I was a sales rep for Atlantic Lottery in Newfoundland (in another life, it seems) and I recognize that experience provided more real "education" than three university degrees have done for me since. A great lesson came one summer's day in the town of Lawn on the province's south coast. A particularly resistant shop owner was testing my Xerox and Dale Carnegie sales training techniques to the limit. It didn't seem he was going to buy into lottery products until I finally asked him to tell me what it was he really wanted.
"At the end of the day," he says "I want to be richer, smarter, or both - you show me how what you got makes me that, and I'll buy it".
It seems that you don't have to be a big or sophisticated business to understand "Return on Investment". But many businesses and their developers, accountants, and consultants use ROI calculation as a way to prove a decision they have already made about a project or investment. That's what I call decision-based evidence-making - where you build evidence around the decision instead of collecting evidence to make a decision. Done properly, however, ROI calculation should reduce risk and optimize the likelihood of making a good choice.
ROI calculation is not easy - but for small and medium-sized enterprises (SMEs) it is more important than ever to do it as well and as objectively as you can. There are some excellent applications out there to help you to do your own, or to support your decision systems when working with a consultant or advisor. Some of the best tools available to Canadian Businesses can be found on the Canada Business Network website at the link shown below. A particularly good tool we like to use is the ROI Calculator from the now defunct E-Commerce Institute of Montreal - unfortunately also no longer on the CBN site, but call us and we'll be happy to get a copy to you. In addition to helping guide you through a well-developed analysis, the tool generates a report to calculate your Total Cost of Ownership, Net Present Value, Payback Period and your Return on Investment for any project (technology or otherwise) that you may be considering. It's simple to use and needs only MS-Excel to run. I do recommend you engage a consultant or accountant in any serious ROI exercise, but regardless, ROI tools like this really can help with evidence-based decision-making. WARNING: this tool could make you richer, smarter, and likely both!
The Canada Business Network can be found at www.canadabusiness.ca
Monday, October 29, 2012
Monday, October 22, 2012
Square Pegs and Round Holes
A few years ago I attended a conference for SMEs seeking eBusiness advice for their operations. The speaker (a self-professed expert on eBusiness) suggested that building a custom application in this day and age makes no sense when off-the-shelf (OTS) applications are available for nearly any conceivable function at a fraction of the cost of custom development.
My disappointment at her remarks stems from a long career that has proven time and again that the debate on "buy versus build" is rarely that simple. Here are a few reasons why:
Overall Cost: The price dimension alone offers plenty of complexity. OTS products may have hidden long-term costs such as license, maintenance and service level contracts, upgrades, platform changes, training, or implementation and installation costs that set their overall cost of ownership above the custom-built price tag.
Functionality: As far as features are concerned, any OTS application will have limitations in functionality out of the box. So, if you need a multifunction solution you may have to buy more than one application to cover all your requirements, while a single custom solution can be inclusive.
Process Fitness: Suitability may also be an issue in this debate as many in the OTS camp will try to sell you a solution that is "close" to your need - suggesting you rebuild your business processes to fit the software gaps. While I am a big fan of business process re-engineering, sometimes your unique business processes represent your competitive advantage. Forcing you to fit your business to a solution instead of the reverse is like forcing square pegs into round holes.
A recent project for one of our major clients identified a viable third option - integration. Integration is a combination of third party products with custom development. In the case of this particular build it involved developing a custom web-based access to connect to a commercial desktop solution. Our research indicated that while the initial price was about the same for upgrading to a different product with the enhanced functionality the client was seeking, the long-term return on investment was substantially better for an integrated solution. The approach offers future economy and scalability - important values for the client that take long-term cost and other benefits into consideration.
No one can tell you whether you should buy or build without a thorough needs analysis. Avoid "ex-spurts"* who present the buy-versus-build argument as a foregone conclusion. Be sure to complete a full ROI calculation on any solution you implement - whether you buy, build, or integrate.
*"Ex-spurts" is a term I use to describe the false prophets of the consulting profession and comes from a humorous quip about experts that states that an "ex" is a has-been and a "spurt" is a drip under pressure.
My disappointment at her remarks stems from a long career that has proven time and again that the debate on "buy versus build" is rarely that simple. Here are a few reasons why:
Overall Cost: The price dimension alone offers plenty of complexity. OTS products may have hidden long-term costs such as license, maintenance and service level contracts, upgrades, platform changes, training, or implementation and installation costs that set their overall cost of ownership above the custom-built price tag.
Functionality: As far as features are concerned, any OTS application will have limitations in functionality out of the box. So, if you need a multifunction solution you may have to buy more than one application to cover all your requirements, while a single custom solution can be inclusive.
Process Fitness: Suitability may also be an issue in this debate as many in the OTS camp will try to sell you a solution that is "close" to your need - suggesting you rebuild your business processes to fit the software gaps. While I am a big fan of business process re-engineering, sometimes your unique business processes represent your competitive advantage. Forcing you to fit your business to a solution instead of the reverse is like forcing square pegs into round holes.
A recent project for one of our major clients identified a viable third option - integration. Integration is a combination of third party products with custom development. In the case of this particular build it involved developing a custom web-based access to connect to a commercial desktop solution. Our research indicated that while the initial price was about the same for upgrading to a different product with the enhanced functionality the client was seeking, the long-term return on investment was substantially better for an integrated solution. The approach offers future economy and scalability - important values for the client that take long-term cost and other benefits into consideration.
No one can tell you whether you should buy or build without a thorough needs analysis. Avoid "ex-spurts"* who present the buy-versus-build argument as a foregone conclusion. Be sure to complete a full ROI calculation on any solution you implement - whether you buy, build, or integrate.
*"Ex-spurts" is a term I use to describe the false prophets of the consulting profession and comes from a humorous quip about experts that states that an "ex" is a has-been and a "spurt" is a drip under pressure.
Tuesday, October 9, 2012
Rambler Mansions & The Butterfly Effect
When my wife and I began looking for a house about 6 years ago, we visited a number of century homes and "rambler mansions"-- you know the ones that were built in the early 20th century, added a wing in the 1920s, a garage in the 40s, a new porch and veranda in the 60s and a studio in the 90s. While touring one such home, it occurred to me that many of the web applications we have provided seem to have developed that way. In the early 90s the client wanted a website. By the late 90s and early 00s they wanted to add some kind of e-commerce and these days they are looking for more strategic solutions like CRM, CMS, Social Media integration, and Corporate Portals. In many cases we have built those new capabilities right on top of the existing foundational site. As a result, we have some real "rambler" applications out there; compilations of parts that don't necessarily fit that well together. Smoke and mirrors (and nice wallpaper) can help them to resemble well-planned architecture but that only hides the complexity and instability of the underlying application.
The problem with such applications is that the more complex and integrated they become, the more the likelihood that if you go to fix or improve one function, something elsewhere in the application goes awry - a sort of application integrator's "butterfly effect" (where any small change can have a significant downstream impact).
There are two pieces of advice I would give to those looking to integrate new applications with existing web services. First, investigate opportunities for integrated suites supported by reputable third party providers. For example, a client recently asked us to add survey and polling capabilities to an already diverse knowledge base system. Rather than add further complexity, we explored and eventually agreed to implement Microsoft SharePoint Services to replace the existing capabilities while adding the new requirements.
Second, if you have to integrate applications from diverse providers, consider negotiating a Service Level Agreement (SLA) with your integrator so you can have confidence that when something goes wrong -- and it will just as sure as the pipe in the new porch will burst in the first winter freeze -- someone will be there to fix that problem, secure your data, and maybe even foresee coming structural problems before they bring the house down.
The problem with such applications is that the more complex and integrated they become, the more the likelihood that if you go to fix or improve one function, something elsewhere in the application goes awry - a sort of application integrator's "butterfly effect" (where any small change can have a significant downstream impact).
There are two pieces of advice I would give to those looking to integrate new applications with existing web services. First, investigate opportunities for integrated suites supported by reputable third party providers. For example, a client recently asked us to add survey and polling capabilities to an already diverse knowledge base system. Rather than add further complexity, we explored and eventually agreed to implement Microsoft SharePoint Services to replace the existing capabilities while adding the new requirements.
Second, if you have to integrate applications from diverse providers, consider negotiating a Service Level Agreement (SLA) with your integrator so you can have confidence that when something goes wrong -- and it will just as sure as the pipe in the new porch will burst in the first winter freeze -- someone will be there to fix that problem, secure your data, and maybe even foresee coming structural problems before they bring the house down.
Monday, October 1, 2012
Hugs and CRM
My father supervised a busy Air Traffic Control centre when I was a kid so sometimes I'd drop in and observe him in action (these were days before the current high security on air traffic control centres). I was intrigued with the interaction he had with his staff. My parents were both affectionate, prone to lots of spontaneous hugs, and my father seemed able to use touch as an effective medium with the men and women who served him - often, for example, placing a hand on a shoulder or arm, or patting a back. I never once saw anyone who seemed uncomfortable about such contact and so I asked Dad is there is a secret to avoiding the "used car salesman"feel to this interaction with others.
"The secret," he told me, "is touching only when you are giving and never when you are taking - people sense your intent." In today's world, where we are highly sensitized to online and instore sales harassment and overt soft-selling, that lesson has been a valuable one, even beyond the physical touch - and into the virtual one.
A Customer Relationship Management (CRM) system is often marketed as a digital "touchpoint" (i.e. to enhance the experience) for your clients. A database-driven application that can track customer sales volume, buying preferences, demographic and psychographic profiles, CRM software can help you to effectively mine the data that comes through your point of sale, and to automate functions that keep you in intimate contact with your client. However, like all eBusiness applications, it is just a tool and only as effective as the person or organization who wields it.
During a stay one weekend at Harris Hall B&B in Granville Ferry, NS owner Jack Slater asked me if I thought CRM was useful to small businesses like his. After some discussion about his business practice, he noted that many of his reservations are for a special occasion like an anniversary, birthday, or wedding. Tracking such occasions could provide a way for Jack to touch base annually on those anniversaries to offer congratulations (and valuable reservation discounts) thereby increasing repeat sales.
There are many affordable approaches to CRM in Nova Scotia through services like ImmediaC, ConstantContact, ClearService and Salesboom. However, you can start to achieve appreciable CRM benefits with a simple database on your desktop, tracking some of the more intimate relationship-building aspects of your client interactions.
With increasing sensitivity to spam these days, we seem to get annoyed by email solicitation, yet we often welcome contact by those organizations that offer value and personal recognition. If you are thinking about developing a CRM system to hug your clients, you may be wise to be guided by my Dad's "give-when-you-touch" principle. Better still - call me at InnovaIT to discuss your CRM strategy!
People do sense your intent...even on the web.
"The secret," he told me, "is touching only when you are giving and never when you are taking - people sense your intent." In today's world, where we are highly sensitized to online and instore sales harassment and overt soft-selling, that lesson has been a valuable one, even beyond the physical touch - and into the virtual one.
A Customer Relationship Management (CRM) system is often marketed as a digital "touchpoint" (i.e. to enhance the experience) for your clients. A database-driven application that can track customer sales volume, buying preferences, demographic and psychographic profiles, CRM software can help you to effectively mine the data that comes through your point of sale, and to automate functions that keep you in intimate contact with your client. However, like all eBusiness applications, it is just a tool and only as effective as the person or organization who wields it.
During a stay one weekend at Harris Hall B&B in Granville Ferry, NS owner Jack Slater asked me if I thought CRM was useful to small businesses like his. After some discussion about his business practice, he noted that many of his reservations are for a special occasion like an anniversary, birthday, or wedding. Tracking such occasions could provide a way for Jack to touch base annually on those anniversaries to offer congratulations (and valuable reservation discounts) thereby increasing repeat sales.
There are many affordable approaches to CRM in Nova Scotia through services like ImmediaC, ConstantContact, ClearService and Salesboom. However, you can start to achieve appreciable CRM benefits with a simple database on your desktop, tracking some of the more intimate relationship-building aspects of your client interactions.
With increasing sensitivity to spam these days, we seem to get annoyed by email solicitation, yet we often welcome contact by those organizations that offer value and personal recognition. If you are thinking about developing a CRM system to hug your clients, you may be wise to be guided by my Dad's "give-when-you-touch" principle. Better still - call me at InnovaIT to discuss your CRM strategy!
People do sense your intent...even on the web.
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