A Dime a Dozen Small Business, Tech and Talk

Maybe it is because of my technical background. But I have found that suggesting, recommending, or hoping that a broken server would fix itself, or that the implementation of a technology solution would materialize by itself never worked for me.

What did get it fixed or implemented was focusing on the current issue, looking at deliverables for short, medium and longer term, then seeing how we were meeting them.

I have provided tactical and strategic consulting to various sizes of organizations over the years, and been involved with organization that have executed well, and some that have not.

A shotgun approach of ideas, concerns, issues, directions and goals simply leads to a scattered half hearted attempt at defining a fuzzy idea into a fuzzier output or requirement.

The print heading of A Canadian Business article here puts it quite succinctly;

The goal of business isn’t to generate activity; it’s to produce results

Geoffrey Moore says it in “Crossing the Chasm” (see influential reading on this site) - sharply focus on one point in your market push. Just as an army does, you cannot attack over a wide area, you break through with point thrusts and widen the wedge.

Ram Charan and Larry Bossidy on Execution (also in influential reading) is solely dedicated to it.

In the SMB space, doubly so if you are growing, it can be difficult to carve out the time required to properly execute. But it is a necessary component for growing your business. I am not going to write all that is in those referenced texts, but in short;

You and your team need to identify the one or two most important issues or goals covering the short and medium term, along with your longer term vision. Keep it in focus, and avoid the shotgun approach of too many, or too scattered ideas or initiatives. With these goals communicated, ensure that regular and formal updates and “SitReps” (situation reports) are presented. Right up until the time you sign off on the fact that it is either completely finished, or you have chosen not to further pursue the issue or idea.

I personally prefer a more formalized Project Management methodology, but the exact structure may vary depending on organization size and type. What cannot vary is that there are particular duties or tasks that are explicitly assigned with explicit deliverables. And that regular scheduled updates are recieved on the status of these deliverables. This ensures that everybody understands the relative importance of each issue or goal, which helps ensure that time is not wasted working on less important, or lower value work.

Carving out that time may seem difficult at first, but that investment will save a lot of time and wasted resources over the longer term.

A recent post by Marketing Guru Ron Shevlin is titled “Debunking Marketing Myths: Single View Of A Customer”. Mr. Shevlin seems to paint a pretty accurate picture of the “CRM” universe as not supplying the desired bang for the buck in “knowing your customer”. I find that a lot of the issues he identifies can be classed under “information overload”. How much data do you collect, and in what areas of contact does it have any real value. Lack of this this information makes it just too burdensome and risky.

I can agree with the “macro” points, however in my humble opinion, the “basic” business specific data that you have collected about your relationship with your customers should be used as a method of driving new sales, and increasing customer satisfaction.

You will notice my emphasis on “basic” - I don’t want my credit card number on your call centre rep’s, or receptionists desktop.

Here is an experience I had recently, an opportunity to gain incremental revenue from me was lost by a vendor in my local region. Losing a revenue opportunity by losing a customer is bad enough - but giving it away by not even trying? Before going further with this opportunity lost, lets look back in time.

Twenty five to thirty years ago, there was some real brand loyalty.This loyalty was, if not written in stone, then was at least a fairly consistent and desired end. Brand loyalty, whether it was for large products such as automobiles, and down to small ones such as toasters or stereos, the product was often purchased because it was made by a particular manufacturer. Brands were almost as sticky as our voting habits on election day.

We all should know that those days are gone, I am just as “guilty” of that as anyone else. I have owned cars manufactured by at least 7 companies, My home entertainment system is a mix and match of another half dozen brands, and I haven’t even a clue what brand the toaster is wearing.

We don’t have that luxury of sitting on brand identification any more. Some large organizations try to maintain some of this brand stickiness by improving the customer experience through enhanced customer communications management. Using previous history and recommendations we get those targeted mailings that try to spin products and keep our “mind share” of the brand. Granted, 1 to 1 Media has a great comment on how not to do these targeted (or mis targeted) communications

Mistakes like the above notwithstanding, we must make better use of the information that we do have to drive revenue - particularly in the durable goods, IT and other channel based industries. While margins on many goods and services purchases are shrinking, more top line revenue is coming from servicing those purchases. Not to mention good service keeps your brand top of mind.

You should be capturing that sales information, you should be using it to market after-sales parts, service, accessories - whatever fits your product. Don’t leave those dollars to someone else. I guarantee that the “someone else” is out there looking.

Now we can return to my opportunity lost, Approximately 2 years ago I purchased a new vehicle, but at that time I chose not to purchase the extra service warranty or other financial products that the dealer was offering.

So now we fast forward almost 2 years, and I have the car in the service shop for an oil change and maintenance with just about 5 thousand Kilometers (approx. 3100 Miles) before the default service warranty expired.

Being in the Technology field, and with a strong interest in marketing, I was wondering to myself how long it would be before I received something in the mail (or email) plugging the extended warranty and other finance products.

I never got it. They don’t know me.

I mean the sales guy knows me, he greets me by name whenever I am in the dealership. The service guy also knows me, when I call for service, or arrive for service, they greet me. However the “organization” that they work for does not know me. If they did, what the sales staff knows (no extended warranty products were purchased) and what the service staff knows (warranty almost expired) would have been an open invitation to initiate a dialogue on the extended service warranty opportunities.

As an IT Manager, I can quote a dozen jargon words on customer relationship technology, but at the end of the day, the job could have been done with cue cards and post-it notes. The process is more important than the technology.

“if you get the product, price, and location right, service is the most important variable” Larry Stevenson - founding CEO Chapters -Canadian Business magazine February 18 2008

SaaS - or “software as a service” - No it is not perfect yet. Microsoft has issues with its Live Services for a good portion of the day yesterday.

It affected logging in to MS Live applications including Hotmail, (and Sympatico mail in Canada) as well as X-Box live and other Live applications.

As more businesses run their applications and tools from third party providers such as Microsoft, these long downtimes will become less and less acceptable.

Of course your own internal network may be more at risk from having a full failure than a company the size of Microsoft. It does goes to show though, you must view your risks and strategies along multiple alternatives

I liked this article at 1to1 Media Forrester Research is quoted as saying that 20 percent of High Definition Television (HDTV) sets sold at retail are returned - not because they are defective - but because the consumer had no idea that the set was not going to give the expected HD user experience unless both your cable provider has HDTV services, and that you are paying for those extra services.

I was happy to read this, because I am now aware that I am not alone. Over the years there has been more than one instance where I have purchased something that had a dependency that that would negate its usefulness unless I had that dependent part or piece. Even in speaking with sales people at the time of purchase - in these cases not one had said - “by the way - for this to work, you need …”

The end result for me is either a frustrating return to trip to the store to either return the item, or purchase its dependencies. Neither of which makes me a happy customer.

On the flip side, the opposite can be true. I purchased an Apple iPod accessory as a gift, the sales representative walked through the requirements of the model compatibility and the types of adapters each model would require. If I ever need another accessory for these things I know where I will go. (I am not an iPod fan, but that is another story)

Although the above article references retail, service businesses can be just as bad. I recently had a services company provide as estimate on some work that I want done. Not once was I told that the quotation was useless unless I already had another particular service performed first. It was only casually mentioned to me by someone else who had already had similar work done. Needless to say I still don’t have that particular work done.

In todays competitive, and very low loyalty market, it makes sense to educate your customers. At its simplest, they won’t be sticking you with returns costs, or just avoiding the product or service. If you are lucky enough to supply the dependency, it is also a cross sell opportunity.

Unless of course, you are one of the lucky ones who don’t need to worry if your customer ever comes back.

On this site, and many others. The future of technology is being defined as a simple utility, rather than spend large amounts of

capital for a particular solution, services for software and storage as well as just about everything else will be available simply by subscription.

In the past week or so, Microsoft has taken its consumer oriented skydrive out of Beta testing - allowing storage of up to 5 Gigabytes of data. Plus, storage giant EMC has listed 500,000 customers of its online storage “in the cloud” according to this eWeek article. With all of these announcements however, there are definately still some issues that organizations have to look at when considering this type of hosted storage;

1) Service Level Agreements: if you lose your data, it is your problem, if they lose it - whose problem is it?

2) Legal: With the global patchwork of discovery and disclosure rules. It will probably be a while before court cases hammer out the details of data ownership and rules. For example, I am in Canada, but if I use a California storage provider - do I have to comply with US or Canadian rules on disclosure and discovery?

3) Data Security: Its my data - will I find it published on the web due to some high profile breach?

4) Data Retention: Ensure that the provider has a retention period that that matches your requirements.

None of these will be insurmountable, but due diligence is still called for

We all have read about massive credit card data thefts from retailers such as TJX, where something like 94 million credit card numbers were stolen. Or backup data tapes “missing” from the back of the truck or a from a contractors car. But as a small / medium business - it is easy to think that it is only the “big guys” that really get affected by these things.

However, the massive outside threats and attacks such as the TJX theft, are the rarer of the data loss problems. In some reports, up to 66% of data loss is either accidentally or deliberately performed by “insiders”. Insiders being employess or contracters of your organization, or others who are authorized to be in your premesis.

Here is an article describing a 2.5 Million dollar data sabotage at an architectural firm by an insider who apparently thought a help wanted posting by the company was threatening her position.

I ask you, what type of gross revenue do you need to be able to comfortably write off 2.5 Million??

Business in the SMB space are often guilty of this type of data security laxity. First, data backup and off site storage are thought of once in a while, if at all. And second, growing organizations often do not take the time to segregate their data by the security level, and role based access it requires.

Some questions for you;

1) Is the majority of your basic data thrown onto one or more file servers with basic access rights to everyone?

2) Do you have a database driven financial package, or manufacturing package that gives everybody a separate login, but do you know if there are restrictions on that login? and is the database itself protected by good security at the physical level? (from outside the application)

3) Do your employees just give someone else their ID and password when they go on vacation, rather than using proper delegate access?

4) Are the majority of your financial files on the controllers PC because there is no where else “secure” to put it?

5) If someone did delete 7 years worth of data - do you have any confidence that you could get it all back?

2.5 Million dollars says you should be able to answer all those questions very positively.

I had the opportunity to take a look at a particular Web based “Software as a Service” application geared towards a particular vertical market.

The tool seems to provide a very good “front office” interface for that business. There are work flow elements and various productivity and communications tools required by that vertical market. In the Web 2.0 lingo, it is also a pretty rich, interactive application. It includes e-mail integration and basic presence awareness, wireless device support and a slew of other tools.

I had a problem though - getting it working on a particular machine - In the “old days” - If I was installing a software application on my company computers for that “front office” job, There may have been the usual single computer that did not like that software when installed for the first time, but perhaps a system tweak, or other configuration requirement would have been made to get it optimally running.

Now though, although I thought that the Web Based tool was good - a couple of thoughts - what can you “tweak” on a web browser when something is not working? There are only so many settings, and they are related to security and other types of controls. And yes - there are lots of them. So which am I looking for? secondly, this tool only works with one particular web browser. And for that browser some “helper” software pieces had to be installed and configured to allow the tool to work correctly.

To extend that - what heppens when Saas tool ‘A’ needs a particular configuration that conflicts with Saas tool ‘B’? And that is not as far fetched as it may sound, some of our current corporate partners already have tool sets that do not work with particualr versions of a single web browser. One more piece to check in your due diligence before signing on the bottom line.

This is a reprise of an essay I had written on an old (now defunct) personal web site. It is still applicable. Although since this was written, The term “right sourcing” has been coined - and I like it better.

Now is the time to consider xSourcing

By S. Elliot Ross

October 2003

It is hard to read a business technology publication today without reading an article, or editorial, regarding business I/T outsourcing. The outsourcing trends discussed usually cover just about all components of I/T. These components include infrastructure operations, such as asset or seat management, help desk operations, data-center, and network operations, all the way to software maintenance and development. Each of these published outsourcing agreements seems to primarily be a strategy aimed at reducing service costs. Yet in the same publication, we can frequently find that there will be a second article on a different business, the second article describing how an outsourced I/T process was returned in house, – again for cost saving reasons. How does a business technology manager reconcile this paradox?

In spite of, or possibly even because of, this seeming paradox, now is the time for business technology managers to seriously look at I/T infrastructure outsourcing. Even companies that would prefer to maintain I/T infrastructure services in house for reasons that could include velocity (rapid reaction to change) or competitive advantage can benefit from this research. Nevertheless, after performing this research you may choose to continue with an I/T infrastructure outsourcing strategy, or you may choose to maintain that infrastructure internally with an in-sourced service model. The key point in reviewing I/T infrastructure outsourcing is that the research you do on outsourcing practices will require that you look holistically at the I/T support processes that you currently have in place.

At least at an intuitive level we realize that I/T infrastructure systems are inherently complex. The character of the technology environment, its systems, plus the interactions among them will usually come closer to chaos theory than any rational sense of order. Unfortunately complexity causes instability, instability causes breakage, and breakage causes downtime and costs money. What business technology managers can often overlook is that trying to reduce the complexity of this infrastructure through change and configuration management processes can greatly assist in reducing costs. Cost reductions can be gained through less re-work, reduced exception handling as well as improved communication and standardization. Lets look at a common example. Traditionally one of the most common business processes that have been outsourced by organizations of all size has been a payroll process. A payroll process is generally stable, mature and measurable; therefore this kind of process is usually outsourced successfully because businesses, whether they are large or small, tend to keep a sharp eye on the steps that send out that money. The process usually consists of a definite input, usually being payroll information from a time sheet or clock, various documented checks and balances, then a definite output, a paycheck. Any or all of these steps can take place inside or outside of your companies walls.

While a systematic process is usually easily visible in a payroll situation, many businesses do not have this same type of process visibility into their I/T infrastructure costs. A business that relies on ad-hoc or seat of the pants management of their I/T infrastructure may find large increases in I/T operations spending, just to keep the lights on, and that their maintenance costs are much higher than average. These organizations will often have an environment that is not stable or measurable, and that has poorly defined or constantly changing requirements. When this happens, the few cost details available are reviewed and a decision is made that outsourcing will reduce this cost. I would argue that these organizations are putting the cart before the horse in attempting to outsource without a firm knowledge of their costs per process. If you cannot clearly define your requirements and have the appropriate measurements and metrics in place, it is very difficult to meet those requirements! We can then say that outsourcing is of a primary benefit when system complexity is reduced and the environment stable. Non-existent or ineffective processes will remove a lot of outsourcing advantages and create a possible lose-lose outsourcing partnership. This is because a non-existent or ineffective process makes it difficult for a business:

• To compare statistics, metrics or costs to properly evaluate an outsourcing agreement
•To have a framework to qualitatively monitor and measure an outsourced partners performance

A common argument against trying to implement a process management framework within an I/T organization is that the knowledge worker field of I/T does not readily lend itself to setting process management objectives. In reality, if work is being done, and it is done more than once, there is an available process. A business that uses an internal or an external (ISO, ITIL, Six Sigma etc) process management framework will often find process benefits that they can apply to their I/T operations infrastructure. The primary benefit of introducing a process management framework will be reducing the complexity of the environment, which will increase stability and measurability, which in turn will assist in reducing costs. Not to mention providing a view into the efficiencies (or lack thereof) that exist. Once this process efficiencies view is available, statistics, metrics and costs can be directly compared when provided internally versus in an outsourcing partnership.

In your research of the outsourcing market, you will find that the companies which provide I/T infrastructure outsourcing services are now well beyond the early adopter stage. They have taken the time to develop an I/T infrastructure strategy that reduces complexity and thereby, reduces costs. This has provided business technology managers with an extensive tool set of best practices, optimized processes and software tools that allow the most efficient and cost effective management of I/T infrastructure. In order to make money, outsourcing companies have had to ensure that the most efficient and effective processes are in place to keep costs down. They can do this only by reducing the complexity that is inherent in managing this infrastructure, through simplifying the steps, or processes, within the environment.

Statistical analysis theories in removing the complexity of manufacturing systems has been written about since the 1930’s so there are really no new theories to assimilate, just applying modified versions of old theories in new ways. While there are no analytical rules or formulae to guarantee outsourcing success, doing our homework on these best practices and reducing the complexity of the I/T infrastructure environment will enable business to view direct and comparable measurements, metrics and costs. The end result can go either to an outsourcing partnership, or an in-sourced model, in one case the business will realize that with enough process improvements and the proper software tools, enough cost reduction can be found that maintaining an in-sourced I/T infrastructure makes more economic sense. While in another case, an I/T outsourcing partnership will be the preferred solution. Some businesses will outsource, others will in-source – and both can save money.

So compare your processes and costs with the best practices that are available. This will resolve the in-source versus outsource paradox as a greater understanding of where costs are occurring within the I/T infrastructure systems appears. Improving the stability and measurability of your I/T infrastructure operations is a Win-Win situation, in-sourced, or outsourced, or as mentioned in the title xSourced. (more…)