The IT of SG&A

August 29, 2008

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.

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

August 27, 2008

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! 🙂

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.

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

August 25, 2008

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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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.