Mid-Market Report: Best Practices for Tech Operations

By Baselinemag  |  Posted 2006-11-06 Print this article Print

Identifying core processes and centralizing tech decision-making are among the keys to success.

Some are public, some are family run, some are owned by private equity firms. Their ranks include manufacturing companies, service providers and government contractors. They would seem to have more differences than similarities.

But from the perspective of their information-technology efforts, mid-market companies have more in common than not. Their I.T. budgets are usually limited. They're usually better at responding to immediate needs than formulating long-term strategy. They often let their technology systems evolve on a decentralized basis. This reduces their efficiency, increases the time staff has to spend putting out fires and can make their CIOs look ineffective and expendable. Some of these challenges were evident in an August survey by Ziff Davis Media's CIO Insight in which 51% of small-company I.T. professionals said they work in departments that are changing faster than ever before.

To learn how these companies are addressing their I.T. challenges, Baseline sought out two management experts and four CIOs currently working at midsize companies—those with $200 million to $700 million in revenue and with about 100 to 2,500 employees. Here's a distillation of their best-practice advice for managing I.T. in a half-dozen areas.

1. IDENTIFY CORE PROCESSES Every company has at least one process that's central to how efficient it is across its businesses. For a brokerage firm, this might involve how it handles client data. For a cable provider, this might be how quickly the company gets new customers up and running and adds them to its billing system.

At defense company VSE Corp. (2005 sales: $280 million), the core process is purchasing from subcontractors. The Alexandria, Va.-based company retrofits Navy ships for sale to other countries, and often buys parts and labor from other companies en route to fulfilling a contract. But its bidding process, which must comply with federal regulations about the use of taxpayer money, has largely been done via paperwork. That is not efficient, says CIO David Chivers. If a bid gets lost, work has to be re-created. Even a simple delay in approval signatures can put a project behind schedule and force it over cost.

Six months ago, VSE decided to automate the bidding process and move it to a secure Web-based system. This will reduce the amount of time VSE has to spend making copies of different bids, gathering them into folders and sending them to the government agency that made the requisition. It will also reduce the likelihood of bids being lost altogether—they'll be sitting on a server, accessible to the many parties involved in government work. VSE is paying TSA of Mechanicsburg, Pa., about $190,000 to provide consulting and build the system, which Chivers expects to roll out early in 2007. "This will help improve the efficiency of what we do," Chivers says.

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