Increasing software project failure rate

Software project continue to have an increasing failure rate according to a Standish report. Standish regularly reports on the success of software projects. This year shows a decrease in success.

While more and more emphasis is placed on project management for the failure, I believe that the real reason is a lack of business value definition. In too many cases, projects get initiated with a good and valid business reason, but the "solution" is seen to be the installation of software. Software is a tool which can help a business improve, but it is not a solution by itself.

More effort needs to be placed at the front end to determine the real goal. The real goal might be to increase sales, reduce costs, improve cash flow, improve quality of service. By using a software product the business may be able to capture and analyze data more quickly and easily, deliver goods more quickly, etc., but the software will not do that. It can help, but if your business process is ignored, you may end up creating more problems, more quickly. That doesn't help reach the business goal.

Start by clearly identifying the business goal, then show how the goal will be achieved. When you see what steps are required, you can identify where software can help. After you have decided how the software can help, don't turn the project over to IT for implementation. Keep focused on the goal, which should deliver business results, earlier rather than later.

If there is something in the project that doesn't produce business results, you will learn that earlier and be able to adjust the deliverables of the project to ensure success.

Key issues in CRM software failures

I attended a town hall meeting today on IT failures specifically targeting CRM. The key items mentioned about the failures all related to not It and non-software issues. Some of the key items that I took away included:

• Software comes with the vendors version of best practices. This may not be your company's view of best practices. Converting to their best practice could hurt your results.
• For CRM in particular, attempting to get information on what your best salespeople do is a problem. If you ask them what they do, so that you can copy it, then watch them, you will find that they don't practice what they say. This is true of other professions, but it may not have the same impact. Most of what people do is done subconsciously. That's why what they say and what they do is different.
• Many IT projects fail because they try to do too many things for too many people. This increases complexity and increases opportunity for failure.
• Because of the defined complexity, the application becomes difficult to navigate and decreases productivity and sales. It's better to make it simple.
• There is too much emphasis on training vs. education. Training tells you how to do it. Education helps you understand why you should do it and how that will help to improve performance. There was another question related to how much training should be provided vs. making the software intuitive. Would anybody play games if they required you to attend a full day training session?

Those were my key takeaways. You can check for more on Twitter at #ITfail.

Top Ten List for CIOs

The Chief Information Officer title has been around for some time now. The title is often used to describe the person who heads the Information Technology function for a business. While this is normally true, I believe that this title should be restricted to leaders who recognize the value that Information technology should be providing for a business.

Too many CIOs are still "managing the business" That is, they are responsible for all of the technical staff and hardware and manage the day-to-day operations of the IT business. While this is a necessary function, it doesn't add value.

The Society for Information Management (SIM) have completed a study of CIOs and came back with the following list of priorities:

1. Business productivity and cost reduction.
2. IT and Business alignment.
3. Business agility and speed to market.
4. Process re engineering.
5. IT Cost reduction.
6. IT reliability and efficiency.
7. IT Strategic planning.
8. IT innovations.
9. Security and privacy.
10. CIO Leadership role.

The focus here is clearly on the business and not on IT as the driver. This says one of two things: Either the CIOs polled are taking action or at least the message is getting through.

In the past, too much of the focus has been on Reliability and efficiency (#6) or on Security (#9). While these are important, they are what the IT operation needs to deliver. The CIO needs to be focused on the business.

See Top Ten Presentation.

A view of a failing software project

I have just read an article about a CRM project that is doomed to failure. The basis for the problem is that, buyers often utilize the customizing features available in many software packages to change the functionality before they understand what the software does and how it works. Utilizing the software out of the box is what the writer recommends.

While this may not be possible for all software buyers, it raises an excellent point. Software is developed to automate a process. If you start to change the functioning of the software without understanding the basic operations of the process, you are doomed to failure.

The answer may not always be, use it out of the box without changes. However, understanding the underlying process is critical. A better approach would be to document your existing business process and compare it to the process provided by the software. This does two things:

• It provides you with a basis for evaluating the software and identifies opportunities for improvement of the existing process and what you can get from the software.
• It will also tell you whether there is a conflict.

Now you know exactly what you need the software to do and whether any enhancements are required. If there are no critical missing requirements, I would agree: Use it out of the box without customizing.

You will get results earlier, and if customizing is required, you will get a bump up when the system has stabilized and your staff are up to speed.

The original article can be found http://bit.ly/47lzRv

What's the difference between an estimate and a quote?

I've been working with a small organization that has to replace it's software.

They have no idea where to start, so they came to me. They want to understand what it might cost them. Before the Board of Directors will approve any expenditure, they want to know the full cost.

In talking to a number of software developers and software suppliers, I found them initially reluctant to discuss potential costs. In their experience, the clients seldom have any idea what it takes to develop and install software. If the supplier quotes too high a price, the client will go elsewhere. If they quote too low a price in order to keep their interest, they get burned when the client comes back.

The problem is that the business needs a starting point. They need to know if it might cost $1 or $100,000. They want it for the lowest possible price. That is a ball park estimate. However, since they have no idea what is required to develop and install software, and the software supplier has no idea what's functions are required, they can't give a quote. No matter what they say or do, the client will see the estimate as a quote.

We have a standoff. The supplier ask for a budget, but the client is trying to create one.

The reality is that we need a third party, who understands that software is an automated process, and in order for the supplier to be able to give a quote, he must understand much more about the business. By acting on behalf of the client, he can get to understand the scope of the business need, without getting any value from the price of the software.

In this case, I have been able to get three estimates from different suppliers, despite their reluctance. They knew that I understood the difference, and they are not providing the estimate to the client. I am. Now I have to make sure that the client understands that this estimate will help them decide how to move forward. As we define the process and identify the requirements, we will be able to get a reasonable quote from the supplier.

What's the business value?

We can't run our businesses without the use of technology today. New technology related projects get started every day. Yet studies that have of project success continue to show a poor success rate.

Most of the emphasis within IT, whether by internal groups or by IT suppliers focus on what the IT group or supplier delivers and not on business value. Yet business value is the priority for the business.

In this week's post at value delvery management, Jed Simms talks about the business case and the fact that it is two things: a contract and a strategy. Between them, maybe we get the value we should always be getting.

See Jed's article.

Is buying software an emotional experience?

I've spent time in software development as well as implementing software for a variety of business functions. One of the things that I always found strange was that most technical people that I worked with, had their favourite software product. Trying to implement new software was always a struggle. One person wanted to use his favourite product, and another wanted a different product. It had nothing to do with requirements, it had to do with experience. People wanted to use what they were comfortable with.

I've seen this many times, and I also understand it. When I believe that I can get the job done using one software product, I have no interest in trying another. As a past software developer and as a business person who has repurposed many software products, I also know that most software today is flexible enugh to do many jobs, if you can define what you want, you can probably do it.

When there is no current software product, and something new must be purchased, I have a logical approach that I take. First define the goal. The define the process that will reach that goal. Then identify whether a software product will help the process to meet that goal. I know this works and have used it many times.

Recently, I have seen business owners look for solutions by assessing website information on various software products (not a problem, it is one of the steps). Then they get comfortable with a software product, without having defined their goal or understood whether the software will help them. Since I am someone who likes a structured approach, I understand why they feel more comfortable (they have spent some time learning about it).

What confuses me is that the level of comfort becomes a decision point. They think the only way to learn more and get results is to buy it. And often nothing can change their minds.

The opposite side is also true. When someone has a bad experience with a software product, there is often nothing that you can do to show them how they can get all or most of what they need from their current software. The decision has been made, even though the costs of installing new software may be 5-10 times of keeping the one that they already have.

Maybe, I'm wrong. Maybe buying software is an emotional experience.

Does your website provide value?

I am working with a not for profit organization that needs to replace the software that they are using. The software was developed for this international organization many years ago and now is supported by one person on a database that has not been upgraded for many years.

As part of the assessment, the organization wants to put together a budget, so that they understand their costs before they start to spend money. As a result, they don't want to do a detailed evaluation of the software at this time, they just want to project the costs.

The approach that we have taken is to estimate the costs with as little effort as possible and as little interaction with the supplier as possible. This has meant using the website information whenever we can and only ask very specific questions which can be answered simply. This won't be a perfect projection (too many projects undertake a detailed analysis, thereby expensive) before creating a budget.

This is the first time, I have done this and it has given me a new understanding of what a website should provide. In the past, I have been frustrated by websites that lure you in with a promise of information, then require you to sign up, so that they can market to you (As an aside, most of them ask for this, but never follow up). This slows the process down and if you are not ready to talk to a salesman, gets you to look elsewhere for answers.

In this investigation, I found the following types of websites:

1. Some that provided very little information other than being a sales brochure, asking you to contact them for anything that would really tell you about functionality. Most, however, would give you technical specs.
2. Some provided a lot of functionality information, but very little in terms of education about what you need to prepare for.
3. Some that provided functionality, technical and educational information, but required you to sign up to get much of it.
4. One that provided all of the above with no request for signup. It provided a lot of information about what not for profits need to look for, why they should manage it and options for getting it. This went way beyond their software. It was a pleasure reading it and it helped us put together a better proposal.

I worked with a business coach a few years ago, who told me that I should be providing educational information, so that people could understand how I could help them. I now understand what I need to do with my website to increase the value that I provide.

The Missing Link to CRM Success

Customer Relationahip Management software has a very poor success rate. Numerous stories have been written about their failure to deliver on anticipated results.

I found a BLOG entry that describes 12 steps to a success CRM Implementation. The list of items is valid for most proojects of any type as well as CRM, but there is one missing element.

The first step says "Calculate the Value". This step is important, but it is not good enough as a statement. Having the value calculated will help you to justify the initiative, but it won't tell you how you will achieve the value. The typical problem is too much of a generalization. This is the source of failure from most software implementations.

Generalizations are made about how benefits will be achieved. Then after implementation, nobody understands why the value was not achieved. In some cases, it's because some activities were cut to reduce the costs of a project. These activities are the ones that provided the most benefits.

In order to prevent this, you must focus on the "HOW". How will the benefits be achieved? This means loking at the details of your operating processes, and showing how the software will be of benefit. Not only will this provide the definition of value, it will also show how the value will be delivered. The HOW will show up, not only in the business case, but in the activities of the project, and every member of the project and the operating team will be able to see it.

Cost problems will not cut the value, because in cutting out activities, you will automatically know what benefits you will be cutting.

To see the full list of other steps, see "

12 Steps to a Successful CRM Implementation".

Problems are simply opportunities in disguise

Most of us run our businesses on a day to day basis, dealing with customer needs and solving problems as they arise. As our business changes, as our custmer needs change, "problems" arise. Often, as business owners, the need to deal with these "problems" consumes much of our day. These "problems" are simply flags that tell us something is not working as it should. We cannot afford this to be normal operations.

When we are up to your neck in alligators, it is difficult to remember that we are there to drain the swamp. But as a business owner, that is what we must do.

The flags are telling us that something is not working properly. By understanding the source of the problems, we have the opportunity, not only to fix the problem, but to prevent it, thereby saving us time in the future. If we go further and understand the source of the problem, we may identify that there is a new need from our customers that we are not satisfying. This is the real opportunity. By satisfying this new need, we may be able to improve our relationship with our customers, because we are "listening".

Our business is not static. It is constantly changing. Our customers needs are changing. Our business processes must evolve along with those needs.

Software Procrastination

Procrastination is something we all fall into, at least from time to time. Why do we procrastinate? Does it matter?

A recent experience with a client provided me with answers to these questions.

The client was a small organization that had acquired software from a related organization many years ago. They didn't have a lot of sophisticated needs, so they stayed with it. Over time the related organization replaced the software, but still had one person on staff with the experience to support it.

Problems developed on a regular basis. Some of them were described as quirks that required a person who had experienced all of the quirks to prevent them. Support was expensive. They had to fly someone in from the US to fix problems.

They knew that they needed to replace the software, but had no one on staff with experience and didn't know what they needed to do. They researched alternatives, but that only served to confuse them. They continued to defer.

Finally, a few months ago, they had a major problem. While one of their staff was on vacation, they encountered one of the quirks. It caused a major problem that required 3 months worth of cleanup at year end to recover.

That created the incentive to take action. In one planning session, we were able to develop a high level plan, provide a basis for justifying replacement, and give them some level of comfort about moving forward.

That raised a few questions for me:

• Why do we procrastinate? Is it because we don't know what to do next?
• How much time are we wasting when we procrastinate? We think about it often, but unless we are taking action, the thinking is wasted and stressful.
• Why does reseach not help? If we know nothing about a specific area, do we actually waste time by doing research?
• Why are we afraid to ask for help from a specialist? Is it because we need to feel in control and are afraid of it costing too much money? Perhaps spending a little with a specialist who helps us plan, without requiring a long term commitment from us would provide value.
• Are the specialists the problem? Do they expect a long term commitment and are they not willing to help put us in control?

All I know is that a lot of time (and time is money) is wasted in procrastination. I, for one, will have to look at my own procrastination differently in future.

6 Myths about buying software

Buying software for a business can be a real problem for small businesses. Many small businesses put off buying until they feel "comfortable" with the decision. They look around at alternatives and "evaluate" them based on what they learn about features and the successes achieved by others. They decide to look for the supplier who has sold the most and go with them. They may also go with the salesman that they feel most comfortable with.

All of these can present problems and increase costs for the business. If your company is losing money, or could save money by installing the software, any delay costs you money. The problem is that many myths exist about buying software.

Myth #1 Software that is successful in one business will be successful in another.

The success of a software product in one company is based on many factors. Some have to do with technical implementation issues. Much bigger issues:

• Is built to solve the problem that you have?
• Are your people ready for the change?
• Does your consultant really understand your business?

Myth #2 The best consultant to hire is the one that knows the software.

The statement says it all. The consultant knows the software, but does he understand YOUR business? Every business is unique. Yes, for the most part, business processes are the same. Yet I have found every one is also unique in certain ways. You may have certain things that you do that make you special. The software consultant may not understand the value.

Myth #3 Education provided by the software company is the best way to get trained.

The software company can train you on how to use their product. Unfortunately much if this training is often given through a "fire hose". Too much is given and not remembered. What is seldom understood, is that new software often brings a new business process. Your people need to understand how their jobs will be impacted. Not all of the functionality of the software is necessary for your business, especially at first. You would gain far more productivity by training on the business process changes, then on the functions in the software that will be utilized in the early stages.

Myth #4 Comparing features is the best way to evaluate software.

Every software product has many more features than any business requires. Many are not required by your business. Many may look neat but not be practical.

What's more important are the problems that you are now facing, what changes in the business process will be required and how the software will help to solve them.

Myth #5 Consultants cost too much. I can do it myself.

Consultants do cost money, but they can show you shortcuts and save you time and money.

The IT field is very broad and there are many specialties. No single person can understand it all, and even if they do a reasonable job of working through it, it will take more time, you will make more mistakes and not get as food a result. The reason people specialize is that they have the experience, have learned from their mistakes and can do a better job.

Myth #6 The cost of the software needs to be justified.

There are two problems with this myth.

The first is that there are many costs associated with installing software. The cost can be 4-5 times the price of the software. You also need to consider software supplier consulting costs, training, hardware, implementation and conversion and initial loss of productivity.

The second is that even if you justify the total costs, you will underestimate the value that the software can bring. The right software can make a significnt improvement in your business process, that far exceeds the cost of the software and associated costs. But you have to plan for it.

Software is an organizational change project

No business can survive without computerization today. Yet the success rate for software projects is highly variable. Some businesses are successful at gaining a return on investment. Many are not.

Why is the success rate variable? In many cases, the same software product is installed in similar businesses, why is one successful and another is not.

The reason is the same as the reason that organizational change projects have a high failure rate. When you change the software that runs your business, you are creating an organizational change and you have to manage it in a similar manner. It is not just a technology change and the reason for failure is not often technology or lack of technical skills.

What makes it an organizational change?

1) Your business operation is made up of business processes (quote, order entry, accounts payable, accounts receivable, inventory, etc.).

2) What is business software? It is the automation of a business process (the process has been programmed to operate in a certain way). There are certain expectations in these processes, and many options available for tailoring the software to your business.

3) In order to implement the software successfully, you must understand your existing business processes in detail and choose the functionality of the software that best fits your needs. Many failures are due to the lack of understanding of this impact.

4) It is unlikely that there is a perfect match between what you are doing today and what the software allows you to do. At very least the software is automating functions that you were doing manually before. This means that people's jobs will be changing. Sometimes this requires organizational changes. If people don't understand the reasons for this change, they will resist it. The resistance will be directly proportional to the amount of flexibility that people have in their current jobs. Many software projects fail for this reason!

5) The software company is experienced in their software and provides training on its features and functions. However, it seldom relates exactly to how you do business. You receive fire hose training on the functions, but not on the changes in the business process. They search around for the features that will let them do what they used to do before. Sometimes they can no longer do what they did before in the way they used to do it. Although projects seldom fail for this reason, productivity goes down for a long time while people learn how to do the job using the new software.

When you make all of these changes, you change your business processes, you change people's jobs and sometimes you even end up changing the organization. If people don't understand why all of this is necessary, you will encounter problems.

Check in to see what the solution is.

Adding more elements to the people, process, technology diagram

In a new post on Value Delivery Management, Jed Simms has expanded the triangle of People, Process, Technology and added 4 new elements: Strategy, structure, information and culture as key elements for a software project to deliver business value.

While I have advocated most of these elements in my past posts, Jed has put it into one diagram.

To see his post, click here.

Does your software provide the information that you need to run your business?

I read a study a few months ago that identified two key issues about managers in a business:

• 15% or more of a manager's time is spent looking for information.
• 42% make decisions based on bad information, once per week.

Since the role of a manager is to make decisions, and decisions are made based on the information that is available, this means that managers are extremely unproductive (wasting 40% of their time) and ineffective if they make decisions on bad information.

What's the reason for this?

Most of our information today comes from computer systems. They are capable of producing data at a much higher rate than any manager can absorb. What is the problem?

Most software that is installed in a business is installed to handle normal transaction workload, because this is the obvious area. The more transactions that can be handled by the fewest staff creates a more productive environment.

However, hidden in all of these transactions is the data about your business. Unless you can extract this data, it isn't being used to manage your business.

In many assignments that I have taken on, I look for data about the business. By analysing that data, I can find out a lot about the business. It may take a lot of analysis and structuring before I can understand the value. In most cases, what I come up with is not known by the business owners and managers. They have assumptions about what is happenning that conflicts with the data. They don't know, because they don't get this information normally.

Computer systems are a great source of data, but it is useless unless the data can be turned into something useful that can be used to make decisions.

The 5 Ws of Software Project Success

Computers are a necessary component of every business today, yet the success rate for software projects in business is not very high. Most companies get some value from implementing software, yet they get far less than they should, and far less than if they looked at software as an investment rather than as a cost of doing business.

If you look at it as a cost, you look at whether you can afford it. If you look at it as an investment, you look at whether you will get a 20, 50 or 100% return. Very few businesses ever achieve returns that measure 20% let alone more than that.

We have all heard the questions that every reporter must answer in any article. They are: Why, what, where, who and when. It turns out that these questions are the same ones that generate results for software projects. The reason that software projects fail to achieve big returns is that there is not a clear answer to these questions.

Let's look at each of these in turn.

Why buy or install the software?
While this seems like a simple question, there are many potential answers to the question. This is often described as the goal or objective of the “project”. The software can be used to satisfy many different goals, and often the people involved interpret different goals from the original.
Take Customer Relationship Management (CRM) software, for example. The assumed goal for some may be to increase sales, but CRM software can do many things:

• It has a contact manager.
• It has the capability to track every interaction with your customers.
• It has the ability to track the status of activity with a customer.

Saying that you want to implement CRM software encounters this type of conflict.

A recent client's objective was to understand the status of activity with customers. The reason was that he was having high turnover with salesmen, and when they left, he had no idea whether there was any sales in the works. By tracking the status, he could quickly assign someone to work on these customers to finish the sale. Most people that I talk to would not have assumed that this was his objective.

You must clearly define why you want to install the software to everybody involved.

What must happen to get the software to deliver the results needed?

Most software projects focus on software implementation, but this need has nothing to do with the software or training on the software. This has to do with how people do their jobs. If we use the example above, every salesperson needs to track all of their activity with clients if you are to be successful. This can be a lot of work.

What is the incentive for the salesperson? If there is no incentive, why would they do it? If they do it, how do you know whether the information that they capture is of value for your objective? Many projects attempt to capture all of the data, assuming that it will be of value later. This results in too much data that is of little value.

Define how you will track whether it is doing what you want it to do. Do it on a small scale to ensure that you can use the data that is being captured. Work with the data that provides the most value first.

Who, Where and When will the information be captured?
These are the questions that deliver the results. If people are in the office and working on their computers, it is easy to capture the information that you are looking for. Rather than write it down, people can type it. However, if they are in the field and don't have access to a computer, and don't have any other need to capture the information, it will be much more difficult. This is where most software projects go wrong. They try to capture too much information, but force people to do it on their own time and don't offer any benefit to the person doing it.

This is a case of less can be more. If you ask for too much, you will get garbage or not get it at all. If you ask for less, the most critical information, you are more likely to get it. If you also show the value that you get early, it is likely to be better information.

This completes the circle:

• Everybody knows why you are doing it.
• Everybody knows what must happen in order to meet the goal.
• The people who must do it, know where they have to do it and when.

Are You Suffering from Software Withdrawal Syndrome?

You know what that is. Your company has just installed new software to run the business. The discussion put you to sleep. When you wake up:

• You have to relearn how to do your job
• Everybody is talking a new language
• your job is harder to do
• Your job takes longer to do
• You get irritated more easily
• Your customers no longer have any patience

For some reason, people who work with computers are immune from this disease.

The impact of this disease on the business can be substantial.

• productivity goes down
• Costs go up
• Sometimes quality of service can be a problem
• You can lose sales.

During a time like this, who can afford it?

The reason for the disease and the assciated impact is that three things have been ignored during the project:

• People - how are they going to be impacted and how can this impact be prevented?
• Process - your business process will be change by the software. How can this impact be prevented?
• Business Results - how do you keep your finger on the goal, the reason why you bought the software during the ensuing chaos?

Can you afford to lose the benefit that you were looking for? What are you doing to ensure that your business is not negatively impacted?

This disease can be prevented. Even after you have it, there are steps that you can take to reduce the impact and recover faster.

Is your business suffering from CRUD

About ten years ago, Fram oil filters ran an ad saying "Pay me now or pay me later". The basis for this ad is that if you don't change your oil filter regularly, you will build up CRUD in your engine and need major engine repairs.

This saying has a lot of meaning in many areas. If you plan, you will avoid future problems, but this is something we often ignore. There are too many fires to fight to worry about planning.

During a growth period, this is especially true. It is hard to focus on preventing an unknown future problem, when you have today's fires to fight.

Things are different in a recession. During a recession, you can't afford to waste time, resources or money. Your business operations are a good source of free time and wasted money.

As your business changes, the activities that you need to perform also change. You add new ones to satisfy the needs, but you seldom review all of the old ones that you were doing. Over time many of these activities become useless because of something else that is being done, but they continue anyway. This is the CRUD in your business engine.

Now is the time to eliminate the CRUD. When business slakens, your people are often less busy. They have time to look at business operations. When business picks up, you will be ready to increase volumes and your costs will be lower.

In most cases, companies don't think of buying software during recessions. They think of it during peak times, because they can't handle the volume. If you have already eliminated the CRUD, your software installation will be more successful. If you automate with the CRUD, it may cause you productivity problems, it will increase cost and may fail to reach your goal.

Why CEOs and CFOs hate IT and ERP

The number of articles that talk about problems with IT seem to proliferate. Many surround the same issues: cost, complexity and customization.

In this article, the writer references a CFO research Services survey of 157 senior finance executives, which specifically looked at initial and ongoing ERP system ownership costs. While many companies may balk at the inital costs, they normally overlook implementation costs (which can be much more) and react again at ongoing maintenance. They particular react to customization.

Even if you don't fit the size and complexity of these companies and their needs ($100 million plus), the same issues apply to you. The numbers just have more zeroes.

Let's look at each of these in detail:

• Cost issues arise because most software sales are focused on the purchase price. The purchase price is only one small part of the cost (see my article on the subject), I think the real issue is expectations. If the purchase price is $10,000, you expect to pay $10,000. If the total cost is $50,000, you have a problem. Yet, if going in, you expected a return of $100,000 a year, then $50,000 may not be an issue. In most cases, nobody looks at the potential of a $100,000 return, because they are trying to justify $10,000. Surprise!
• Complexity creates problems with productivity and this costs you money. If you provide an easy to use aand easy to learn solution, people will become productive more quickly, saving you time and money. In most cases, there is no focus on people. All of the focus is on technology implementation. People are left to fend for themselves. Even the training leaves a lot to be desired. This creates frustration, productivity loss and increased cost and even reduced value. Computers can do complex things easily, whereas people make mistakes when performing complex activities. We should be using computers to simplify activities.
• Customization is a common occurrence in most medium sized companies. Software is purchased and then modified or extended so that the company can maintain existing operating methods. This is a cost that is of questionable value. Every business operates a little differently. Software products are developed around an assumed business process. The customization is required when you don't want to use the process that comes with the software. There are many reasons to use the process that comes with the software. First, you don't need to modify the software or create special routines (less cost). Second, in many cases, the process is best of breed (you will be better off using it). Third, when improvements are made to the software, you will be able to take advantage of them (You won't need to look at new software again). There is one reason why you may want to customize: Your process is more effective and costs less that the one that comes with the software. Don't lose this benefit. This may also be a reason to choose different software.

To see the referenced article.

Procrastination

What is procrastination and what impact does it have? My focus here is on business productivity and the impact of procrastination. In most cases today, it relates to buying software, since software is the primary tool that we use to improve business performance.

We procrastinate because we are uncomfortable. We are unsure about whether we will achieve the goal that we have.

If we are trying to improve sales, for example, we hear from others (especially salespeople) that CRM (Customer Relationship Management) is a good tool to help us increase sales. But we don't know how it will help us increase sales. So we mull it over. Should we do it? We ask others who have been successful. They say it did the job for them. They are typically sold on a particular software product as being the reason they were successful. So we look into the software product. The more we look into it, the more we get comfortable with it. The more we get comfortable with it, the readier we are to buy.

The problem is: We still don't know how it will help us increase sales! We are just more comfortable with it.

I pick on CRM because it has a high failure rate and is one of the more difficult processes to manage effectively.

It is good to feel uncomfortable before buying a new software product. Our problem is, we don't know how to effectively become more comfortable. If we focus on the software product, we have a reason to still be uncomfortable with it, but we become more comfortable, because it becomes familiar.

The area that we should focus on is the business process that is being automated. If CRM will help us increase sales, then HOW will it do it. If we start to create a vision of the new process, we can identify exactly how it will help, we will not only become more comfortable with what we need to do, we can even become excited. The detail allows this vision to become real. When we now go out and look at the software products, we can see exactly whether and how a software product can help us.

At this stage, we will no longer be suffering from procrastination, we will want to take action.

Being able to see what this will look like can be difficult if you have never done it before. You can get help from a coach or consultant, but it is important that you do it yourself. Nobody knowss your business like you do and nobody else can say whether the change is the right one for you.

To eliminate the procrastination, take action. Don't run out and buy, start creation a new vision for your business!

Success or failure in software applications

Our businesses run on application software. Yet the failure of new software applications continues to plague us.

A survey of 158 organizations by Aberdeen group in February and March of this year, has shown another set of issues. The writer describing this in a BLOG, outlines the symptoms, but his perspective also describes the problem. The results of the survey show:

• Nearly 65 percent of respondents reported declines in employee productivity, up from 58 percent in the 2008 survey.
• Just over 60 percent stated that problems with application performance have caused decreases in customer satisfaction, a jump up from 47 percent in 2008.
• nearly 40 percent said that application problems damaged the company's brand, compared with 32 percent in 2008.

Is this kind of performance acceptable?

Part of the problem starts with the writer's opening sentence "Sometimes I forget that selecting, implementing and paying for core enterprise applications are just the first steps in the long and arduous journey of managing the lifecycle of enterprise applications. "

Implementing new application software is not about software, it is about business outcomes. Talking about software projects in terms of selecting and evaluating software as the first steps is the problem. Too many projects get started with the software and end with the software being installed. The software is only a small part of the need.

After implementation, business units are left trying to make sense of the software, become productive with the software, respond to customer needs and continue to sell their products. Unless this is an integral part of "the project", why would you expect anything but dissatisfaction with the results.

Successful software projects need to follow the following cycle:

1. Identify the business goal in concrete measurable terms. This may mean dollars and cents (the most common measure), but also means other business outcomes. For example, improvement in quality of service, faster response time, improvements in productivity may be more easily measurable and will eventually lead to improved profitability.
2. Identify how the software will help you reach these goals. If you just assume that improved results will come, you will be disappointed. New jobs, new software, revised business processes will initially cause reduced productivity. Unless there is some early return on investment from these new tools, you will cause frustration, reduced performance, etc.
3. Evaluate software based on its ability to best deliver the improvements identified above. Then implement and measure the results based on the imporvements. Leave the financial measures until later.
4. Do not end the project when the software is installed, or even when the technical cleanup is completed. End the project when the business goals have been achieved.

The original blog entry describing the survey can be found here.

CRM - 3 roads to disaster

CRM (Customer Relationship Management) seems to get an increasing number of articles about failure. It offers so much opportunity for a business, yet has a high failure rate.

The attached article by Rick Cook in Inside CRM is another in the list. In it Rick identifies 3 areas where businesses have made mistakes with a CRM project:

• Concentrating on technology rather than people.
• Not having everyone on board.
• Not putting the customer first.

I've mentioned these before, but it keeps happenning. The last is the most interesting. When we use the words "Customer Relationship Management", how can we think of anything but putting the customer first. If we want to improve the relationship, the customer must be first.

The second must be important if we are to accept the third. If our people are not on board, the customer will never be first.

If we accept those two, then we should not be concentrating on technology. It is the least important and only becomes important because the job is left to the technology people. Technology is only a small part of the solution. It may be a big one from a non-technician's point of view, but forget that. The people, the change in process, the relationship is what's important.

In order to achieve success, it is the only thing that is important.

Are you in a Perceived Staisfactory Relationship with your IT suppliers

In a recnt discussion with an IT supplier, he described one of the challenges that he faces when speaking to potential clients. They are in a perceived satisfactory relationship. They are not ready or interested in a new supplier.

Having worked for large companies with many suppliers, I can understand the situation. There are a lot of articles out there about customer relationship management that describe how it is easier and less expensive to keep and grow an existing customer relationship than it is to build one. The same is true of suppliers. I have had many poor supplier relationships that were turned around. It is much easier and I fully support it. Changing suppliers is a major distraction and keeps you away from your priority, building your own business. You focus on your major suppliers, who are very important to your business.

Unfortunately, computer support is not a priority for most businesses. They must use computers, but it is a distraction. We see this not only in small businesses, but also in large ones. Many CIOs (Chief Information Officers) have complained for years that they should be at the executive table. In those situations, since the experts are in the company, we can say that it is their own fault. They haven't shown how important Information Technology can be to the business, so why should be business care?

In a small business, there is typically no one with a good combination of business and technical skills to guide the company in exploiting technology, so perhaps that is understandable. But what is the impact?

Before discussing the impact, let's look at the source of the problem. Most computer support companies and staff that support small business are technically skilled and experienced. They speak technical language to their customers and expect them to do the same. They look down on anyone who can't speak their language and make their customers feel inferior.

Albert Einstein said "if you can't explain it simply, you don't understand it well enough". That is the problem. The suppliers and technicians don't understand the issues well enough and they need to show their superiority by using technical language. As a result, business people suffer from a low expectation of what they can get from an IT supplier and changing suppliers is painful and doesn't produce value.

There are a few suppliers out there that can speak the language of business. Business owners and managers need to start looking for them and expecting to be able to get the kind of service and language that they need.

Some of the expectations that you should have and should get:

• Your computers should provide a stable service. Failures and problems cost you time and money.
• New software should increase productivity, reduce costs or increase quality. There should be a rapid return on investment.
• You IT suppliers should be able to speak to you in your language, expalin the business issues without technobabble.
• Your suppliers should be coming to you with business solutions, not another sales pitch.
• Your suppliers should make it easier to make use of computers, not harder.
• Your suppliers should help you learn to adapt to the new technology, not drop it in your lap and have you learn through a fire hose.

There are probably more things that should be expected. Start not only expecting this, but demanding these from your suppliers. This is the only way things will change.

Don't waste company knowledge

When a business looks at productivity improvements and improved profitability, they often look outside their company for the skills to help them get there. This is particularly the case when new software is installed. They look to the software company as the "experts".

The software company are experts in their own software, but not necessarily in getting value from their software. In order to get value from software, it has to help you to achieve your goals. That starts with your existing business processes.

Your business already does some things right. There may be opportunities for improvement, and many of the opportunities are already known by your staff. They just don't know how to make the improvements.

When you turn over a software project to your supplier, you are giving them the keys to your business. They don't know your business! They know their software.

The challenge is to get the knowledge from your staff of what works and does not work. Help them to develop solutions to improve productivity, increase sales or reduce costs, whatever your current priority may be. Focus on the issue that is most important to you. Once they understand the priority, and have a way of making their knowledge known, they can help to redesign the process to achieve the improvements. Once they understand that they will be able to see where the software can help them.

Most small businesses don't have the kind of skills and experience to bring people together
to achieve this goal. So they have to go outside for help. The mistake that is made here is that they turn the whole process over to outsiders to design the new solution. What is needed is someone who can help bring that knowledge to the surface, educate your staff about process improvement and help them to redesign the process. Notice the emphasis on help, not do it for them.

Doing this will ensure that they are focused on your goals, they will buy into the solution and own it in the end.

Not only will the job be easier, the solution will be better, and the cost will be lower (you are paying for a facilitator or coach, not a designer).

Business Software - Buy first, pay later

Does anybody remember the old Fram oil filter commercial "pay me now, or pay me later"? It describes a situation where, if you don't change your oil and filter in your car on a regular basis, you will pay maore for it later, by having to buy a new engine.

The same thing applies to buying software. It has gotten very easy to buy business software. Just download it. It is easy to use. There is no effort to install. Most business managers will buy first, then investigate later. This can be a waste of money, time and effort. You may get some value from it, but you can get a lot more, if you plan for it. In addition, the cost of implementing new business software goes far beyond the price of the software. There are many other hidden costs. Check out my articles at www.thevirtualcio.ca for more information.

The problem comes with the changes to your business: the process, job definition and training. If you aren't prepared for that, you will lose in the end. Your productivity will go down. Your costs will go up. You may not get any value from the software.

By doing a little planning up front, you will understand the total costs, understand exactly what benefit you will get and how you will get it and minimize the lost productivity.


We have all heard the old The problem with not preparing for what you will do with software that you buy.

New Business software: Are you in the show or a spectator?

I recently read an article that talked about the differences between a spectator, the star and the people creating the scenery, the lighting etc., relating this to other activities.

I think it can also relate to installing software for your business.

In many cases, business owners look at their job as funding the activity, making the decision and getting out of the way. Their perception is that they are not technicians, and all anybody wants to talk about is technology. Since they don't understand what's being discussed, they back away from the project. Many of the business staff also back away leaving it to the technicians (either the supplier or the more technically oriented staff).

As owner or manager, you don't want to become a technician. If you do, you won't do the important jobs.

There is a much bigger role for the owner/manager, much bigger than any technican provide. Would you let the lighting specialist define the return on investment? Would you let the set builder decide on who the actors would be. Would you let them define how much to spend? No. You are the Producer and Director. You decide why you are doing it, how much to spend and what kind of a return that you want. You also do everything in your power to ensure that you get that return.

So what does that mean?

• You define your business goal. You visualize how the goal will be met.
• You ensure that your best people are involved, and they look at how the business activities need to be changed (doesn't an actor provide an interpretation?).
• You keep the goal up front so that everybody understands what success means.

These are the most important activities in your project. They can't be left to an electrician, a stage hand or even an actor. None of those responsibilities are technical. yet they are the keys to success of your software installation.

Little things mean a lot

I had a discussion with a small business owner recently. She was typical of many people who start a small business. The was in it for her skills, and she was really good at what she did. What was lacking was the business skills. She hated accounting, tracking expenses, doing calculations, etc. So she did it when she absolutely had to, no sooner. She did what we all do with something that we don't like, we procrastinate. Then we come to the time when we must do it and it is very painful. We dread it.

Many activities required for a successful business are not things we like to do. They are things that we must to to succeed in business. What we need to do, is ensure that we build a system to manage our business. Don't do a bunch of "one of" things just to get through it. Find someone to help you put together a system that will get the job done with minimal effort. For example, if you have to do quotes, is the data captured so that you can automatically create the invoice? When you order materials for a job, is it tracked as part of the job, or is it a separate activity? Are your invoices and costs automatically allocated to the right accounts? Setting things up this way can greatly simplify your business and make it easier for you to manage those things that you hate to do.

You may not have the knowledge to do this for yourself, so get someone to help you. Set it up once, then use it. That will minimize the complexity, eliminate the need for you to think about it. It will happen automatically, so you don't have to procrastinate. And when the big time comes (tax time), everything will be ready for your accountant.

Setting up once, saves you time, saves you frustration. Even if it costs you money fora bookkeeper or accountant to set it up for you, it will be worth it.

Software training like gaming software

There is a change coming in business software. It's happenning in web based solutions, but has been around for a long time in games. How effective it is for business is another question.

Games are designed with training in mind. When you start playing a game, they give you a simple problem. As you succeed at the first level, you get a bigger challenge. Each level gets more difficult. There are two benefits to this:

• First, you are not exposed to the complexity of the full game. In effect you learn by doing.
• You get a feeling of achievement as you pass each level. This creates an interest in going to the next level

Business software traditionally has not done this. Because the software comes with the software supplier, he provides training. There is an assumption that people will remember this blast of training and that common training is adequate for everybody. It not only assumes that everybody learns at the same pace, but it assumes that every business is the same. Learning through a fire hose does not work! Every business is different, every person has a different learning process, and every person has a different job. The learning process should be like what is delivered by gaming software. Learn a little at a time, learn only what you need, see some success and go on to the next step.

Self learning is available in web based applications as well. Many of the products that are delivered over the web are easier to use. We can see that in individual products such as Amazon and eBay.

Is that good enough for business? Do we just wait until the software suppliers deliver a more innovative way of training business people?

There is one more compliation in business. In games and in many of the services like Amazon, there is one process and it is defined by the software developer. The software developer defnes the goal and the methods of achieving success. They program this into the game. They are in total control. Services such as Amazon may be more adaptive, but the supplier is still in control of the game.

Business is different. The software developer develops an automated process, but the business is in control of the game. The business has their own set of goals, their own business process and will try to adapt the software to support the business process. The software supplier is not in control. He doesn't know how the software will be used, so he can't build a self training approach.

Many businesses buy the software and assume that installing the software will address their problem. After the fact (time and money), they find themselves dissatisfied with the results. They didn't know that they had to provide the goal, the vision of how to reach that goal and the process that the software has to be applied to.

I'm sure that we will solve this problem some day. But for now, we need to focus on the process and a better method of training staff to learn the software.

CRM, Salesforce.com and other software

I just read an excellent article about the misconceptions of justifying software and getting value.
The article talked about justifying salesforce.com to your CEO.
The author talked about 5 misconceptions about Salesforce.com. These misconceptions are valid for many software products, not just salesforce.com
The five miconceptions (generic to any software)

1. Buy the software and the results will come in a few weeks. While the software can be up and running in a few weeks and in use, whether you get value is another question. How is your business process going to change if you are going to get value? How will the software help? This is often the biggest failing of any software implementation.
2. Use of the software can be mandated. CRM products are a major problem here, but others are as well. You can tell people that they must use it, but two things will happen: Your productivity will go down; Your data will not be very good. The biggest benefit of your new software is the data that you capture about your business. If the quality is bad, your value goes down. The net effect can be that you get less value than before you bought. People must buy into the need and get some benefit from it, or you will not succeed.
3. CRM products suffer from this problem more than others. The misconception is that Salesforce is a glorified contact manager. No software product is that simple. All software automates a business process. It does not just sit there and contain data. The process that it automates may not match your existing business processes. You need to understand what it does for you and how you can use it.
4. Low intial setup costs should sell you. Different software products have different setup requirements. Some have an initial outlay for hardware and software. Others do not. In either case, the cost of the software is only a small part of the cost of installing and using the software to get value. If there is no value delivered, the cost is too high. No matter how high the cost, if the value exceeds the cost, you are ahead. See my article on the cost of buying business software.
5. The best way to install software is the big bang approach. While there are some minimum things that must be done to ensure that you have it right, the big bang approach creates the big opportunity for failure. This applies to large companies (and some have had a BIG bang failure), but it is even more important for small ones. You don't have a bunch of people sitting around to work on this. You have a business to run, and change is a challenge. It affect productivity. See my BLOG entry on Chaos.

To see the article on Salesforce.com click this link.

Salesforce.com seminar

I attended the Salesforce.com seminar ysterday. Salesforce bills itself as usable by large and small businesses alike. Because of its business model and lack of large up front costs, this is true.

What I found interesting though is that the seminar that I attended was defined as an introduction for potential users of the product. They did have an introduction to the functionality, however, most of the focus was for large multi-nationals and how they can integrate Salesforce.com into their business. They focused on Cloud computing. The partners were there promoting the add ons that they provided. The signs identified the companies and their products by name, not by value or functionality.

While it is nice to see that they are trying to make their product easy to set up and use by introductory users and small businesses, their marketing of the product in this forum leaves a lot to be desired. Most small business users will not care about cloud computing or components. They are looking to get value from the software. They don't have time to analyze the productss. They just want to make it happen.

Software companies that want to sell products to small businesses need to change their approach, if they want to provide solutions to small business. They need to get out of the technology and into value.

Installing software means creating chaos

Many business owners decide to buy software in order to improve their business. They often assume that this is all that can happen. However, no matter how small the software product is, they are making a major change to their business that has implications on their business operations.

A software program is an automated process. The developers have defined a business process and chosen to automate it in a specific way. This means that when you implement the software, you are making the following changes to your business:

• You are changing the way you run your business. It is unlikely that the way the software developers have chosen to automate the process is exactly the way you currently run your business. Do you understand how things will change?
• You are changing people's roles and responsibilities. Since the business process is changing, the job people do will change. Roles and responsibilities will change. Do you understand how people's jobs will change?
• You are changing the tools (the software) that people will use to do the job. They will be uncomfortable with the new software and won't know how to use it properly. The training that is provided will not help a lot. Most training for business software is like drinking through a fire hose. What impact will this have on productivity? How long will it take to recover?

These three changes will create chaos in your business. Your choice is whether you create CHAOS 101 (the basic version) or CHAOS 701 (the PHD version). Through proper planning, design of the process impact and appropriate training, you can ensure that you minimize the impact.

refer to chaos 101 vs 701

Software is just Automated processes

I couldn't have said it better myself. This is a quote from Jed Symms, a consultant from Australia, who also looks at getting value from software.

He describes software as automated processes and outlines how to evaluate software.

• First describe your business processes.
• Simplify your business processes taking 40-50% 0f the processing steps out. (this is possible because most of the steps are carry overs from past actvities and no longer are required. Sometimes standardizing activities can achieve the same thing).
• Then, and only then, look at the software and how it supports your new business process. Some processes will match exactly. Some software processes will be better than your current process. Some will not be as good, but you can live with them. For some processes, the software will not help at all.

Most businesses that install new software, don't recognize that the software automates a business process. The way they automate it may be in total conflict with their existing processes. The end result is a conflict and a result that doesn't improve business operations. It makes it worse. That's why so many software projects fail.

You buy software to upgrade your business. Make sure that you get value from the experience. Start by looking at your business processes.

Chere here to see Jed's article.

Return on Software Investments

A recent study by the Aberdeen Group indicates that small and medium sized businesses that are investing in ERP (Enterprise Resource Planning) software are not estimating the Return On Investment (ROI). Considering that these "investments" are being made to increase performance of the business, you would think that more businesses would want to see the return. Can you imagine investing in stocks and not knowing what a good return was?

For those that do estimate ROI, less than 25% look at the return after the project is completed.

Calculating ROI for an ERP project may be the challenge. ERP affects so many parts of the business that it is difficult to see the impact after the fact and difficult to project just what will be impacted by the change.

The software change is easy to see, but that is not "the big change". The big changes, are cultural, improved productivity, reduced costs and improved information for decision making.

Most software projects focus on the implementation of the software and on training people to understand what the software does. The original goal is often lost in the activities of implementation. Most businesses acquire software because they feel they have to. While they may have to, to survive, they still need to understand how it will affect their business and because their business is constantly changing, financial measurements can't be the only ones. Questions like: "how will it speed up delivery to my customers?; "how will it improve the quality of service?"; "how will it reduce costs, improve productivity, improve access to information?". If you can visualize the answers to these important questions, you will develop a plan that goes far beyond implementation of the software, and even if you don't estimate ROI, you will get a much better result.

Look here, if you want to see more detail on the study.

Save to Invest in new technology

Most businesses that look to take advantage of new technology, look at this as an expenditure. They know that they need to spend money to buy the hardware and software, and they have to wait until they can find the money.

At a conference, recently, I heard the term save to invest. What I realized was this was the approach that I take with software projects. Often companies buy first, hoping that they can save money later. It doesn't have to be this way.

A company looks to software to improve their business, and they should. But this doesn't have to be guesswork.

Whatever your goal is, you need to spend more time visualizing what a difference this will make to your business. This is where you will define in detail where your savings will be.
As you design your business process, you will identify many areas where your can save money or improve performance. Many of these can be done without buying new technology. You may be able to buy a small amount to gain further benefits.

This is in total conflict with the traditional approach to implementing software, which I would call the BIG BANG approach. Pay all your money up front and hope to get a return. This not only increases risks, but takes longer to produce a return.

every project should have some benefit up front, then produce incremental returns until it is finished. This will cost you less, reduce risks and keep everyone feeling involved in the process and seeing that not only the technical people are making a contribution.

Increase productivity with new software

I have often mentioned the productivity that is lost in a business when new software is installed. This is caused by two things: People are uncomfortable with the software; they have been forced to consciously think about what they are doing. This slows them down.

At a conference yesterday, I was reminded that games don't work that way. When you start a new game, you enter at a simple level. As you gain experience at that level, you begin to get more comfortable. Once you pass the first level (you are now comfortable), the complexity increases. The complexity and knowledge that you need increases at each level.

Unfortunately, business software doesn't work that way. When you first get to look at new business software, you get to see all of its complexity. You have to figure out what you don't need, so that you can ignore it, and focus on what you do need. Most people never get to use more than 10% of the functionality, even when they are very experienced. This makes people uncomfortable and slows them down.

Training doesn't help. You get one to five days of feature blast. Most people remember very little of this firehose training.

Let's assume that the business software industry is eventually going to get it, and provide a learning approach to their software. What does a business do in the meantime?

The solution comes in planning.

1. If you have defined your business processes before you went to to buy the software, you know what you want the software to do for you.
2. Use that to identify the training that you need. Ensure that people understand the way the new process will work. train them on the functions that will make the first phase work.
3. Once they become comfortable and productive, you can go on to phase two. Do the same thing again. Define the new steps in the process. Train people on these new features.

Not only don't companies go through a phased approach, they often never get to phase two. The first implementation is so traumatic, they never get to exploit the real functionality of the software. The next time that the business needs to improve, they assume that their current software doesn't do it and they go through another forklift upgrade.

Small Business pays for Technology supplier's mistakes

I have run across two instances lately of a small business that paid for mistakes made by their technology supplier.

Most suppliers to small business are small businesses themselves. When they make a recommendation of a solution to their customer, they tend to charge in two parts. The first part is for the hardware and software. Since they must purchase this themsleves, they tend to charge for it up front. They charge for their time later. This is something they can control, and it is where they make their profit.

All of this is understandable, and if the solution was guaranteed, it would not be a problem. But since the supplier had to pay for it up front, if the hardware doesn't do the job, new hardware must be bought. The client ends up paying for this. The first purchase is a loss.

This may be understandable except for one thing. In both cases that I mentioned, the supplier had made an assumption. They assumed that because this was a small business, they did not want to pay for a top of the line solution. They bought a cheaper solution, because they assumed the client would not pay for it. The client wasn't given the opportunity to choose. The quality of the hardware may have been ok for most situations, but not all.

Technology suppliers need to change their approach with small business. They need to assume that their clients are intelligent, even though they don't know the details about the technology that they are buying. They need to make clients aware of the options and the risks that exist. If they do that, then their client will have more respect for them and trust the solutions that are recommended. Until that happens, small business will continue to feel that they do not have any control and will not trust the solution providers. That is one of the reasons why many small businesses are reluctant to take advantage of new technology. They knwo that they are likely to get the shaft. They only go there when they have no choice, or have totally satisfied themselves that the solution is right. Both delay the implementation of solutions that could bring productivity advantages to their business.

Software sales tactics

I recently experienced a sales tactic used by software sales people and I thougth I would provide a caution to business owners who attempt to get support for their investigation into acquiring software.

I was preparing to help a business that was interested in CRM software. I had not looked at this package before, so when the supplier (out of the blue) sent me an invitation to an event, I thought I would attend.

The first thing that I got was a phone call from the supplier asking what I was interested in. After I explained, he asked me what I used for myself and whether I would be interested in a free trial. He then put me onto my sales contact who followed up by phone and email within two days.

While this was excellent follow up by the software company (most don't do that well), it was a major problem for me. I hadn't defined my own needs yet. I hadn't helped my customer define their needs either.

So here I was, being sold a free trial without any definition of what I was trying to accomplish!

This is a common experience for most business owners. We start with the software and see if it sort of fits with the generic concept of what I wanted to do. Then we make a decision. Now it's too late.

If you have read my blogs before you know what I believe:

• Define your goal. Visualize the end result.
• Get a detailed definition of your business process.
• Identify how the software supports your business process.

Do all of this before you consider buying. I understand how easy it is to fall into the software sales trap. If you want to be successful, don't let the supplier dictate your schedule!

Conficker Virus and legitimate software

Many companies think they are saving money by getting bogus copies of software. There is no question that software companies charge too much for their software and constant upgrades. For the small businessman and large for a different reason, buying software is a pain.

But all the hype about the conflicker virus provides us with another good reason to have licensed software and up-to-date virus definitions.

According to the people that respond to these issues, anyone who had a valid operating system and up to date anti-virus, was not vulnerable to this virus. There were 2 million systems that did not have valid operating systems and could not get updates. These are the people who were the most vulnerable.

One IT supplier identified a new customer that had bought what they thought was legitimate systems, but the supplier had simply copied their own version of the operating system. The customer didn't know, and as a result were vulnerable. This begs the question. If you got it cheap, is it valid?

All small business owners are concerned about running their business and the costs of running their business. The cost of the software is small compared to what the Conflicker virus could have done. There is so much free software out there, that you can run your business with free software (including LINUX), why would you put your business at risk with copying software?

Focus on running your business. Get qualified suppliers that can take away the problems of having to develop technical skills. There is far more value in that than in trying to get cheap services.

Small Business can be Beautiful when it comes to IT.

I see many small businesses that are struggling with the use of computers. They often spend the money thinking they are going to get improvements and end up with far less than what they expect. What is the problem here?

Large businesses have many different problems. In a large business, many people have to work together to get the job done. Many of these people hardly even see each other. They make assumptions about what other people are doing and try to do their best, in their own little silo. In many cases, they are operating to different objectives, objectives set by department and end up working at cross purposes. When new software is implemented, the project is often assigned to dedicated people, people who don't do the job on a day to day basis. They develop the new processes, identify what needs to be done and turn it over to the people that have to make it happen. There are huge communication problems and even when the needs are identified, it is difficult to solve.

In small businesses, people work much closer together. They can see each other and should know what everybody is doing. They don't have departments with different objectives. They shouldn't have silos and communication problems........... But they do. I have seen organizations as small as 5 people operating in silos and not knowing what each other is doing and what impact they are having on each other.

So the problem is not unique to large business. It also exists in small.

The good news is, it's easy to solve in small businesses:

• It's easy to set a single obective.
• It's easy to get people in a room and talk about what needs to be done.
• You can undertake major changes in software, business process, organization and do it in a few months.

So what's the problem?

The problem is that when organizations decide to implement new software, they think of it as a technical project to be run by technicians. It isn't.

The reason that you start is that you want to upgrade your business by using technology more effectively. To make it work you need to:

• Have a common business goal that is understood by everybody.
• Understand how you will achieve that goal, by changing your business process, using the tools provided by the software, training your people to work differently, perhaps changing roles and responsibilities.
• Installing the software and converting your data.

Only the last one is technical. The first two are not. Success should not be measured by whether the software was installed, but by what business goals were achieved.

Large businesses can afford to put extra resources towards a large project. Small businesses can't. They also need to demand business results quickly.

Simplicity Increases Software Value

I just read a book about simplicity, and, although it has nothing to do with Information Technology and Business Software, it describes perfectly the problem that most businesses have when it comes to IT.

In some ways, technology is simple. This is the way most people who work with computers every day would probably describe it. In some ways, it is simplistic. Software does whatever you tell it to. It can sift through tremendous amounts of data very quickly, but it has a set routine that it follows.

When it comes to implementing new software, we have two groups of people involved. The ones that know the software and the ones that don't. To the ones that know, it is simple. They are cmfortable with it. They work with it every day.

To the ones that don't, it is confusing and frustrating. It is confusing because there are so many options. Most of them are of no value to you, but until you know that, they are still an option that you have to choose to ignore. Then when you try to do something, it doesn't work the way you think it will and you encounter a problem. This gets you frustrated.

In order to help you overcome your frustration and confusion, many technicians will simply shrug and say you have to learn. Others follow the KISS principle (Keep It Simple Stupid). They try to dumb it down. This misses the point completely. It assume that the people learning are stupid or slow. This is not the issue! The issue is that the software is showing all of its options (read complexity), and the users have not yet developed filters to ignore all of this complexity.

The answer is to help new users learn. You don't do it by firehose training. You help them to develop filters. Instead of KISS, you need MISS (Make It Simple, Stupid). This meets the person doing the training needs to do it in a way that helps the new learners. Give them the information that they need to do the job. As they do the job, they will learn to ignore what is not important (develop filters) and encounter less confusion and frustration. They will also become productive much more quickly. The problem is switched from the learner to the trainer.

How do you help people develop filters, learn only what they need to do the job? You start with the business process. Then look at what parts of the software help doing the process. Some parts are more important than others. Some can be delayed until later. Train only on what's needed. Just in Time.

Four steps to success of software projects - Step 4

The last step of the project is what is normally viewed as the project. The difference here is that the project as defined in many organizations as the imlementation and set up of the software. The project must go much further. No value is delivered by implementing software. The value (new business outcomes and benefits) is delivered by the new business process.

The software is simply a tool that allows you to perform activities more easily, perhaps do some that you couldn't do without it.

I won't emphasize any of the normal implementation activities here, as most software suppliers will provide the details, and most technical staff will know what to do.

What I will emphasize are the things that are normally not done and why that must change.

Recognizing that the software is simply a tool and that the process delivers the value, the approach to training must change. Most software training is like drinking through a fire hose. You get too much information too fast for you to absorb. In addition, most of the information is of little value, especially at implementation time.

When you implement, you are using a new set of tools in an unfamiliar way. therefore your staff will be less productive, uncomfortable and frustrated. This is normal! Your goal, then, is to get them productive as quickly as possible. You can't do that with firehose training! What you can do is tailor the training.

You know how the process has changed. You did it in step 3. You know what part of the software is required to perform the functions that are critical to productivity. You went through that in step 3 and the early part of step 4. So you want to develop a specific set of training to have people understand how to do what they have to do every day.

Hopefully, the software that you have chosen has the capability of doing much more than just those early activities. Once the software is stable, people are more productive and comfortable with their new environment, you can look at the software again with a view of exploiting more of its features.

Exploiting the capabilities is often overlooked in many organizations. The pain of implementation stretches for months and nobody ever goes back to look at what more can be done. This is another area where value is lost. You have bought software that has tremendous capabilities, yet you never go back to gain the value that is waiting. Most software is significantly underutilized.

One of the biggest opportunities is taking advantage of the information that is now available. Most managers spend most of their time looking for information to make effective decisions. This new software should be capturing a lot more information that you had before (otherwise, why did you install it?). This information is a valuable resource.

The four key elements of this phase are: software tool, training, information and expand.

Four steps to success of software projects - Step 3

Once you have your goals and vision and have identified your team, you need to look at your business process.

Your business process is the list of activities that you do to deliver the results that you are looking for. Since you are trying to improve the results that you get, obviously you need to change the activities. The software that you buy will require a change to the activities that you do. Even if the method of recording is the only difference, something will change. In addition to just automating activities, software comes with built in assumptions about how you will go about using it.

The is the big mistake that many organizations make! They assume that all they are doing is using a new tool. The approach to doing these activities will change! You are trying to deliver a different set of results.

Albert Einstein once said: "Insanity is doing the same thing over and over and expecting a different result". The opposite is also true. You can't expect to improve the results that you receive by continuing to do the same activities.

You start by describing the activities that you now do. This is extremely important! Everybody will make assumptions about what is going on, and they will be wrong. The devil is in the details. Once you know what is happenning today, you can look at what you need to do to get the improvements that you are looking for. This lays the foundation for the new flow of activities.

This new set of activities and the flow between activities and people will provide you with a new set of business outcomes and benefits. The process will show you what you must do to deliver the business outcomes. It will also provide you with a specific set of requirements for the software that you will purchase. You have a direct relatiosnhip between the software requirements and the business outcomes.

These four elements: activities, flow, business outcomes and benefits, will provide you with the basis for success.

Four steps to success of software projects - Step 2

Once you have set your goal for a project and have visualized the results, you need to start looking at your project team. In most small businesses, there are not a lot of people available to work on such a project. That's why most small organizations take the lead of the software supplier, and let them run wth most of the project.

In larger organizations, where there are people who can dedicate themselves to the project, they tend to be technical people and the total focus is on the implementation of the software.

This is mistake #2.

The software will not deliver the results that you need! Your people will! They will only do that if they are aware of your goals and your vision, are educated in the tools necessary to deliver your vision and work together to make it happen.

Your project team must consist of the people who will be doing the job after implementation, the technical resources that will implement the software, the people who will provide the education and training. Most of these people will not be dedicated to the project. They will do activities that are required, but they must all understand the goals, the vision and their roles before during and after.

The big mistake that many organizations make is to not involve the people who are currently doing the job, because they are too busy. They are the people who understand what is being done, must understand what has to be done after implementation, and must be involved during the project.

The four key elements of this phase are: Awareness, education, involvement and teamwork.

Four steps to success of software projects - Step 1

When you consider buying, installing or upgrading business software, the starting point is asking the question - why?
It may be that you want to increase sales, increase productivity, decrease costs, improve cash flow, etc. The reason doesn't matter. Most often and organization will jump from this broad goal right to looking for software products, or talking to friends or colleagues about what they used. This is a big mistake! The goal is too loosely defined. Everybody in the organization and your suppliers will have a different view of how to achieve this goal. How you achieve this goal will depend on what you mean by it. And this is different from person to person, company to company.

You need to be able to visualize what this goal means. For example, if you are considering Customer Relationship Management (CRM) software, is it your intent to become more intimate with your customers, understand their needs and wants even when you can't satisfy them, understand every interaction? Or do you just want a contact manager and the ability to track sales in process?
This step is the most important!

Once you have visualized the solution, you need to identify how you will maintain the energy to deliver the results. Most software projects are more of a marathon than a sprint. As much of the activity is technical and of no interest to the business, most business people get tired and ignore the project waiting for something that they can get involved in, in spurts. They are busy running the company and can't focus on the project the way that technical staff do.

During this step, you need to identify deliverables that are to be performed by the business to move it forward. You must identify activities that can be done in spurts that help to move the project along and maintain focus.

As leaders, you must also maintain this focus by looking for results, improvements in te short term and not be satisfied with waiting to the end.

These four elements: Goal, vision, focus and leadership will be critical to the ongoing success.

Four steps to success of software projects

Many business owners are frustrated with the performance of Information Technology in their business. To some, it is the reliability of the hardware and software, to others, it is the language of IT that gets them. They are trying to run their business and unless they are technicaly proficient, they get frustrated.

The real issue, though, is their sense of value and lack of control. They don't feel that they are getting as good a return on their investments and are frustrated that they can't seem to do anything about it.

This doesn't have to be the case. As a business owner, you don't have to be technically skilled, like you don't have to be a mechanic to drive a car.

The problem is that all of the focus is on the car. If you had to know how to repair a car before you could drive, most of us wouldn't drive. If most of us knew how to repair a car before we drove, car manufacturers wouldn't have to put any effort into preventing them from failing.

Unfortunately, computers haven't reached that place yet. Most computer technicians believe that everybody should be knowledgeable about computers, so they don't consider speaking business language.

In order to fix this problem, we have to change our attitudes. As business owners, we need to insist that software developers and companies focus on the business issues and not just on implementation of the software. If we ensure that they do this, we will increase the value that we receive, decrease the frustration and improve our business performance.

Where do we start?

My approach is to change the sequence. Often a business project that will require software, moves straight into the project development phase and all future focus is on the implementation of the software. This is the problem period and is the source of all future problems.

My approach goes through four steps:
1. Purpose
2. People
3. Process
4. Technology
Yes, technology is the last step. It may be the largest. It may be the longest. Many of the benefits can be received before the software is fully implemented. There are big benefits in the first three.

I will outline each of the steps and their benefits in future posts.