Archive for business

Internet strategies for SME’s

Posted in General with tags , , , , , , , , on June 20, 2010 by newideasconsult

Very often, and especially on LinkedIn.com I read about people and companies wanting to start their own online business, and most often they ask for a recommended ‘shopping cart’ or ‘e-store’ software to build their venture on.  Most often too, when you respond to them and ask them for more information regarding what they wish to do, it becomes clear that they wanted to start the plan by securing a good platform, a e-commerce system on which to build their business.

That sounds perfectly logical and for many mom-and -pop type business ideas, the cookie-cutter approach works.  Much like SAP can sort out processes within a company that implements it because it enforces certain rules on them required for it to work correctly, these e-commerce systems will force people to think through what it is they need before being able to launch their business.  Without certain key features being addressed within such a system, the site won’t go into production or won’t work correctly when you try to take it into production.  So for the majority of small ideas for an e-store type business these products will work very well, and I often recommend my favorites to some of these questioning parties.

However, starting with selecting an e-commerce platform when you’ve got an Internet idea, is possibly the worst decision you can make.  We used to say that on the Internet everything and anything is possible, but we try and box them all in similar ‘open source’ or ‘commercial’ e-c0mmerce platforms these days.  Imagine if we accepted that art could only be done on a canvas – we would have some wonderful pieces of art to this day, but we would not have a ‘Sistine Chapel’ or Michelangelo’s ‘David’ or Villa of the Mysteries.

If as an SME you are planning to go on the Internet and launch your e-business there, try and think expansively and plan like the corporates and brands do.  Work out what it is you want to do, what you want to sell to your customers, and how you want them to experience this.  Put together a business plan and a strategy to achieve it online.  You cover the basics, for example, you would need to be ‘connected’ to the Internet to enable your business, you would need to have a payment system or bank connected to enable you to do paid for services or product sales, and you will need a fulfilment service and a customer service, and so on.  But the way you plan your online presence, its shape, its function, its look, and its exposure, all contribute to the customer experience of your idea, your plan, your business.

Once you have these all down on a document, no matter how rudementary, sit down with someone, friend or family or local consultant who are Internet savvy, to work through it with you to grow your idea into a mature model  before looking for an e-commerce system to enable your business.  Only after such an exercise would recommendations for e-commerce systems make any sense to you or have any value for your business.  Planning your e-commerce venture this way enables you to better choose an open source e-commerce platform, a commercial e-commerce platform or a design agency to provide the vehicle on which to launch it.  At the same time you are better equipped to answer the questions the bank or payment processor will ask of you before awarding you an account against which to accept card, e-wallet, and/or ACH payments.

There are more details to the above, but this post is about getting people to sit down and plan their idea out before jumping on the most popular e-commerce platform and trying to force your idea to work through it.

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One business strategy, not two

Posted in General with tags , , , , , , on May 11, 2010 by newideasconsult

Over the years I have heard many companies speak of their e-commerce or ‘internet’ strategy as if it is some secret or hidden agenda that has covert operators hacking around in the dark trying to ‘hit’ on the magic SEO numbers that will realize the company huge numbers of online visitors with the accompanying bonus for the coverts of course. I am 100% behind a planned attack when approaching e-commerce or when considering launching an Internet presence as a business, don’t get me wrong.
What bothers me is that the starting point is often so wrong, with the board or management within a company spending their time considering ‘real world’ issues whilst the ‘other’ team focuses on developing some sort of e-commerce strategy often even as a secondary department or company to the main. It bothers me because so many companies in fact should start with one strategy for the whole, one plan to reach their market, grow it and retain its loyalty. We should be encouraging business to talk about their business strategy first and foremost (see my post for SME’s here on a similar topic).
My mantra since Netscape days has been to make company execs understand that there is only room in their budget and planning for one strategy, the core one, the reason why they do business, the core value their customers love, and so on and so on. One strategy as your starting point means everyone, from the tech savviest to the semi retired within such a company, will know exactly what needs to be achieved in terms of their business. One strategy determines how the Internet and mobile channels will be tackled, and what those two channels will be required to deliver to enhance the company’s bottom line and justify their existence.
Too often we react, doing what we think or know our competitors may be doing, and in so doing we dilute our value proposition to the customers and to our shareholders. We invest in serious technology because we are told to or because our IT team has recommended it, regardless the value to our core strategy as a business. As a consultant I try to help and inform my clients for example to consider the line ‘technology should be an enabler to THE goal’ when too often it becomes the goal. An exercise to me that seems to always work is for a management team to re-evaluate their strategies and decisions against the original core strategy that brought their company to where it is. Like Nokia and Berkshire Hathaway have proven, change is good too, if it is a total change.

However this post is not about core strategy re-evaluation, but rather about aligning our e-commerce or internet or mobile strategy to our core plan and to keep reminding ourselves to check how far they have drifted from the middle. Of course right there we have some excellent pointers to discuss in another post – the reasons for such a drift may not always be negative. However, most companies, I generalize here as it is the vast majority in my view that should consider this, should have a single strategy for their business, and they need to study carefully the benefits of implementing any x-commerce project against that strategy before making the call.

One strategy takes everyone within the company along for the x-commerce ride, if it fits, and one strategy creates a framework of achievements such an implementation must reach for to be deemed successful. One strategy also very quickly shows when any x-commerce implementation would not fit, and in doing so a decision can be made quicker and often at a much lesser opportunity cost than usual, as to whether such a venture should be created as a separate department or company apart from the main. When that is done, the creation of a new x-commerce unit will be based on solid business principles that can contribute worth to its parent instead of bleeding out the budget each year.

The uncomplicated world of information technology

Posted in General with tags , , , , , , , , , , , , on August 7, 2009 by newideasconsult

Technology is uncomplicated.

Yes, I know that this seems to be a contradiction in terms for many people, but technology has to be this to be successful.  In my experience technology must always address one or several needs in an uncomplicated KISS manner or it will almost always turn out as an expensive and bloated solution.  IT where I focus my efforts embodies this for me, even in its most basic form it exists as ones and zeroes. For me as a trained engineer it has always been about looking at a problem or challenge and seeing how to solve it, with or without technology. It has always been a situation where getting from ‘A’ to ‘C’ may or may not require technology, and if required then what technology solution would be best fit to get from the one to the other quickly, economically and simply.

Observing the news about current and past IT projects around the world seems to me to show that many of these projects take the approach of ‘I have a technology solution, now where is a problem I can fit into it’ or ‘I have this great solution, I just need to find where in my organization or my customer’s business there is an ‘A’ to ‘C’ issue I can use to press this into’. So they start a complicated under-planned and often unneeded project that ends with the customer believing the complexity of their problem can only be solved by the solution offered, who then spends a fortune on consultants, integrations and licenses only to sit back a year or five later and realize that their savings from this project is either non-existent or in fact negative, or that the ‘problem’ was never as huge as it was sold to be.

These are possibly bold statements to make in some readers views as technology almost always seems complicated and features difficult to comprehend, but those are most often design faults or bad planning in my view and not something to label technology or information technology with.  Information technology over the years grew into a domain for geeks like me, and as is often the case in the land of the blind where the one-eyed find they become kings and leaders, geeks realized soon enough that customers should be treated as mushrooms, kept in the dark, fed manure, and billed and billed and billed.

I generalize here and that is clearly unfair, but there is a large group of people in IT who still prefer to keep their customers in this state for as long as they can so as to maximize their revenues and profits.  After all, if we are listed IT companies, our shareholders become our priorities and not our customers, as with many industries these days I guess.  When we design solutions we do the same again, where we believe representing a solution in the most complex of ways will keep the customer astounded and paying, very often much more than the work is really worth.

The current way to address problems offered to IT companies by their customers, is to consider ways to ‘fit’ them into the solution from one of the big brands, or to bring in consultants who maximize their own revenue opportunities by making lots room within the final solution specification for even more consulting opportunities, which then leads to branded solution providers bringing in their own pre and post sale experts to see what added products could be included, whilst the going is good, and finally a team of integrators to put everything together, with a project manager hoping the final product will come in above the expected profit margin his employer demanded, with very little thought of coming in on budget or on time, or within a working specification for the actual customer who will be paying for and using this solution.

Again I generalize here, but it is absolutely true from my point of view that many such projects over the years have made IT the ‘complex’ industry it is branded as today, and laid the foundation to the fog of ignorance we hope our customers are lost in, so that we can remain the ‘experts’ who can save the day at a fee of course…

Information technology is actually about solving real business problems for me. About finding the lowest cost solution to a business issue, designed to require the least amount of customer employee training to manage in an ongoing manner. Compare that statement with what has been happening in the IT world today, and it comes somewhat short of reality, I agree. I guess for me it is panacea that consultants and IT professionals can think this way, but I stand by this statement. We as professionals have to come to a point in our careers where we change the view we have of ourselves, from ‘lets take short cuts and make loads of profits off our customers’ type of people to ‘let’s help our customers in a real way saving them real money and being there for them over the long term’ type of people. I am not forcing this on anyone, just lamenting the fact that there seem to be much more of the former type of person in our industry these days than the latter, leaving us with a false heritage and little integrity in the end.

Technology is a simple and wonderful solution to many things and it should be sold that way, even to our customers. We should make it our primary focus to roll out the most simplistic of solutions that actually solve business problems and improve productivity, instead of cause more problems and cost productivity. IT can be this to our customers, but it takes a fresh look at our own approach to them, their budgets and their actual business requirements to make a lasting change to our industry and the way people perceive it.

Business vs Software

Posted in General with tags , , , on May 13, 2009 by newideasconsult

I am often involved with companies where a new software system is being rolled out across offices and the boardroom expectancy is for immediate benefits in their bottom line with ‘our new system’.  I am very involved in terms of the actual rollouts when it is a card based, e-commerce based or transaction processing based solution rolling out, and from personal involvement on this level, am even more amazed from time to time just how much room management of companies give ‘us engineers’ to build the software processes independently from proper business analysis of their existing business practices.

With brand name software it is even more evident, with so much money spent on the implementation of an ERP or a financial system with little regard of what processes were already working within the company.  By this I mean that these days there seems to be a tendency for managers to ‘trust’ the thought processes of the software engineer and therefore his or her product they are buying.  They seem convinced that the software vendor or engineer must know more about the generic business model than they themselves, and so trust the creation of a virtual version of their business without any real analysis of their physical business.  So instead of them telling the software vendor or engineer how the software should work in their business, they accept the model where the vendor or engineer’s software products forces their business to adapt instead.

My mantra all these years have been that technology cannot control business in such a way that business must change to accommodate it, just for the sake of accommodating the new technology purchase.  Technology is intended to make our lives easier, not more complex, and changing business processes on the fly, just because that’s the way the ‘system’ works, has always had the opposite, expensive and highly frustrating result of confused customers and employees instead.

Visiting Telkom for example will indicate that Telkom staff at the stores claim they cannot change the address you originally registered your telephone to, as the ‘system will not allow this’ or even better, that your wife or partner cannot be registered as a co-account-holder because ‘the system has no room for this’.  An even better example of this in business these days, is the problem ERP systems present us all, where you simply cannot integrate to the ERP system powered company unless you also have the same software.  Or they simply cannot deliver a product or service to you, because their ERP system will not allow it in the open standard format your system communicates.

In SA that often means unless you also have SAP for example, you cannot do business on specific levels with some companies.  A solution may be unbelievably easy to implement outside of the standard ‘SAP’ model, but if you are dealing with a CTO or IT staff that is or are SAP trained you cannot even try to communicate that to them. The ability to think beyond their ERP system simply does not exist.  O, I am not slagging SAP here, it’s certainly not for any fault on their part as it is a good system as far as ERP systems go.

Sadly many companies just go with what is fashionable, regardless their own ability to truly earn back the huge costs incurred with the implementation of such systems, or the negative impact often made on their own business processes because they simply accept the software norm for a specific process must be ‘correct’ and implement it that way.   I’m a software executive, so I am not slagging software here at all, but I am wondering out loud, ok, very loud, why it is I keep sitting in meetings where executives turn my way to explain to them how their own business should work.  That seems wrong in so many ways.  I know how my systems work and I know what benefits they can have for a company, but I also know that these systems are not perfect, not by a mile, in terms of implementing them as they are.  My systems, as with other software products, are a 70% fit for companies, and my expectancy would be of my customers to tell me how they wish the 30% modification to be customized for their business.

Management, study your own businesses carefully, pick out only those parts that truly fail (often outside analysts can do this audit better than you), and then instruct software vendors / engineers to provide you with ways to make those ill functioning bits work better.  That’s how software should be evaluated and implemented.