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Tools
for the Not-So-Big Boys (and Girls)
By Michael Alan Hamlin
July 28, 2003
That’s not meant to be a tongue-in-cheek
title to this week’s column, and no, I’m not suffering
from spam overload and the neuroses so many of those messages promise
to solve. Neither is it a Freudian slip, or at least I don’t
think it is. No, my thought processes are purely business and management
centered, and to give you an idea of what I really mean by the title,
imagine two contractors, one building a small house, and one building
a big house.
While the contractor building the
small house will require fewer building materials, less equipment,
and fewer people, in order to complete his task successfully he’ll
have to go through the same basic processes as his cousin who is
building a very large house. He’ll have to excavate for a foundation,
or footers. He’ll have to mix cement and lay cement blocks,
and hire the laborers to do these things. He’ll have to hire
a carpenter, a plumber, and an electrician. And he’ll have
to keep track of their progress, the cost of materials, labor costs,
and the usual “hidden” costs.
The only real difference between
the small contractor and the big contractor is scale. It stands
to reason therefore that the small contractor will benefit from
using the same tools the big contractor does to build a bigger house.
Those tools will provide the same quality, productivity, and efficiency
benefits to our little contractor as they do our big contractor.
Unfortunately, the little contractor
sees himself as just that: a little contractor, and someone not
in the same league as the big boys. The tools the big boys use are
big, they cost more, and they’re probably harder to operate.
That mindset keeps the little contractor little, because he’s
got all he can handle with his limited set of basic tools and the
brawn of his workers. In fact, he’s probably even busier than
the big contractor because the little contractor is doing things
the hard way, without the benefits of modern tools and technology.
At the end of the day, the little
contractor will still build a good little house, even if it takes
longer than it should and costs more than it should because of his
low productivity and the difficulty in tracking costs. Not having
a handle on costs, of course suggests that the little contractor
doesn’t really understand his business model very well, and
whether or not he’s making much money. Which explains why he’s
living from project to project and using funds from one to support
another, and, well, you must get the point.
The same issues that keep the small
contractor small frequently explain why other small- and medium-size
(SME) businesses stay SMEs. There are two parts to this equation
for stasis. First is the small contractor mindset. Many organizations
may simply assume — based on anecdotal “evidence”
— that they can’t afford to invest in some of the management,
efficiency, and productivity tools that their larger competitors
do.
Second, of course, is they may actually
be right. The tools may really be too expensive to afford. Enterprise
systems, or what’s often called ERP systems, are a good example.
For the 30 years or so that enterprise systems have been around,
they’ve generally been perceived as the preserve of really
big companies. And in fact, most big companies do use them. San
Miguel Corporation was among the first in the Philippines, but there
are around 250 or so corporations — that’s my estimate
— that are using enterprise systems in the Philippines today.
SAP (Full Disclosure: SAP is a client of my firm.) is considered
the premier enterprise system, and in the Philippines enjoys a better
than 50 percent share of the market according to independent research.
But last week, SAP Philippines managing
director Krishnendu Datta told a number of journalists in a formal
media briefing that SAP has tried for years to penetrate the SME
market. In fact, of over 6,500 SAP installations in Asia Pacific,
over half are considered SMEs. In the Philippines that would include
companies like Golden ABC — which both manufactures garments
and sells them through its Penshoppe and Oxygen retail outlets —
the local Shakey’s franchise, and Quantum Foods, which has
less than 200 employees, and had around 50 when it first implemented
SAP.
Now, however, SAP seems to be getting
really, really serious about SMEs, in part because they account
for almost 20 percent of the company’s sales, and of course
far outnumber large corporations. So last week, SAP launched a new
SME program with partners Magnus, HP, IBM, and Microsoft called
M3Lite. The program offers at least three SME-oriented features
you’ll be especially interested in, I think.
First, it has simplified the acquisition
process by making the software, hardware, and implementation and
management services one straight-forward, bundled package. Second,
it’s aggressively priced, but is a full version of SAP’s
enterprise system. I know how aggressively, but get the details
from SAP. Third, it comes with financing, so that upfront investment
and payout is manageable.
So that’s what I mean when I
say Tools for the Not-So-Big-Boys. They come in all sizes, there’s
one right for you, and it’ll make you feel like a big boy (or
girl).
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001), and he is
currently at work on High Visibility: The Making and Marketing
of Asian Professionals into Celebrities. Write him at mahamlin@teamasia.com.).
Copyright © 2003 Michael Alan
Hamlin. All Rights Reserved.
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