Business Tech

Have you noticed that sometimes it is easier to focus on the "doing" versus the "achieving?" 
I think The Arbinger Institute said it best; Busyness is a focus on "doing." There are few people more "busy" than people who fail to focus on results.

As I work with businesses to fill a part-time "C" level executive position, I am amazed at how "busy" people can make themselves. As Milestone Advisors becomes part of the senior management team, we find that after the first few months we can be highly effective at achieving the needed results for the company in a part-time capacity. In fact, I see greater operational efficiency because our focus is on the achieving and not creating work. As you look at your current business strategy, consider talking with Milestone Advisors to explore ways we can help you be busy accomplishing.

 

Gartner Research predicts that "by 2012, 20% of businesses will own no IT assets." New services for being able to consume computing power and disk space using virtual server technology has enabled the concept of Cloud Computing. Cloud Computing is running your business applications on equipment that you do not own and paying a fee for what you consume. This is a fantastic way to grow your business. The service enables you to experience the normal peaks and valleys throughout the year while only paying each month for what you actually use. The alternative is to over-purchase technology for the high volume months. Additionally, you do not need to staff for the operations and support as the service handles the backups, maintenance, and new release upgrades as part of your monthly fee. You get guaranteed up-time of 99.9%, the benefit of redundant everything, business continuity technology, and security certifications that would be cost prohibitive for most small to medium businesses.  

This is a major shift in technology strategy and I recommend you consider it as part of your business plan. If you do not have a technology strategy, Milestone Advisors can assist you with our technology consulting services. We will help you analyze your current technology environment and determine if Cloud Computing can be leveraged to achieve your business goals.

Many entrepreneurs wrestle with this question and may get opposing viewpoints. I have seen recommendations that say you sould figure out what you need, double it, and don't be afraid of dilution. Other views counter balance this approach with caution that you should not take too much investment money too soon. This view is supported by examples of how taking too much money results in pressure to deliver growth before you are ready. Causing a change in focus from creating customer value and building a durable organization to meeting arbitrary business plan goals.

As I work with technology companies to understand how much cash to raise, I suggest a detailed review of the business plan. With the pace of technology change, it is important that you frequently analyze the market potential for your products, the best approach for packaging and pricing, sources of supply, and go to market plans. The analysis of the market, competitors, and cost drivers becomes the building blocks to development of a financial model. The financial model provides the lense to see the potential for your growth and to give insight into how cash would help you achieve the full potential of your business. 

Unfortunately, I have not found the easy rule of thumb to how much case to raise.  However, I have learned that following a good methodology for strategic planning, having the right financial models, and getting outside expertise will give you the best answers. 

The process for evaluating and selecting a software package is a major decision that brings multiple risks to a business. Especially when the software selected is critical to the growth and scalability of the company. I often recommend getting consulting help early in the process so that the results and return on investment can be achieved. Let’s face it; you may only go through a software technology selection a few times in your carrier and therefore should not go it alone. 

The first place to start will be to develop a questionnaire for the evaluation and to weight each question so you can measure the responses when returned. The questionnaire becomes the key requirements for the product and should also include items on maintainability, fit to your technology plan, security, and business continuity technology. When sending out the responses, I recommend you notify the potential supplier that the responses will be tied to the agreement when the selection is completed. I have witnessed many companies skip the strategic questionnaire evaluation step and go directly to the software demo. Decisions made from the demonstration only approach yield disappointment, frustration, and significantly higher costs.

In addition to the requirements and the questionnaire, you should put time into developing measurable goals on what a successful implementation will achieve for your business and tie this into the statement of work. These goals usually can be lifted from your business and financial plan. Having well communicated goals understood by both companies will increase the chance for a long term partnership.

I would be interested in hearing your thoughts on these suggestions and I would welcome the opportunity to share more strategies on software selection.

When looking for money to grow operations, I recommend small businesses consider strategic partners as a source for money. I believe partnerships can be better than selling stock as the dilution can be less extensive or even nonexistent, if the deal involves prepaid royalty or licensing fees. I think of strategic partners as either a corporate partner or a supplier. Suppliers sometimes can be persuaded to defer payments if they believe in the company’s future and the increased pull through sales for their product. The corporate partner may see opportunities to increase revenue by bundling the technology in their own product or leverage their existing distribution channel to sell the product or service. 

I find these types of strategic partnership opportunities often surface while developing or updating the business plan.

I often find high growth companies struggle to balance fighting fires and doing appropriate business planning. They are growing so fast they find it difficult to get the needed time to plan. Milestone Advisors has helped business owners and executives with this balance by facilitating a strategic planning workshop. The workshop enables a management team to efficiently complete a new or updated business plan while ensuring their business goals are achieved. Recently, with a high growth technology company, we were able to leverage a cross section of our team to work on updating the strategic business plan. Leveraging our collective experience in financial analysis, product development, market analysis, and operations we were able to surface opportunities for growth and improved margin. Once a management team has the plan, decisions on priorities and investments can be made knowing how they fit into the strategic vision.

I recommend seeking outside consulting expertise to keep your plan alive and active while you manage daily operational.
 

In my December blog post, “Scale Business Operations – Conserve Cash” I discussed Cloud Computing as a consideration for conserving cash.  As I assist companies with their business plan and technology architecture, a consideration I regularly recommend for delivering the needed business applications is a Software-as-a-Service model.   

SaaS is a model that involves the delivery of software solutions in a form different from the traditional, on-premise client-server solutions that have dominated the software industry.  With SaaS, a third party hosts the application and end users access applications over the web.  With high speed secure networks, end users enjoy high performance and reliability, while outsourcing the management of and purchase costs of hardware, networks, application updates, backups, database administration and licensing, etc.  The net result to the company is a monthly expense that conserves cash and is typically a lower overall cost.  The software company who delivers the solutions via SaaS can offer these services more efficiently with economies of scale.  Additionally, you benefit from lower support costs because the applications are running on servers they control, without multiple hardware and software versions that must be supported and maintained with the traditional on-premise licensing model.

If you are in a situation where you have outdated technology that needs to be refreshed or have an application that may be on a very old release, I would consider looking for a SaaS solution in your business plan.

I’d like to spend some time touching on a technology solution that continues to grow in maturity -  “Cloud Computing.”  The basic concept behind Cloud Computing is being able to consume technology solutions as your business needs them without the typical capital investment needed to purchase software or hardware. The name, like many other titles given to tech products, gives a visual picture of your hardware and software solutions being provided somewhere out there in the cloud of virtualization. You will hear other names being used to help differentiate what specific type of cloud solution is being provided; Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) both describe the operating environment. Another popular alias for cloud computing you may recognize more since the launch of Salesforce.com is Software as a Service (SaaS).  Although the technology architecture and consulting service may differ with each type, the benefits of a robust environment with economies of scale are the same.

Gartner identified Cloud Computing as one of its top 10 strategic technologies for 2009. These technologies are enabling businesses to access tools and solutions that would have previously been cost prohibitive or put a significant drain on cash. What I find compelling is that although many large enterprises are using this ‘pay-as-you consume’ technology solution, according to Forrester Research, small and medium size businesses are not. Why are operations with more limited resources not taking advantage of this new advance in technology that brings advanced solutions to your finger tips without a heavy investment? Is it likely that most small companies don't have a CIO or Part-Time CIO helping to make these decisions? What can be done to encourage small businesses to incorporate these technology solutions in their strategic plans? Tell me what you think.