Centralisation, or centralization, offers a massive step forward to your business. How does a business go about it if its not already in place? Should you?
With more and more businesses being held to account for not meeting compliance regulation how can you in your role help your business.
The concept of centralisation is not new but from an IT and systems perspective has been left to the realms of IT professionals when actually everyone could help.
This article looks at pragmatic steps to help your business achieve centralisation and deliver against all your compliance commitments.
- Chickens or eggs
- Step by step approach
- Wrap up
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Chickens or eggs
All your eggs in one basket
The bigggest fear of centralisation is that if everything is in one place, and that central place is affected, you lose everything.
Walking to the market to sell your eggs, they are in one basket.
You drop the basket, the eggs smash, you lose everything.
If you have two baskets you have more to manage but you’ve reduced your risk? Right? Or have you given yourself more work and hassle to manage?
Computers have massively helped business, as they allow the best of both worlds.
What if you said to someone, you carry one bag of eggs to market.
- If you get it right, you get paid.
- Get it wrong you pay me for the lost wares?
Mitigation, right? This is the basis of outsourcing.
You reduce your risk and headaches by letting someone / something else do the work.
You trust a computer… right? What if the computer doesn’t work one morning when you come in?
What you really want?
As a business person what you want is one tool with your entire business in it.
Everything behind that one basket has everything you need. It’s just easier to manage.
Yet you have done some checking and diligence to ensure that there double’s, checks and measures to reduce that risk. Mitigation of risk.
You decide not to go to the market at all. You find a supplier who has two baskets and two runners, who take two different routes. You’ve used the concept of centralisation.
The plan puts in place a clause that ensures you get paid for the delivery regardless. You have to pay for the service but the protection it provides gives you peace of mind.
So now you have saved a ton of time. You don’t need to go the market. You don’t need to do anything but collect the eggs and give them to your collection partner.
What do you do now? Life is wonderful, time to put the feet up and relax.
Inevitable change
For some people this is now the ideal scenario. You’ve protected your business. Everything has double and triple backups… or has it?
One day your supplier comes back to you and goes, sorry, I’m retiring. Thanks for the great years! Your one basket became your one supplier.
So you are lucky enough to find another supplier but they’re not as scrupulous.
Tarriffs, risks and you find they’re selling your goods at a much higher end price making your wares unattractive.
You lose faith in humanity and bring the process back in house.
Congratulations you’ve just gone full circle! A ton of life has passed and all the while you’ve just been managing stress.
Suddenly there’s a knock on the door and it’s the food regulatory authority of the country. Have you done all your checks?
You throw your eyes to heaven and wonder why you didn’t get into something else.
No better off and going round literally in circles, how do you break the cycle?
IT breaks the cycle, right?
What made business radically change and we are still in the process of that change is the strategic impact IT has made on business.
Most business treated IT as a tool like a calculator on a desk.
Some business treat IT as their entire business and it has revolutionised their business. But how?
We still make eggs. Now however we put a system in place for everything.
- Firstly, a website allows customers order at the price we believe is fair.
- Next, a transport companies provide numerous egg and basket carrying capabilities including global distribution.
- Also we use the internet of things (IoT) to monitor our business and the temperature in the coop.
- Finally our accounting software keeps track of money.
Now we have a modular approach. Each element is isolated and can be replaced / fixed quickly.
Generally we are not technical, we’re egg farmers. This is too modern and like our ostrich eggs, we bury our heads in the sand. So many tools, so many options. Frustration!
More stress… and no further forward.
Seriously this needs to stop!
Updates, version control and documentation melt the head and a degree in Computer Science feels like the only solution.
Your specialty is eggs! How did we end up here?
Your life becomes a ton of tools. When you need a report you need to pull it from a ton of sources.
Though you’ve evolved and protected the business, you have a stress headache from not being able to see everything and a litany of new questions from everywhere.
New approaches and change for any person is scary for one primary reason. The fear of shame.
You’re not a transport expert. Nor are you an accounting expert.
Yet with those tools, if we can conquer our fears and educate ourselves, we can revolutionise our business and our lives. Do we have time to?
There has to be another way!!! When’s retirement from the egg business due?
Yet.. there is a solution.
First thing you need is someone to help. A partner who can help you through this.
You may not understand all the IT. Understanding the ins and outs of transport either is not your forte.
Yet you do know that you’re going to put the pieces of the business together like a jigsaw and not risk any one part.
An ERP, or Enterprise Resource Planning tool, is a modular tool that allows you to plug in bits.
Each new bit plugs in when you’re ready to go.
Traditionally exclusionary and expensive, modern technology and software companies can provide solutions for your business at fractions of historic costs.
Now how to do this!
Step by step approach
Centralisation
So one morning you decide you’re going to go the centralisation route. You phone up your partner or a software suppliers and say, I want everything under one roof please. Help! Let them come to you with answers.
Each aspect of the business will run independently but the information flows into one tool. That one tool must also have protections put on it to ensure it’s safe but the partner / supplier will help here.
Then you start plugging all the separate tools of your business into this one centralised system.
It doesn’t have to all be done at the same time but only plugging one tool in, is not going to help you much.
The solution doesn’t have to be instantly everything which is the common approach and mistake.
So you and your partner work out which bits can easily change first and then look to migrating other parts.
Process improvement
We all put jobs off till tomorrow. Prioritisation is the curse and joy of the busy and successful.
Get it right and you change your world. Wrong and you’re cleaning up gigantic messes of your own making.
So applying the concept or resuability and dealing with the opportunity to change is at this point.
You will end up with a better life for struggling today.
The parts chat to each other using APIs. Application Programming Interfaces. These connectors allow you join up solutions to your centralised solution.
The stuff you haven’t thought of yet
Once you have centalised your business and gone through the struggle of change, new opportunities present themselves.
Centralised information helps you review your products and services to find opportunities to improve and diversify.
One information source helps all of your compliance and regulation responsibilities. You only have one place to keep tidy and look for information to answer questions.
The ability to modularly plug new items in means you can add new technologies and capabilities with little effort. You wake up one morning and decide text messages upon delivery is a good thing. Not a problem, plug in the change.
Centralisation allow you employ a data warehouse more easily and the power of these is what business today use to remain relevant and grow their businesses.
Furthermore just by having the solution you open the ability to have an API of your own opening more opportunities. People can connect their business to your solution! You can become part of their business centralisation solutions.
Wrap Up
I’ve spent most of my adult life design, developing and consulting on centralisation and building effective tools.
Each process is like a lego brick. Of course you can make the perfect brick on its own, but when you join them up you end up with something more powerful.
Centralisation when managed sensibly with some critical thinking helps business evolve.
There is no one right or wrong route, just know that it is a journey that keeps your business going.
Change is inevitable, making change possible and building an approach that supports change and makes it easier, is in everyone’s interest, your, your suppliers and your customers.
The choice is yours.
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