Evolution of IT Modernization

There is no doubt that IT can generate value to your business. But having just a computer and software in your company does not mean that IT has generated enough value to you. To achieve maximum value of IT, a company would undergo various stages of IT transformation before achieving it's full potential.

This article will explain the different stages of IT implementation maturity.



Computerization
The first transformation of a company to use IT is the replacement of paper process with data keyed into computer instead. This would immediately bring benefits of data now being able to be retrieved easily from the system, instead of inefficiency to do with paper. However, this is just the replacement of work from doing it on paper to be doing it in a computer instead.
Most companies have reached this stage of IT implementation, as they have their computers and standard software for their daily operations. They would be able to generate their reports and print their documents from the system.


Automation
When the company grows, they would find that with the company will face the same problem as before, that there is more and more work that needs to be done by the same headcount. Many companies who are not able to transform, would have to slow down their growth and expansion because of this issue. However, companies that brings their IT to the automation level will fly high.

By having IT automate the work of the staff, companies are able to gain more productivity from each employee. Things which computers are good at, should let computers to do, allowing employees to work on higher business level need of the company.

Automation tasks which IT should do are like commission calculation, where if manually staff is to do, would take days to generate. This saves not only manpower, but by opening up the commission to be daily commission, this boosts sales for salesman striving to meet sales target.

There are many processes which businesses can automate on. Do you see anything in your company which is manually done by your staff which you think IT can help in? Transform it to an automation program and reduce staff work!


Process Rationalization
Computerization and Automation would help centralize your business process and makes it faster. However, your business process is still just a migration from the previous paper-based process. Businesses needs to shift to the next paradigm of IT and Internet system and process. This level would be Process Rationalization of your business with IT.

Rationalized process would take advantage of IT to enhance your current process. If your normal process is for managers to sign off in all purchases, a rationalized process could be for the system to only show the managers purchases above certain amount that need his attention. If you have to look at a aging and post-dated cheque reports to find which customers to chase payment, a rationalized process would be for the system to find out and email out to you the customers that need your involvement.

In the rationalization process, the existing flow is optimized to remove unnecessary steps, and enhanced to add in more control to align closer to your business flow. When a business has reach this evolution, your business process would be unbinded from your paper trail, and more on data flow.


Integration
Now with your department already optimized to the new age of IT, the next phase of transformation for the company is to have an Integrated Process between the departments or with external parties. This reduces duplicate work done by different departments, and communications and aligning of data as well.

The most common data integration in the system is between inventory and accounting module. More complicated integration is between invoices and orders between companies within the same holding company. Instead of needing to key in both company accounts, this is automated and saves 2-4 times duplicate entries for the same document.

Bank Statement and Credit Card Reconciliation also takes a lot of manpower to be read when it's a paper-based statement sent to your company by the bank. Manually using the eye to view both results from the computer and the bank statement is prone to mistakes and is tedious for the accounting department. Computers can do the same logic again and again without being tired and complain, and with better result and accuracy. Integration your system with the bank's system output enhance your company productivity further.

Other integration includes EDI, and automated import / export functionality which saves manual process by clerks in a company


Strategic IT
The final step of IT transformation is for the company to be able to use IT to achieve Strategic IT advances. At this phase, the company would be able to make strategic decisions and benefits with information and recommendation provided by system and software.

Companies in retail use IT to transform their ordering process from manual centric calculation by buyers to an automated ordering system. The system would provide suggested order through product's pareto ratio, movement and sales trend calculation, allowing store operations to scale easily. Strategic reports like product ABC reports allow users to identify and take action only on the important items.

Managers of the company which has reached Strategic IT maturity are freed up to think about any company initiative, without thinking of constrains brought by manual process or IT system. IT in the company is matured into a level that it can support any new company plans for growth and expansion.


Final Words

With each IT maturity, it will bring a whole new set of IT benefits to the company. Which level do you think your company is in? How do you think IT can help you?

Xeersoft can lead IT transformation in your company. Please feel free to contact us at sales@xeersoft.com if you need more information.

Businesses need software…. Intelligent Software

Information Communication and Culture Minister Datuk Seri Dr Rais Yatim said in March 2010 that Malaysia is confident of reaching 50% Internet penetration by year-end. Currently, the country stands at 33.3%. In business, 55% of IT spending goes on software and applications1. While more businesses are aware that IT plays a crucial part of their businesses, far lesser realized that they will need smarter and more intelligent software to compete in the market.

1. Intelligence

Software which merely helps in reducing paperwork and routine workload is not intelligent enough to ensure businesses survive in this challenging market condition. Larger companies are using software to generate sophisticated analysis and accurately forecast the future of their businesses. XeerSoft aims to help SMEs to understand and realize the importance of intelligent software.

2. Advanced Analysis and Reports

Analysis alone is not enough. Any spreadsheets software can generate graphs and charts in a snap. Advanced analysis allows dynamic data to be organized into valuable information, in turn helps instant bottleneck detection, precise decision making and assist in charting the outlook of your business.

3. “Crystal Ball”

If your software does not give you a crystal ball in hand to predict the future, it is not intelligent enough. To cite some examples, intelligent software should be able to forecast purchases based on advanced sales analysis even for seasonal items; foresee future stock levels in advanced so inventory can be managed efficiently; and focuses on products which bring the most income for the business instead of managing unproductive products.

Diagram 1 Traditional Replenishing of Stocks - when stock quantity reaches reorder level, purchasers will order back to the shelf level

Diagram 2 ABC Analysis analyses your core products which bring in the most profits to your business

4. Integrated and Automation

Intelligent software also allows most of your routine workload to be automated thus reducing manual labor. XeerSoft provides automated commissions calculation even to the most sophisticated commissions, automated bank matching in accounting and even credit card reconciliation. While each department in your business does their own work, intelligent software should be able to integrate among departments and organize data as whole for the whole company.

Just like you could not see the future without a crystal ball in hand, words alone could not describe enough what intelligent software is. Call us today at 03-9284 8286 for a no-obligation, one-hour edu-presentation on intelligent software.

1 http://www.malaysiasme.com.my/index.php/SME-News/SMBs-must-take-profit-seriously-to-survive-downturn.html

Is a VAT? Is a WHT? No… is a GST!

Is your software vendor prepared at all times for any upgrades?

While the GST has been called to halt for the time being, what other surprises will businesses get in the near future?

Changes and policies
Government policies can change overnight, rates can be altered and more changes are affecting businesses in one way or another. Businesses have been using Information Technology (IT) to sustain business, build relationships, increase sales, manage commissions and even control employees. Changes like Goods and Services Tax (GST) or Value-Added Tax (VAT) and in some countries Withholding Tax, are but a small and insignificant addition.

Impact on Changes
However, the impact could be huge. Are your staffs prepared of these changes? How many memos, faxes, reminders, emails and broadcasts are going to be sent out just for one small insignificant change? Is your IT system prepared for the changes and what are the costs of upgrade? Any additional trainings to your employees after upgrading your software? All these need to be countered in.

The XeerSoft Factor
Whether is Withholding Tax, VAT or GST, XeerSoft has the experience in implementing these taxes in Singapore, Thailand and Vietnam. So, at XeerSoft, like it or not, we welcome GST as an opportunity to service our customers. No additional charges to upgrades and definitely no charges involved for extra trainings needed. Talk to us if you need to find out how XeerSoft services could assist your business by calling us at 03-9284 8286

Diagram 1: VAT implementation for a Vietnam based client

Diagram 2: Settings for Taxes – XeerSoft could assist your business

Diagram 3: Withholding Tax implementation for a XeerSoft in Thailand

First Credit Monitoring Services for SMEs

When I read the news, I was delighted to see our friend Alex posing for a picture in The Star. I met him at a Malaysia SME event and then another one during the SMI Association event. I thought this is cool to share as XeerSoft has many customers which are SMEs and therefore, it will be helpful to know.

Saturday January 16, 2010

SME Credit Bureau to launch country’s first Credit Monitoring Services for SMEs

By DALJIT DHESI

THE inception of the SME Credit Bureau Sdn Bhd in 2008 has given hope to credible small and medium enterprises (SMEs) seeking funds to expand their operations. At the same time, it has spared financial institutions the burden of screening trustworthy and reliable ones for financing.

The current internal credit rating system used by banks to assess SMEs takes only a micro view in the sense that it rates only SME customers without having a wider picture or other pertinent information on the SME market.

This is where the Bureau steps in. It offers SME credit risk rating, business review and business information reports to banks and SMEs.

The credit risk rating, according to chief executive officer Alex Lim, is carried out after getting the relevant information data of SMEs and later conducting credit rating specifically for each SME to facilitate financing. Information is extracted, among others, from the Companies Commission of Malaysia and Bank Negara.

“By using the default probability model we can gauge the likelihood of an SME’s ability to repay over the next 12 months. This is premised on their payment behaviour over the past 12 months.

(for picture - please browse to the site - link provided below)
Alex Lim ... ‘An effective CMS system will ensure that SMEs growth will not be hindered or affected by identity theft and fraud.’

“If they have been successful in making payments over the last 12 months then the probability of defaulting in payment is low and vice versa,” he tells StarBizWeek.

Another scale used in credit rating, he adds, is the percentile ranking which shows SMEs ability to pay relative to the entire SME universe. The higher the percentile ranking, the higher the SME’s ability to pay up the loan, he notes.

Having credible information and reliable data cuts down the bank’s processing time for applications of loans by average between 20% and 30%.

Having tied-up with US-based Dun & Bradstreet, he says, has enable the Bureau to localise and tap the expertise of its partner in credit ratings as the former has years of experience in the specialisation of solutions for credit bureaus worldwide. Dun & Bradstreet’s methodology has been used by credit bureau’s globally for more than two decades.

The Bureau at present has about 26,500 SME members fromover 500,000 SMEs in the country, and 38 member financial institutions. These include commercial banks, development financial institutions and Islamic banks.

SMEs wanting to be members must sign a contract with the Bureau. Based on the principal of reciprocity, they can only then access information if they provide authentic data to the Bureau.

Lim stresses that the Bureau does not provide any recommendations to extend or deny credit to SMEs, but rather aid them in building a track record and financial standing for facilitating funding.

He points out that the Bureau has spent millions to ensure that the data retrieved and stored is safe and not open to tampering or abuse. He says it will make significant investment over time in its bid to become a one-stop centre for credit information for financial institutions and SMEs.

To beef up its credit ratings and to curb fraud, the Bureau will launch on Feb 1 Malaysia’s first Credit Monitoring Services (CMS) for SMEs. Early this month, it introduced a similar service for financial institutions. The CMS system monitors key changes in banking and business information, trade credit information as well as credit ratings of SMEs.

These changes in data are then sent out as email alerts to SMEs who subscribe to the service.

By alerting them, Lim says the CMS can prevent fraud and identity theft as well as any discrepancies or changes to their credit information.

Identity theft occurs, for example, if an SME’s identity is used illegally to apply for credit, and changes to credit information occur when there is new loan applications, enquiries by financial institutions, and other credit guarantors and utilities related updates.

Apart from receiving email alerts upon changes of their information in the Bureau’s database, SMEs may also purchase the self enquiry report separately if more detailed information is required, he noted. A nominal fee of RM50 per year will be imposed on SMEs that wish to subscribe for the service.

“An effective CMS system will ensure that SMEs growth will not be hindered or affected by identity theft and fraud. It also ensures their business registry and credit information are kept updated and accurate to ensure their applications for financing will not be jeopardised by inaccurate or out dated credit information,” Lim says, adding that CMS will promote good credit culture among SMEs, which will ultimately lead to more credit facilities in less time.

Source: The Star Business

Does YOUR ICT vendor provides updates often?

Last month we posted about the FRS 139 accounting standard. Now, the GST (Goods and Services Tax). Is your software ever ready for changes in policies and ready for upgrades as the policies change? Does your vendor charge you EXTRA when it comes to critical changes like these? Do you feel that each time government announces something new, you feel the burden and burn a hold in the pockets for implementing new systems?

Whether it is GST, VAT or withholding tax, XeerSoft has the experience in implementing these systems at Vietnam, Thailand, Singapore and now coming to shores of Malaysia.

Talk to us when you need to re-look your software and how we provide upgrades without extra charges when it is critical. Call us at 03-9284 8286 for a no-obligation 1-hour presentation TODAY!

Here are three reports in The Star newspaper on GST.

Should you fear the new tax?

By ERROL OH

GST can mean many things to many people and economists argue that it’s inevitable for the good of the country.

ONE Dr A. Soorian of Seremban must have drawn quite a bit of attention when his letter to the editor appeared in Sunday Star on Dec 27. Writing about the proposed 4% goods and services tax (GST), he describes the tax as “a broadband weapon with cumulative effects down the line”.

“When the manufacturer sells goods to the agent, he pays 4% GST, and when the agent sells them to the wholesaler, another 4% is levied. It does not end there. When the goods are sold to the retailer, another 4% is added. Eventually when the consumer purchases them, another 4% is hammered in,” he complains.

“The consumer is potentially liable to pay 16% tax in the upshot!”

(To read more, click here)

What you should know about GST

Because the new tax is complex and broad-based, we have a lot to learn ahead of its introduction. As a start, StarBizWeek has asked some experts to each highlight five key points.

(To read more, click here)

Making sense of GST

By CECILIA KOK

THE Government has never been as aggressive when it comes to consolidating its financial position until recently.

From ongoing efforts to restructure the various subsidy schemes in the country, and the removal of them in some cases, to the proposal of introducing a new tax format, called the goods and services tax (GST), or value-added tax (VAT) as it is known in some countries, one thing is clear – the Government is intent on putting up mechanisms that can trim its persistent financial deficits and rising debt burden to hunt for that elusive surplus and build up its savings to prepare for rainy days ahead.

Kenanga Investment Bank economist Wan Suhaimi Saidi puts it succinctly, “The country cannot continue raising debts to finance its deficits; otherwise, it will go into a debt trap. The Government needs to build surpluses, so that it can have more leeway in adopting measures that can stimulate and develop the domestic economy in the future, particularly when market conditions turn unfavourable.”

(To read more, click here)

Three biggest challenges of Travel Agencies and How Travel Agency Management Software Should Help

There are travel agencies which are still managing travels and tour packages manually. Too many papers are wasted daily to check on tours and collaboration among departments in the travel agencies is difficult.

Walk in to a typical travel agency and you see stack of papers on the shelf with all tour itineraries, some may even be outdated. If you are lucky enough, you get a good pricing for your tour because the travel agency did not update the pricing or tours on a real-time basis. Main challenges for travel agencies include business operations, costings and employee management.

Business Operations Challenges
- Updates of travel packages were not applied across all departments and branches, affecting front desk staffs selling packages with old pricing - incurring losses
- Difficulties for front desk staffs to check on updates as there were no online, centralized database
- Break-down in communications among departments and difficulty to communicate among branches

Costing Challenges
- Tremendous amount of papers used and wasteful printings for travel packages and itineraries - incurring extra overheads
- Employees need to work extra hours to complete checkings and coordination manually - incurring extra employees wages
- Communications using traditional methods including faxes, scans, phone calls and land lines incurring additional costs

Employee Management Challenges
- Fraud of employees punching cards for each other, making losses for extra overtime payments
- Leaves are managed manually without accuracy and often miscalculated
- Additional employees needed every end of month to calculate working hours to compute payroll

Travel Agency Management System - What is Good?
For a travel agency management system to work, it should at least have the below features. I am, however, generalizing based on typical travel agencies which still operate manually in Malaysia. For any IT systems to work, it should solve the biggest challenges and bottlenecks in your business. Therefore the below list is just a general one.

Real-time, centralized travel itineraries and uploading of tour files
- XeerSoft centralizes data and its powerful online engine allows uploads of tour files for immediate viewing, real-time information across whole company, branches and even with external agents, also allowing front desk staffs to disseminate information accurately

Fully integrated with back-end system
- XeerSoft is the first and only IT solution in Malaysia for travel agencies with full-fledged back-end system, including payroll, online photo-capturing time attendance system, e-leave management system, billing, accounting and financial implementation, customer relationship management and loyalty programs to name a few

Accurately calculate payroll and overtime for employees
- At month-end, time attendance information could be exported to XeerSoft Payroll System for calculation of basic salary, overtime and allowances, saving costs and time

Reduce frauds with photo-capturing time attendance system
- Employees punch cards no more! With XeerSoft, time attendance log is taken digitally with photo capture each time your employee logs in and out. It is online, so you can view attendance online, real-time

Audit log files for transactions
- Monitor transactions by viewing transaction history or audit logs of each amendment done to the system to avoid frauds

Multiple payment types
- XeerSoft systems allow multiple payment types including by cash, cheque, direct transfer, credit card or tele transfer

Integration with Google Apps
- Easily integrate with Google Apps and Google Maps for easy viewing of tours, tours management and arrangement as well as easier explanations to travellers

Connect and maintain centralized customer base with CRM system
- Customers registered for tours can be centralized in a common database for better customer relationship management. No more paper, filings and manual records of clients details - easy to search and store information digitally

For screenshots, more information and details on ERP system for Travel Agencies, kindly visit http://www.XeerSoft.com/Travel or call us for a complimentary, no-obligation consultation at +603-9284 8286 or email us at sales@xeersoft.com

Does this look like how your purchasing is done?

If you are still using this method, is time to change or time will change your business!

Are you still monitoring your stock level and when it reaches reorder level, you order the quantity to the shelf level? If this is the way you control your stocks and manage your inventory, is time for your business to change. Otherwise, time will surely change your business - to the worse. Smart purchasers and inventory managers use advanced analysis and merchandising system to help them have total control over their inventory.

Diagram 1 Traditional Replenishing of Stocks - when stock quantity reaches reorder level, purchasers will order back to the shelf level

This method of reordering is good only for items which sells at a steady trend - meaning a consistent quantity of stocks sell at a stipulated duration. For example, you may have a malt drink at your convenience store selling at 8-10 packs per week, consistently at this level every week. It is perfectly alright for you to use the traditional method.

Challenge 1: Differing Sales Trend
However, this is not the case for many businesses these days. With SKUs (Stock Keeping Units) over 3,000 in your inventory and almost all with different sales trend, traditional replenishing method simply does not work. There are items which could sell in an increasing trend, meaning it sells 8-10 in the first week, 15-20 in the second week and then 30-60 in the third. With such sales trend, if you still reorder using the traditional method, most likely customers walk in your store with an "Out of Stock" sign simply because the replenishing level does not support the uptrend in sales. On the other hand, if you reorder using this method for items with downtrend in sales, you will find your warehouse stocked with excess of these items.

Challenge 2: Loss of Opportunities
Customers walking in with an "Out of Stock" sign simply walk away to another store to purchase - you lost customers. On the other hand, when overstock happens, your cash flow is locked and logistics (warehousing, store keeping) cost increase. Either way, you incur losses.

Challenge 3: Focusing on ALL instead of CORE
With this traditional reorder method, it forces you to monitor ALL your stocks to ensure stock availability. Unless you have a sophisticated sales analysis which tells you which are your best selling items, you will have to control every single item in your store. Smart business owners analyse and focus on core products which bring in the most profits for their businesses.
Allow XeerSoft to show how 2 simple technologies could assist analysis and reordering.

ABC Analysis

Diagram 2 ABC Analysis analyses your core products which bring in the most profits to your business

ABC Analysis helps to analyse core products for your business. Using the Pareto 80/20 rules, it says that 80% of sales comes from only 20% of your stock. Do you know which 20% of you stocks is really contributing to 80% of your sales? With ABC Analysis, system tags A items which contributes 80% of sales, allowing you to further configure percentages for B and C categories of items. This way, you know A items contribute to 80% of your sales.

In a case study, a retail client actually manipulate this record to ensure he knows exactly his A items every week. He then ensure stocks is always enough for A items. He also strategies his business by doing promotions on B and C items, partnering with suppliers of A items for better pricing as well as negotiating with suppliers for extra discounts so margin will be higher.

Auto Reordering

Diagram 3 A good reorder system will take consider sales trend of each item before suggesting a reorder level

Auto Reordering identifies sales trend for each item to then suggest a reorder level for your inventory. For items in a decreasing sales trend, the system will suggest a lower reorder quantity. Likewise, for items with uptrend and increasing sales in nature, auto reordering suggests a higher reorder quantity. With less focus on reordering methods and lesser attention in the purchasing department, business owners can focus on sales and core business functions.

Is It Time to Change?
To get started, analyse your business if there is a need for such technologies. Signs of needing such a technology includes:

• Inventory and stocks are often in a mess
• Items are often out of stocks with no visibility, especially when having multiple stores
• Having at least 3,000 item codes (SKUs) especially with difficulties in managing multiple codes for the same products
• Having to hire more than 5 purchasers just to maintain stock levels and each one works their butts off
• Not knowing inventory levels at any point of time when needed

If you face 2 of the above signs, is time to change - for the better. Talk to XeerSoft if you need to have us take a look at your current inventory system. Fix a no-obligation presentation appointment with our solution consultants today by calling 03-9284 8286 or email sales@xeersoft.com.