One of the unfortunate legacies of the rise in computer use since the 1970s and ‘80s is that few companies, regardless of size, ever implemented their IT with a serious plan. It all began with processing words, then handling spread sheets, and then some of the more adventurous began accessing databases. Small companies found the PC cheap and relatively easy to use and large companies discovered that various departments were scraping money together to buy systems without any overall control. As this developed, the computers became more and more powerful, eventually (somewhat) easier to use and the days of hugely expensive computer systems began to fade. Large companies soon realised that without exercising some form of organisation it would all become a nightmare to deal with. Smaller companies - even today - just seem to soldier on.

What all of this is about is the handling of information. It does not really matter if that information is looked up in a large ledger or displayed on a computer screen: we need to access it in a timely manner. IT helps - or should help - organise this information so we can use what we need, when we need it. That need in our modern world seems to be greater and hungrier than ever before and wants to be satisfied immediately.

Les Hales is the vice president of the Hong Kong Knowledge Management Society and was formerly the head of IT for DHL, Asia Pacific. When he began his work at DHL, from an IT perspective he was dealing with a variety of small companies coming together to form a global one. His experience is not only unique, he was in a position to see it all develop.

“Information as a business asset and information management as a corporate competency are high on the agenda of many companies today. The reason is the now-established linkage between effective use of information and improved business processes, increased client satisfaction, and lower costs,” he said. Lowering costs and client satisfaction are clearly areas small companies can understand as well as larger ones, but what about “improving business processes”? Most SMEs are struggling with that.

Today there are hundreds of solutions from simple ERP (enterprise resource planning) software for small companies to huge solutions from the likes of SAP, Oracle and others. Some of these will cost a few hundred dollars, others will go into the millions. The solutions themselves, according to Mr Hales, are not what is important. Companies need to focus on the management issues.

“The era of companies dealing with IT as a backroom and support issue is over. In the past, many managers treated IT as a budgeted expense to be justified on a project-by-project basis. The technology aspect has largely overshadowed the role of information, and as departments computerised their functions, islands of automation were created,” he said.

Although dealing with these issues is a challenge to all companies, it is a particular challenge to SMEs because they are less likely to consider it important and almost completely unable to justify the expense, which can be considerable. Mr Hales said the magic word was “process”: if a company can see that the way that it manages information is directly related to the efficiency and effectiveness of its processes, then that’s a big step to realising the potential for IT.

Toa Charm is the general manager, Asia Pacific, of Kingdee, a local Hong Kong-listed company that has been in the ERP business for 12 years. The company has 200,000 customers, a thousand partners in Asia Pacific and deals specifically with the SME market. Mr Charm would agree that for the SME, it can be difficult to understand the value of something like ERP. Much of his work, he said, must be in the form of education and consulting.

“The SME owner has no idea what ERP is and is usually confused by it. We must work very hard to explain what it means and what benefits an ERP system can bring to his company. What we can offer them is a solution to tie their data and processes together,” he said.

One area that importantly touches what the SME does is the business interactions it has with other global companies.

As the deployment of IT over the past 10 to 20 years has exploded, the world has begun to look to the Pearl River Delta to produce much of the its goods. Southern China has become the manufacturing centre of the world and thousands of companies have begun to realise that they will continue to prosper if they can implement sophisticated IT solutions - such as ERP - to deal with the outside world.

“In the new, forward-looking era, the role of IT changes, with a much greater focus on business impact. IT will consequently become an issue for the entire company. Success will depend much less on mastering new technologies and much more on the abilities of the management and staff to embrace new understanding and new roles,” he said.

If this is indeed what is happening - and the evidence is strong that it is - then companies like Kingdee should do well for a long time to come. Local companies that have not been keen to embrace technology at the highest levels may also want to reconsider. Their future may well depend on it.