Flying high on tech

Frederick Yong, Singapore Hobby Supplies' business development manager, sees IT as the way into the future.

The second-generation business owner hunts for solutions online and works with a service provider to computerize Singapore Hobby Supplies' systems.

The combination has helped the distributor of remote control model aircraft and spare parts monitor inventory and access prices in seconds.

Frederick Yong, business development manager, Singapore Hobby Supplies.

Q: What plans do you have to align IT with your business goals?
A: For the last three years, we've been increasing our IT expenditure. One of the key things we've been trying to do is to automate our inventory (barcode) system to reduce duplication of data and work. The less time we take to do something, the better it is. Previously, we had to write every item that a customer bought. If he or she bought 10 spare parts, you'd have to write each item every time and use the calculator to compute the cost. The invoices could be up to three pages long.

We've also been integrating the inventory and point-of-sales (POS) systems. We also bought a few handheld barcode scanners this year. You can scan the barcodes and prices of 8,000 items including spare parts. To find out the price of each product, the printed price list will be long. The scanner then becomes a price list in that sense.

Some of the products don't even have their own barcodes and we have to create our own barcodes for these.

Training is important. Before implementing the barcode system, the staff went on Windows interface training, so that they don't fear the computer system or it crashing. Being a small company, we consider the costs and benefits before implementing any system. For example, we bought one unit of the barcode scanner and sourced for programs and solutions providers who could help us, before we went ahead in a big way.

It took us nine months to a year to consider using the system because we were looking for the most reliable and affordable service provider. Many of them were selling the solutions we needed because Spring Singapore was promoting them. But we didn't want to be hasty and put ourselves in a position where we have to relearn and change our whole workflow.

We've been working with Systems Integrator's software for the inventory, barcode scanner and POS systems because the solutions are scalable. They are also our consultants.

How applicable is maintaining good corporate governance as an IT priority next year?
To us, it is integrated to our objectives because we are owners of the business. We want to run the business to our benefit.

Part of our financial systems, which captures sales, is integrated (into the other systems) but automating profit-and-loss statements and the balance sheet is not yet there and is not top of the list. We are a small company so we know our numbers quite well.

I've seen how the SAP and JD Edwards work during my accounting days in PricewaterhouseCoopers and you need a full-time, in-house staff as a middleman if we were to use these providers' systems.

What steps do you plan to take in the next 12 months to improve efficiency in your organization?
We're considering using a wireless network where we can retrieve information of our stock in real time. Now, information is downloaded into our handheld scanners but the information is not in real time. In a year or two, we'll implement this wireless network.

Do you have data of customers' preferences and if yes, how do you ensure customers' data privacy?
No, we don't have a customer relationship management (CRM) system in place. We know our customers' preferences by heart. A CRM system is a consideration, but of course we'll have to weight the maintenance and hardware costs.

"We didn't want to be hasty and put ourselves in a position where we have to relearn and change our whole workflow."

What are the drivers behind next year's IT investments?
Increasing efficiency is the key reason that been investing in IT.

What is your organization's IT budget forecast for next year?
We're looking at S$10,000 (US$6,093). We're not capping the figure—if we find that we can increase our efficiency so much by just spending that dollar, we will invest. If we can tap into some of the government's grants to lower the cost, we will.

Compared with this year's IT budget, will the 2005 one increase or decrease?
It will be the same.

What proportion of Singapore Hobby Supplies' IT budget will be spent on hardware, software, services, staff training, info-security and so on?
Generally, software and services together will be 50 percent, because our service provider also provides the software. Staff training will take 10 percent, as will info-security. Hardware will be 30 percent.

What are Singapore Hobby Supplies top three technology projects for 2005?
To implement the wireless network for the barcode system.

How helpful will it be to have customers' data stored?
Customers walk in knowing what they want to get. Our POS system also captures the items sold. I've been looking at Microsoft, GoldMine and ACT! but the costs and benefits will still have to be weighed.

What is Singapore Hobby Supplies' preferred approach to IT deployment and management?
A combination (of doing it in-house and outsourcing to an external service provider). I'm quite IT-savvy. The handheld devices were my idea. I searched the Internet for software and bought the software suitable for my needs, which are to pull out the data from the inventory system into the barcode scanners.

I downloaded the software into one barcode scanner and it worked. I wanted to make sure the software is worth the expenditure and is something I can use. The download took at least half an hour for one device.

I then went to my service provider and told them the format I needed. With a click of a button, Systems Integrator took five minutes to download the data into each scanner, and at a cost of at least 50 percent lower.

What are your organization's top strategic info-security priorities for 2005?
We have daily scheduled and remote backups of data. We don't need firewalls because we are not connected online across the company and we don't have a dedicated server. We have antivirus software in place.

Who makes the final decision on IT investments in Singapore Hobby Supplies?
My father, Johnny Yong, who is the managing director, makes the final decision. He'll consider my recommendations of IT solutions, because I'm inclined towards IT. I believe IT is going to be the way for the future.

Don't jump into the first solution that comes by. Hear testimonies of other users. For SMBs, the cheapest solution may be the best solution for you.

Lai Ee Na is a freelance journalist based in Singapore.