Simplify your business, get a life

The 3 problems of small businesses

2011-02-07T07:59:00.000-08:00

In a recent discussion with a small business banker, he identified three problems faced by most small businesses. They were:

Cash flow
Planning
Staffing

In my Blog entry last week, I mentioned the problems from Quote to Cash, where many small businesses don't generate invoices on a timely basis. If your only costs are time, and you have enough money coming in, then late invoicing may not be a big problem, and will not have a big impact on cash. But if you have materials to buy, cash flow becomes a big problem. You can at least reduce that problem, by issuing invoices on a timely basis.
Next week, I will describe a common problem that I have encountered with some small businesses who see having time to generate invoices as a problem.
Planning is the second area identified by the banker. Often planning is what people do when they are not busy reacting to the challenges of reacting to day to day business issues. Planning should outline what you want to achieve, so that you can focus your time on the important issues. If you don't plan, you tend to react to business issues as they come up. You focus on what's urgent versus what's important. The key is to identify what is important to you, and spend your time on activities that help you get there. That is what planning is all about.
Staffing is the third area mentioned. As small business owners, we have a challenge finding staff, who have the skills necessary to do the job. We can't afford the very skilled, because they are too expensive. We hesitate to use specialists, because they are too expensive. So we hire junior people and tell them what we want. We then have to tell them over and over and they don't seem to get it. What's wrong with this picture? When we get into business, we start with a specialty and learn that we have to do many other things. Most of these things are difficult to delegate to junior staff and we end up doing it ourselves. Who is the busiest person in the office? The owner.

All three of these problems are process issues. I will provide some insight into solutions in my next few posts.

For anyone who reads this, if you have other problems as a small business owner, please let me know.

From Quote to Cash

2011-01-30T08:09:00.000-08:00

Many small businesses suffer from the quote to cash cycle. With many small business owners that I talk to, who work IN the business, delivering products and services, there is always a challenge to balance workload.

You work hard to get a sale, then work hard to deliver. In many cases, these jobs are back to back, with a need to start working on the second, the minute the first is completed.

With a build to suit approach, which is where many small businesses start, a lot of time and effort is spent doing a quote or estimate. Once the sale is made, all focus goes into delivery. When the job is finished, you start to work on the next one. Many times, you are too busy to create the invoice.

Most people might say "generating the invoice is the most important part!". I always felt that, and was surprised at how many businesses don't do it immediately. I found, surprisingly that many people are focused on delivering the next job. They react to business critical items, such as paying their suppliers and their staff (or they can't do new jobs), but are very slow to pay themselves. They often defer creating the invoice until they "have time".

In analyzing the situation with clients, I found the challenge. Most of these owners hate paperwork and love doing the work. They don't work at simplifying the paperwork, because it doesn't come easy to them. They often create complex processes and tools that makes the job hard to do. Yet they have done all of the real work, they just haven't made it easy to use.

A common example that I have seen is the generation of quotes or estimates in Excel or Word, the generation of the order form in a different product, purchase orders created manually, then invoicing again using a different tool. Each of these often requires entry of customer information, product information, prices, etc. Since there is no link between them, the data is entered multiple times. In many cases, the same information in the quote is again used in the invoice. Then the data is entered in the accounting program. To save time, only the basic accounting entries are entered.

The result is that the business is able to do financial statements at the end of the year (often late), but has no understanding of the profitability of products or customers.

A simplified business process would capture the information once at the beginning, provide the ability to generate order confirmation, purchase orders and invoices simply, as well as save time, give you better information about your business, and get invoices to your customers faster.

Sounds like a winning proposition to me. Why doesn't everybody do it?

An evolving business

2011-01-25T07:42:00.000-08:00

I started my career in Information Technology and went from programming software, to planning data centres and networks. In managing data centres, I learned that effective operational processes were critical to delivering consistent quality services.
As a consultant for 13 years, I started by improving IT processes in large data centres as The IT Process Doctor, to working with smaller businesses who were not getting value from their IT investments, as The Virtual CIO.
In my previous Blog entries, I blogged about IT.
Recently, I found my true passion, helping small businesses to operate more successfully, by eliminating the complexity in their business, so that they can improve productivity and eliminate many of the frustrations that they encounter in the activities that we all must do to success in business.
The approach to simplifying a business is rooted in simplifying operations through the development of consistent processes that continue to deliver day after day.
Every person who becomes adept at any skill operates on a subconscious basis. The more you have to think about an activity, the slower you are. The more you operate at a subconscious level, the more productive you are. If we simplify activities, people can move more quickly to a subconscious level.
That's why change causes so much disruption. When you change a set of activities, you have to think about what you are doing, and you slow down. This can be extremely frustrating when you have to be really productive.
Over the next few weeks, I will be blogging about approaches and ideas to help small businesses improve their performance.

Increasing software project failure rate

2009-10-13T07:31:00.000-07:00

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

2009-10-07T10:37:00.000-07:00

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

2009-10-02T06:05:00.001-07:00

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:

Business productivity and cost reduction.
IT and Business alignment.
Business agility and speed to market.
Process re engineering.
IT Cost reduction.
IT reliability and efficiency.
IT Strategic planning.
IT innovations.
Security and privacy.
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

2009-09-29T11:24:00.000-07:00

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?

2009-09-23T13:30:00.000-07:00

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?

2009-09-16T13:04:00.000-07:00

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?

2009-09-11T10:52:00.000-07:00

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?

2009-09-03T05:42:00.000-07:00

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:

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.
Some provided a lot of functionality information, but very little in terms of education about what you need to prepare for.
Some that provided functionality, technical and educational information, but required you to sign up to get much of it.
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

2009-08-25T08:01:00.000-07:00

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

2009-07-07T07:00:00.000-07:00

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

2009-06-23T06:47:00.000-07:00

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

2009-06-15T11:44:00.000-07:00

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

2009-06-08T08:20:00.000-07:00

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

2009-06-04T05:07:00.000-07:00

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?

2009-05-26T07:03:00.000-07:00

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

2009-05-25T12:07:00.000-07:00

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?

2009-05-14T07:22:00.000-07:00

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

2009-05-08T05:48:00.000-07:00

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

2009-05-06T07:49:00.000-07:00

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

2009-05-03T07:07:00.000-07:00

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

2009-04-27T02:23:00.001-07:00

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:

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.
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.
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.
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

2009-04-25T02:23:00.000-07:00

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

2009-04-23T04:59:00.000-07:00

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

2009-04-21T05:43:00.000-07:00

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

2009-04-20T05:00:00.000-07:00

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?

2009-04-19T05:03:00.000-07:00

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

2009-04-18T06:56:00.000-07:00

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

2009-04-17T05:01:00.000-07:00

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

2009-04-16T04:56:00.000-07:00

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)

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.
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.
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.
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.
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

2009-04-15T05:30:00.000-07:00

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

2009-04-14T04:58:00.000-07:00

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

2009-04-08T18:35:00.000-07:00

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

2009-04-07T05:25:00.000-07:00

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

2009-04-06T18:42:00.000-07:00

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

2009-04-05T18:26:00.000-07:00

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.

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.
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.
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

2009-04-04T18:12:00.000-07:00

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

2009-04-03T15:18:00.000-07:00

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

2009-04-02T11:48:00.001-07:00

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.

2009-03-25T15:15:00.000-07:00

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

2009-03-23T15:51:00.000-07:00

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

2009-03-22T10:46:00.000-07:00

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

2009-03-21T10:26:00.000-07:00

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

2009-03-20T10:12:00.000-07:00

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

2009-03-19T08:47:00.000-07:00

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

2009-03-18T07:04:00.000-07:00

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.

Is Resistance to Change a problem for IT projects?

2009-03-08T06:11:00.000-07:00

I read about a lot of project failures that are classified as failures due to resistance to change. I was recently speaking to a consultant who was talking about Customer Relationship Management (CRM) projects and the challenges that they face.

All change encounters resistance when there is no benefit shown. If there is no benefit to making a change, then why should I change? After all, I listen to WII-FM (What's In It For Me). All change is difficult. We have to want a change in order to go through the effort to make a change. Just look at people who have lost weight, quit smoking, etc. They had to really want to change. To people who run IT projects, resistance to change is common. However, most of them are deeply involved in the change, see the value or potential value and are comfortable with technology. They can't understand why people don't embrace this new solution.

Often people involved with a project don't see it as a change, or at least don't see the negative side of it. Any change requires a refocus, a relearning, a move from subconscious activity to conscious activity. This is very time consuming. Your productivity goes down. However, business volumes don't (except for a recession, when staff gets cut to compensate). This means you take more time to do your normal job, and therefore will encounter more stress. Who wants that?

Much has been written about organizational change and cultural change and the efforts to get everybody on board. All of these changes are the same and require the same kinds of effort. If people don't understand the goal, don't understand how they can contribute to the goal, they won't support the pain that they have to go through to get there.

When a project fails due to resistance to change, it has still failed. It has failed because of a lack of recognition that people are listening to WII-FM. What's playing on your station?

The last mile of software development

2009-03-04T15:31:00.000-08:00

I read a paper recently that talked about the last mile of software development.

The software development process was described with the following components:

Business requirements are identified.
The software is developed (seen as most important by developers)
The software is tested
The software is implemented.

This last stage was called the last mile of software development.

If we look at it from the business perspective, no value is created until the last mile. Until the software is implemented, the business gets no value (except for software development companies).

Describing it as the last mile may be part of the problem and the fact that many software projects fail to deliver on their promises. The same is often true when a business buys a software product. The only time that value is created is after installation of the software, when improvements in the business are actually received. And even then, it is not the last mile. Your initial implementation will not be as valuable as when your people become comfortable and productive with it.

So implementation is not the last mile. This is where you need to focus.

If your supplier or your staff view the implementation as the last mile, maybe you need to change one or both.

IT Value comes from speaking business language

2009-03-03T14:09:00.000-08:00

I was at a seminar recently that was focused on helping new immigrants to integrate into our society. You may ask why this has anything to do with computers.

It is probably the major issue and the reason why many business people get frustrated with IT staff and suppliers. The issue is communication.

Despite the proliferation of computers in our society and in business, the reality is that maybe 20% of people are comfortable with computers. Many of those people are comfortable with the games, but not any more comfortable with business use. When I speak to small business owners, and many staff, they are often frustrated with computers. This is a result of computer speak and lack of focus on the business issue.

Most business owners know they have to use computers and want to, but when they speak to the technicians, all they get is computer talk. They are told all of the great things that computers can do for them, but in terms of the software or hardware, not in terms of their business.

Getting back to the seminar, one of the things that was stated was, "In order to make new immigrants productive and effective in our society, you have to make connections with them, speak to them in their language". This doesn't mean that they don't have to adapt. However, the more stressful that you make the interaction, the slower they will be to adapt to their new environment.

This is also true for people who are uncomfortable with technology. If you force them to speak the new language, and they don't see how it helps them, they grow frustrated and "tune out". The only reason why technicians don't speak their language is often that they don't know the language of business, even though they profess to know it by their selling approach. The sales pitch talks about solving business problems. However, the implementation approach seldom does.

This is the primary reason why IT projects fail. The steps go as follows:

Define the business goal
Develop the technical implementation plan.
Train staff of the functions of the software
Implement the software
Have people figure out how to use the software to do their business functions
Find new ways to address the functions that can't be done by the new software.

If we change our approach, we get:

Define the business goal
Describe the business process that will help us achieve the business goal.
Define how the software will help improve the process to achieve the business goal.
Define the process and technical implementation plan.
Train people how to use the software to implement the process improvements
Implement the software
Support people in their learning how to improve the process using the software.

In this case, all of the focus is on improving the process to meet the goal. The software is simply the tool that helps, and there should be no confusion as to why you need to learn the software. You also don't waste time on learning parts of the software that don't help improve the process.

Is your project a technical project or a change project?

2009-03-02T15:51:00.000-08:00

Many projects fail to achieve the business results that were expected when the business started to plan for them. The basic reason is that the projects are seen as technical projects, that is, delivering a new piece of software that may be necessary to automate a business function.

While that software may be required to deliver the function, it is seldom sufficient. The software assumes that certain things are in place (I know that software can't assume, but the programmers do). In many cases, the software creates the opportunity to build a new business process. That business process would not be possible without the software, but it seldom addresses all of the problems. The changed business process may require changes in roles and responsibilities, new interfaces between people and departments, totally different activities. If those new functions are planned for, then the process falls down. In many cases, new approaches are developed after the implementation. Although this works, it is seldom efficient.

If the process is designed when the software is developed, all changes can be planned for. In many cases changes to the process can be completed before the software is implemented, thereby gaining some of the benefits early.

Don't assume that a technology project is a technology project, to be left to technicians. Make it a complete change project and paln for all of the activities that the technical people probably won't think of.

Describing IT project success

2009-02-27T14:06:00.000-08:00

IT organizations have a problem when they talk about project success. That success is almost always described in terms of the project itself, yet the reason why the project was undertaken was a business reason. The business wanted to improve the outcomes that they received from one of their processes.

Project success is normally measured by:

The project was completed on time.

The project was completed within 10% of budget.

The real issue is: "did the business receive the value that they expected?" If the answer is no, then the project was a failure. If the business can't answer the question, then the project was a failure. Significant time and efort has been spent in the last 30 years to improve project success. All of it has been placed on success as measured by the project team, not by the business.

In this example, the project team considered the project a success. The business considered it an outright failure, because:

The solution increased workload.
The solution did not cater for exceptions.
The job roles were changed. The staff were trained on the software, but not their changed roles.

The result? Negative productivity impact on the business.

Technology value through Focus and Will

2009-02-23T18:51:00.000-08:00

Years ago, I went on a course that presented three steps for achieving results:

Focus
Will
Capability

I read about cultures that achieved great things. They lacked the skills or capabilities to move forward, but had the focus and will. They eventually developed the capabilities.

The same is true of technology. I see many small business owners that are frustrated wth technology. They don't have the interest and abdicate their responsibilities to others who are comfortable with it.

I understand the frustration that these business owners have. Most technology based solutions are presented as technology solutions in their own right and not as business solutions.

When a business decides to buy software, they start with a business problem. As solutions providers, we jump right in and assume that the software is THE solution. The business peopl lose interest, because they don't care about the technology. They care about their business problem. This is the way it should be.

The three words listed above offer the solution to the problem.

Focus: on the business problem, not on the software. What problem are you trying to solve. If it is important to your business, keep this focus. Don't get distrated. When the software supplier tries to teach you everything about the software (fire hose training), resist and get them to focus on the features and functions that will help solve your problem.

Will: This will be painful. The technical support people will try to get you away from your focus, to get their approach and become technical. Resist. Maintain your focus. Learn what you need to know to succeed at solving your problem.

Capability: If you can maintain your focus, you will learn what you need to know. You don't have to be a technician. You need to understand how to manage technology so that it helps your business.

Business Process Consulting and Software as a Service

2009-02-19T11:25:00.000-08:00

With the growth of software being provided as a service, for rent rather than purchase, some consultants have the opportunity to make themselves experts in the processes behind these software products.

In the past, many consultants have provided support for specific software products, because there was revenue available by selling the hardware and software as well as installing and configuring the software. In his article on "SaaS drives business consulting", Michael Vizard describes some of the opportunities. Software products have seldom been utilized to their full capabilities. If consultants start to focus on helping businesses understand the processes behind the software and extend the use, so that they get better value, they become much more closely tied to the processes rather than the software product.

This is a good thing.

Too much time has been spent on the technology or the specific software product, and not enough on the business process. Improved business processes help to drive business value. Focusing on trying to get the software to deliver more value to the process can only help to improve performance and reduce costs.

I haven't seen many consultants with a business process focus, but if more get into it, I think it's great. To see Michael's full article click here.

Is Vista about money or Value?

2009-02-17T13:40:00.001-08:00

A Computerworld article describes the reason why Microsoft is having trouble getting businesses to upgrade to the Vista operating system.

It describes the problem as being about money. Because of the recession, most large businesses cannot afford to take on a project to convert from Windows XP to Vista. It costs money for licenses, it costs time and money to do the upgrade. And after upgrading, you get a new slate of problems that you have to diagnose. This means that reliability goes down, productivity goes down. On top of that users have to be retrained.

Now if there was value to be gained by the upgrade, it may make it worthwhile. Traditionally, people in IT have taken upgrades as a normal thing. But upgrades have always cost money, and time, and training and releaqrning how to solve the new set of problems that come up.

Maybe it's time we start thinking differently. Just because the software supplier wants more revenue, is not a good enough reason for users to be buying new licenses. It has to have business value! The cost of upgrading is far too high to waste money and not get business value!

Maybe we need a new model to work with. There are elements of this new model out there in open source and Software as a Service. At least this may keep the upgrades in the realm of the people who may find value from it, the people who provide outsourcing or applications for rent. The average business person has nothing to gain.

The full article can be viewed here.

Getting to the Business Goal

2009-02-16T12:29:00.000-08:00

Many technology related projects get stuck in the technology world. They start with a business goal, but by the time they get to doing something, the goal is totally wrapped as a technology related project. The end result is that although the technology related project is delivered, the business goal is missed, or the effort to deliver it exceeds the value.

A recent project provides an example of how the business goal can easily be missed.

I was called in to help a small construction company. They were growing rapidly and went from small jobs to much larger ones. These larger projects required more sophistocated tools. As a result, they purchased new software. After a year of trying unsuccesfully to implement, they called me for help.

In analyzing the situation, I found that the software was probably the right one for the job. However, the approach was wrong. The focus had been to implement the complex functions first, ignoring was was their bread and butter operation. The complexity of the new function required significant effort, meanwhile, they had problems with day-to-day operations.

In digging into the issue further, I found that they were unable to invoice their customers ina timely manner. Since everything was being done manually, they had no records until after a job was invoiced, no ability to follow up on what was billed or not billed. Invoicing was 3-6 months late.

The delayed invoices meant that customers were not being billed and therefore not paying their bills until months later. This created a cash flow problem. lack of cash flow meant that the business could not take on the bigger, more profitable jobs. Lack of bigger jobs meant that the growth of the company was stopped.

So the real business goal was to grow the company. In order to grow, the company needed cash. In order to get cash, the company needed to invoice more quickly on the small jobs. In order to bill more quickly, they needed to start tracking jobs when they were started, when a quote was given.

We were able to capture all existing jobs and and create a follow up process for planning and executing the jobs as well as invoicing most jobs within days of completion in less than 3 months. This meant that the company could focus on growing the business quickly. The new functions to handle to large jobs could be done during quieter times.

If the original goal of fully implementing the software had been maintained as the priority, it would have taken a lot longer and cost a lot more. During that delay, the company might not have survived its cash flow problem.

Herding Cats, Buffalo, Geese and Information Technology

2009-02-15T05:22:00.000-08:00

These three types of animals are very different in their makeup, and the way that they can be managed. This makeup also means that they deliver very different results.

Herding cats is a real challenge. Even though they are a common house pet, they are very difficult to control. Cats will do what they want to do, whenever they want to do it. Working with one cat is manageable. When you get a second or third or more, they are impossible. Where some animals, such as cows or buffalo, follow a common path, cats don't. They do whatever they please and when you try to exert control they scatter.

Buffalo are another matter. While much bigger and stronger, buffalo are very easy to control. They follow the leader. They don't think and choose for themselves. Before controls were established, they almost became extinct. All a hunter had to do was control the leader, and the others would follow.

Geese, on the other hand are very different. Each goose knows where it is going and what is needed to get there. They work as a team. When one tires or falters, another quickly takes over. Split them up and they continue to function, and eventually get back together. They know that their strength is in their support of each other, whether its two, five or ten. There is strength in numbers, if those numbers understand where they are going and how to get there. When a weaker member gets in the lead, they don't have to be the strongest. They can lead for a short period, yet know that another is ready to take their place.

In a business, we have cats, buffalo and geese. I have seen many organizations that function with mostly buffalo. As a result, they succeed for a while, because of the strength of their leader. But when their leader falters, they lose.

Many organizations prefer to manage buffalo, because it's much easier than trying to herd cats. But cats are free thinkers. They have ideas that can help an organization, but there is no common direction in the organization. Each cat has his own views and approach, and since there is no common goal, there is no way to measure success. Since cats are fighting the system, managers attempt to put controls on them. This succeeds in one of two things: the cats become buffalo; the cats leave the system. Both result in a loss for the business. Buffalo will become extinct, unless their system is managed for them.

The solution is to help cats become geese. This means common goals and a system for reaching those goals with the strength of each individual. What is that system? It may be slightly different for each business, but the process for achieving that goal must be understood by every individual within the business. They must know how what they do affects every other step in the process. This may sound difficult, but it isn't. It's a matter of focus.

What does this have to do with Information Technology? When you change the software in your business, you are changing the system for meeting the goal. Cats, buffalo and geese will all react differently. This is what change management specialists are trying to manage. If you don't understand what animal you are working with, you are going to have problems. No matter what you do, you can't herd cats. No matter what you do, you can't get buffalo to think and act independently.

My next post will talk about what you can do to handle a major change such as software implementation.

Eliminate the problems of computer support - Part 3

2009-02-12T08:19:00.000-08:00

My last two posts talked about the benefits of a good computer supplier. My last one talked about the problems caused by buying and installing software on your computers.

This one will look at the benefits of an alternative solution: Renting your software. If you are not convenced yet, go back to my last post and ask yourself if you want to solve these problems. If you don't, then let me describe the benefits, and why you should lease software.

First of all, let's talk about what I mean by leasing software.

There are a number of software products that are available on the Internet. To use these products, you don't buy them and install them on your computer. You simply access them via your browser. Some are free, like google applications, others you pay for using them every month. There are a number of very good products that are available this way and this is the direction that the industry is going.

While you may have to pay something every month, there are significant advantages.

You pay for only what you use. This means that a large and a small business might use the identical product, but the big business will pay more because they have more users.
When a new version comes out, the supplier is responsible for upgrading it.

If it doesn't work, you call support and they have the problem of fixing it.

The exact same software with all of the fixes is used by everyone, so you don't have to worry about keeping it up-to-date.

Your files are stored on their computers, so they are responsible for backup. If you want to protect yourself more, you can take a backup yourself. You don't have to worry about offsite backup.

Whether your office is in one location or many, you all have the ability to share it, without having to worry about designing a network.
Software is not being installed on each of your computers, so you don't have to worry as much about computer maintenance and support.

No matter how big the software gets, you don't have to worry about upgrading your computer's memory or hard drive. Your PC could last a lifetime.

Do all of these benefits make it worthwhile to rent instead of buying? It at least must make it worth considering.

There is another issue that may make it worth considering. When a software supplier sells you a big complex software product, they often surprise you with a big training cost. This package is never enough and even though you get training (see fire hose training), it is never enough. With some of the software that I have tried, they are simple to use. You can use as much of the product as you want, which means less training required and a gradual approach. I intend to look more into this to see how easily a small company can convert all of their business to these products. Some are very comprehensive.

Do you have a business problem?

2009-02-11T07:18:00.000-08:00

Running a business is an ongoing challenge. There is constant change in technology, in the structure of communities, in customer requirements. New problems crop up all the time.

I see stress in people as these new problems come up. You can no longer solve the problems in the same way you did last year. You come up over the hill of solving one problem and think that you can relax, but you can't. Another problem is there waiting for you.

You can approach it in two ways:

Continue to think of it as a problem, and continue to get stressed by the problems.
Look at it as an opportunity. Every problem is an opportunity in disguise. Every problem creates the opportunity to learn, to solve a problem in a better way, so thata it doesn't come up again.

Opportunities create excitement and interest. Wouldn't you rather go around being excited about opportunities, excited about learning new things, meeting new people, identifying even more opportunities?

The difference between problems and opportunities is attitude. What affects your attitude is your ability to focus. If you don't have a goal and focus on achieving that goal, every problem is an independent issue and doesn't really mean anything to you, other than being a problem.

If you have a goal and you know what the problem is stopping you from achieving, then it is no longer a problem. Overcoming it is an opportunity to reach your goal.

Do everything computer support

2009-02-10T06:24:00.001-08:00

I've recently read a number of ads and articles from ccomputer support companies that claim that they can provide all of your computer support from hardware and software purchases to strategic planning to website development.

In this day and age, technology is changing and growing rapidly. In order to stay up to date, you must specialize. When you try to sell your services to a customer, what is he impressed with?

The fact that you can do anything, but not particularly well?
The fact that you are a specialist and you can solve his or her problem the fastest?

No single person or company can be the best at everything. With the frustrations that most of us face with computers, it is tempting to "abdicate" our responsibilities as business owners to the kid down the street who is comfortable with computers.

Don't do it! He will be managing your business for you!

Even companies that get into this and try to do everything can't be good at it. Even if they have enough staff to keep up-to-date on everything, every company needs a focus. They need to be known to be REALLY GOOD at one thing. They may be able to do other things for you, but they work best for you if they help you to find other specialists.

On top of that, there are three different types of consultant or support that can be valuable for you. They are:

Computer and technology support
Business planning support for effective use of technology.
Websites

These three types are very different, and someone who is really good at one, is unlikely to be really good at another, because they are very different skillsets.

Websites are not about technology, they are about marketing. Any technician can build a website, but if it doesn't produce a return on investment, it is not worth the price that you paid for it.
Business planning for technology is not about technology, it is about business results. If you buy software and it doesn't produce a return on investment, it is a waste.
Computer and technology support is not about fixing computers, it is about keeping your systems up and running, so that the other investments that you make can produce the return on investment that you expect.

The next time somebody tells you that they can do it all, run for the nearest exit! Find somebody that has your interests at heart and get help you to meet your goals, not try to be everything at the lowest price. You can afford the cost.

some support companies tell you they do everything.

Too much specialization, can't do anything well.

Eliminate the frustration - Part 2

2009-02-09T07:52:00.000-08:00

Many business people are frustrated by the problems that we have with computers. They don't do what we want, they have problems, they are complex to learn and understand. They take time away from running our business.

My whole career has been spent in IT, and I feel that way as well. I know how to go about solving these problems and I still get frustrated, because they get in my way.

The other day, I described how a good computer support company can improve the quality of service that you get. Today I want to take a look at another side of the problem and describe what you can do as a small business owner to solve these problems. I will not describe any technical solution, because I know that this would simply frustrate you more and take you away from what you really want to do. Go find that supplier! This relates to what you can do in your business.

In order to address this, I have to start with the attitude of most small business owners. When we go out to buy software, we want to OWN it. OWNING IT puts us in control. Or so we think. If we own it, then we can do whatever we want with it. When we rent it, we pay and pay and pay. So we want to own it.

Microsoft and other PC software suppliers love us for this. Because we buy and install our own software, they can upgrade it and even though we think we can put off the upgrade, they know that in order for people to work together, they often must have the same version. And look what they do to us. We can't buy the old version, so they make major changes to it, causing us a huge amount of effort to change. Look at the Vista fiasco. Not only were there many problems, but we had to relearn everything. Huge cost for NO VALUE. Problem #1.

Windows is a messy system and every time you install something, you update the registry. The more installs and deletes of software, the messier it gets. Not only that, but every software supplier is responsible for cretaing the "package" to install their own software. Some do it well, some make a mess. I worked with a large business to improve the installation process to prevent errors. We had to repackage everything to make it work properly.

Who is responsible for solving this problem? You are! All of these software developers are creating this problem and they want you, the computer user to solve it.

The more change you make on your PC, the more space is taken up, the more problems are potentially created, the more support problems you will have. Unless you feel that you are in a position to solve the problems created by software suppliers, you should be looking for another way.

Wouldn't you know it? There is one. And that future is being discussed by many technicians today, and many suppliers. They call it Software as a Service (SoaS. As a business owner, you don't care about SoaS and this is the last time I'll talk about it. But the benefits to the small business are significant, and that is what you should be interested in.

The solution and its benefits will be described in my next post.

Eliminate the frustration of managing computers - Part 1

2009-02-08T06:23:00.000-08:00

As a small business owner, it is difficult to get the expertise necessary to manage computers well. The cost of an experienced technician is too high and even if you could afford to hire him or her, you couldn't keep them happy or satisfied.

Hiring a computer support company is a better and cheaper solution. They have the expertise and can solve problems much faster than a less experienced person. The good news is that this improves your productivity, because your computers are down less time.

As small business owners, we are often concerned that we can afford the downtime while we wait for a technician to get on site. The problems can be solved by the time that the technician arrives. If you are having this problem, then you have the wrong supplier. A good support company manages your computers for you and prevents these problems from occuring. This means that you have fewer incidents and therefore you don't need immediate response.

Most suppliers today also have remote management tools. They can diagnose and resolve problems without coming on site. With the preventative maintenance and remote support, you get more reliable service and faster response at a cheaper rate.

Why would anyone not want to have this? There is only one issue here. And that is the relationship with your supplier. Unfortunately many suppliers see themselves as technicians and not as partners in your business. You get the most value if they treat your business issues as their issues and help you to solve them, without costing you a fortune. This is an area where an employee may have a different attitude, or at least you might help them to learn to have a different attitude.

Having a supplier that you can trust and cares about your business is a great solution. But there is another question. Why do you need so much support and preventative maintenance? Why can't those computers just run.

To quote Jef Raskin, a human/computer interface expert:
"Imagine if every Thursday your shoes exploded if you tied them the usual way. This happens to us all the time with computers, and nobody thinks of complaining."

There are a lot of reasons why we have these problems. But this is another topic and I'll describe them in a future entry.

the problems of PC based applications.

What do you expect from your IT supplier?

2009-02-05T03:24:00.000-08:00

A recent incident with a client, brings me to this discussion and what a business should expect from their IT supplier.

This IT supplier advertises themselves as a small business' IT department.

First, some background. This client is very non-technical as are many small businesses. I had helped to define the original requirements, since the organization didn't have the understanding of what they required. The supplier installed the complete suite of hardware and software, and had recommended the anti-virus, backup hardware and software, etc. So they knew and understood the situation completely and knew the skill levels of the staff.

When the organization needed to expand, they purchased an additional 3 PCs. They knew that they wanted Microsoft Office and specified the additional licenses. What they didn't understand was how the Anti-Virus licenses worked. When they ordered the PCs, the supplier did not say anything, just ordered exactly what was asked and installed the additional PCs with no Anti-Virus. Of course they encountered a problem, after which the supplier said "well, you didn't order the Anti-Virus".

For an organization that advertises itself as "your IT department", this is unacceptable. As far as I'm concerned, it is unacceptable for any supplier.

As the specialists, we need to help our clients do what is best for them. They don't know or understand the complexities of IT and they shouldn't have to. If we are to do the job, we need to understand the client's needs and specify exactly what is needed to address the problem, clearly (non-technical) the issues, the benefits and risks of the recommendations. If the client is willing to take the risk because of the costs involved, we need to understand and offer them options which mitigate those risks.

I doubt if any client would risk losing their business because of a $35 expenditure.

This is just another case of poor customer service.

Talk about the issue of buying a computer and not being told that they need anti-virus

Justifying IT projects

2009-01-30T14:08:00.000-08:00

In many cases, IT projects get initiated with a wish list. There is a legitimate business need behind the project. The business defines that business need, but can't necessarily articulate it to the technical staff and/or suppliers. The business generally know what they are trying to achieve, but because there is no detailed definition, it is simply a wish.

These wishes need to be turned into plans. If you want to get more sales, many software suppliers will tell you to install Customer Relationship Management software (CRM). While CRM can help to improve sales, it is not a magic bullet. Just because you want it, doesn't make it happen. So far it's just a wish.

How do you change that wish into a reality? Sticking with CRM, the way it helps to increase sales, is that it helps you to improve your relationship with your customers. It provides the capability to track every interaction with your customer, no matter who talks to them, using whatever vehicle: phone, email, letter, even web. The software doesn't do it by itself, it provides the tools to do it.

Implementing CRM may totally change the roles and responsibility of your sales and support staff, as well as change the way your software works. If you justify the project based on the software aspects, you will get many of the costs, but few of the benefits.

In order to create a plan, you have to start with understanding how you will increase sales. If your intent is not to increase sales with existing customers, then CRM will be of no value.

If you do intend to increase sales to existing customers, then CRM software may be a solution. What benefits can be gained? Do you see a 10%, 20% gain? What else will have to change in terms of roles and responsibilities, other software, etc., for you to make that gain.

Most technology staff and suppliers will help you to install the software, but few will address the issues of how the business will have to change and what you will have to do to measure whether it is working. You may also end up implementing a lot more than you have to, to achieve your goals. Most software products have far more features than most companies need.

Even if you successfully implement the software and successfully gain the benefits that you expect, you may end up installing far more than you need and paying a much higher cost.

The biggest issue is justification of the expenditure. Start with the business goal. Then lay out a plan that shows how you will achieve it. This will define the benefit you will receive AND what components or activities are necessary to achieve it and what will provide the biggest benefit Then figure out the cost, and see how the costs map to the benefits. Drop anything that doesn't have a high benefit to cost.

This will get you out of the issue of dealing with all of the extraneous technical issues, the options that provide no value.

Does Software make you feel like a victim?

2009-01-27T07:58:00.000-08:00

When business owners look at software, they are looking for solutions to their business problems. The software supplier describes the benefits in specific detail and often will describe how others are getting great business value from the software. You're sold. You buy the software.

If the solution was as good as you were told, then why are so many people frustrated by the experience?

There are the techies of course/ They enjoy the challenge of digging into a software product and seeing how it works. The more difficult it is to find, the more they enjoy it. But the people who enjoy it are a very small part of the population. The rest of us live with the consequences.

I have a long background in software. I've done software development. I've done software support. I've managed technical staff in mainframe hardware and software, as well as PCs and servers. I've managed staff in voice and data communications.

In all of these jobs, I've often found challenges in getting the results that I was looking for. I enjoyed the challenge of developing the solution, but often been frustrated by the experience. The software is seldom written for the average person. It is written by techies for techies. That why the average person is frustrated and feels like a victim.

I've developed a solution that has worked for me, in overcoming the frustration, the technobabble and working effectively with technical staff.

The are 5 simple steps to achieving business outcomes from business software. But first, you have to make a decision. Do you want to remain a victim?

Small Business Dreams for Information Technology

2009-01-25T05:35:00.000-08:00

I speak to many business people who are frustrated with technology. They see what others are getting, and would like to get it for themselves, but they don't like technology or are not comfortable with technology, therefore they get frustrated.

The technicians that are hired to do a job, take away the need for business owners to become technical, but they also take away the focus from the business.

What's the business owner to do? He/she is not comfortable with technology. The technicians speak a different language and always talk about how complex it is, and how the business person doesn't understand.

All of that is BULL! The reason that the business owner doesn't understand is that the technician is not knowledgeable enough to explain it. I have worked with technology for many years, and there is one thing that I have learned. When somebody is not very skilled, they cannot explain what they are doing. The really experienced people, understand how to explain things in meaningful terms.

As a non-technical business owner, what do you need to do?

Let's start with a dream. If you had the perfect world (for the non-technical business owner), what would you have? You would ask a business question and get an answer that you would understand. There would be no complex jargon, no "you don't understand", just simple answers to simple questions. If there was a need for learning, your supplier (internal or external), would help you learn what you need to know so that you could make the necessary decisions.

So, as a business owner, why don't you assume that this is the world that you live in? If you can't get an answer that you understand, is the technician willing to provide you with the learning, on your terms, so that you can make the proper decisions? If not, find another one. I don't mean that you have to become technical. If you have no interest in that, you shouldn't have to. The technician should be able to provide you with what you need without being a techie.

The key to all of this is focus and determination. Determination to not let technicians befuddle you with technical mumbo-jumbo.

Thry it! You might like! It works. I know it..
what would they like to see? How do they get it?

Making Information Technology simpler for small business

2009-01-23T05:11:00.000-08:00

I spoke to a couple of small business owners last night, who complained about the lack of solutions to their business needs. Every "solution" proposed by consultants and software suppliers started with "well, in order to do this, you've got to BLAH, BLAH , BLAH". That is what the small businessman heard.

Why? The business owner saw a small problem and wanted a small solution. What he got was a complex "solution", one that involved changing his business. Most software products used by business have been developed with all of the checks and balances that are needed to make sure that the business functions as it should. This is good if the business is actually doing this. However, most are not. So the problem is that a proposal to totally restructure the way the business operates is met with resistance. The business owner sees a small benefit, while the "solution" provider wants to make sure his software is used properly.

Added to this problem is that the business owner can't articulate his problem, nor communicate what he wants to the software supplier or consultant. The software supplier sees only the software and how it "should" be used.

Most software is flexible enough to be used without all the bells and whistles. There are limitations to the benefits when this happens, and potential problems down the road. But when the owner doesn't see the problems or benefits, he/she is often unwilling to commit to the major effort to achieve it. Software suppliers often ignore all of this in their efforts to sell the software. They quote the benefits without showing the impact that it will have, nor the prerequisites to getting all of the benefits.

I have written many times about the need to understand the business process improvements expected when you install new software. While that is valid, there is a need for the business to evolve and learn what the benefits can be and identify new problems that can be solved. If the owner cannot see these problems, then there is no benefit of attempting to solve it.

I prefer and incremental or iterative approach.

Identify the problem as the owner sees it.
Outline a solution with minimal effort to solve that problem, without putting them in a box.
Once that is solved, look at the new data provided and how that expands the possibilities that may be available to the business.
Identify the new problem as the owner now sees it. More information will help to describe the past problems in new ways, requiring new solutions.
As the business learns, the solutions will get bigger, and the prerequisite activity will get larger. However, the business will see that incremental effort yields new benefits and be more willing to support it.

Most small businesses don't have the resources to take on a large job. They may be willing to invest in the software, but not be prepared for a major investment in staff resources and time to do what's needed for a complete makeover.

Most businesses never use all of the functionality provided by the software products that they buy. When the big bang approach is used, they will be scared off until they need major enhancements again. They will put off the pain of the big bang for a long time, maybe until it's too late.

The incremental approach makes progress regularly, gets benefits in small chunks regularly and makes it more acceptable for small business.

Can a small business afford a Chief Information Officer (CIO)?

2009-01-22T11:16:00.000-08:00

Every business is dependent on Information Technology today, yet many small business owners are frustrated with the results that they are getting.

For any business owner that lacks experience with technology, doesn't feel comfortable with technology, or just lacks the time to properly assess the value or the needs, it can be a very frustrating experience. Often a small business will hire someone to look after it.

That someone is typically an administrator or a junior technician that loves to play or learn about technology, but doesn't understand what the business needs or how to get it. Although it takes the burden of watching over IT from the owner, the result is that the business suffers.

In large organizations, more and more businesses are hiring Chief Information Officers. In some cases, it is just a title, but the effective ones are those that understand business, understand the business outcomes that the business is looking for and does not speak in technical terms.

This type of individual will not be attracted to a small firm, for two reasons:

The small firm cannot afford to pay them.
The small firm will not have enough challenge for them.

What the small business owner to do? There are three choices:

Hire a technician? This does not help the business to take advantage of technology and grow the business
Hire a full time CIO? He can't afford it, and probably couldn't find one who will come.
Hire a part-time CIO? This may work for the larger firms, but could still be expensive.
Hire a Virtual CIO? What is it?

A virtual CIO has all of the skills of the full time CIO and has a focus on the business. Instead of spending full time or part-time at your site directing your effort, the Virtual CIO brings all of the skills and knowledge to your business, providing guidance, advice, coaching and support to you and your staff, helping you to become more knowledgeable and capable. This means an affordable cost, that goes down as you learn to manage this yourselves. And it comes as "just enough" to let you choose how fast you want to work, how aggressive you want to be and how much you want to pay.

Consider this as an approach to getting the results that you want at a price that you can afford.

Why CRM fails

2009-01-21T07:54:00.000-08:00

Customer Reltionship Management projects have a high failure rate. There are many reasons for failure and most of them have nothing to do with software. A recent article on InsiderCRM describes the issues.

The key to any software project is to recognize that there are three components to success, People, process and technology, and any project that focuses solely on the technology is doomed to failure.

To start with, you must recognize that salespeople are often independent operators within a business. If they don't see the value, they won't do what you need. Other parts of the business are often easier to work with, because their activities are integrated with the use of the software. Salespeople seldom can function without the software.

Secondly, you must recognize that the software is useless without a sales management process. The software provides you with a framework to deliver and improve that process, but it is not necessarily obvious.

The last is the software and other technical components. As some of these activities are complex and often take a lot of time, they often become the focus of the project. This is where everything gets off the rails. Yes, you must plan and implement the software, but this component is the least important.

The article that I have referenced describes this in more detail, but there are two items that stand out:

Face the truth. What are the obstacles and challenges to making this work? They are unlikely to be the software or technology.
What's in it for us? How will your business be improved by implementing CRM? Be very specific in terms of business outcomes. A wish will not achieve it.

Future state with a software project

2009-01-19T16:53:00.000-08:00

When a business owner decides to take on a software project, they want to create an improvement in their business. With a owner managed business, this is more important that with a public business, because the money is coming out of the owner's pocket.

If this is so important, then why do many business owners get frustrated with the results achieved.

Many projects taken on to improve a business start off with a dream of improved results, but they are often just a dream. You look at what others have achieved, and HOPE to do the same. You don't know how they did it, but they used this software and got results.

The reasons are very simple, but not necessary very easy. As Albert Einstein said: "Life is simple, but not easy". The same is true of software projects. In order to get the results that you need, you need to understand HOW you will get those results. Your business is working a certain way today. How will the software change the way you get results? How will that benefit yoyr business? How will you know that you are succeeding?

If you can't answer these questions, you will be disappointed.

You understand your business. You don't need to understand the software. But you do need to understand how the software will help you. And you do have to play a major role in the decisions that are made during implementation of the software, because these can be critical.

Dream about what you want the future to be like. That's great. Then take a detailed look at what you have to do to make it that way.

http://www.valuedeliverymanagement.com/blog/index.php/2009/01/20/critical-insights-1/

Is your IT service delivering what the business needs?

2009-01-19T15:33:00.000-08:00

A CIO Magazine article "What it takes to succeedNow as a CIO" described the difference between results described by the CIO (Chief Information Officer) and the CEO of organizations. Much of this relates to the definition of expectations. Many CIOs are still buried in managing Information Technology and still not focused enough on business outcomes.

Some statistics in this study:

70% of 506 CIOs rated IT as "considered an integral business partner by the rest of the company", while 46% of the business respondents rated IT as fair or poor.
When asked about the impact of IT, "only 15 percent of you chose managing customer relationships and 11 percent said acquiring and retaining customers", yet these were critical to the business.

The real story is in this quote "There's an outcome that we need. How do we get it? Not, 'We need a new system. Please put it in." If your business discussion is not being held this way, then your business will lose. Whether you have a CIO or an IT Manager, or no IT department at all, this is the type of discussion that needs to take place.

You can see the full article here.

New Years IT Resolution

2009-01-17T06:27:00.000-08:00

Every new year's day, people make New Years Resolutions for themselves. While some are successful and others may not be, should we be looking at doing this for our business?

This year, in particular, it may be more important than any other, with the state of the economy.

When business is good, we focus on selling and satisfying our customers needs. We seldom have time to do anything else. What do we do when business slows down?

There are two things that we can do:

Look at ways to increase sales.
Look at ways to reduce costs.

Often both actions are taken, but not effective.

If we look at increasing sales in areas that are not profitable, we lose. Yes, we have increased sales, but perhaps at a high cost.

If we look at our current customers, those that are the most profitable for us, and see how we can increase their sales, we get a double benefit. How do we do that? We need better information about our customers and the quality of service that is being delivered. Where do we get this? We get it from our computer systems. Many businesses don't look at this information, sometimes because it is hard to retrieve. But it is there and if we dig into it, we can find a lot of information. Because sales are down, you have more time to look at improving serice. If you get better profitability from your customers, the extra cost may be worth it.

One of the first things most companies do to reduce costs is to cut staff. While that may provide some short term relief, it also weakens your company. You lose the skills that they have developed, you can provide the additional support to improve quality of your most profitable clients, and you have no basis for competing with those who do. There are many ways to reduce costs and cutting staff, although perhaps the easiest, is the least effective. If you delve into your business processes to try and improve productivity, you get a double benefit.

You reduce cost in a way that stays with you. You are able to take advantage of it when business picks up.
You get more time to focus on improving the quality of service and therefore you can compete more effectively, perhaps even increasing sales during a recession.

How do you get the information to do all of this? Again you get it from your computer systems. We all use software to run our business. This software is typically used only at an activity level to manage transactions. We use only a small percentage of the software that we own. There is a tremendous opportunity to increase the value that we get from this software, without buying more.

So your New Years Resolution should be to increase the return on investment from your existing software. Your company will be more profitable, not just today, but for years to come.

Should software installation be profitable?

2009-01-14T02:38:00.000-08:00

When an organization installs software, they do so for many reasons. They want something that they currently can't get from their existing business software. In large businesses, they assume that a lot of investment is required in order to gain the advantage that they are looking for. In small businesses, they want to minimize the investment, yet want to gain the advantage as quickly as possible.

Which approach is better? While many small business projects are underfunded, many large businesses overfund their projects and are willing to wait too long for results. This is the primary reason why business units often abdicate their responsibilities to the IT project team. They get tired of waiting for results, and there are too many technical discussions that have nothing to do with improving the business.

Every project to make significant changes to a business can be improved if there is a focus on the bottom line. They should have an interest in making the project profitable for the business as soon as possible. There are at least two benefits of this approach. The first is that less money will be spent before money starts coming back in. This means that the business will be more willing to spend time and effort on the project. Second, because there has been a return on investment already, business people will look to get results and won't get fed up waiting. Because business people are more involved, there will be pressure to drive more results.

I think that the half life of a project is about 3 months. There are too many distractions in running a business to keep someone's attention focused on something that doesn't produce visible results.

So, you should plan to deliver some results from your project within three months. You can incrementally add to the project as it makes progress.

Whether in a small or large business a lack of short term results leads to a lack of interest.

Is a technology upgrade necessary or adding value to your business?

2009-01-10T07:38:00.000-08:00

Many small businesses face a challenge when dealing with todays technology. Most of the hardware and software far exceeds our capacity to use their features and functions. Yet in order to maintain support from the software supplier, we have to upgrade to a new version.

This might be ok, except for the fact that there is so much extra capacity in the hardware that the software developers do two things:

They get sloppy with their development or add new features, because the new hardware can support it.
They include these new components in the basic package, forcing you to run out of capacity on your desktop or server.

The end result is that you have to upgrade your hardware and software, just to maintain your status quo. The alternative is to lose support from the supplier.

Many small businesses do just that. They can't see the value of the upgrades and don't see support as a major concern. They get very little anyway.

The the big one happens. They have to upgrade because the software will no longer do the job. This causes a major disruption. The changes are so large that it is just like buying a new software product.

Most small businesses resist the upgrades because they can't see the value. They are given no alternative.

Developing changes in the industry are addressing this issue, but many small businesses are reluctant to take it on, because the model is different.

In the past, you bought your hardware and software. You owned it. You didn't have to pay for usage. The new model is usage based. You pay of usage of software. This payment never ends. The advantage is that you don't have to worry about hardware and software upgrades. No large capital expenditures. The supplier is responsible for keeping the hardware and software up-to-date. This is called Software as a Services (SaaS).

A small business should look at this in the same way they look at a building. You rent space. The advantage is that you get a cheap entry point. When you need extra space, you rent more. If you need less, you can release the space. When major changes in building codes come up, you let the landlord pay for it.

This is a good solution for small business. Most small businesses cannot afford the skills and time required to maintain all of the hardware and software. Hardware and software upgrades add no value to their business.

You do more than outsource the maintenance of the technology, you have outsourced the responsibility for it as well.

Todays tools allow you to do this for software and servers and also desktops.

an example.

Is your new software providing new value?

2009-01-05T08:06:00.000-08:00

Many software suppliers claim to have the better answer, but is it just more of the same? When a business implements new software, they encounter reductions in productivity caused by the lack of familiarity with the software, the learning curve, the increased stress due to the change.

A business needs to get value from this type of change. In a blog on ZDNet, the writer sates that software companies cannot continue to focus on new whiz bang features, but must contribute real business value, something that is shown on the bottom line.

I agree. But how does a small business assess that business value from all of the statements that are made by the software suppliers? How do they know what contributes to business value?

The first stage is to understand the real business need. Every business runs on its business processes. If value is to be contributed, the business process must improve. Improvements can come in terms of cost reduction (less to deliver existing returns), productivity (more work for the same cost), quality (less returns or more sales), cash flow, etc.

The first question is: "Can your existing software be used to deliver that value?". If it can, then use it! That delivers increased value for a flat software cost and no loss of productivity. That value alone may be enough to stay with the current software. If your current software can't do it all, but can do some, then you must evaluate the additional value possible against the cost of not only the new software, but also the loss of productivity.

To check out that writer's perspective, click here.

Most Software Projects plan to fail

2009-01-04T15:48:00.001-08:00

The success rate for software projects in most businesses are set up in a way that makes them easy to fail. They fail to achieve the original exectations of the business. The reasons are fairly simple. They are set up as technology based projects to achieve a technical objective, that of installing the software. Yes, there are other activities, but they typically lack a business focus.

The approach is as follows:

The business has a goal. Let's say it is to increase sales through the implementation of CRM software (Customer Relationship Management). CRM software allows you to understand your relationship with a customer better, and HOPEFULLY, to increase sales as a result. The business has certain expectations of what will be delivered (business outcomes), but they are not clearly defined.
CRM software is purchased to implement this function. A project plan is produced to provide the function. The project defines the project outcomes to be delivered. This includes the software, perhaps additional hardware, training, perhaps data conversion.
The project delivers the project outcomes (assuming it is very successful).
The business is left to make the busines outcomes happen using the software that has been delivered.
Has the project been successful? Is the business happy? Success rates of 20-30% have been identified on software projects. Business expectations are not met.

In order to have a success project, business expectations have to be met. In order to do that, we must define business outcomes, not project outcomes. Typical IT project outcomes are a subset of business outcomes. The plan needs to change.

The business has a goal. The business defines the business outcomes that must be ahieved in order for the project to be successful.
A project plan is developed to meet the business outcomes, including not only the items above, but also including changes in business process, change of roles/responsibilities, etc.
The project delivers on its activities, which produces the desired business outcomes. If not, adjustments are made until it does.
We don't have two teams, we have one. The business result is a common measure for both.

One of the most common problems in many IT projects is that business people get tired of all of the technical activities and abdicate their responsibilities to the IT team. Taking the second approach, reduces the risk of this happenning, because the business outcomes are key elements of the project.

Getting Business Value from Software Training

2009-01-03T06:51:00.001-08:00

Learning to use new software can have a big impact on software productivity. Your goal in getting new software is to make your employees more productive. That may not always be obvious, because you may be using the software so that you don't need as many staff, but you still are getting more productivity. You get more work done with fewer people.

Most organizations don't think of that when they buy new software. Training is considered to be a necessary expenditure, but not critical to success of the project.

On the contrary, it may be the most critical element. If you are looking for a productivity boost of 25%, but actually get a reduction during imple,mentation and for 6 months after, you are losing a lot of the benefit that you expected, even if you gain that 25% later on.

Part of that may be due to resistance to change, peak workload issues, and new staff, but I believe that most of it is due to poor training methodology.

Most software training follows the firehose approach. It's like drinking from a firehose! You get a crash course on the software features and functions, but very little context. By context, I mean the standard WIIFM (what in it for me?). Unless I understand how I will use a function, I am not likely to remember much about it. Many trainers may try to put context around it, by showing how it would be used, but that context may not apply to your organization.

When you buy new software, you typically are buying a new way of doing business (you don't want to do it the old way or you wouldn't have bought it!). This new way is a change in your business process. If the context that the trainer is providing is based on the new process and your people don't understand it, the context will be meaningless.

The solution is to start with the business process, understand how the software will help to improve the business process, then to provide training with this new context in mind. You employees will have less confusion, you will get less resistance to the change and your employees will become productive much more quickly.

Why not Experiment with Software during a Recession?

2009-01-01T07:58:00.000-08:00

Most of the software that we use in business today far exceeds our normal business usage. Even with normal office products such as Microsoft Word, most of us use very few of the features. Even though I have been comfortable with computers for many years, and always work with multiple products at the same time, I use very few of the functions. I only expand my use when I have a problem and need to do something that I have never done before. Even then, I often use the products and features that I am comfortable with.

This works just fine if I only have to do something once. It isn't worth the time and effort to learn new products and features, when I can do the job faster with the tools that I currently have.

Most businesses are using much more complicated software these days Enterprise Resource Planning (ERP) software coordinates data from many different parts of the business. These products are designed for many different businesses and provide functionality to support them all. Any single business probably uses a very little percentage of these products. Luckily, many of them are modular, so that you don't have to buy all of the components. However, the complexity still exists.

Implementing an extensive software product is a very painful operation. Everybody has to be retrained and becomes uncomfortable because they no longer can do their jobs easily until they learn the new software. As they become comfortable and learn how to get the job done, they typically stop learning about the functions of the software, even though there may be much easier ways of doing the job if they knew more about the software.

The reason they stop learning is that they are getting the job done. They don't need the extra features and don't have time to learn them because of business volumes. They may also not know how to start looking for additional features. Most software suppliers have a standard training package, that doesn't allow for investigation and/or experimentation.

During a recession, volumes are lower and employees may have time to learn, but don't know how to go about doing it. Where do they start?

I worked with one software company that was receptive to the idea of developing specialized training. I set out to see how we could get much more effective use of the software. I asked them to show us how we could get much better use as well as where they would not recommend it use. It worked very well. Our organization became much stronger for a number of reasons:

It wasn't their first exposure to the software. They had all used it for over a year.
They had a lot of questions, that they had been too busy to ask.
We addressed the business problems and looked at how the software could be used to improve things.

This worked because the supplier was receptive. I have worked with other suppliers that weren't as receptive. Mostly this was because the trainers didn't know the software well enough. This may be one of the criteria. Judging the capabilities of your trainers may be one of the most difficult things.

IT projects without a goal

2008-12-31T05:11:00.000-08:00

I see a lot of IT projects that are undertaken without a clear goal and this gets reflected in the failures. A good example is the recent cancellation of an SAP implementation by Select Comfort hotels.

During periods of slow sales or recession, a company should be focused on improving productivity or reducing costs. Implementation of new software should be based on increased sales, improved productivity or reduced costs. In this case, Select Comfort is cancelling an SAP implementation to save money. This is contrary to what they should be doing, if the original purpose was valid.

As described in the referenced BLOG entry and original announcement, the SAP implementation didn't seem to have a business goal. There were no identified problems with the original ORACLE system and no defined need for the conversion.

If Select Comfort had a measurable goal, they wouldn't have cancelled it during a slow period. They would have intensified their efforts.

Software reduces business productivity

2008-12-30T17:03:00.000-08:00

People buy software to improve their business performance, but software initially decreases business productivity. Can a business afford this reduced productivity? During peak periods, maybe you can't.

Whether you currently use software to help you run your business or not, your initial step in introducing new software will be unfamiliar. You will start with a learning curve, learning how to do what you used to do easily. This will slow you down. At very least, you will have to make conscious decisions about day to day tasks. This will slow you down.

Adding to this productivity problem will be the complexity of the software. Most businesses use a very small part of a software product, probably less than 10%. With all of these features and functions, you will have to find your way through all of the features that you don't want, to find the one that does the job that you want. You often will try a feature that does the job, but another feature will let you do it more easily.

Adding to that complexity is the training. With all of these features and functions, it is impossible for a software supplier to train you on all of the features, so they restrict this training to the most common ones, or the ones that they think you will probably use. However, since they haven't worked with you to understand you business, they don't know what you need or how you will use it. Since most businesses don't have the time nor the money to provide extensive training, most organizations opt for the one shot deal, what I call "firehose training". The supplier provides their training program in a one or two day course. Since the training is out of context, little of it is remembered.

The net result is lower productivity, often for months, until people learn to become more comfortable with the software, starting to do activities subconsciously. Some will then experiment with new functions. In most cases, it will take months or years to become comfortable with the software. Some people will never experiment and never uncover the functions that could make them more productive.

talk about learning curve, complexity, training problems.

Surviving the recession: Lean thinking

2008-12-27T09:34:00.000-08:00

During a recession, most organizations focus on reducing costs. Much of this focus is broadly based, looking at cutting costs, where the numbers are really big. In many cases, the approach is to cut staff, because fewer staff are needed to handle the volume of sales.

Many of these cost reductions cut to the bone. That is, they cut costs in areas which hurt them and make recovery of the business more difficult during a recovering economy.

All businesses waste their resources during peak times. The focus is on sales and growing and not on saving money. Work is done in the most "responsive" way to support customers, without proper planning. This waste builds up and a recession is an opportune time to focus on this waste.

In an article "Surviving the Recession: It's back to basics", the writer recommends the following:

Develop a deeper understanding of your current and prospective customers (Don't cancel your CRM project!).
Work to improve operational clarity (document your business processes and ensure all your staff have an end-to-end view!).
As clarity improves, look at ways to reduce waste.
As the economy recovers, look at your business strategy.

You will come out of the recession with an improved operation, better able to compete. The quoted article is based on Lean thinking.

Computer systems reliability and business impact.

2008-12-26T05:28:00.000-08:00

An article on computer systems reliability from ZDNET Asia quotes statistics from Freeform Dynamics that shows the impact on business from what they call software resiliency. This means the system's ability to recover from software failures.

Some of the statistics include:

24% of organizations suffer from a software failure once per week.
In addition, 34% suffer from a software failure once per month.
Even worse, 20% of organizations suffer from financial or legal issues once per quarter.

These problems cause major business impact. In most cases, these problems can be prevented by planning for systems to be resilient. Yet organizations focus on new business functions, creating more dependence on these systems, and seldom plan for resilient systems. They assume that systems will work and react to failures.

Despite significant improvements in computer systems over the years, systems continue to fail. These failures can be prevented by proper planning, or at least the impact of these failures minimized.

Many technical support staff enjoy diagnosing problems and become very good at it. However, the business suffers while they react. Until business owners and managers insist on software reliability and understand the impact to their business, things will not improve.

The original article can be found here.

Organizational silos -why do they exist

2008-12-25T12:01:00.000-08:00

Organizational silos are a big source of waste in most organizations, large and small.

This question was asked on Linkedin and thought it was worthwhile posting here.

Do you want to buy technology or upgrade your business?

2008-12-24T06:40:00.000-08:00

Software companies sell software as a business solution. Are small businesses getting a business solution, or are they just getting software packaged that way?

When a business owner or manager looks for software, they are trying to solve a business problem. They are seldom looking for new software. Look at software as a way to upgrade your business.

What many businesses get insteadare a series of problems that they must deal with. Hopefully they overcome most of these, and recover to achieve a good return on thei investment. However, the cost are often much more than they need to be, due to a lack of planning for business outcomes, a lack of awareness of technology and a lack of experience with technology projects.

Lean is the way for business startups

2008-12-22T09:04:00.001-08:00

We have seen many articles about the Lean manufacturing process started by Toyota.

What is just starting to gain traction is using the Lean priciples in non-manufacturing processes. Think of a business process in the same fashion as you would a manufacturing process. It is simply a bunch of activities put together to create a defined result.

There are two major differences between a manufacturing process and an office process.

A manufacturing process uses machines to perform the activities. An office process typically uses people, supported by software.
Waste is typically obvious in a manufacturing process. You find it in poor quality products, in wasted materials, etc. In an office environment, you find it in two places: Wasted time and bad data. You don't see wasted time; it doesn't accumulate. You don't see bad data until you try to make decisions; you end up with wasted time.

While some large companies are staring to use Lean principles in the office, it is seldom looked at in small businesses.

I thought the following article was interesting because it talked about Lean in new business startups.

IBM provides software to help businesses to improve value of Technology Investments

2008-12-19T07:09:00.000-08:00

In a recent article on MSNBC, IBM announced that they are providing new software to help improve the value of technology investments. Some of the failure statistics identify the failure rates of IT organizations to achieve business goals. This has been the history of software projects. Part of the reason has been that IT organizations have been focused on success of the IT project, even though the project was initiated to meet business goals. Most of the studies of project success have been in large companies (small ones may not have as disastrous results, or the business fails if it does, so there is no company to study). However, many small business software projects fail as well.

My experience has been that the business goals have often been a fuzzy vision versus measurable business goals. When these can translated to project goals, they get very specific and often the business goal gets ignored. In addition, most of the focus goes to implementing the technology and not on meeting the fuzzy business goal. In addition, the business people are not interested in the technology and don't get involved until the HAVE TO. This is often too late as most of the business value comes from business outcomes that need to be delivered by the business. The technology project plays a supporting role.

What is interesting in this announcement is that it comes from the general manager of Managed Business Process Services, not from the software group. The software will help organizations to communicate more effectively to develop the business process, so that the software project can support it.

While small businesses likely can't afford IBM's software, they also don't have as large a problem as large companies do. They can communicate more easily, if they focus on their business processes. This is where the value can be found.

Start with a well defined business outcome. Define how your business process has to change in order to achieve that business outcome. Assess whether the software can help to achieve the business outcome. Measure the project results, not from a technology point of view, but from a business outcome point of view. The technology will get implemented, but it's not at the top of the list.

If you want to cheack out the MSNBC post, you can do it here.

Why don't more Small Businesses look at improving their business processes?

2008-12-17T08:19:00.000-08:00

In this time of recession, many organizations are looking to reduce costs. They typically look at traditional ways to reduce costs. That may mean buying less of something reducing staff, getting cheaper products or whatever.

Most small businesses probably think that process improvement is something that only applies to large organizations, and is too expensive and not enough value for small business.

There are many stories of process improvement in large business, and the costs of doing it, as well as the difficulty in doing it. Many of these stories show how the improvements can result in big savings that can only be found in big porganizations.

While it's true that big organizations can find big savings, they also have big challenges to face. It is very hard to get a big organization working together to achieve these big goals because they have BIG communication problems. Process improvement is not hard. It is simple and straightforward. Communication is hard. Because the management team doesn't communicate their goals effectively, different people in different parts of the organization are operating on different goals. This is what causes the problem.

Most people work in isolation, not recognizing that what they are doing is having a negative impact on what somebody else is doing. This is where a lot of time is wasted. By getting everybody to look at the same process and see the inefficiencies and waste, they understand what is happenning and the problems are typically easy to fix and don't cost a lot of money.

There are times when major changes are needed and they cost a lot of money. However, it is often possible to make small changes that can have a 10, 2 or 30% improvement with minor expenditures.

How can we educate business owners that this is possible?

CRM for your business or your sales force?

2008-12-16T06:00:00.001-08:00

Customer Relationship Management (CRM) is a big issue for any successful business. The better you manage your relationship with your customers, the more successful you will be at keeping them as your customers. This is why many software companies are in the business of selling software to help you do this.

IF CRM is so important, why is there such a high failure rate in CRM projects. I speak to many people who attempt to implement CRM, and most have the wrong approach. They look to the software as the solution and ignore the people.

In a recent discussion with a sales person, I found a very frustrated individual. The company had decided to implement CRM. He hated it! It created more work and didn't help him do his job. That doesn't sound like it will be a successful project.

To address this problem, you have to understand what CRM is all about. The purpose of CRM is to collect data, so that you can understand your customer better. If you collect bad data, you will have bad information about your customer. If you have bad information, you have no chance of satisfying your customer. If your sales people are frustrated with the CRM software and don't see the value, they will not collect valuable information. There is an old saying that I learned in my early days working with computers: Garbage In, Garbage OUT (GIGO). It applies to the CRM project.

There are two things that you need to do:
1) Define a very clear goal. Show how what you are doing will help you achieve your goal.
2) Ensure that what you are doing with the software will make it easy to capture the information to help reach the goal. The more difficult it is to capture, the less chance you have of reaching your goal.

This means that your sales people and your sales support people need to clearly understand and support the activities. If you don't, you will fail.

You may be able to get your support people to "follow the rules". You will have more difficulty with your sales people. They rend to be independent and are measured differently. Do your assessments of performance measure them on the "new Rules".

Is it time to cut back or invest in Technology?

2008-12-15T03:07:00.000-08:00

During times like these, it's always difficult to decide. It seems that this is true of many companies. And many times we view it from two perspectives. We often say "Do as I say, not as I do", and this is true of SAP, the software giant that says they can help you run their business better.

In a recent BLOG on the Australian CIO site, Thomas Waigum comments on what SAP tells their customers versus how they act internally. In October, they issued an internal memo saying "stop all spending on Technology hardware and Software". This month, they recommended that their customers should take this time to upgrade their business by buying SAP.

We all have this conflict. While I am not a believer in across the board statements like "decrease expenses by 20% everywhere" or "stop all spending", during these times it makes sense to look at what you are spending on. During peak volume business, it is very hard to focus on where you are wasting money. You are too busy reacting to customer needs. During weak periods, it is often easiest to cut back on everything. Large companies often cut to the bone and end up weaker after the recovery sets in. If you focus your attention on the areas of waste, you reduce costs in the short term and come out stronger in the recovery.

So the answer to the question is "It Depends". If the investment produces a return, then it is a great time to invest. If not, don't do it. The questions are: "how confident are you that it will produce a return?" and "do you understand how it will produce a return?".

However, now is the time to do it. When volumes are low, your people have more time: Time to look for improvement opportunities, reducing waste, improving productivity. One place to start is the software you already have. Most software is underutilized and has many more capabilities than are used. Getting better use of such an asset will position you for the recovery.

Click here for the blog article that was referenced.

http://www.cio.com.au/article/270919/blog_surprise_surprise_sap_promotes_enterprise_software_investment?eid=-154

What's an Owner's time worth?

2008-12-13T16:31:00.001-08:00

As with most small business owners, I always question whether I should pay for services from business consultants. Buying hardware or software is easy, but buying services that I could do myself always seems to be a difficult decision. As a consultant, I should be able to justify this, since I believe that specialists can do things faster (and cheaper) that non-specialists.

In a discussion with a client last week, I got a new perspective. Small business ownersdon't have a lot of time, and any time spent away from earning money is a waste. Most of us earn more in an hour than we gain from doing other work ourselves. Consider this:

A specialist can probably do a job twice as fast as a non-specialist, because they have done it so many times before.
A specialist has made many mistakes in the past, and has learned from those mistakes. That means that they can prevent mistakes from happenning.
A business owner cannot focus his or her attention on a single activity. There are too many parts of the business looking for attention. You can't tell a customer to wait, because you've got more important things to do. This means that you work in fits and starts, constantly interrupted. It takes much longer to get the job done.
If the job is really important, can you really afford to do it later?

This means that it will probably cost you three to four times as much to do it yourself, and may produce fewer results.

My client explained to me what I helped her with. I helped her to look at her operation with a new perspective, looking at how the organization could be more productive. This brought new opportunities into the discussion. Specifically looking at establishing standard processes which saved her time. When it was time to look for solutions, I was able to bring in new specialists, saving her time in finding and evaluating proposals. My experience in a broad range of technology allowed me to translate proposals that were essentially technical proposal into business terms. This again saved her time, since she didn't have to struggle to understand what the technicians said.

The biggest benefit that she described was time. Time saved by developing processes, time saved by finding opportunities, time saved by bringing in solution providers. All of this time could be devoted to developing the organization, upgrading technology platforms and generally moving ahead. Doing it herself would have increased the time requirement. There is one problem with time. There is never enough, and once it's gone, we can't get it back.

I knew this. We all know this. But why do we tend to act the opposite way?

Are you Wasting your Software Investments?

2008-12-11T06:13:00.000-08:00

I speak with many business owners that are frustrated with Information Technology. They start with seeing opportunities in software to help their business, but get frustrated because it doesn't deliver what they need. They then go on to try another and another, hoping that they will be more successful.

While some software products may be more suitable for one business or another, the problems seldom have anything to do with the software. The software is working for someone, so it can provide value. The problem is usually with the way the software is used.

Problems come from a conflict in business processes, the impact that software has on processes and people, and reality. The reality of a software installation is that business is going to change, and that change will take effort, usually at a time when you can least afford it. These issues are the source of the problems and the lack of results.

Getting back to the waste question, why do we allow this waste to occur? It is waste because we have spent money to buy and install this software and we aren't getting anything for it. Even worse, as we move on to the next software product, we are adding to the waste.

The problem with software waste is that it is usually invisible, except on the Balance Sheet. Software is stored on a computer's hard drive, and nobody sees it. There is another type of waste created by the software and that is productivity. Because we have installed the software and we aren't using it effectively, our people are less productive that they could be.

In a plant, when we produce inferior products or have too much inventory, it is often obvious. It piles up on the floor and is visible to everyone. Software waste piles up in invisible places, and productivity waste disappears (lost time is gone, never to come back).

Another form of waste is software functionality. As your business grows and changes, the software you already have may be able to provide you with new functionality that you have already paid for. You may have the opportunity to turn on this functionality. While it's not free (no effort to enhance your business is free), it won't increase your costs but can improve your bottom line.

Don't let your Information Technology Investments add to the pile of waste! Look at how the softwarean can be used to upgrade your business.

Recession and Opportunity in Information Technology

2008-12-04T15:48:00.000-08:00

A lot of talk is going on about the current state of the economy. Most people see it as a negative thing and assume that they will have difficulty maintaining sales, and will have to cut costs and reduce staff.

While this is a possibility, it is alaso an opportune time to improve your business operations. Improving business operations can reduce your costs, increase the quality of your products and services and and put you in a better position to maintain sales and be more ready to take on more business when the recession is over.

Let's look at the situation when things are going really well. We are so busy responding to customer needs that we do anything to deliver. This often means bypassing existing processes because they slow down deliveries. We also ignore excess inventory because we need more to satisfy customer needs. Over time these excesses cost us money and create excess overtime and waste.

As business slows down, your people have more time and while you can't afford to let them go yet, they have more time available. They are also more receptive to change, because the recession forces us all to think about it.

This is an excellent time to start to look at your business processes and how they can be improved. You have the time. You may also find ways to reduce costs. You may find ways to improve the quality of your products and services. All of these improvements may allow you to keep more customers because you have the ability to serve them better. A recesion provides a buyers market. Better capabilities means you are better positioned.

Another opportunity is your existing software. Usually when we buy software to run our business, we buy it for a particular reason. We get what we want from it (if we are lucky and do it well), then we move on. We seldom go back and look at the software to see if it can help us solve other problems.

Our business changes over time. As we grow, our needs change. These needs may be satisfied by software that we have already purchased. We don't have to evaluate new products, we don't have to install and learn new software, we just try the new function and see if it helps. That is like found money!

Nobody likes a recession. However, with every problem comes an opportunity. A recession provides an opportunity to improve your business so that you come out stronger and more competitive when it is over.

Why the traditional approach to IT staffing doesn't work

2008-12-01T17:09:00.000-08:00

I see many small businesses that hire technical staff to support the technology used by their business. They often have been poorly served by sales people or buy technology from their local business or computer store. Things invariably go wrong and they don't know how to solve the problems, so they hire someone who is comfortable with technology and can fix the problems without having to call in tech support.

This makes the management more comfortable because they don't have to worry about technical problems. Someone else is responsible for handling it. In most cases, these businesses end up with reliability problems and problems that impact productivity of the business.

Why is that?

First of all, there are so many types of technology out there and no single person can be an expert in all of them. The result is that anytime something new has to be looked at, a lot of time is spent understanding and evaluating tools. This time could be saved by getting help from an expert.
Secondly, solving problems requires experience. So many things can go wrong. It can take a lot of time to identify the problem and get it fixed. In a small business, it is not often that the same problem occurs twice in a row, so your onsite staff starts again on every problem.
Thirdly, if you have a recurring problem, it has a major impact on your business. Your onsite staff may become expert on resolving it, but it still has an impact on productivity of the staff member who has the problem and the support staff that works on fixing it. Wouldn't it be better to prevent the problem in the first place? Most small business support staff don't understand the value and need for preventative maintenance nor what to do.
Lastly, if you have someone who is really good, they are gaining experience on your dollar. As soon as they have that experience, they are more marketable and you either have to pay more money or hire another untrained staff member.

A computer support company can be a much cheaper alternative, even though the rate that they charge is higher that an employee. This is not the case for all companies, but it is what you should look for.
They have a number of people and have a breadth of experience that you cannot afford in your business. You can get an "expert" in each type of technology. It will take much less time and effort to investigate and install new technology.
They see many different installations and see problems over and over again. While they may struggle on the first occurrence, they quickly learn how to solve these problems on somebody else's dime, not yours.
They learn what causes problems and how to prevent them. They can come to you with a preventative maintenance program, that ensures that your equipment keeps running. This increases your reliability and the productivity of your staff.
You don't have to worry about losing a staff member. Your support company is responsible for that. They can pay higher wages, get more qualified staff and keep them happier because of the range of challenges.

Hiring an IT support company can be as challenging or more challenging that hiring staff. It's important that you identify your needs and determine whether the company can meet them, and not put you in a tougher bind. This requires a good process for identifying the benefits of good management and ensuring that your supplier can deliver. Unless you have experience with doing this, you can get in trouble. Get somebody to help you structure this relationship.

Are employees laying bricks or building a cathedral?

2008-11-30T15:19:00.000-08:00

There is an old story about three bricklayers, who were asked what they were doing.
The first said he was laying bricks.
The second said he was buliding a wall.
The third said he was building a cathedral.

Many people think they are doing their jobs when they do as the first bricklayer said. This is all most managers expect them to do. That is the cause of many problems and the reason that many managers are busy. They have to handle all of the issues caused by people who are simply laying bricks.

Just think of the third bricklayer. Is he likely to leave issues hanging? He is building a cathedral! You can't build a cathedral if you don't know what it takes to build a cathedral. The third bricklayer will do everything in his power to ensure that the cathedral will stand for centuries. The job of the manager is much simpler, as he knows that the bricklayer will not leave new issues to be dealt with every day.

What does this have to do with business?

I work with small businesses and help them to get a better return on their software investments. Invariably, I find them struggling with the software, because they may know how to use the software, but they don't understand how that helps the business to succeed. I work with them until they understand the business process and how they must work together to achieve the goals.

Two things happen:

They understand what impact they are having on each other. They look for ways to eliminate negative impacts.
They find that when they work together, the job is much easier for all of them. It is also easier on the manager, because he doesn't have to watch their every move.

At one company that I recently worked with, they found both those results. The comment made by one of the employees was that "he now understood all of the layers of the BIG MAC and why they were necessary".

This company got out of their silos and started to work together to achieve better results for their company as welll as made their own jobs easier.

When Should you Focus on Process Improvement?

2008-11-25T06:56:00.000-08:00

Somebody asked me that recently and I had difficulty answering that question. My view is that you should continually focus on improvement. If you do, then you will minimize the amount of waste in your business.

However, that doesn't help someone who wants to start. There are good times and bad times to start. I'll focus here on good times to start. Once you have it working, it is much easier to maintain.

The good times are when there are major changes in your business. The timing is the same whether you are in a service business or manufacturing.

Typically, when you start a business, you develop solutions to meet your customers needs. The product or service varies depending on what the customer asks for. In your search for customers, you try to be flexible and provide it. This type of business is classified as a custom business. You deliver custom solutions based on your customer's needs. Your business processes are often customized as well.

As your business grows, you find that most of your customers are asking for very similar solutions, so you recognize that you can be much more efficient, perhaps more effective and deliver a better quality service or product, if you standardize. You look at ways to standardize the solutions that you provide. If you standardize your services or products, you also need to standardize your business processes to support it. If not, your business will become more complex and you will waste resources. This business is delivering standard products to a niche market.

The next stage is the mass market. Here there is not only a standard product, but also a very large market. In order to produce in these volumes you need not only standized business processes, but efficient ones as well. Mass market products are usually much cheaper. The business processes that support them must also be much more efficient.

When products are widely available, there is seldom enough market to justify a large number of players. onsolidation is the result. With consolidation, comes mergers. When two or more companies merge, there is significant upheaval. The business processes are different, the software used by the companies is different and often the company culture is very different. Attempts to merge without a review of business processes can be fatal.

To answer the question of when should you focus on your business processes, we look at the changes in the business model. There are three critical situations:

When you move from custom to standard products.
When you move from standard to mass market.
When you enter a merger or joint venture.

Each of these is a critical stage. In general, I have found that growth beyond about 15 people makes it difficult for any manager to keep everything in his head. He needs good business processes which provide him with the information that he needs to manage his business. Good processes require software that support the process.

Too busy to focus on process improvements?

2008-11-24T06:02:00.000-08:00

In many of the assignments that I take on, I find that small businesses are struggling to make progress and move their business forward. The primary reason that they give is that they are too busy. When business is good they are run off their feet responding to customers' needs (often reacting to service problems) and when business is bad, they are too busy looking for business and finding ways to cut costs.

In many cases, they have made decisions to upgrade their business by buying software. Installing software takes a lot of time and effort. It isn't a silver bullet, automatically changing your business for the better. When it comes down to the hard work of implementing, the business is too busy dealing with day-to-day issues, and does not complete the implementation successfully.

Recognize that being too busy is a symptom of problems. Yes, on any one day, priorities arise that keep you from achieving everything you want to. But if it happens every day, something is wrong. A good reason is that your business has grown very quickly and you are responding to customer orders. However, if you don't look at how you can support this level of activity, then you will quickly deteriorate into the second reason.

The second reason is that the quality of service is a problem. You are constantly dealing with customer complaints. If that is the case, this is a huge waste. You must respond to this in the short term, but prevent it in the future. If you don't, you will lose customers or your costs of delivering service will grow and profits will drop.

As an owner or manager, you can't afford to let this happen. Waste is a natural occurrence in a business. You take care of your customers and as your business changes, processes are forced to change. As these processes are changed, waste gets introduced, because only part of the process changes. What no longer is required often remains because nobody has looked at it. This waste is easy to understand in large organizations, but assumed to be small in small businesses because everybody "knows what's going on". On the contrary, small business often starat to miscommunicate when there are about 5 people involved. It hurts more as it grows, often being very painful as you reach 20-25. Unless you stand back and look at how your business runs, the problem is there.

Stepping back and looking at your business can be very difficult when you are reacting to what's happenning. "When you are up to your neck in alligators, it's difficult to remember that you are there to drain the swamp". Often the business owner will need help to remain focused. The help can come in the form of a business coach or consultant, a mastermind group or mentor that can help you to remain focused, as well as provide advice and support as you make changes.

The benefits are significant. Some studies have shown that 30-40% of activities and supplies do not help to deliver value to your clients But they do add to costs. Looking for a bigger profit? Improving you business processes can be a major source. If you are looking at software, don't automate the speed at which you can produce this waste. Fix the process, then get the software to improve on it.

When you need Information, Think Process

2008-11-22T06:35:00.000-08:00

Every business neds information to operate effectively. Much of the information that we use to make decisions is subjective, based on what we think is happenning, or what has happenned in the past. As your business grows and develops, this changes, but our thinking about it often doesn't.

A set of studies done by Kodak described the following:

20% of the data that we have in our business is structured.
80% of the data that we have is unstructured.
Unstructured data is growing at a rate of 36%, which means that the problem will continue to grow.

What is unstructured data? Unstructured data is data that is disconnected from our business processes. It is produced by our business processes, but may not be captured automatically nor stored in a consistent form.

What does this mean? It means that when we need this data is required, time is wasted searching for it, or recreating it or finding it. This is time wasted or decisions being made based on outdated or incorrect information. A further element of the study, showed that:

Most Managers spend 15% of their time searching for information.
42% use the wrong information once per week.

Before you suggest that this is a big business problem, I have found that small businesses have the same kinds of problems. When I start to work with an organziation, I ask them what data they have in electronic form and try to analyze what's happening. Invariably, I am able to tell them something that they were unaware of. The problem is that the data is typically not 100% accurate, because it was not captured by a process that was designed for that purpose.

I often see decisions being made due to a lack of information. Attempts to collect the information often fail (except in large businesses where there are resources to do it) because staff are too busy delivering service and they must take time away from this to collect information. This seldom works very well of for very long.

The solution is to make data collection a by product of the process that you design. Most software has an assumed process built in. When you use it the way it was designed, it captures all of the data that you need and allows you to provide the information that you need to make decisions. When you only use the parts that you think you need, you lose all of the information you need for decision making, because not all of this data is captured.

The first thing you should do when you decide to buy new software, is to look at your business process (right after you define your goal and decide which process will help you deliver it). Identify how the software will help you meet your goal, including the information that you will need to make decisions or understand when you are having problems meeting your goal. Collecting the data should not be a major effort. It should be a byproduct of the process.

So when you want information about your business, think process. Design the process that will deliver not only the functionality that you are looking for, but also the information. Use the software as a tool to help you get there.

Information Technology is like a one legged stool

2008-11-21T06:31:00.000-08:00

Every business today uses computers. It's hard to run a business without one. Even if you have a very simple business, you need to communicate with your clients and your suppliers and they force you into this world. Most businesses look at computers to improve the waay they do business. They look to productivity improvements, or functions that cannot be done without them.

Most of the technology that we buy is underutilized. The price of hardware has dropped so much that is is cheaper to put in too much hardware than to provide smaller alternatives. Software is the same. It is cheaper to distribute a single piece of software than to try and maintain multiple copies. So we have much more than we need.

There are two problems with this excess capacity. First, the software and hardware is more complex and harder to maintain. Each of us pays for this complexity. We may think we are getting value for money, but unless we can use it, the complexity adds up to more costs. In a large business, this may be manageable. In many small businesses, this can add up to slowdowns, extra downtime, extra support costs, productivity loss.

The second problem is that the complexity makes the software more difficult to learn and implement. I see many small organizations that fail to achieve the benefits from the software they bought. Part of this is caused by the fact that there are too many features. Part of it is caused by the expectation that the software is bought as a "silver bullet". Install the software and it's magic. Things will be better. It doesn't happen. It takes a lot of effort to get value from new software. Some parts may be easy. Getting real value is not.

I see Information Technology as a three legged stool. I will ignore the hardware at this point, because it doesn't provide value. It simply allows you to use the software. I will also ignore tools like Microsoft Office for the moment.

Leg #1 is the business software. It can be as simply as Quickbooks or as complex as SAP. Business software comes with built in business process assumed. It expects you to work in a certain way. If you do, then you get the best return. It helps you to do the job. If you don't, then it can make your life difficult, whether by forcing you to do things multiple times or by getting bad information because of the quality of data entered. If you look at your business process before you try to implement, you will be more successful.

That leads us to leg#2, the business process. The business process is how something moves through your organization, say from order to cash (your real goal is to get paid for the product or service that you deliver). If you understand all of the steps in this process, and understand how the software will help you to make that process more effective, then you will get significantly more value from the software. In many cases, even when an organization has looked at its business process, they encounter problems. The reason is that when you change business processes, you affect people. It's often been said that people resist change. That is true. People don't want to change if they don't see the value! Why should we? We are comfortable with what we do, we are more efficient when we know what we are doing, and we know how to prevent errors. Give me a new process that I don't understand, I will be less productive and I am more likely to produce errors. Why should I change? OK, some people like change for the sake of change, but we can only take so much. If you wake up one morning in a new house, have to drive a new car and go to a new job, how comfortable are you?

This leads us to the third leg: People. If you don't consider people, you will be less successful. I have seen many software projects that redesigned and implemented processes without involving the staff that did the job. The designs were based on senior staff or management input, and the process was automated to do what they wanted. The problem was that the process was not based on current reality. It was based on old experience (Senior staff and management don't do the day to day job), or on ideas of how things should work. The staff tried to work with it, but had to create all kinds of workarounds to get the job done. This reduced productivity, created frustrations with the staff and made them resent the change. Is there any doubt as to why people resist change? By involving staff in the goals of the change, in the redesign of the process and in how the software can provide tools to improve the process, you end up with a more effective process and less resistance to change.

So there you have it. A stool with three legs: Software, process and people. All three are critical for success.

There are two other elements that you will see on a stool and these are important as well.

The first is the goal. The goal is to have a place to sit. The seat describes the goal of the project. This goal is a business goal, not a technical one. See yesterday's post for examples of the business goal. It's important that the goal be well understood and repeated regularly. Try sitting on a stool without a seat, if you don't understand. I have seen many stools without a proper seat.
The second is support. Ever seen a stool without supports between the legs? Doesn't last for long does it? As with the stool, you need support between the legs (Software to people and process, process to people).

The most important thing is Focus. In real estate, they say there are three things that are important: Location, location, location. In IT projects, it's: Focus, focus, focus.

What is Business Value from Information Technology?

2008-11-20T10:17:00.000-08:00

I've made a number of posts to this BLOG talking about getting business value from Information Technology. In discussions with different people, I have found many different interpretations. I've often commented on the fact that many IT projects have failed to deliver business value, and often get lost in "successful technology implementations". In these cases, the operation was a success, but the patient died.

In order to clarify, I want to describe business value in terms that might be better understood. Business Value can be measured by:

Cash Flow
Sales
Cost of Sales
Cost of Administration

It's that simple. There are many aspects of each of these, but if you have enough cash to manage your business, you have adequate sales, and your costs are in line so that you can make a profit, you are OK.

When you take on a technology project, you are trying to drive improvement in one of those elements. If not, why are you doing it? You may be doing something to reduce waste, improve quality, reduce inventory, improve productivity, but the real goal is to improve one of these four items. If your expenditure in technology or other services doesn't return value here, then it is a failure.

An assignment with a client recently, outlined the following problem:

The company had installed software a year ago yet was not using it effectively.
They took too long to issue invoices - weeks, sometimes months.
They had opportunities to grow the business, but were restricted due to cash flow.

The focus of our actions was on improved cash flow. Within three months, we were able to get the software operational, tracking business from order to cash, and significantly improving cash flow. With improved cash flow, the business can now invest in equipment that will provide growth in sales.

The world is not static. The business was constantly changing while this activity took place. Traditional methods of measuring benefits would not have been possible. What was obvious, is that the order to cash cycle was improved, allowing the business to invest in growth. The improved cash flow was measurable.