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Last Update: Monday September 20, 2021

Key Idea: Go Digital

Anne hired her husband, Michael,  because she was stuck. She was smart enough to know that her company had outgrown her ability to take it to the next level. Michael applied his knowledge of computing way before there was such a thing as the Internet.

Key Question:

A: 

Apply technology whenever and wherever you can.  What comes to mind when you hear the word "technology"? For most of us, it's computers first, followed closely by the Internet. But technology's role in the small business is just as important as marketing and finance. Technology is the ultimate enabler. You can do more in your business and you can do it faster with less error if you incorporate technology in your everyday business operations.

When Michael started to turn AMCI into a digital workplace he was using EDI, electronic data transfer, to move information faster and better and to get rid of paper. His goal was to minimize data entry mistakes, provide immediate customer validation and verification, save sales reps time, generate immediate billing, collect faster, track orders and automate customer service.

Q: How does a small business use technology in the business?

A: There's lots of ways and many of them were only available to big businesses up until a short time ago. But new products and plummeting costs have positioned all of us to be more competitive in our respective market places with a minimum investment. We can analyze our inventory and learn what sells and what doesn't, in what quantities, to whom, with what seasonality, at what margin, and just about anything else we might want to know.

We can codify the intellectual capital of our organization, protect it, keep it organized and up-to-date, and easily search and retrieve what we need. It's all about the learning continuum, turning data into information and information into knowledge, then using that knowledge as the basis of the decisions we make in operating our businesses. Hence the term: knowledge management.

Our challenge as business owners is to figure out what data to store, in what vehicle (data warehousing) and how to access it in such a way that it provides meaningful information that is of real value to us in our business (data mining). We've used a lot of buzz words here; let's look at knowledge management, how it actually works, within a small business. There are a number of things that even the smallest business can do to capture, organize, and make available the intellectual capital of the organization. We'll focus on three here.

Establishing a Common Operating Environment (COE). Before you had computers at your office you kept documents in folders in file cabinets. Different people had access to those documents because they needed them to do their work. Sometimes people forgot to return the documents when they were through, and you would scout around the office until you found them. Sometimes two people needed the document at the same time and they would work something out, or make another copy of the document. The point is that every business generates important information, has processes that includes forms and templates, and shares these among a number of employees.

Now that you have computers, you still generate documents, you still keep them in folders, folders are kept within folders, and various people have access to them. Electronic filing systems can be vastly superior to paper filing systems if we remember to follow the business practices we used in a paper environment. Do you have documents on your computer or network server that are not in folders? How many? How does that compare to the number of documents you would have tossed into a file cabinet without filing?

The good news is that at least (a) the documents are listed alphabetically wherever they are stored and (b) we can always "search" for them if we remember the name, or the software application, or when they were last modified. Hmmm. There must be a better way. You're right! And it's called a common operating environment or COE. In a business with a network environment, where a number of employees have access to a central data depository, you:

1) Establish document naming conventions. As new documents are created, they are named in accordance with organizational policy. People looking for a document would have a good idea of the document name, even if someone else created it.

2) Determine the file structure. Folders within folders within folders. Organizing your information so that documents are easily located.

3) Grant access as appropriate. Security levels and edit rights, determining who can have access to what or not, when to permit "read-only" access, and who is authorized to make changes.

4) Safeguard information. Back-up systems, on and offsite, disaster recovery plans.

If you do all of the above, provide training on the implementation, you will have established a COE. The benefits are enormous and immediate.

Using Databases to Work and Mine Data Most of us couldn't imagine functioning without word processing software and spreadsheet software in our businesses. We all use e-mail and a lot of us can use presentation software, some more rudimentary than others. Yet, for some reason, the database software frequently goes unused in the small business.

Digitize, Digitize, Digitize Maintaining our information in electronic form is critical to both the establishment of a COE and mining our data on an ongoing basis. Virtually all software applications allow for exporting data and importing data. So as long as you maintain your data electronically, you can take advantage of new software development in your industry without having to re-enter the information. As you digitize your workflow, be sure you have adequate back-up systems with offsite storage for all important information. Compare how you safeguard your money with the way you safeguard your information.

Electronic files are easier to navigate and cheaper to maintain. Additional computers and memory are just less expensive than rent, file cabinets, and storage facilities.

Think about it

How far has your business moved along the learning continuum? Are you taking advantage of the latest technologies to codify the intellectual capital of your business? If you arrived at your office, and all your information OR all your money was gone, what would be more devastating to you? Are you building the necessary infrastructure to handle and sustain the growth of your business?

Clip from: AMCI with Anne & Michael McGilvray

Dallas, Chicago, Los Angeles, New York City: This story begins like so many  stories, one person goes out selling. Her name is Anne McGilvray and she sold holiday cards. She became as a manufacturer's rep and grew her business to $2M in annual revenues. She then invited her husband, Michael, to join her.

Anne knows how to pick products that capture our lighter side, spark our imaginations, and make us smile; Michael controls the magic of technology that transformed this Mom-and-Pop shop into a $60M per-year major distribution channel to over 60,000 retail chains.  We discover two very talented people who find and work with creative, talented people. Spend some time with this episode of the show and you'll learn what it takes to have the magic touch.

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AMCI, Inc. (AM)

Anne McGilvray, Owner

2332 Valdina
Dallas, TX 75207
2146384438

Visit our web site: http://annemcgilvray.com/

Office: 2146384438

Business Classification:
Retail/Wholesale

Year Founded: 1975

Go Digital

(Voiceover) Based in Dallas, they own this building, which houses their largest showroom and support staff of 20. They also have showrooms in New York, Los Angeles and Chicago. Anne and Michael have tiny, plain offices here, but primarily work from home on their kitchen table, as they have for 23 years.

HATTIE: ... are you testing a product?

MICHAEL: Most of the people are second-and- third generation salespeople. When I came into the company, that wasn't my forte; that wasn't my profession. It wasn't my training. I think what I bring to Anne McGilvray and Company is more of the systems.

HATTIE: (Voiceover) Michael is leading the way to a paperless environment. Sales reps are converting to electronic ordering.

MICHAEL: Over the last several years there is a system that has beccome more widely used in the marketplace called EDI. It's basically electronic data interchange or interface. It's a system that allows people to communicate electronically between the vendor and the retailer, whether it be a vendor who's working with Penny's, whether they're working with Dayton - Hudson, it's communications that allows them to look at their orders. They transmit orders electronically, again, same day, same hour, you might say. You're dealing with people that get invoices same day, same hour. The retailer is getting the product shipped to him faster.

HATTIE: Yes.

MICHAEL: The vendor, because it's all being done electronically, is getting paid faster.

Unidentified Man #3: We put together a CD-ROM catalog for the first time. This will eventually link into our reps' abilities to sell via computer, so they'll be able to, for instance, call up an item on this CD-ROM catalog. They'll be able to click and move that over to the order form that they're filling out for the customer, and continue to move through that way and automatically then print out afterwards the purchase order in duplicate copies, or whatever, and send electronic files of that to the various manufacturers and into their in-house systems. And we're trying to coordinate with that.

MICHAEL: About four years ago, I saw this coming, in terms of working, for example, with J.C. Penney's. And needless to say, they're the masters of their destiny, and they take the position that if you want to do business with us, this is what you need to do. And so you have a choice? Do I do business with them or do I walk away from that business? And I also, at the same time, know that I represent very small vendors who would not have the resources on their own to go out and buy the systems necessary to do business with Penney's. So what we did, we made, again, a financial investment in the systems and we allow our vendors to use our system to do business with J. C. Penney's.

Unidentified Woman #2: Well, it's made our lives easier. We can do our orders on the computer and then we can send the orders via Internet right to the companies.

(Voiceover) Let's say I wanted to find a company; let's say, Sidney's Silkscreen(then finding the one she wants). Here it is . I press enter. The address comes up. I have a PO number. Now, if they want to order Club Earth products. I can go down to Club Earth, it will bring up the products in this field; so when I want to order, I just go down here and click. It automatically fills out the order form. And it saves a lot of time in the evening when you normally sit and fill in all the headings. Well, we'll have everything on the computer and there will not be a paper trail. With paper, you can always lose it.

(Voiceover) There's a lot of information you have to have. You have to have the numbers, the product numbers, the quantity, the price, and then you have to manually do the addition. With the product on the laptop, it does all the addition for you.

Unidentified Woman #3: Well, actually, it's making it so that I work smarter and not harder. I am becoming more error-free, and I am one of those people that does not have pretty handwriting. It brings it up very quickly for me, and I'm able to adapt and adjust very quickly in the sales call, which is very important these days when it's a highly competitive industry. I make more money by being able to suggest quicker and faster. (Voiceover) If we need something on golf, we can find six or seven manufacturers. We're not flipping through a book and looking like, `Oh, wait.' You know, I only have a little bit of time to be with that buyer, so I need to be smart and be able to show things very quickly.

MICHAEL: Again, it's a matter of having to look at the future. And you have to be willing to make those kinds of commitments, because it is the future.

 

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