IT needs determined by business plan direction: the key is to determine where IT fits into your company's plans.

For the modern business, using information technology (IT) all through the production chain can provide real competitive advantage.

Just ask Roy Dittman, vice-president of systems and customer service at Three-H Furniture Systems in New Liskeard.

Over the past several years, Dittman has developed the system to go from the initial order from the retailer to design, calculate the weight and hardware requirements of the order and allow the retailer or customer to track the order through the production process on the company's Web site.

"Our business really isn't able to function without this kind of system in place," says Dittman

Dittman is a production engineer who has been developing these kinds of systems over the past several years. The system he designed is exclusive to Three-H.

"A lot of the mainframe concepts and ideas we were using back then, I've been able to adapt and apply them to this system here," he says, adding the technology over the past 12 years has evolved significantly to make the process possible.

"The multimillion-dollar mainframe systems we had then had a lot less capability with graphics and other things than systems we have today," he says. "Today, a system that might cost you $20,000 has a lot more capability and storage with graphics and database applications."

Maggie Matear, director of operations for the Northeastern Ontario Communication Network (NEOnet), says assisting companies in integrating information technology into more functions of their business process is one of the main goals of the organization.

The important consideration for any business is that it makes sense for the direction they want their business to go, she says.

"You can't really say generically that it is a good thing or not," says Matear. "It has to go back to the business plan, what the goals and objectives are and what the competitive environment is. If the business uses only two suppliers for all its raw materials, it may not make sense to incorporate a computer-based buying system. It may cost more to maintain the system than making a couple of phone calls."

On the other hand, she says companies that deal with a large number of suppliers would find a computer-based purchasing system more efficient and cost effective.

"It would all depend on how many transactions you're using," she says. "Different automated systems and how much they cost determine who you go to, to set up the system."

The key is where technology fits into each element - financing, resources, processes and management strategy - of the company's business plan. Matear says Industry Canada has benchmarking studies on its Web site www.ic.gc.ca that can help a company decide if this is something that is a good direction for them.

"Technology should not be considered a separate function of a business, but should be underlying each of the functions of your business plan and I suspect if you talk to those who are most successful at it, that's what they've done. They haven't just tacked it on. They've thought about their business strategy and how technology can help them streamline those functions."

It has worked out well for another Timiskaming-based company, the Highway Book Shop in Cobalt.

Co-owner Lois Pollard says computerization is "of primary importance," particularly the Internet.

"I don't think it would be exaggerating to say that it has increased our sales by half, particularly in the winter months," she says. "In the summer, we do O.K., anyway, with the tourist traffic...this summer was good. I think people had seen us on the Web."

Change is always difficult and there is no magic formula to determine when to go to an IT-based system. The key is to consult people affected by the change and allow them to have input into the process, says Matear.

"You have to have top management buy-in," she says. "If the owner or manager of the company doesn't believe it's a good idea, then neither will the staff. If they're not convinced it's going to work, it isn't going to work. It could be a massive change from paper oriented to automation but it can be made easier if everyone communicates what's going on and involves all the key stakeholders in the process.

"Generally, when people are making an IT upgrade, it's not the technology that screws things up, it's the communication with the people involved and the process used to integrate the new technology that causes the problems."

www.incard.ca/highway_bookshop.htm

www.neonet.on.ca

By ANDREW WAREING

Northern Ontario Business