A Dime a Dozen Small Business, Tech and Talk

Took a few days off! it has been too long.

Spent an extra long weekend in SanFran. Did all of the usual tourist visits and squeezed in a visit with friends at Travis AFB.

All in all a wonderful time

Talk about ignorance, or nasty advertising.

Here in Canada, we use the metric system (yes I grew up in that change) it was a hassle when Miles changed to Kilometres. When it came to automobile “gas mileage”, we went from the familiar “miles per gallon” to the more confusing number of litres of fuel per 100 kilometres.

Now - liters are smaller than US gallons (to the tune of approximately 1 US Gal being 3.78 L) So in the Litres per 100 Kilometres equation, smaller numbers are better, vs. large numbers in the “miles” part of miles per gallon.

I drove past a car dealer yesterday and found that they had emblazoned absolutely HUGE numbers on the cars being sold such as 66 or 77.

I could not see any other text at the time, but I knew that sure as hell, that those cars would not get 77 MPG, and even a Hummer gets better fuel economy than 77 litres of fuel per 100 kilometers.

So, I drove past again today - what they had done was put 77 KMPG

In other words, the shorter kilometer as the distance measure, with the larger gallon as the fluid volume measurement.  And I am sure that there will be some out there illiterate enough to get caught in a scam like that.

As I just wrote last week, my computer threw a fit and died. Over the weekend I was doing the rebuild routine and going through my archives for the tools and data that I wanted to restore to the machine.

On this blog back in March, in response to a particular published article, I wrote a quick post on Nicholas Carr’s IT Doesn’t Matter.

In going through my old data backups, I came across my original argument in support of Mr. Carr’s thesis. This was done after the Harvard Business Review thesis, but prior to the book being published.

I found that my spelling and grammar was just as poor then - so a few “corrections” were made.
——————-

Does IT Matter?

By S. Elliot Ross

November 2003

A lot of ink has been spilled over an article by Nicholas Carr that was published in the Harvard Business Review titled “IT Doesn’t Matter” The spilled ink was in rebuttals of the article, and in good old fashioned “Internet Flaming” of the author.

Mr. Carr’s thesis is based on the premise that IT is no longer a competitive differentiator for corporate competitive advantage. The argument is that IT is now a commodity and that in and of itself a commodity cannot provide the rapid competitive advantages that that early adopters gained through the use of IT. In other words, the cost of IT is simply table stakes to get into the corporate poker game. Since the table stakes are required to get into the game, by themselves the table stakes cannot give or remove an advantage to any player. One definition in the Merriam-Webster dictionary would seem to accommodate this claim: “com·mod·i·ty - noun: a mass-produced unspecialized product.”

I am sure that a good proportion of the arguments against this article are because of the title. While I also disagree with the title, (although I believe any article that requires you to really question and think about your assumptions to be an excellent article) I find very little to argue about in Mr. Carr’s thesis, however I believe it should be extended a little. I think a point that eludes many critics of the article is that Mr. Carr states that as IT is a commodity, so it therefore must be managed as a commodity. I would also state that there does not necessarily need to a negative connotation to the word “commodity”.

Extending our analogy, when Henry Ford developed the assembly line, he had tremendous competitive advantage. The assembly line allowed Ford Motor Company to mass-produce automobiles with cost benefits that had no direct comparison with other automobile manufacturers of the time. Within a few years, other automobile manufacturers then emulated this assembly line, thereby negating any competitive advantage for Ford. If we fast forward to today, we can definitely say that if you wished to start a mass production and mass market automobile manufacturing organization today, an assembly line is table stakes to the poker game – or as defined by Mr. Carr – a commodity.

If we accept that an assembly line may be a commodity, or to continue the analogy, to be table stakes to the automobile manufacturing poker game, not all manufacturers turn their table stakes into winning hands. Whereas one automobile manufacturing business will manufacture a car that makes a profit, has low defect rates, and low warrantee costs, another business will lose money on each vehicle sold, lose money on warrantee claims and lose more money on recalls due to defects. At least a portion of all these costs (or benefits) will appear, (or disappear) on the assembly line. Therefore, I would argue, if an assembly line is a table stakes commodity, the assembly line manufacturing process should have no differentiation on the quality or success of the automobile’s production in the market place. Product differentiation in the market place would have to be through other methods, such as marketing, design or other non assembly related methods.

Empirical evidence would support that a “commodity” assembly line does translate into competitive advantage, as Consumer Reports, and JD Power surveys show. However, the companies that successfully manage their table stakes, or as Mr. Carr states, manage their IT as a commodity, will still be able to reap benefits and competitive advantage. If we return to the trusty Merriam-Webster dictionary, another definition of commodity can be: “something useful or valued.” If we use this definition and manage IT as something “useful and valued” we will use our table stakes or commodity IT for a competitive advantage by managing it to obtain other corollary benefits from the use of IT.

If you treat your IT as something of value, and play those table stakes to win, you are going to find and produce more value from your two aces of IT than if you view it as an undifferentiated product and just try to avoid losing with a straight flush.

Yes, it happens to us tech types as well. A corrupted device driver toasted my laptop - it needed to be rebuilt from scratch. No software repairs worked. Rebuilding is a pain, But; yes I have backups of all my data……

To paraphrase that old American Express commercial, Backups, don’t leave home without them.

From the department of scary facts.

I have always refused to let the kids install Peer to Peer sharing applications on my home computers. Certainly, one part is the illegality of downloading copyright material.

Being in the technology world, the second issue was the risk of data compromise.

It goes to show; no matter how paranoid I am of the security risks in P2P sharing tools - I was not even close to being paranoid enough!

This Information Week article by Avi Baumstein is downright scary.

The results were shocking and scary–loads of confidential business documents and enough personal information to ruin any number of lives and create PR nightmares for quite a few companies. Among the business documents were spreadsheets, billing data, health records, RFPs, internal audits, product specs, and meeting notes

Much of the data found came from smaller business, in some case consultancies and suppliers, who were possibly doing work for larger organizations. Large organizations tend to have more resources to lock down the installation of unnecessary software.

In the SME space - we often don’t.

The end note?

Don’t; use work PC for home use
Don’t; use work PC as the kids playtoy, no matter how much they want to watch some Hannah Montana video
Don’t; let your staff do any of the above
Do; assume that staff, contractors, or consultants may have done it already.

On this blog, you have seen me define how critical Technology can be, then in another post say not to bother with technology.

I promise that there is a reason!

So - In the Small Business space, why and when should you consider investing money in more technology?

It is really no different than hiring a junior clerk or assistant when you find that too much senior (and more expensive) staff time is being wasted on certain less important tasks. You don’t hire that junior staff member until you identify what the problem is.

Look at this quote from the CIO Magazine print edition March 15 2008;

“…accounts payable department can process 20% more invoices per day..”

That is the key. You have the right people and processes in place to run your business and service your customer base. However then you get to the point where you are losing efficiency due to manually performing tasks. That is the time to look at the improvements in those processes that technology can bring.

What might these inefficiencies look like?

You find that your time from order to customer delivery has grown too long. You have the product, but you find that writing out manaifests and confirming orders as they get loaded on the truck keeps the truck in the bay too long, meaning fewer deliveries per day. Can a technology investment automate these manifests and orders letting that truck clear the bay quicker?

You find that the number of accurate and on time sales orders is falling. The old way was a sales staffer writing down the order and customer and passing it on. With growth, the handwritten notes are either getting lost, or customer A was shipped part of customer B’s order. Can a technology investment automate the this order cycle?

This post, Don’t Automate Broken Processes has an excellent example as well.

So the reason for my contradictory appearing posts is;

1) Yes technology can accelerate and improve business process in the SMB space

2) BUT - you must have the people and processes in place and working first. Like the junior clerk example above, once you identify the problem, you can look at the technology to improve it.

Parts 1 and 2 of this provided a quick overview of ITIL, and the basics of Configuration Management.

In this one, I will take the same overview of the ITIL Incident Management process. As stated in the earlier posts, all of the ITIL processes are tightly linked, as each process generally accepts information from, and provides information to the others. However pieces can be lifted and customized for your environment. As quoted in this CIO article;

All one has to do is purchase a set of ITIL books, and adopt whatever ITIL practices one wishes.

Again, the goal here is to demonstrate how the basics of ITIL can assist organizations of all sizes reduce costs.

The ITIL Incident Management process and Problem Management process can seem to be the “same” at first glance, however there are key differences. Incidents are deviations from expected operations, and Problems are the root cause of those deviations. Problem Management will be covered in a later post. However, as a non technical example, lets imagine that you are a distributor, and you have 15 customers that did not get their orders on time. That is 15 incidents, the issue was that your delivery truck broke down - that is the “problem” So in this case, one problem maps to 15 incidents.

In your technology infrastructure, Incidents are then any issues that provide a loss of service; “email not working”, “can’t print invoice”, etc. Larger orgaizations will most likely track these incidents through standard “Help Desk” type tools, in smaller organizations it can be as simple as a spreadsheet.

This tracking of incidents is the key point in the Incident Mangement process. whether you are a 10 person shop or 100. Ensure that someone is resposible for ensuring that these are documented. And that includes the typical “Oh wait while you are here, this has not been working…” type requests, these happen all the time.

Having these incidents, and their resolutions, documented will provide visibility into the IT service response you are receiving, either by your own staff, or by contracted staff. And provides improved monitoring of what was performed and why.

Documenting these incidents will have further benefit that I will describe in Problem Management, but on its own, you will have;

- visibility into the issues (incidents) that are ocurring
- reduced business impact through visibility into the timely resolution of incidents
- Better staff utilization through better coordination of effort
- Getting rid of incidents that are lost or “fall through the cracks”

A small business that I have previously referenced on my site, had gone through two outsourced IT services organizations and were on their third. The first two just “were not acceptable, … poor service” etc.

But like most small businesses, if someone had a problem, they called the provider, who then responded and was to take care of the problem, and then sent an invoice. However the “perception” was always negative. And without concrete information, neither they or their providers really have any evidence on way or the other.

My recommendation? Have one person responsible for the calls, document the issue (incident) and document when it was fixed.

The immediate benefit?

Was it fixed? - yes or no
Was it fixed quickly? - yes or no
was the number of incidents equal to what is appearing on that invoice? yes or no - and why?

The concept of these processes is very simple, the discipline required in ensuring that it happens is the hardest part.

UPDATE: Part 4 is now here:

Due to the number of visitors here looking for information on the concepts of ITIL (IT Infrastructure Library) I am guessing that many of you are seriously considering it. If you are looking for more in-depth details than my little “Notes” on ITIL on this blog, here is where to dig deeper.

The IT Service Management Forum is an International non-profit organization dedicated to promoting and facilitating ITIL. There are chapters in most major communities through which you can find resources or training.

International: http://www.itsmfi.org/

Canadian: http://www.itsmf.ca/

US: http://www.itsmfusa.org

And yes, I will be continuing on my little “short form” overviews ASAP.

A great read in this May 2008 PROFIT Magazine article by Rick Spence.

Go ahead, I’ll wait!

So, How easy are you to do business with? I have gently brushed the edges of this theme on a couple of posts, K.I.S.S. here, and Sales, Service and Education here.

The reason I like the article, except for oblique references, no mention of technology.

Thats right. People, processes, then (maybe) technology.

…it’s usually a case of companies looking to do things in the easiest way possible for themselves — and forgetting customers’ needs.

If you are not looking at your customers needs, All the technology in the world will not assist you. No matter how often technology consultants and the IT sales folks try to tell you differently.

It does not matter If your goal is excellence in customer service, or product delivered right the first time. The people and processes to do this must be baked into both the organization and individual.

Then, and in my opinion, only then! do you consider whether a technology product or tool can help improve your metrics.

Here is one example, there are some large automotive dealerships that pride themselves on customer retention and service. Customers are greeted by name, and the service centre is an open book during the repair cycle. All staff know that regardless of job function, this excellence in service role is part of their job description.

Consider this; some of these dealerships have even invested in cameras and software that decipher the license plate of cars entering the service area. They do this so that by the time you reach the service desk, all appointment details are ready, and the service staff can greet you by name. The goal? The goal is for you, the Customer, to say good bye to that 20 minute wait of obtaining your name, phone number, appointment confirmation, appointment details, loaner or rental details etc.

However, by themselves, these tools do not make a dealer excellent in customer retention and service. If the excellence in people and processes do not exist first, the tool is nothing.

That auto dealer? if his/her people and processes are already committed to excellence, then the same end result of those cameras and software could be obtained by a body looking out the window and writing down the licence plate number as cars come in.

And that is the point;

Imagine that your excellence in service does involve manually writing down that plate number. That works perfectly until you get to the point that the number of vehicles arriving for service exceeds the ability of staff to manually process it.

It is When you reach this point, the point where you cannot keep up; that it becomes the time you can look at reducing the human time by looking at technology solutions. Not before.

I just finished a book by Marianne Broadbent, Ellen Kitzis (ISBN 1-59139-577-1) called the The New CIO Leader. the book is already a few years old, copyright 2005 by Gartner. (I missed it somehow when it was first published!)

In the text, the authors use the term “Sense and Respond” in my post here I called it “learn to Dance” the context is the same, the future is unknown (and unknowable) so it makes sense to take small steps in strategic direction, sense the environment and its changes, then respond.