Enterprise software: Making it through the 3 phases of business development

Every entity has phases of development. Just as humans go through birth, infancy, childhood, puberty, adulthood, old age, and then death, so do businesses. Like a caring parent, you will need the appropriate level of skill, people, and tools in order to get through these phases of business development, which are:

1. Startup

In a study by John Haltiwanger, Ron Jarmin, and Javier Miranda in Who Creates Jobs? Small vs. Large vs. Young, startups were discovered to have created the most jobs in the past decade, spurring employment growth.

The startup phase is usually the most exciting and nerve-wracking phase. An idea is fresh and full of promise. There is plenty of room for creativity. It is during this initial phase that business processes are still young and undeveloped. There aren't many employees, and the manager is more hands-on. Operations are more flexible, dynamic, and less systematic, as the manager tweaks things around to see the best fit.

The software approach

Utilising easy-to-use, out-of-the-box tools with built-in workflow templates and web forms can help organise these processes. With proper documentation and customisable rules, these will help ensure quicker time-to-market and effective reuse of existing best practices.

2. Midlife

In her Harvard Business School article, Carmen Nobel notes that most startups eventually fail. She quotes Shikhar Ghosh, a Harvard Business School senior lecturer, as saying that in the first five years, the failure rate for startups that lose most or all of their investors' money is 30 to 40 per cent, while the failure rate for reaching a projected amount of ROI is 70 to 85 per cent. Even more disheartening, the failure rate for meeting a declared projection is 90 to 95 per cent. Mr. Ghosh went on to say that failure is considered normal, even good news to veteran entrepreneurs, as this serves as learning ground.

Making it past this phase, however, is another story, and this leads to the next phase of business development, which is called the midlife, or the growth and expansion phase. This phase normally requires even more work, as you consciously put in more effort to push your business forward. Jay Goltz outlines in his New York Times article several barriers to small business growth, with lack of technology, the right people, standards and policies, and marketing among those. To overcome these barriers, you need to generate more new ideas and employ faster, more efficient people and processes.

John Hoskin of CleverAccounts.com, an online small business accountancy service, was quoted in the Guardian as having said: "To grow a business, you need to focus on more than the service or product. The basics of business, such as bookkeeping, cash flow management, invoice chasing, financial planning, VAT payment and personal tax returns are often the difference between failure and success."

The software approach

To this end, you must ensure that your tools will improve scalability and collaboration within your company. You may need to update your software to facilitate complex cross-department approvals and requests management, as well as cover lengthy documentation processes and deliver comprehensive, error-free reporting. By taking care of the necessities, you allow your people more time to focus on the more salient aspects of your business.

3. Maturity

When you reach the maturity phase, you will find that the larger your company becomes, the more rigid the organisational structure is. Your once fluid and dynamic management transitions to a stricter, corporation style of business operations.

A cell-based organisational structure is enforced. With lesser room to explore, learn new skills and innovate, employees can become less inspired or eager to excel and outperform. To this end, workers become easily expendable and replaceable, which may be good for management in the short term but bad for the morale of the essential workforce.

After maintaining stellar results for some time, you plateau. Continued growth at previous rates now become challenging. A new competitor manages to outrank you, and your growth becomes unsustainable. Your stock value starts to decline as your margins continue to dwindle. On the other hand, IBM is an example of a long-existing business that's still relevant and relatively successful. This goes to show that not all businesses in maturity should go into eventual decline.

The software approach

IBM's secret to corporate longevity boils down to one essential ingredient: the ability to change. While software is hardly the sole reason for IBM's success, continuous improvement and adoption of emerging market and technological trends greatly helped. To this end, for companies to work their way past maturity and eventual decline, existing enterprise software should be capable of time-saving features such as:

  • Real-time capacity to ensure every business process flow is captured exactly as it happens and dealt with promptly
  • Automation to optimise accounting and payroll, HR, IT, administrative and other repetitive tasks
  • Maximum architectural flexibility to modify an existing set of workflow setup tools to accommodate further business process developments

By investing on software flexibility and business process agility, you give your company the advantage of speed. The key to the many market competitive wins we see today isn't always breakthrough technology behind innovative products.

It is the ability to change with the times and execute quickly on objectives that separate successful businesses from those that struggle.

Maricel Rivera a freelance business and technology writer currently managing content for Comindware