E-business, the use of the Internet as a business tool, is a major component of growth. Whether you plan to create an online store, use the Internet to process payments or to communicate with your customers, any plans you may have to grow your business should take the mass potential of the Internet into account.

Information technology can be an effective way to make your company more productive and profitable — especially if you’re competing with low-wage countries like China and India.

Whether it’s integrating your processes, enhancing your marketing abilities with a customer database, better managing receivables or improving supply chain management, the right technology can dramatically improve how you run your business. Although it sometimes requires a significant investment, the long-term advantages usually far outweigh the initial costs.

Customer relationship management

Another term often used in e-business is customer relationship management or CRM. CRM uses technology to improve your insights into customer needs and behaviour as well as the management of your relationships with clients. Some companies use it to create personalized call centres where technology recognizes incoming phone numbers and automatically calls up customer information for the representative taking the call. A CRM system can also allow travelling sales and repair personnel to use mobile wireless transfers to pull up information on customers.

Benefits include an improved ability to anticipate clients’ needs based on historic trends, targeted marketing that reaches specific audiences and increased sales through better client relationships.

Even if CRM technology is not within your budget, you can put some of its basic principles into practice. For example, in most businesses, entrepreneurs deal with customers using a variety of means including email, faxes, phone calls and letters. Putting this information together can help you improve customer service by tracking on a spreadsheet your dealings with customers (who said what to whom and when), for example, or by identifying top clients so that you can offer them special promotions. This information can also be used to customize products to suit the needs of customers or to target certain types of clients with specialized newsletters.

Web 2.0

Web 2.0 is a term used to describe a whole array of interactive web technologies, including networking, blogs, podcasts and online social networks. Businesses can tap into these technologies to communicate with customers and partners or to collaborate internally.

Podcasts or video recordings

Entrepreneurs can use this medium to communicate with employees, customers or prospective customers and promote new products or features.

RSS (Really Simple Syndication)

This enables customers to subscribe to online news, blogs or podcasts in order to receive up-to-date information on developments within your business.

Social networking systems

These can be set up internally to enable employees to exchange information, skills and knowledge. Such networks can be used to design, develop and make innovations to your business’s products and processes.

Database management

Databases allow information such as customer mailing lists to be managed in a systematic and controlled way. Relational database management systems can electronically link various aspects of your business, linking a customer with a specific product or service that they regularly purchase, for example. In turn, your business can better keep track of customer behaviour and ensure that targeted marketing reaches such clients. This type of tool allows you to get closer to your customers by better understanding their needs. It also helps you process information such as client sales patterns, analyze data in ways that can shed light on a specific aspect of your business such as marketing techniques and spend less time managing your data.

The best choice of database management software depends on the complexity of your business.

Shop around

Before you invest in any of these technologies, do a careful assessment of what’s available on the market to determine which is best suited for your company. (Most of the time, you should be able to find an industry-specific solution.) You can do that by subscribing to specialized sources such as electronic journals, databases or research services, attending trade shows frequented by software vendors and networking with organizations in your industry that have already tried and tested new innovations. Finding out what your competitors are doing can also help narrow your search for solutions specific to your industry. The web and universities that publish studies evaluating technological innovations are also good sources of information. Simply type “technology watch” in any search engine and you will find a wealth of information on the latest trends.

All of these tools are readily available today and affordable for small and medium-sized businesses. Each product and vendor has its strengths and weaknesses. Some systems provide rich industry-specific functionality but lack fundamental accounting features. Others provide a broader feature set that can be customized to meet the needs of different manufacturing methods and industry requirements.

When you make your decision about your software application, you need to consider your expected growth, the viability of the vendor, the stability and functionality of the product and the availability of third-party add-on solutions. Other key considerations include the total cost of ownership and the potential return on such an investment.