazzarol 2018 all rights reserved


• Examine technology use in the small

firm.

• Review the Small Business Diagnostic

with attention to technology use in:

• Internal Integration.

• Management Information.

• Operations.

• Address Action Learning Task 7

Workshop Overview


In this workshop we aim to:


Action Learning Tasks and Small

Business Diagnostic


ALT 7 – Technology

• Examine the ICT systems:

– Enterprise Resource Planning (ERP)

– Databases and Digital Dashboards

– CRM Systems for Small Business

– Knowledge Management (KM).

• Developing strategies for:

– E-business

– E-commerce

– E-marketing

• Appreciate how to create a technology road map using balance scorecard.

• Understand Action Learning Task 7.

Understand the application of technology in small business.


How to match planning and performance via KPI benchmarking data:

• Regular analysis of business performance

against established plans.

• Monitoring variation levels in planned and

actual performance using KPI

benchmarks.

• Contingency planning for key suppliers to

ensure reliability of supply.

• Identifying key skills and competencies

needed to maintain competitiveness.

• Stock and inventory management and

control.

ALT 5/Internal Integration


How to obtain regular data on business trends and performance levels:

• Using performance and market KPI to

guide management decision making.

• Getting regular information on variations

between actual and planned performance

levels.

• Getting regular information on sales and

performance trends.

• Getting regular data on wastage rates.

• Benchmarking wastage rates against

known industry averages.

• Benchmarking employee absenteeism and

turnover against known industry averages.

ALT 6/Management Information


How to integrate marketing and sales with operations:

• Linking marketing and operations

strategies together.

• Standardization of procedures to lower

cost of processes.

• Recognition and reward for process

improvement ideas from employees.

• Using sales people as an information

gathering resource.

• Gathering qualitative and quantitative data

from sales activities.

• Documentation of key operational

processes.

• Capacity planning in the physical facilities.

ALT 5/Operations


Key terms


Source: Mazzarol (2015)

Enterprise Resource Planning (ERP):

• Use of ICT to integrate internal business systems for enterprise-wide optimisation

of data capture, storage and reporting within a management information system.

Customer Relations Management (CRM):

• Use of ICT to integrate external and internal business systems to monitor and

support customer engagement throughout the full buying cycle and customer

lifecycle.

Knowledge Management (KM):

• Use of ICT to capture, store and report intangible assets within the firm, including

knowledge, skills and competencies upon which to build a competitive edge.

E-Commerce:

• Use of ICT to undertake transactions such as business to business (B2B) and

business to consumer (B2C).

• Essentially selling goods and services via the internet.

E-Business:

• The use of ICT to enhance production processes, customer engagement

processes, and internal management processes.

• Includes ERP, CRM and Supply Chain Management (SCM) systems.

E-Marketing:

• The use of ICT to undertake marketing and promotion that complement e-

commerce and e-business strategies.

Social media use:

• Social media use to support e-marketing and CRM activities.


Technology use in Australian SMEs


Source: Sensis (2017)

Computer ownership:

• 98% of SMEs own a computer

• 79% own smartphones

E-marketing:

• 90% are online

• 52% have a website

• 35% have mobile optimised site

• 50% say their website has not increased their effectiveness

E-commerce:

• 36% take online orders

• 47% receive online payments

• 81% express concerns over cyber security

E-business:

• 16% have a digital business strategy

Social media use:

• 47% use social media – Facebook (90%); LinkedIn (35%), Twitter

(25%), Instagram (20%)

• 58% update their social media sites at least once a week

• 48% use paid advertising on social media.


DTI adoption ladder for SMEs

©Mazzarol 2018 all rights reserved

Sources: Marting & Matlay (2001); Taylor & Murphy (2004)


Model of e-channel use in micro-firms

©Mazzarol 2018 all rights reservedSources: Karjalutoto and Huhtamaki (2010)


Elements of a Management System

What future activities &

challenges are anticipated?

(e.g. sales, expenses)

What future actions are

required?

(e.g. business plan)

When will actions occur?

(e.g. within the business plan)

How will these actions take

place?

(e.g. when, by whom?)

How successful have these

activities been?

(e.g. KPIs, benchmarking)


Principles of an effective management

system

ManagementSystem

Transparent

Work must be related

to time

Performanceexpectations

impactproductivity

Managethe whole

by managingThe parts

Continuousimprovements

Interdependent

Measurable


Management System Applied

Source: Olivares (2007)


What is an ERP System


Enterprise Resource Planning System

Sales Management

System

(e-marketing)

Financial Management

System

(e-commerce)

Customer Relations System

(CRM)

(e-commerce)

HRM System

Operations Management

System

(e-business)

Supply Chain Management

System

(e-business)

ERP System

Resource

Schedule

DPSC

DWOR

Management

Report

Volume

Forecast

Daily

Review

Weekly

Review

Forecast

Review

Standards

Review

Work

Standards

Quality

BudgetStrategyBusiness

Plan


Evolution of ERP in industry

1960s

• Inventory controls systems “Just-in-time”

1970s

• Material Requirements Planning (MRP)

1980s

• Manufacturing Resources Planning (MRP II)

1990s

• Enterprise Resource Planning (ERP)

Source: Umble et al. (2003)

In-house inventory

management

systems for stock

control & WIP

MRP systems for

master production

scheduling & control

of production

process

MRP II systems

enterprise-wide

linking operations to

financial management

ERP systems

enterprise-wide

connecting all parts of

the enterprise


Evolution of ERP and Supply Chain

Management (SCM) systems


Critical success factors for ERP

implementation

Source: Umble et al. (2003)

• Have a clear understanding of your strategic goals:

• Why is this ERP system needed?

• What specific outcomes and results are desired?

• Management support for the ERP system:

• Is senior management supporting the system?

• Will they provide leadership to get it implemented?

• Excellent project management:

• Have clearly defined objectives.

• Develop work and resource plans plus project monitoring.

• Organisational change management:

• ERP is not just a software tool, it requires a change of how the

organisation works.

• Implementation requires changes of behaviour and workplace

culture.

• Implementation resources and processes:

• Skilled implementation team

• Data accuracy

• Education and training of staff

• Focused performance measures


Customer Relationship Management (CRM)

Source: Couldwell (1998)

“A combination of

business process &

technology that seeks to

understand a company’s

customers from the

perspective of who they

are, what they do, and

what they like”

(Couldwell 1998). Acquisition

Sales & Service

Retention

Key measures:• Cost of acquisition

• Conversion rates

• Retention rates

• Customer lifetime value

• Reasons for loyalty & loss

• Service quality


Overview of CRM


CRM system elements


CRM

Prospect

Quote

Order

Purchase

Service & Support

Retention

Sales


Factors influencing CRM

implementation in SMEs


Source: Alshawi, Misis and Irani (2011)

ORGANISATIONAL REGULATORY TECHNICAL DATA QUALITY

• Perceived benefits of

CRM

• Customer/client data

security

• Cost of CRM system

integration & support

• Data infrastructure &

management

• Employee skills &

competence in ICT• Competitive pressure

• Pre-purchase

assessment of CRM

systems

• Evaluation &

management of data

quality

• Size of firm may impact

CRM adoption• Technical complexity

• Acquisition of data from

internal & external

sources

• Cost of CRM systems• ICT infrastructure &

integration

• Business strategy

focused on customers• Vendor support

• Pressure from

customers and suppliers


Knowledge Management


Knowledge Management

Source: Neef (1999) and Dougherty (1999)

• The effective management of:

• People

• Data, information and communications

• ICT systems:

• Data capture, storage, use & optimization

• Data security, accessibility, integrity & integration

• Data distribution and information flow

• People:

• Ability to receive, assimilate, analyse & value

add to knowledge

• Ability to create and innovate via knowledge

sharing

Key management challenges for most businesses


Absorptive capacity within the firm

Sources: Teece, Pisano & Shuen (1997); Mazzarol (2015)


Potential and realised absorptive capacity

Source: Mazzarol and Reboud (2017)


Acquisition and dissemination of knowledge

Source: Civi (2000) and Bagshaw (2000)

• It must be:

• able to consistently produce new knowledge

• disseminate it throughout the company

• embody it in new products & services

• Attention should focus on:

• Capability – knowledge and skills

• Capture – how to find and deliver ‘tacit’ knowledge

• Codification – making tacit knowledge ‘explicit’

• Connection – creating knowledge networks

• Co-creation – creating new knowledge

• Conversion – using knowledge for value adding

A successful company is a knowledge-creating company


A Knowledge Management Process

Source: Adapted from Tan (2000)

Create knowledge

Encapsulate (encode)

knowledge

Share / disseminate knowledge

Retrieve knowledge

Apply / exploit

knowledge

Identify

knowledge

assets

Learn


Implementing Knowledge Management

Source: Civi 2000)

1. Identify business problems and develop a clear set of goals and objectives for knowledge activities

• What is the cause of any problems?

• Environmental analysis

• Objectives to overcome these problems

2. Create the “knowledge crew”

• Multi-disciplinary and expert

3. Adapt all level managers to the process

• Unite and excite both senior and middle level managers

• Stimulate enterprise behaviour and fulfill potential

• Reinforce good practice and develop networks

4. Change organizational culture to implement knowledge activities

• Training and development programs & re-engineering

5. Provide access to knowledge using networks and technologies

• Computer-based data and information systems, intra-nets, groupware, data-mining etc.

A 5-Step approach to implementing a KMS:


Knowledge Management System

Knowledge creation

Encapsulate (encode)

knowledge

Share / disseminate knowledge

Retrieve knowledge

Apply / exploit

knowledge Knowledge

Management

System

Resource

Schedule

DPSC

DWOR Management

Report

Volume

Forecast

Daily

Review

Weekly

ReviewForecast

Review

Standards

Review

Work

Standards

Quality

BudgetStrategyBusiness

Plan

HRM System

Skills

Flexibility

Matrix

Variance

Control

Quality

Controls

Backlog

Control


E-Business Vale Chain

Source: Walters and Lancaster (1999)

Identify information

system contributions

CRM

System

KM

System

ERP

System

Construct a value chain

for the firm, its customers

and its suppliers

Establish the customers’

value criteria

Identify the key success

factors

Identify sources of

expertise, participants

and linkages that offer

value differentiation

Establish key

performance indicators


Aligning technology with strategy

Source: Walters and Lancaster (1999)

Objectives,

KSFs, process

design and

management

Business Strategy

Organisation StrategyInformation Strategy

From: an emphasis on cost reduction and efficient administration.

To: an emphasis on creating customer value through innovation

within an integrated value chain.

From: a centralized, internally focused and ‘mechanized’

orientation.

To: a devolved, empowered and customer focused orientation.

From: an emphasis on internal cost control, administration and

cash accounting.

To: an emphasis on decentralization, customer commitment and

value delivery business activities.


Group Discussion

Working in teams

• Review your firm’s technology use with

attention to the following:

• ERP system

• CRM system

• E-Marketing strategy

• E-Business strategy

• E-Commerce strategy

• Social media strategy

• How well do these systems provide

timely and reliable information for:

• Forecasting

• Planning

• Scheduling

• Implementing

• Reporting & Evaluation


ALT 7 – Professionalism

Task Requirements:

• Examine the ICT systems:

• Enterprise Resource Planning (ERP)

• Databases and Digital Dashboards

• CRM Systems for Small Business

• Knowledge Management (KM).

• Developing strategies for:

• E-business

• E-commerce

• E-marketing

Key Documents

• ALT 7 Technology.

• ALT 7 Technology List.

• ALT 7 Online Marketing.

• Readings.

End of Presentation

Small Business Management MGMT5601 Workshop 5 Part B ...€¦ · guide management decision making....

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