The IT of SG&A

Lauren J. Kelley at Sandhill.com has a article regarding reducing G&A expenses. The article was written regarding the mid-sized business in the software development space, however it applies everywhere.

Companies that swing between high G&A spending (often the result of a “problem”) and then major cuts in expenses often have trouble meeting profitability targets

The “boom and bust” concept from Lauren’s article is all to common in the SMB/SME and mid market. And where there is that type of boom and bust spending, I can tell you from experience that there is money being wasted on the IT side.

Even if you do drive some revenue from your business technology investments, I guarantee that there is waste that should be removed.

It goes like this;

Don’t spend a nickel until it breaks then panic & pay too much in money and time to fix the problem.

The IT Staff

Check your ego at the door. Trying to do the superman and fix every failure throughout 48 hour marathons is waste.

Your IT plan should have steady state incremental spending that is forecast over at least three years.

The Business Staff

A planned and conistent steady state investment in the IT lifecycle reduces risk, increases the accuracy of your financial planning and forecasting, and reduces the knee jerk smash to your G&A expenses.

ITIL – Process and Process Control Part 3

update: First – the above image is just window dressing – not a true process control no click necessary.

As I wrote in the previous posts, I was dropping the term process within the concept of ITIL, without doing a very good job of explaining the terms as used by the ITIL framework authors.

There is a good reason that defining this is important.

While the concepts of ITIL are not difficult, What can be difficult and time consuming is ensuring that there is management and commitment to the processes and framework.

Within the ITIL texts Process Control is defined as;

The process of planning and regulating, with the objective of performing a process in an effective and efficient way

Clear as Mud?

In reading the ITIL texts, within each of the processes, there is a pretty vague idea of Management Reports. This primarily means a method of validating the errors or successes of your ITIL processes.

To clarify this, lets use the same order to cash process we used as a (simplified) sample in part one of this series;

- The sales Department – getting the order to warehousing
- Warehousing – for pick, pack and load
- shipping – for freighting to the customer
- Accounts Receivable – for invoicing

Lets say that your A/R always has a significant percentage of receivables aged over 60 days. You find out that the aging is because you aren’t getting the invoice out the door for 30 days.

We know that our order to cash process has inputs and outputs (hand-offs) from all the above departments, with some research we find out that the shipping driver forgets to hand over (output) the signed delivery slip to A/R (input) so the invoice can be prepped and sent (another output).

So our process control system must have a method of ensuring that the signed delivery manifest is properly handed over.

It can be manual (maybe a signing log) or automated (ie software alert) but the end result is that knowing the process, and ensuring that you have controls in place are important to effectively move towards ITIL alignment. These controls are then our management reports on the success (or failure) of the overall process.

Summary

To re-iterate, ITIL is a journey, not a destination. Purchasing a “help desk” software package does not make one ITIL aligned.

Defining and managing the end-to-end process and results are the key.

They take time, energy and commitment.

Image Credit Mario Seekr

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Change – It’s Personal

An excellent blog post by Vaughan Merlyn on personal change and change management;

But the real point is a lesson in change management. If my colleagues had known, or had flushed out my personal value system, and related the change in browser to my “need for speed” I would have jumped at the change – no hesitation. Instead, they threw features at me, or benefits that I just did not relate to or was not interested in.

As a Business Technology Manager in the SMB/SME space, I know that change is an ongoing battle.

(you know it is a challenge when I use a word like “Battle” don’t you?)

When I see a phone call that requires 5 people to have a meeting to gather 3 small data points regarding a single project – and I know that I can put those data points within a few mouse clicks – it can seem so obvious to “Git ‘R Done”.

But it is change.

It’s the way it was “always done”

As Mr. Merlyn points out – it all comes down to WIFM – “What’s in it for me”

I know that it is incumbent upon me to present, and articulate WIFM to those 5 people. And I know that I ain’t no natural “sales guy”.

I know that to articulate it, I have to go in with open questions and options – because I will not always know with full accuracy the WIFM buttons of each of those 5 people.

Is it stepping out of the comfort zone? Sure.

Is it necessary? – You better believe it!

Tips from SMB/SME Managers on how they prefer technolgy change recommendations always welcome!

The Late, Great, Peter Drucker

I recently finished reading Peter F. Druckers “The Practice Of Management”.

I have read several texts by, and about, Mr. Drucker but had not read this seminal work.

The hundreds, maybe even thousands, of person-years of research into organizational behaviour, social psychology and even governance.

Yet most of it is here in this text – in black and white;

And written in 1954.

A Customer Service Award….

Background – Our ability to track the conversations within our business needs work. (Actually it sucks)

Countless hours are lost in tracking down who committed what deliverable and when and to whom.

As a Small Business – we also don’t have lots of money to spend, so I have been investigating Open Source solutions in the CRM space.

I was pointed to SplendidCRM and went through the sign up for a hosted 30 day demo. The sign up did not work successfully.

However:

1) The support email address was front and center on the page – beautiful

2) The issue & the text are not needed here – but look at the time stamps on these two emails;

Thats right – no joke – barely 20 minutes – this from an email query. Congrats

From: deleted [mailto:deleted@splendidcrm.com]
Sent: Monday, August 25, 2008 15:59
To: Elliot Ross
Subject: RE: Hosted Demo Error

(deleted)

http://www.splendidcrm.com

——————————————————————————–
From: Elliot Ross [mailto:eross@deleted]
Sent: Monday, August 25, 2008 3:41 PM
To: Deleted
Subject: Hosted Demo Error

Taking Over A Trainwreck

Trainwreck

The title is directly from this Howard Solomon article of the same name at ITWorld Canada.

In the article Mr. Soloman quotes a mid market CIO;

“I was left with a mess,” he recalls. “Just about everything imaginable was wrong with what I was given…..”

This blog is dedicated to small / medium market business managers ensure that they don’t have IT infrastructures that are trainwrecks, obviously these managers have not been reading my blog!!!

(ok,I will drop the vanity now!)

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Managed Hosting For SMB’s

Karen Schwartz has an article on eWeek Midmarket called Managed hosting may reduce costs for SMBs.

The article references a white paper by a hosting provider. I found that it leaves out some more basic information for SMB managers who may be evaluating hosting. I have used several types of hosting over the years, and there are key differences.

This will be about traditional hosting, not the current market in virtual hosting. The traditional hosting models usually fit into these categories;

Colocated Server

In a server colocation hosting agreement, the hosting provider physically sells (or leases) the server platform to you. The physical server is then installed in their data center. The hosting provider maintains the power, security, fast and redundant Internet circuit speeds and will usually service hardware failures.

But all software and server software maintenence (ie security patches) are your responsibility.

The benefit is that you maintain complete control of your platform, with the benefits of the high availability and redundancy that the provider has built into their data center.

Co-Managed Server

In this form of hosting, the hosting provider leases you the server, and again, the physical server is then installed in their data center. In a co-managed scenario you have negotiated roles regarding server maintenance. For example, the hosting provider may do the maintenance of the Operating System, or the database engine.

You remain responsible for your tools or applications that are installed on the server. If you have custom applications, or complex applications that you can modify – this will be what the hosting provider will want. Simply becasue they cannot be responsible if your internal developers blow up the application from poor coding practices.

Managed Server

A fully managed server environment has the provider fully maintain the server environment. You just use the server. While this requires the least work on your part, it also has the least flexibility. Simply because to ensure that you don’t kill the server and cost them money fixing it, only limited supported applications (ie a web application) are supported. If you wish to add anything (ie support for an environment such as PHP),it is to the negotiating table with your provider to see if it is a suported environment.

Which is the Right Choice?

The choices all come down to your needs. The less you need to change any server configuration, the more fully managed it can be.

I have posted previously that we currently outsource hosting to a third party. In our case we are using the co-managed model. The hosting provider takes care of operating system updates and database backup etc.

Our on-line LCMS (learning Content Managent System) tools require frequent updates and modifications, so we maintain those.

ITIL – Process and Process Control Part 2

In the previous post on Process and Process Control I gave a very simplified overview of the concept of a business process – as used within the ITIL framework.

The purpose being that in my posts on ITIL, I was dropping the word “process” without providing the background on its applicability to the framework.

In that post we defined how the Process Manager (or Process Owner) is responsible for the cross functional or cross departmental process flow of the particular actions that result in a desired result.

From my simplified sample, a sales staffer may report directly to the Manager of Sales, however there is a dotted line to the Process Manager in charge of ensuring that sales, Warehousing, Shipping and Accounts Receivable do their parts to ensure that the process of order to cash is properly completed.

This concept of “Process” is key to the ITIL framework as the ITIL Processes are interlinked (drop down the categories box on the right of the HOME page and select ITIL to see other ITIL posts) and often cross functional. It is critical that visibility be maintained across these functional silos.

The Example

A number of years ago I visited one of our biggest customers (A large organization) to ensure that the installation and configuration of a software application platform we were providing for them was going smoothly.

It wasn’t

The software needed a server, it needed an Internet (IP) address, it needed a database – and guess what – the Network Operations group did not talk to the DBA’s, who did not talk to the Server Admin team, who did not talk to the PC support team etc etc.

Getting the IP address for the server alone was a three day excersise.

And your point for ITIL Service Support is?

OK, Ok I am getting there!

The ITIL processes depend on this cross departmental visibility.

So your Service Desk (help desk) receives a phone call on a particular incident, troubleshoots the issue and……

Well,,,, the Tech Support folks don’t talk to Network Supprt folks, who don’t talk to the server support folks etc….

The resolution of the issue can take hours.

Under ITIL, For example, the Incident Mangement Process has an Incident Manager (or Incident Process Manager) responsible for effective service support delivery within the organization. That means that the role includes the responsibility (and authority) to ensure that the service incident is taken care of. Regardless of the functional departments (Network Operations, Server Operations etc) required to get the issue solved.

While the Database analyst (DBA) Staff work for a department manager, and the Network Operations staff report to another, and the Server Support staff report to a third, etc. Within the context of an “incident” – They are just as responsible to the Incident Manager for timely resolution to meet service delivery goals.

Clear as Mud I am sure !!!

For the next post will go into the basics of Process Controls. (If you have a question – please don’t hesitate to ask!)

UPDATE: Part 3 is now here

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ITIL – Process and Process Control Part 1

There have been many previous posts on this blog regarding the utilization of the ITIL framework in the small business / medium business space (One of the first ones on the basics of ITIL is here)

Many of these posts refer to the term “process“

I want to back up a bit and provide some definition of the term in the context of ITIL. Again, this will be a high level “non-techie” overview geared towards non-technology managers in the SMB space.

Definition

In the ITIL texts, a “Process” is defined as;

A connected series of actions, changes, etc, performed by agents with the intent of satisfying a purpose or achieving a goal

The Process Manager vs. the Department Manager

To use a non technology example, lets assume you are a SMB manufacturing or distribution firm. You have the standard sales department, shipping, warehousing, accounts receivable etc. Each of these departments has a manager responsible for their function.

Now lets imagine you just received an order for 13 pallets of one of your widgets. We have to ship that order to the customer and get that invoice out to get paid. A simple as it may sound, to get this shipping and invoicing done, we must cross various departmental functions. This is the purpose of the Process Manager

Therefor the Process Manager is responsible for the end result and process control of that cross departmental or cross functional “process” (and yes, a departmental manager could be a process manager)

Inputs, Outputs

In a process, our series of actions are made up of various inputs and outputs that make up a process flow.

In our simplified example, shipping that customer order of 13 pallets could theoretically touch;

- The sales Department – getting the order to warehousing
- Warehousing – for pick, pack and load
- shipping – for freighting to the customer
- Accounts Receivable – for invoicing

With so many cross functional touch points, things can obviously get lost in the cracks. Another post will dive a little deeper sample inputs, outputs and the process controls.

UPDATE: Part 2 is now here

Responsibility Equals Authority

I have been reading “The Practice Of Management” by the late, great Peter Drucker

The fact that it has been in print since 1954 should be recommendation on its own!!

In the text Mr. Drucker emphasizes that responsibility with out authority does not work.

Hoo-Boy! that reminded me of a very frustrating period a lot earlier in my IT career. Being the lone IT Administrator in a SMB I had responsibility for;

- 24 x 7 on call support
- Minimize scheduled maintenance outages during business hours
- Ensure tested and reliable data recovery services for all enterprise resources and data
- Ensure reliable and consistent operations of all IT physical and data assets within the organization

Yet I had no authority to make any of these work without tying myself in knots with 80 hour work weeks.

- Our data exceeded the amount of tape space available, requiring manually feeding in tapes, a larger tape drive or library was not in the cards.

- Heat, even as a small business we had a very packed server room. Heat became such an issue that on my own dollar I had purchased huge fans and peeled out ceiling tiles to try and improve airflow. Even with that, hardware was still dieing on a weekly basis. I had to fix it all- but it took 2 years of begging before better air movement was installed.

The list could go on, but needless to say, it was frustrating.

For business managers in the SMB space, I know that IT can be as invisible as the service on your car or your truck fleets.

But as invisible as you may think it is – it needs that maintenance too. If you want someone to have the responsibility for something working – you cannot withhold the authority that provides the ability to get it done.

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