Computerization of small business redoubtable beneficiary. So, let’s know all about how to computerize a small business.
A computer is a system of electro-mechanical devices that receives data from its environment, processes the data arithmetically or logically, and transmits the converted data back to the environment in some way.
How to computerize a small business
The data read by the system usually include instructions for its own operations. This broad definition covers a wide range of different devices and applications. The small business owners should keep in mind, however, that a computer is only a tool.
Whether the firm owns its own computer or uses a data processing arrangement with an outside company, the tool is not an end in itself. Rather, it is a means to provide information to facilitate better business decisions with the hope of obtaining a better competitive position for the firm, which could mean higher profits.
A prime example of the impact of new technology on business practices and capabilities is the growing use of computers. Computers have reshaped methods of obtaining, recording, and applying the information in nearly every company of any size.
The increasing use of statistics and formal management control and decision methods has largely resulted from the availability of general-purpose computers. Such methods were nearly inconceivable in the past.
Types of Computers to Use
The firm owned and operated computer is very popular today. This ownership may be in the form of a small microcomputer, a medium-sized minicomputer, and occasionally some businesses use a larger mainframe computer.
- Microcomputer: A microcomputer, called a personal computer (PC) or micro, is a small desktop machine that can do many, many tasks and which can be operated by persons with no special computer knowledge.
- Minicomputer: A minicomputer is a medium-sized machine into which information can be entered directly, such as inventory changes, as they occur. Minicomputers have large storage capacities and computing ability and can be operated by persons with no special computer knowledge.
- Mainframe: A mainframe is the traditional large, room-sized computer with vast computing and storage capacity.
The choice for -more and more small businesses is the microcomputer. They have plenty of power for many small firms. The super micros currently on the market, such as the models produced by Compaq, IBM, AT&T, and Unisys, have the power of a 1975 mainframe. They can perform the needed business functions at incredible speed and accuracy.
Digital Computers: A large class of computes work by turning all the-, data received into numerical form and performing operations on these numbers. These are digital computers.
Hardware: Computer hardware is the term applied to the actual physical devices that send and receive data and perform operations on it.
Software: In the restricted sense, the software is a collection of instructions read by a computer that tells it where to read input, what specific operations to carry out on the data, and where to write the resulting output. A software program to be formulated would have to specify the following instructions in detail
- The form in which data is recorded and how to read the input
- How to record the data to be operated on.
- What should be added and where, and
- What form to describe the output.
The software then has to be tested extensively. The new application can then be put into operation to produce reports as desired.
Applications for Better Efficiency & Productivity
All benefits from using a computer relate either directly or indirectly to increased productivity. So few, if any, entrepreneurs can afford to ignore the value of computerization.
A remarkably versatile tool, the computer enables entrepreneurs to get more output with less input-in short, to “work smarter, not harder.”
Although there are many ways in which a computer relate either directly or indirectly to increased productivity, the following applications are particularly important to small business:
- Spreadsheets: for forecasting, modeling, accounting, and bookkeeping.
- Word processing: for producing letters and documents.
- Project management: for planning tracking, and analyzing complex projects.
- Database management: for storing, organizing, manipulating, retrieving, and summarizing data.
- Graphics presentation: for creating, editing, displaying, and printing graphic.
- Desktop publishing: for writing, editing, typesetting, graphics, page layout, and printing. Desktop publishing is used in the preparation of brochures, newsletters, catalogs, and reports.
To locate the software that can perform these functions and the hardware on which the programs will run, entrepreneurs should hire a computer consultant.
The first step in the process is making sure that the consultant understands the venture’s product and needs. Jo this end, entrepreneurs should ask the consultant to write a statement summarizing how their product is produced and marketed and identifying areas that might benefit from computerization.
Entrepreneurs then should commission a proposal for action, a proposal that specifies what the computer system will be able to do for the business. And, in alt instances, they should be sure that the consultant is able to communicate in the language they understand.
In the actual choice of a system, the first step is selection software. These programs help define the type of hardware the business is going to need.
Before making a software decision, entrepreneurs should speak with other entrepreneurs who already have chosen their software, to learn about their experiences with different packages. Talking with a noncompetition in the same industry can be especially helpful.
Once they have selected their software, entrepreneurs are ready to select the hardware. There are six major criteria to consider in choosing a computer system:
- Software needs
The final decision is choosing a vendor. Here, again the experience of other entrepreneurs can be a help, as can the recommendations of a computer consultant.
You may like also:
- Why do small businesses fail
- How to start a small business
- Selection of Line of Activity for Small Business
- Factors to consider when buying a small business
- Considerations of location selection for small business
- Human Involvement in Different Stages of Small Business
- How to do accounting for a small business
- Budgeting for small business
- Essential data of internal controls for small business
- Importance of Inventory Management for small business
- How to increase profit in a small business
- Advantages and disadvantages of using a computer in small business
- All about Small Business Risk Management strategy
- All about Small Business Production