Information Systems – Right Sizing the Database for Growth

Information Systems – Right Sizing the Database for Growth
Monday, July 2nd, 2012 Scott Bossart

                One key element in business today is using the technology for an information system.  These are the systems required to assist in managing the organization.  Consider everything that is being tracked or recorded in today’s business world.  In the old days, it was all on paper.  Then computers came along and everything was initially recorded on paper but then someone would input it into a computer to be able to run reports and track progress.  Now most programs are structured to allow direct input into the database by either a direct computer terminal or a portable device of some sort.  The key now becomes the size and functionality of the database, matched with the expense of the system, to facilitate adequate reporting and tracking.  If too small or inadequate, reporting against the health of the organization is limited.   If too large for the current size of the organization, the costs can be too high and could outweigh the benefits if a majority of the system functionality is underutilized.   The full functionality will not be realized, therefor becoming a waste of initial investment dollars.  The other factor to consider is the ease of input for the data to be captured not to mention the hardware and peripheral software required to run the actual database system itself.

                When determining the need for the right information system, the most obvious target is finances.  It is fairly obvious that having a robust financial reporting system is crucial to monitoring money and its flow in and out of the organizaiton.  This includes having the functionality to separate tax related costs and burdens from other business costs.  The question then becomes; what about the ability to separate department or component costs?  If you recall from my Improvement series, I talked about the importance of componentizing the organization to determine individual profit margins.  This then leads to better reporting and focused loss and gains in specific target areas.  Your information system on the financial side should facilitate this type of scrutiny and allow for a focused approach to improvement.  If your current financial system is basically geared for the sole purposes of profit and loss reporting and tax preparation as a whole or business entirety, you may want to consider an upgrade.  This is not to say you need to become an accountant and start doing your own financial reporting, but you may need to take a closer look at what your system can and is doing for the organization.  There is more to doing general financial reporting with WIP, COGS, and Taxes as a whole.  Determining these in each component can be a valuable function towards seeing profit and loss ahead of month end.

                As for the detail of the information system, it is important to find a system you do not have to do mass data extracts in order to managing routine business functions.  I see this often, where a business process exists to do a mass data extract each week, dump it into an Excel file, to manage the work load or process externally because of a lack of understanding, knowledge, or functionality within the internal information system database.  Not a good practice!  If this is typical in your organization, you should consider an evaluation of your current information system data base and functionality.  If you were to calculate the time required to perform data extracts, data scrubs, and manipulations for external software, you could probably upgrade the current system functionality or purchase a more robust system.  Along with financial numbers, a robust system should be able to manage raw materials, people, products or services, and schedules as well as link all the financial from each to the financial system of record.  Yes, good systems are not cheap.  Yes, training to learn how to utilize it is required.  Yes, ongoing and refresher training is required to dispel myths, unknowns, and false learning’s and habits.  If you take the “Once Learned, Always an Expert” approach, you will undoubtedly underutilize your current system as well as potentially be doing it wrong for long periods of time.

                If you have a vision to where you want the organization to go, and have a clear idea of what you want and need to track and measure, you should be able to find a balance between the cost of the system and the functionality.  There are certain things that are extremely important to fully understand and research prior to an initial installation or upgrade of an existing system.  Remember, the company you are talking to is also trying to make a sale and demonstrations are designed to not fail in front of the potential customer.  See examples of similar business structures as yours and even look towards similar customers.  Ask about server requirements, network requirements, system loading and bandwidth requirements, customization abilities, data backup scheduling, etc.  All are very important and must be talked about so there is clear and full understanding of what is being installed.  Ask about failures of other companies’ installations and why.  If the company begins to skirt around functionality and wants to sell separate add-on or bolt-on software, it may be a sign the system is not robust enough for your company.  Keep in mind, when bolting or adding on to your system with other software, all must function transparently with each other to include updates, upgrades, enhancements, etc.  This includes the front end software such as Windows, MAC, Oracle, etc.

                Bottom line is if you have read through my Business Improvement series and performed all the steps I have recommended, you should be able to utilize the work flow and process flow documents along with the visions the business plans and targeted measurements in determining the best suited Information System you need.  There are a lot of network related security and accessibility concerns which need to be address also.  Consult an expert if needed…or even two.  Be leery of those experts who try to sell only one system and claim it to be suited for all businesses.  Be leery of experts who claim they have never had any issues with any software.  There are always invariably issues that need to be overcome.  Ask what they have been in the past and how they were overcome.  Be leery of “FREE” shareware or software as many do not provide the level of security or the functionality you will need to sustain during your business growth cycle.  If concerned, get an external knowledgeable person who doesn’t have an association with the software provider to act as an unbiased liaison.  While it might be an added expense, the total expense will pay for itself in the long run to ensure you get what you need and how you need it.

Stay Well

Scott B.


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