Marvin Richardson is chief technology officer of MCI Systemhouse, which advises clients on setting up the best computer system for their needs. He was the Nov. 4 guest in this Business Week Enterprise chat, part of America Online's Your Business Dinner series, to answer questions about systems for small business. He was online with Fred Strasser, BW associate editor in charge of Enterprise, published seven times annually for small business and entrepreneurs.
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JackBW: Welcome to this week's Business Week Enterprise chat, part of AOL's Your Business Dinner series. Tonight's guest is Marvin Richardson, chief technology officer of MCI Systemhouse, to talk about designing the best computer system for your business. I'm Jack Dierdorff of BW Online, your host for this chat.
This chat is presented by Business Week Enterprise, the edition of BW published seven times yearly especially for small business and entrepreneurs.
MarvinMCI: Thanks, Jack!
JackBW: Marvin, assume I have a small business and NO computer setup yet. Where should I start?
MarvinMCI: Well, you need to first look at the type of business requirements for your small company. For example, if you are in a manufacturing organization, you may only need some front-office support systems for administrative and clerical work. If this is the case, you can stay pretty basic -- meaning a small network of three or four PCs and a file and print server. Of course, some manufacturing businesses have needs for computing resources on their shop floor. In this case, you need to look at ruggedized equipment and manufacturing software packages.
JackBW: Let's pause to introduce SmallbizBW. He's Fred Strasser, associate editor of BW in charge of the Enterprise edition. Welcome, Fred.
SmallbizBW: I want to especially welcome Marv and Systemhouse. I had personal experience with the outfit long before MCI, when they integrated the system at my former newspaper. This is one knowledgeable bunch.
MarvinMCI: Our name in the U.S. is MCI Systemhouse. Our name in the rest of the world is SHL Systemhouse. Of course, you may have heard that MCI and British Telecom agreed to merge over the weekend.
JackBW: Yes, a slight news story! I'm sure you can read more about it in BW this week.
SmallbizBW: Marv, how is anyone supposed to keep up with all the changes -- the daily changes -- in technology? What do you think the average small-business person really needs to know and, generally speaking, needs to keep abreast of?
MarvinMCI: I don't think it's realistic for anyone who is not in the technology field to keep fully abreast of technologies. The market just changes too fast, as you mention. Now, what does one need to know? Well, I think that a basic understanding on personal computing, including the prevalent desktop software and standards, will keep one from choosing niche packages that are hard to support.
JackBW: Marv, tell us what MCI Systemhouse can do for a business.
MarvinMCI: O.K. MCI Systemhouse provides services that will help customers assess their computing needs and choose the right combination of hardware and software to keep their business functioning at maximum productivity.
BobABW: What's the basic stuff most small businesses need -- types of hardware/software/network connections?
MarvinMCI: Hmmm, by "types of" do you mean brands or general configurations?
BobABW: The latter.
MarvinMCI: O.K. A small business needs an LAN [local-area network] with a server for printing and files, a backup device, a hub, and a number of PCs for desktop use. A printer is very important -- I mean one that matches the needs of the business. For example, many businesses underconfigure their print capacity and upgrade quickly.
Wilserb: Great stuff -- a business needs all of the above. Good evening. I designed the computer software for my firm, order entry, Inventory, etc. What type of software do you recomend for the apparel business?
MarvinMCI: My company generally recommends more infrastructure kinds of software and looks in detail at application software to determine if it meets specific business requirements. It's very tough to make generic recommendations for a specific type of business without the requirements of at least a high level, plus, of course, the sizing information like how many users, products, customers, etc.
BobABW: So to follow up, how much per desktop (in capital dollars) should a small business plan to spend for a companywide computer system? Any guidelines?
MarvinMCI: About $5,000 to $7,000 per desktop. This includes midlevel PC hardware, a network, and a midsize server and printer. Also some software, but not application software -- just general office automation stuff.
BobABW: Marvin, how long should this stuff last before it's out of date? Three years? More?
MarvinMCI: Well, accounting says three to five years, but desktops will tend to be very usable for two years, and then better hardware will pay for itself in productivity and its ability to run new software that's out. Also, for laptops the cycle is quicker -- more like 18 months.
JackBW: Do you make any recommendations on setting up Net links and/or Web
sites?
MarvinMCI: Yes, with all due modesty, MCI Systemhouse is pretty good at this. And, of course, we use MCI's network.
SmallbizBW: What is your take on Apple at this point? Are Macs still easier,
simpler to network, learn, etc., or is the ease-of-use edge now gone?
MarvinMCI: Good question! The Mac is still easier to use and set up, but most applications are much more widely available in the Windows 95 environment. The Mac is still a good choice in publishing and graphics design environments, but other areas are better suited to the PC.
D1UCK: The price you gave to start a business system, does that apply also to an in-home business system?
MarvinMCI: I think that for a home you could probably get by with a very large desktop system and forgo the LAN setup. But you still need an industrial printer, and if you
plan to use the net a lot, consider ISDN [integrated services digital netowrk].
BobABW: Any best brands of equipment for small biz, or all about the same -- once you make the Mac/PC decision?
MarvinMCI: I still recommend mainstream brands for a business. Compaq, IBM, HP, Dell provide the kind of hardware -- more important, the right level of support for a business. Remember that support can cost up to $10,000 per year in lost productivity and other costs if it's not well managed..
BobABW: Maintenance contracts or not?
JackBW: What's the system size at which you need in-house technical support?
Those two can go together.
MarvinMCI: Maintenance contracts are usually worthwhile on both home and small offices. In-house tech support -- this is required when you have the following characteristics: mission-critical workstations (customer interaction) or manufacturing process controls or high-change environments.
Isswethct: For maximum production, WP in DOS or Windows vs. Microsoft Word?
MarvinMCI: In the DOS environment, WP is more prevalent than Word. For this reason, you can usually find more temporary staff, etc., to help out on WP. In the Windows world, the opposite is true -- so Word is the choice. Now the tougher question is which is more productive for the experienced user. On that, we've found that an experienced user can make either one hum -- we use Word in our company.
BobABW: I know it'll vary by business, but any rules of thumb on when it makes sense to have your own programmer(s)? Revenue size? Number of employees?
MarvinMCI: For a small business, you should really strive for commercial software packages wherever possible. I know of companies with 50 employees and several million in revenue that do not use any custom programmers (as opposed to system administration). However, a few very small companies -- such as a customer of ours with only 20 people -- use custom software, since that is how they differentiate themselves from their competitors. So I guess I'm hedging a little, but the basic message is that it is generally much more effective to use packages for the small-biz environment.
SmallbizBW: I wonder if you see a lot of overbuying in the technology area, either hardware or software?
MarvinMCI: This varies by business type -- in the government market, we see a lot of buying at yearend :-). However, what we usually see in the small-biz market is people who try to extract the last nickel of life from an old PC. When you compare the productivity of a new PC and new software to that of a three- to four-year-old system, you can usually find a good payback in a short time. The exception is when you have something like an old point-of-sale system that runs well on the 386 it was designed for, and it still meets your business needs -- no reason to change for the sake of change.
BobABW: How much do companies such as MCI Systemhouse charge for advice? What makes the advice worth the price?
MarvinMCI: MCI Systemhouse charges in the same ballpark as other major integrators such as Price Waterhouse, Andersen, EDS, so our rates probably range from $500 to $2,000 per day. How are we worth it? Well, we've got the experience and the stature to take full responsibility for solving a company's business problem using technology. This is much different from some consulting firms that really just provide a person for a set time, without taking ownership of the problem. Also, we have alliances with the major suppliers such as Microsoft, HP, Compaq, Sun, IBM, etc., and we can leverage our buying power to ensure that we solve your problem.
BobABW: What percentage of small businesses do you think have yet to take full advantage of computerization? And what type of competitive advantage are they missing out on?
MarvinMCI: I think that most have yet to take full advantage -- but the problem is really that it can be a challenge to easily install and maintain a small computer system when you don't have the resources for full-time help. However, the situation is getting much better! Windows 95 Plug & Play makes lives a lot easier and reduces training requirements. By the way, if you're in a "can't crash" environment, then the new Windows NT 4.0 has the user interface of Win95 but provides premium reliability.
LFlury8996: Is Lantastic a fairly good network system?
MarvinMCI: Lantastic has been a reasonable low-end system. However, I question whether they will be viable for much longer, since Microsoft has built almost the same capabilities into Windows 95, and network cards, etc., are quite inexpensive. Some network cards are even preinstalled, and setting up a Windows 95 network is quite easy (I have one at home).
LFlury8996: The Windows 95 network will be my next step -- first year under my belt, thanks.
SmallbizBW: Returning to the overbuying question, I wonder what tech mistakes people in here have made? Have they spent wisely? Has anyone set up a small office at home or elsewhere?
JackBW: Anyone have a comment? Or a question? JMBN, you're on. Thanks.
JMBN: Do Windows 95 and Windows Plug & Play interact?
MarvinMCI: O.K., JMBN. Yes, Windows 95 comes with Plug & Play, which works for all Plug & Play devices (look at your PC and card labels before you buy).
STEELECITY: I need to upgrade my memory. I have not formed my business yet. Should I legally form a business so the RAM is listed as a business expense?
MarvinMCI: There is a variety of ways to deduct a RAM expense, even if you are an independent consultant without a formal corporation. However, RAM is probably cheaper than incorporation, and that type of business advice is best from your accountant, not your techie!
STEELECITY: Good point. Thanks, Marvin.
SWebs34719: I need software for a five-man business (100% DOD).
MarvinMCI: SWebs, what did you mean by 100% DOD?
SWebs34719: Dept. of Defense is the customer.
MarvinMCI: O.K., so you mean security standards, or ruggedization or...?
SWebs34719: Yes, security.
MarvinMCI: You can get versions of Windows NT and most versions of Unix that are C2 certified. This is O.K. for most DOD work. Some require B-level certification, which is typically only available in very specific versions of Unix or some older proprietary systems. What kind of apps are you looking for?
SWebs34719: Cost accounting, payroll, etc.
MarvinMCI: I think you may have a challenge getting secure applications in the PC market. As such, you will probably have to look to higher-end applications (higher cost, too!) such as Oracle Financials or Peoplesoft.
YBizBob: Why would a person with only one computer need a network?
MarvinMCI: If one only had one computer, no network is required. However, you may benefit from a laptop PC with a network card that can connect to a home system or office system if you are frequently mobile.
JackBW: That looks like the last question. The guest in this BW Enterprise chat has been Marvin Richardson, chief technology officer of MCI Systemhouse. Thanks, Marv, for being with us tonight. You were most informative.
MarvinMCI: It was a pleasure! I hope I helped out a little!
BobABW: Thanks, Marvin.
JackBW: Thanks to you, too, Fred Strasser (SmallbizBW) of BW Enterprise.
JMBN: Thanks, Marvin.
MarvinMCI: Thanks, all! Bye now, and best of luck in your computing endeavors!
JackBW: Be sure to visit BW Online's Enterprise/Small Business Center for lots of helpful information, including all the BW Enterprise editions. Transcripts of this and all BW Online events are available soon after the event. Look under Talk & Conferences on the opening screen. Goodnight to all!
Copyright 1996 by The McGraw-Hill Companies, Inc. All rights reserved.
