Introduction to Information Technology for Small Business Marc Compeau and Mike Wasserman Wednesday, 7/21/04

Welcome! Tonight’s Agenda 1.What is the web? Defining technology, defining information technology, defining the internet (6:00-6:10) 2.How can information technology help your business? (6:10-6:20) 3.What other technologies should we be thinking about? (6:20-6:30) 4.Break (6:30-6:40) 5.Implementing technology on a shoestring - asking the right questions (6:40-6:50) 6.IT as strategic investment (6:50-7:00) 7.Wrap-up and Program Evaluation (7:00-7:30)

Two questions for you: 1. Do you use technology in your business? 2a. If so: –What technologies do you use? –How do these technologies translate into VALUE for: customers, employees, suppliers, owners? 2b. If not: –Why not? –What factors, if any, have influenced your decisions not to use technology as part of your business?

A basic definition of technology Technology is any “process that any company uses to convert inputs of labor, materials, capital, and information into outputs of greater value”. (Christensen & Raynor, The Innovator’s Solution, 2004) Let’s look at a specific type of technology: Information technology

What is Information Technology? Information Technology is hardware (computers, wires, printers, etc) and software (programs that run on and across hardware) that helps 1)collect, store, analyze, and interpret data 2)Help share that data. 3)Convert data to information to knowledge. Data – individual pieces of information (not necessary useful, timely, or relevant) Information – multiple pieces of data organized in a way that makes the data useful (comparison over time or across cases) Knowledge – multiple sets of information that are used to solve problems or make decisions

How can information technology help your business? Building Revenues Better customer service (Customer data, tailored selection, responsiveness to questions) Access to different customers (not bound by geography, hours, parking, weather, etc.) Multiple ways for existing customers to access your products and services (in-person, phone, online) Examples: Web: eBay, Amazon, independent small business web sites (Penzey’s, Zingerman’s, Whole Latte Love)

How can information technology help your business? Managing/Controlling Expenses Controlling costs (expense mgmt, inventory mgmt, purchasing, = CASH FLOW!) Improved quality (reduced errors) Better measurement and strategic decision making (faster access, pattern recognition) More accessible learning (employee training) Examples: Software (e.g. Quickbooks) and online resources (e.g. Skillsoft)

1.Initial Hardware, Software, and Training Expenses 2.Ongoing Support Expenses –Setup –Maintenance/Upgrades –User Training 3.Two critical issues with long-run cost potential –Privacy –Security Information Technology What are the costs?

Software –Operating System Windows, Mac, Linux –Applications Accounting: QuickBooks, Excel Database: As simple as Microsoft Excel, or Microsoft Access, or MySQL (Linux) Desktop publishing Webpage creation Software Decisions

Other technologies What other technologies should we be thinking about? Can you think of any technologies that would help you sell or distribute your product? Build your customer base? Manage your expenses? Help your employees do a great job?

Implementing technology on a shoestring Don’t do it yourself unless you are good at it! (Outsourcing core competencies) Asking the right questions. Learn enough to understand rough costs, key stumbling blocks, make sure you know exactly WHAT you want the technology to do and be able to measure it! (Networking with other business owners is key) Get multiple opinions - there is no ‘one right solution’ - only tradeoffs. Don’t rush - be strategic! Think about it, learn about it, then make a decision with a long-term implementation plan.

IT as strategic investment Should you invest money now in IT in order to improve the long run performance of your firm? 1.Total cost of ownership –purchase plus maintenance, training, and upgrades 2. Tradeoffs of tying up valuable capital for long-run IT investments –Options: lease vs. buy, Linux vs. Microsoft 3. Look at cash flow impact: cost reduction, revenue enhancement

Sources for More Information Free web-based sources: Infoworld: Context: Darwin: An article or two: Intel. Business Week. 3/8/04 _10/b _mz001.htm _10/b _mz001.htm The Future of Technology. Business Week. 8/23/30 B futuretech.htm B futuretech.htm

Today’s Key Points: Wrap-up