SELECTING AND DEVELOPING SMALL BUSINESS SYSTEMS
Potential Problems And Pitfalls
By Michael Sawyer, President of Sawyer Software
As microcomputers become more powerful and inexpensive and personnel salaries increase, the use of the microcomputer for business applications becomes more and more attractive. The small businessman however, unaware of whether the capabilities of the microcomputer can meet his company's needs or interface properly to existing applications, is left with a monumental decision. This article will address itself to aiding the small businessman in answering this question.
There are four main elements to any computer "system." These are hardware (the actual computer equipment used), software (programs used to instruct the hardware what to do), personnel required to operate the system and the procedures necessary to accomplish any given task. It is extremely important for the small businessman to consider a system rather than just the equipment used.
I've talked to many a small businessman who after investing thousands of dollars in equipment found no software to fit their application or found interfacing their application to their computer equipment both frustrating and expensive, if not impossible.
Without the other elements of a computer system a piece of computer equipment is useless.
Before evaluating each of the four elements of a computer system the small businessman must define what applications he would like to involve the computer with and define his purpose in utilizing a computer system. If the purposes are cost and time effectiveness, he must define present cost and time necessary to complete a particular application, to have some degree of comparison to the microcomputer system.
Without fully defining current applications or present costs the small businessman loses any prospective of comparison and often ends up with an inadequate computer system.
Some standard applications which are suited to the microcomputer are Payroll, General Ledger, Accounts Receivable, Accounts Payable, Word Processing and in certain instances Inventory Control.
When defining your application divide it into three parts. The first is the information required to implement a specific application. Below is a payroll example:
NAME ADDRESS SOC.SEC.# SALARY/HOURLY RATE MARRIED/SINGLE # OF EXEMPTIONS EMPLOYEE # YR TO DATE, QUARTERLY, CURRENT FOR THE FOLLOWING: GROSS FED FICA STATE CITY TAX OTHER DEDUCTIONS
The next section is what the computer is to calculate or figure:
FEDERAL TAX FICA TAX CITY TAX NET PAY, etc.
The last section is the reports or print-out you want:
W2's, 941's, Payroll Register, Name changes/additions, Cost accounting-payroll summary, checks, etc.
By this time you should have a good idea of your present cost and time involved along with your defined applications. It is important to be properly prepared before purchasing any equipment.
There are several things to keep in mind before "shopping" for a microcomputer system. The first element of the microcomputer system is the hardware.
There is so much hardware available on the market today it is difficult to know what to choose. Also many companies are having financial trouble or have left business completely. When purchasing a microcomputer, it is probably best to consider the popularity of the microcomputer. The top three selling microcomputers of 1978 were the TRS-80, PET and Apple (in order of sales). I am not inferring they are the best or the only microcomputers that can be used, but because of their popularity these microcomputers have more software available for them than other microcomputers and can usually interface to more peripherals such as floppy disks, fixed disks, printers, etc.
An unpopular microcomputer may not be well supported by software companies, user groups, or peripheral companies and therefore end up with a very short life or lack of long term support by the microcomputer industry.
My suggested minimum system for a business environment is a system with at least 32K, two floppy drives and a printer. The price for such a system will be $3,500.00 or more. Some small businessmen may be able to use a cassette based system, dependent upon the volume of accounts, reducing that figure by $1,000 to $1,500.00. However, for reliability and speed the floppy disk is certainly worth the extra cost.
In considering any hardware, service is important. Find out who will service the equipment, where they are located and how long (maximum) it will take, along with what the charge rates are. Radio Shack is the only microcomputer company I know of that has a service contract, although most computer stores will service the equipment they sell.
There are three basic ways of obtaining software. The first is "custom" software which is designed for your individual company. It is usually the best, but also the most expensive. It can easily cost as much in custom software as the hardware to build your system. The second type is "canned" software, which is what most software on the market for microcomputers is. It is generally less expensive than custom software, but usually incorporates only standard features of a certain application. It will lack non-standard reports or information your company may need. The third type is hybrid — a "canned" program which is modified for your own company. This type of software is becoming a more popular type to achieve low cost and still fulfill the specific needs of your company.
If you have a computer store near you, that is the best place to evaluate software. Use the application sheet you used to define each application to make sure the software fits your application. Simply buying a Payroll or General Ledger package without evaluation is like walking into a clothing store and buying a suit without trying it on.
If no computer store is available contact a software company about your application. Most software companies offer brochures, but often the brochure will not answer all the questions you may have. Writing a letter explaining exactly what the software must do will give you the feedback you need to make a decision. Ask for print-outs of any reports the application generates and when the program will be delivered. Also ask about custom programming charges to modify the program if necessary and what documentation is available for the software.
Failing to evaluate software before purchasing may lead to an inadequate microcomputer system.
Operating a microcomputer is a learning experience which requires time and patience. Some people have a natural ability when operating a microcomputer, while others find it very difficult. This factor alone can substantially affect whether the microcomputer becomes a tool or a nuisance. All personnel that will be involved in operating the microcomputer should have several hours of "hands-on" experience if at all possible. Comments from personnel will aid upper management in the decision making process.
Failure to involve personnel who will be responsible for data processing with the computer system at the initial level may result in a large amount of lost time or frustration for the personnel involved with the computer system.
Procedures are an important element of the computer system and are usually dependent upon the application software. Procedures should be simple to perform yet provide the necessary functions for your application. Adequate backup is a must, for each diskette can hold a mass of information which can be lost in a number of ways. Procedures should cover methods to edit or change data. Program response when you key in incorrect data is almost as important as if you key in correct data.
Confusing procedures cause confused personnel, loss of time and money.
The computer store is a valuable place to evaluate the microcomputer system. Be sure to take the person who will be responsible for operating the microcomputer with you on any "shopping" trips. If at all possible let them operate the microcomputer rather than the computer store owner, so they can get a "feel" for the system. Be sure to ask the owner the following questions:
Does the store provide training for your personnel?
Who will service the computer, when are service times and how long can it take?
What additional equipment will interface to the microcomputer system, if you need further expansion?
Can you get software modified and what is the cost for such modification?
What is the maximum number of accounts or employees the system will handle and how can you add more in the future?
Look at several microcomputer systems and don't buy on impulse. Substantiate your need to buy the microcomputer system. In the end you'll find the time involved will pay off.