While they know they've outgrown their current IT company, they're still coming to grips with the thought that they need to outgrow their approach to IT. The bad news is that after all the years of neglect - both physical (ie: not spending the money as they should have) as well as spiritual (ie: viewing IT as a cost center rather than as a way to reap the benefits of improved productivity and efficiency) - have left them in a difficult situation. The difficult situation isn't the state of their technology, but rather the state of their mindset. Bottom line - because they haven't spent on IT for so long and have muddled through, most still think they shouldn't have to (spend on IT). There are some who think they've changed their view, but still think that once the network's "fixed", spending should go back down to a minimal level. The reality couldn't be further from the truth. The reality is - there is some minimum that needs to be spent to ensure the initial investment is maximized to achieve some basic benefits - extending the life of the assets, improving staff productivity, and ensuring stability. Significant business benefits can also be achieved by looking at specific IT spending as opportunities to increase business efficiencies by improving, enhancing, or even sometimes simply utilizing, systems, processes, and work flows better thereby significantly impacting the bottom line.
There are ways to spend to improve efficiency and effectiveness - but you have to have the mindset to do this. What would you be willing to spend to improve your staff's productivity by 10%? 20%? Or more? Or, would you at all? How much do you value your staff's time? When was the last time you looked at their productivity and thought of ways to improve them? Do you look for ways to increase staff productivity at all? How often do you send them to training? What are your performance schedules like? How do you look at an increase in productivity? In dollars? Dual monitors improve the productivity of staff by at least 5%. For a staff member costing $50k/year this would amount to an increase in productivity worth $2,500. If it costs $500 to do this, this is over a 500% ROI. And for just the first year! If you can improve the productivity of a staff member by 10% by replacing their 3 year old computer, would you? Are you looking at your business this way? If not, a mindset shift needs to happen. This ties in to the findings of a previous entry I wrote Businesses Who Value IT Outperform Those Who Don't. I believe if you want to operate your business at Best in Class levels, at the core you have to adopt their mindsets.
I liken this mindset needing to be changed to be like going from your first bike when you're a kid to getting your first car to getting the SUV you need to trust your family's life with - but thinking you should still be spending at the same level as for your first bike. Certainly you can, but I wouldn't trust my family to this level of care. Nor would I (nor do I) run my business this way.
So, what's really your approach to your IT?
]]>The interesting findings include the fact that despite the global recession, more SMBs surveyed in 2010 reported an increase in revenue for 2009 than in 2008. Those who reported growth view IT as critical to their business success. Let me repeat that...
Businesses who reported growth view IT as critical to their business success.
While I think this is huge, I also have to clarify this. Every business owner I've ever met THINKS they view IT as critical to their business success. Yet, NOT every one of them actually acts this way. From where I stand, it's actually a pretty small percentage that act this way. There is a difference. And it is a critical difference.
In a recent meeting with business owners and key decision makers, I threw out the question asking who thought they valued IT and if their IT was critical to their business' success. Every one of them raised their hands. Then I asked if they knew or planned on how much they spent on IT. Only a handful knew what they spent or were of the mindset that they viewed their IT spending as an investment. The remainder viewed IT as a cost center (whether they admitted it or not). One of them (who raised his hand earlier) even commented, "I only spend when I have to AND as little as possible." Clearly this is NOT the mindset of someone who values IT.
Clearly the study backs this up. In fact of the SMBs that view IT as critical, 60 percent saw revenues grow over the past 12 months. In contrast, among SMBs that stated IT is not important, less than 29 percent saw revenue increase.
In addition, the 2010 index indicates SMBs are beginning to see the benefits of cloud computing; more than 40 percent of the respondents that use hosted or cloud technology reported revenue rises of 30 percent or more compared with 90 percent of respondents not using hosted technology that saw decreases in revenue. The advantages of hosted or cloud technology are viewed as reduced cost and IT management and maintenance, as well as increased business value, productivity and competitiveness.
“Our assessment of the report tells us that an increased focus on IT correlates with good performance in all of the size categories surveyed,” said Dale Vile, research director of Freeform Dynamics. “This whole picture corroborates the notion that technology and hosted services can provide tangible business advantage, even for smaller companies, and it’s not surprising to see that investment in IT and hosting goes hand in hand with good financial performance.”
One of our successes at FPA has been our ability to align ourselves with growing companies who value IT and see it as an integral part of the success of their business. There are meaningful acts that back up this thinking - acts like IT budget planning, implementing proactive maintenance, business continuity planning, and looking for meaningful ways to leverage technology to improve business processes. Also, the perception that ROI is measured against true costs, not just the IT dollars spent. What I mean by this is considering the impact of hidden costs of IT when making spending decisions - ie: reduced or lost staff productivity, reduced or lost sales, delayed orders, delayed receivables (impacting cash flow), etc. Some people get the value of this and some don't. Luckily for them, the majority of our clients seem to get it and get IT!
]]>How does this tie in to technology you might be asking yourself? Well, these days I'm feeling like we're reliving the same thing over and over and over again with much of what's going on with technology these days. Every day it seems to be more of the same - this is faster, that's the latest thing, this will change your life, you can't live without that. While there are a ton of new great things that keep coming out, where are the truly life changing things at?
Case in point - the iPad. Do we really need another "gadget" - one that fits somewhere in between our smartphone and our laptop? How does this really make our life that much better? I understand how it will make Steve Jobs or an Apple shareholder's better, but c'mon - seriously? The latest and greatest from Apple is a device that's vying for the space that's currently filled by Amazon's Kindle and a Netbook. I can see where this could get to (and "could" is the operative word in this sentence) once they work out the kinks and add the other features it really needs. When I can replace my home computer, laptop, netbook, smartphone, AND Kindle, then we're talking. Till then, it seems like the same thing over and over again - promises, promises, promises.
]]>So, what does this REALLY mean? It doesn't mean that if you want to email the mayor, his new email address is going to be TonyV at gmail.com. What it does mean is that the concept of "Cloud Computing" is maturing and getting a resounding vote of approval from a major organization. While I'm not here to voice my opinion on whether Google's solution is better than Micosoft's or Novell's (the other competitors), I am interested in what this means to the millions of other businesses out there and the trend towards more and more cloud computing.
If you're not familiar with this concept, simply put "cloud computing" is about moving the computer systems you rely on from being at your location to someone offsite who can provide these same functions through your internet connection. This also goes by the name "Software as a Service" (SaaS). This greatly reduces the strain put on your business to own, manage, and maintain pieces of your own network infrastructure and put this responsibility on to someone else who's sole purpose is to provide these services. We're seeing this more and more these days. The greatest example of this are things like Salesforce.com, Google apps, Mint.com, etc.
What does this mean for you practically speaking? For many of our clients this can be seen in hosted email and hosted spam filtering. You can run MS-Outlook internally on all your workstations while NOT requiring an internal MS-Exchange Server (but rather using one out in "the cloud"). While this has many advantages: lower cost to start, lower cost to maintain, upgrades taken care of, etc.) there are also a number of significant disadvantages: data stored offsite, reliance on your internet connection, reliance on a 3rd party, etc. Like I said, we are seeing this more and more these days. While it's not for everyone and certainly not for every application, for certain size businesses and certain applications, it's a very cost effective and valuable solution that we will be seeing more and more of in the future.
While the base need to leverage technology to achieve your business goals hasn't changed, what has changed is "how" (technically) this gets accomplished. And how, we, as a company are changing "how" we do what we do is changing. While historically we've been focused on internal technology and how we manage, maintain, and support it for our clients, we now are moving in ways to ensure that we're able to effectively provide similar consulting services for hosted or SaaS or "cloud" technologies to ensure the technology our clients' are using are as effective for them as possible.
]]>So, if your network crashed tomorrow what's the likelihood that your business could survive? How prepared are you?
One of our engineers was pondering this exact question at 2:00 in the morning the other day trying to rebuild one of our client's drive arrays. Much to our comfort, he was able to rebuild it and get our client back up and running before the day started. But, this brush with catastrophe really made us ponder how seriously all of our clients take the responsibility of securing their data.
As much as it's our goal to "remove the worry" surrounding IT for our clients, often times we're handcuffed by the limitations our clients put on us because of budget constraints. And while this is (somewhat) understandable, from my perspective it seems like only those who have "felt the pain" have any sort of perspective on this issue and have taken proactive actions towards ensuring their data is safe. This is a tough one for businesses to consider - how do you justify spending money where there is no quantifiable ROI. In the best cases (ie: where you won't ever have to use it), this is money spent that will never be recouped. On the other hand, if it's not spent and you are hit, 90% of you will be out of business within the year.
So, how close do you need to come to losing all that you have to finally act on this and begin your Disaster Recovery planning? This shouldn't be a question you put off answering for too long.
]]>My point is, it's quite difficult (if not almost impossible) for your IT Service Provider to be a Trusted Advisor if you won't let them be one. We run into this all the time. If all the client cares about is doing the absolute minimum, reacting to problems, keeping costs down (at all costs), and always thinking short term, then you're in trouble. There's almost no way to be a trusted advisor to someone who doesn't want it.
The word "advisor" is an active noun. It implies action. It implies proactive action. It's professional. If you're not planning, then your partner can't be advising. To have a "Trusted Advisor" is a two way relationship. It requires involvement on both sides. For us to be a "Trusted Advisor", we literally have to be a partner with our clients in their business. We can recommend till we're blue in the face, but if nothing is done about it, are we truly advisors? No.
Now, you have to ask yourself - are you willing to pay for it? If the answer is no, then we're back to "do I care?" If you are (willing to pay for it), then regardless of whether you actually have to (pay for it, you've just escalated the discussion up to a whole 'nother level. The fact that you are willing to pay for it will take you to the level where your expectations are higher and the demands you'll be placing on your IT service provider are higher. And this is key. But - "willing to pay for it" doesn't necessarily mean what you think I mean - paying more for our services. On the contrary, we often times advise clients to spend less on us by spending more on something else. We may ask clients to spend for a better solution so that our ongoing support fees will be less and their productivity will be more (long term thinking)
For you to take your business to another level, you need to be surrounding yourself with advisors who bring more to the table than what you may be asking for. You need someone who will add value above and beyond what you ask for, but rather - what you need. This is where your IT Service Provider is truly a "Trusted Advisor".
So, back to the question - do you have an "IT guy" or a "Trusted Advisor"? The difference could be the difference between your success and failure.
Business Before Technology - We Get IT!
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When people think about the cost of their IT, they tend to think about only the costs they see. This would seem to be logical - how do you think about things that you don't know about? But the problem is - When people think of the cost of IT, and more specifically, reducing their cost of IT, most of the time they're thinking only of the costs they see - the cost of the hardware, the software, and the related service fees. Rarely, in my experience, do you really see clients considering all the "hidden" costs.
Some of the most obvious "hidden" costs are those associated with lost or reduced employee productivity, wasted dollars spent on poor investment decisions, unseen administrative costs, and costs resulting from poor planning. Drilling down further, a lot of these costs are caused by things like downtime (caused by insufficient budgetting for proactive maintenance), poor performing machines (reducing staff productivity), redundant work (increasing staff costs), insufficient training (reducing performance), over-extending the life span of machines (causing increased support $'s and increased replacement costs), and improper configurations (also causing increased support $'s). Some of these are soft costs (lost productivity impacting staffing costs) while some are hard costs (increased replacement costs).
Rarely do we see clients considering the long term costs of their short term decisions. It's almost always, how do we cut costs NOW! But the reality is all of these decisions go to the bottomline impact IT has on your company. And more often than not, the long term impacts are way more costly than the short term savings. If I don't stay current with patching all my machines, I can save some $'s this month (while fixing that infected workstation will cost way more next month). But again, I believe one of the key components here is how clients define the word "cost".
You can easily have a conversation with a client contemplating spending $100,000 on a new piece of machinery with a 5 year life span, but talk about replacing the $3,000 server the business completely relies upon BEFORE it crashes and it's like pulling teeth. Why is it that people are ok running computers into the ground but wouldn't think twice to do this with almost any other part of their business? Why is it so rare that a business owner strategically acts to take a proactive approach to deal with IT issues BEFORE they bring their company to a screeching halt? Again, it comes back to the definition of "cost" (ie: how business owners currently think about costs).
I believe a lot of it has to do with the oversimplification our industry (with Microsoft leading the charge) has done over the last five to ten years. Everyone still thinks these machines are like calculators or dishwashers. But the reality is, when something that could bring your whole company to a complete standstill is treated like this, these hidden costs will continue to have a bigger impact on profitability than they really should. We (as an industry) need to do a better job of helping our clients understand IT "costs" and the business impact of them.
So, before you yank that weed (ie: make a short term decision re: IT), think twice about what's going to happen when it grows back...
]]>Now imagine this car is responsible for generating your income. Imagine you own a fleet of these cars and your business depends on them. Sometimes you take them in for servicing, but most of the time you'd really rather not have to. And with the economy the way it is, you only want to take them in when something's not working - like it won't go fast enough to get on the freeway or it doesn’t turn right anymore (making 3 lefts does the same thing so you put up with it for a while). To cut costs, you'd do anything other than spend money on them. You basically drive them till they stop working (they're running, so shouldn't they just keep running?).
This scenario seems a little far fetched, right? Now replace the word "car" with "computer" and maybe you can see where I’m going. Driving a car without a dash is like running a network without a monitoring system. Literally. It's scary to say but probably 99% of businesses out there do this! They think that because this is the way it's always been, this is the way it should always be. When it breaks, call the computer guy. If it ain't broke, don't fix it. It's "fine".
Well, it's not fine. It's just an accident waiting to happen. The best computer guys in the world are still at the mercy of the laws of probability reacting to things over and over again till something major happens. And the reality is, something major will happen. Machines last between 3 and 4 years. Sure you can push them longer, but why do you think all major manufacturers (Dell, HP, IBM, etc.) limit their warranties to 36 months? Because their actuarial tables tell them their machines won't last longer than this! Statistically speaking, this means pushing machines past this point will almost always ensure some system failure. Now, if you have 3 servers on your network, you could be looking at a crash, on average, of one per year! Still want to drive without a dashboard?
When clients ask me what's the one thing that they could do that would be the most impactful way to use their IT dollars, without a doubt the answer is - implement a network monitoring system and start proactively managing your network. But you have to notice how this question is phrased. It's not, "how can we save money?" It's, "how can we better use our money?" Because, the reality is, you have to spend a little to save a lot. The ROI is there. But, it's all in how you view IT. You can't just think "save" (as in "not spend"). Because it will backfire on you.
So, the next time you're thinking of ways to cut costs, don't drive blind - add a monitoring system to your network.
]]>The first is the release of Palm's Pre. This is the supposed "iPhone killer". It's actually garnering rave reviews.It does sound pretty good. It has all the bells and whistles of the iPhone but supposedly integrates the web much further. It also has some intelligence to integrate all your address books and contact lists into one. If it works, this would be pretty cool. Since the OS is based on the web, the apps are more platform independent and should be easier to build than iPhone apps. Palm says they're not looking to take over or cut into Apple's dominance in this area. Their approach is there's still plenty of room for a competitor.
Ths second item of interest is Microsoft's release of bing! (ie: www.bing.com). This is their response (again) to Google. How high are the stakes here? In their first TV commercial, it seems that they even go so far as to accuse Google of causing global economic ruin! Do we need a "better" search engine? Does anyone trust Microsoft to deliver completely objective results?
So, what do these two things have in common? Not much on the surface. But if you dig deeper, plenty. What it means to me is as comfortable and as ingrained as things could be in our daily lives (ie: the iPhone and Google), anything can change at any time. There were search engines before Google (hard to remember, huh!). And there were smartphones before the iPhone. What will the landscape look like in a year, two years, or more? I don't know, but it does remind me to not get complacent. We always need to be thinking about what the future may hold for our businesses and our lives to be successful.
Ok. So I know we're pretty much past the point where people are fighting the need to use computers (although, can you say "dial up"?). But there are still many businesses who look at technology as a necessary evil - "I guess we have to use computers. But, darned if I'm going to upgrade my fine Windows 98 machines!" Something to think about - what is the time of your staff worth? If you could improve productivity by 5 minutes per employee per hour, would you? Consider this: at $20/hour for a 20 person office, this would be worth nearly $70,000 per year! Or, if your server was down for 2 days, under this same scenario it would cost $6,400 in lost productivity - not including the fees to restore it which could double this!
The true innovators are the business owners who look at technology as a way of leveraging and scaling what they have to offer. These are the ones who are going to propel their businesses to another level. They're not the ones who are on the sidelines being passed by. They're the ones cutting their own path and defining what their competitors need to do just to follow and keep up with them.
This can be done in a number of ways, but the basic foundation of this comes back to the "mindset". How do these innovators get this mindset? How do they come to look at technology as a friend and not a foe? Besides having a successful track record backing up their intuition of spending money to make money, often times it takes a certain ability to move forward on a hunch. "I know if I spend to get a new server, our productivity will improve ten-fold." or "I know we need to automate our HR Performance System to improve our retention." They're thinking ROI, but often times it may not be easily quantifiable.
From my experience, another component to this mindset falls under "satisfaction". That is, true innovators aren't satisfied with what they've completed. They're always looking for more ways to improve things. When a project is completed, they're thinking, "ok, now what else can we improve?" This definitely isn't looking at technology as a cost center.
So, now, can you honestly answer the question - which are you? A cost cutter or an innovator? But more importantly - which do you want to be? It's up to you...
]]>What we're seeing now is a huge push in the industry towards addressing this. It's an industry wide move towards fixed fee IT support - or what the industry has dubbed "Managed Services". The idea of this isn't revolutionary, but rather evolutionary. It's about time. For years, clients have been asking pretty much for two things - 1) to know what their IT support costs are going to be and 2) to know that their IT Solution Providers are on their side. It's hard to preach that you're objective and a trusted advisor when the whole Time and Materials billing concept is at odds with that. The more we work on something the more we get paid. It's sad but true. So, how are we truly on our clients' side? Regardless of our integrity and honor and the trust we’ve built up over decades with clients, this methodology of billing for our services is still at odds with what the client wants - which is the least amount of fees as possible.
Well, now the industry has a solution for this - and it's called "Managed Services". Because of the maturity of the monitoring systems and underlying technology, we're now able to truly and (more importantly) proactively "manage" a network. These new tools give us the power to see events and deal with them BEFORE they become critical problems. Before they create time intensive repair work. Before they become nightmares. We can now really KNOW what's going on with a network immediately, without being onsite, and without having to manually do anything. It's simplifying the management of a computer network down to something like having an "oil change" light on your car. Well, almost this simple. Not that the response is any less technical than before, but now we can deal with the symptoms rather than at the time of crisis.
These tools also allow us to automate certain tasks that we used to have to do manually. We can now push service packs and patches down to specific machines. We can now run scripts to install software across multiple machines. We can now remote control machines and devices quickly, easily, and with an audit trail. We can now have a real time inventory and know whenever a user installs something they shouldn't have onto their machine. We can now run reports and have quantifyable information about the network that we never had in the past.
So, how does this give us the ability to offer support at a fixed fee? Well, it allows us (the service provider) to commit to a better service level, because we can now prevent many things from happening, increasing the uptime, and ultimately decreasing the frequency and impact of issues. This now gives us the ability to be in control of the network rather than the network controlling us. Essentially, we're changing the IT Support paradigm - from a reactive approach to a highly proactive one. This gives us the ability to be accountable and responsible for the network. This gives us the capabilities to OWN IT!
So, is this truly the future of computing? In time (and not that long), every business computer system will be monitored and under a Managed Services or Flat Fee Support Plan. How can they not?
]]>Here we are at the most technologically advanced time in the history of the world and yet while also in one of the deepest recessions since the 30's. We're already seeing companies holding back rather than looking forward. Unfortunately, this mindset will prevent many companies from taking advantage of all that technology now has to offer. Some of the hot topics that we look to see more of in 2009 include:
These all have their strengths and weaknesses, but the bottom line of most of these is how they can help companies become more cost effective in how they utilize technology.
]]>We have to approach every single thing we do as though it's the only thing our clients see. So, simply put, EVERYTHING WE DO MATTERS! As a service business, the "how" of what we deliver is really more important than the "what". Everyone assumes we can do what we do (that's why they hire us), but we believe clients stick with us because of "how" we do what we do. One of our strengths through the years has been our focus on "Business Before Technology". It's about how we can help IT fit into our clients' businesses.
It's one thing to aim to be "better" than our competitors, but it's another to be seen as "Best in Class". This not only goes to the services we provide, how we deliver those services, the value we provide, but ultimately to the performance of our company as a business. Being in business for 17+ years, we've seen a lot of trends come and go. We've seen a lot of changes in the business model and we've have seen what works and what doesn't work over time. Over the last few years we've not only invested in our internal systems but in our basic underlying structure and processes constantly striving to be Best in Class.
To be "Best in Class" we have to have the best staff possible. This is why we have a dedicated, interal Recruiter focused solely on finding and hiring only the best and the brightest to join our team. This is why we have a detailed process for determining which of the 1000's of candidates we go through will succeed here. This is why we put every candidate through a rigorous assessment process including an online technical assessment, an online job profile assessment, along with a rigorous interview process.
To be "Best in Class" we have to grow our people. One of our Core Values is "Take Care of Our Staff". This is why we have FPAU, a formalized training program that everyone goes through when they first come on board. This is why every member of FPA has a written Performance Plan that we meet and review every quarter. This is why we have a Continuing Education Program where every member of FPA has an annual training budget.
To be "Best in Class" we have to provide value in everything we do. This is why we're always looking for ways to improve how we deliver our services. This is why we're always looking for additional service offerings that matter to our clients. This is why we focus on "Business Before Technology".
When you get down to it, to be Best in Class as an IT Service Provider - it's about business, it's about our people, it's not about IT.
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