Perhaps the restaurant sector doesn't immediately come to mind when you think of creative applications of current business technology. But, that's exactly why it can provide a distinctive competitive advantage for a savvy forward-looking company.
Popeyes quick-service restaurant was founded in 1972 and has expanded to over 1000 franchised locations globally. A Popeyes franchise owner of multiple U.S. east coast locations became interested in using the latest communications technology to reduce his operational costs and streamline back-office functions at each site.
This upgrade included installing a new voice and data network that could manage secure credit card transactions. The decision was made to research a solution to update communication capabilities with a private Internet Protocol (IP) network.
A network using Multi-Protocol Label Switching (MPLS) technology was procured, replacing the cumbersome and outdated analog communication lines. Once the private voice, data, and video network was in place, the next logical step was to determine how to further gain cost advantages by leveraging this advanced infrastructure.
Built on a Solid Foundation
After carefully evaluating several telephone system solutions, the decision was made to use a hosted Voice over IP (VoIP) service from Geckotech, layered over the new backbone network. As a hosted service provider, Geckotech manages an off-premise voice solution that has built-in disaster recovery and very high reliability.
The Popeyes franchises are now able to fully realize the advantages of an outsourced VoIP phone system without having to purchase, maintain, or manage separate phone systems at each location.
All restaurant sites can easily reach each other using simple 4-digit extension dialing. They also benefit from one consolidated monthly telecom bill -- which includes unlimited local and long distance, advanced features like Auto-Attendant, eFax, Conferencing, and Unified Messaging.
Moreover, all of the outdated phone systems were replaced with one advanced VoIP solution, using Cisco Systems hardware end-to-end. As a result, Geckotech enabled the franchise owner to prepare for future business needs, based on a solid communications foundation.
The multiple locations benefit from a built-in disaster recovery plan, which reroutes all calls to a different office location should any site experience a disturbance or natural disaster. The new voice system has reduced overall operational costs by almost 40 percent at each site.
The Power of Strategic Foresight
In reality, there are few enterprises in the 21st century that are inherently low-tech. Every industry has its early-adopters of business technology that assess all the options, survey the competitive landscape, and then take decisive action.
The rewards clearly go to those business leaders who keep and open mind, and willingly embrace change –- especially when it equates to a quantum leap in progress.
Can the current economic environment actually create an opportunity? Even though the present financial crisis will adversely affect capital investment, the uncertainties are also creating new demand for the application of certain business technology offerings.
"In particular, ICT solutions that shift costs from a capital to variable component, focus on productivity increases and cost reduction, and support organizational restructuring and acquisitions are likely to see growing demand," says Andrew Milroy, ICT director at Frost & Sullivan.
Four Areas of New Demand
This belief that there will be a strategic increase in IT demand is the result of the consulting company's latest global market study.
While their assessment acknowledges some ICT setbacks, it identifies four key areas that are likely to experience heightened demand -- sustainable IT; outsourcing, managed and hosted services; information management tools; and those services that support mergers and acquisitions.
Sustainability initiatives range from server or storage virtualization and low-energy consumption hardware, through to the use of online collaboration tools, thin client technologies and power consumption modeling. Most of these activities have the dual aim of reducing costs, as well as lowering carbon emissions.
An Increase for Online Collaboration
The anticipated reduction in business travel will create a corresponding increase in demand for conferencing tools. These applications will allow more employees to work remotely, further cutting travel costs and emissions. Secure remote access solutions will therefore experience demand.
The need for cost controls and a desire to minimize risks will place greater focus on variable costs, leading to an increase in demand for software-as-a-service (SaaS) and hosted service models.
Frost & Sullivan's research suggests that the hosted model will be adapted to suit a wider range of services -- including storage and unified communications. New opportunities are expected in many areas of managed services -- such as managed handsets, managed network services and leasing services.
Change Creates Abundant Opportunity
In a summary of their findings, Milroy adds, "We believe that there are opportunities for solutions and services that can help organizations to cut costs, change cost structures, or increase productivity."
The lean times ahead of us will foster the environment where all "business as usual" thinking is challenged -- and, rightfully so. Forward-looking leaders will not falter; they will grasp that potential for new sources of advancement and take the appropriate action.
Perhaps all IT and business decision makers must now ask themselves the ultimate question -- is my organization preparing for a purposeful advance, or an unpredictable decline?
Thousands of small businesses in the United States have already embraced managed services. Now, thousands of additional businesses across the globe are climbing aboard the managed services bandwagon.
Consider the following data points:
- Asia Pacific organizations will spend more than $10.25 billion on hosted and managed services by 2010, up from $6.47 billion in 2007, according to Frost & Sullivan.
- Australia's managed security market will grow roughly 20 percent annually through 2013, the same research firm predicts.
- Small and mid-size enterprises will drive nearly half of Europe's managed services revenues -- jointly spending nearly 11 billion euros in 2008, estimates Forrester Research.
- Small business managed services spending will reach $5.4 billion in 2008, according to Techaisle. The data covers the US, United Kingdom, Australia, China, Brazil and India. In the US alone, small business managed services spending will hit $1.5 billion this year, Techaisle predicts.
When you string those data points together a clear pattern emerges: Small businesses worldwide have overcome their fears of the IT unknown, and they're turning to trusted advisers for managed services guidance.
So, what services are small businesses outsourcing most frequently to MSPs? The answers include:
- Remote administration (94%)
- Help desk services (90%)
- Managed security (82%)
- Managed storage (65%)
- VoIP and telephony (57.1%)
- and unified communications (32.1%)
I've heard many excuses, during my years as an ITIL consultant, as to why a client did not want to start IT Financial Management -- the business is not ready, we don't have the tools, we don't know where to start, etc.
However, in these troubling economic times, it is imperative that IT adopts IT Financial Management in order to respond to the increasing pressure to reduce costs.
IT can reduce costs through service-based cost transparency and charge-backs. This method does not mean IT is a profit-center; it just means that IT is educating the business on the cost to provide the services.
With this knowledge, the business can adjust their consumption to better manage their budget and ensure spending is aligned with the value of the service they are receiving. Contrast this with a nebulous IT overhead charge which does not incent the business to use scarce IT resources wisely.
A Roadmap to IT Financial Management
The secret to successfully starting IT Financial Management is to develop a roadmap with increasing levels of maturity.
For example, in Phase 1, pick four to five key services for consumption based costing, e.g. number of servers, storage consumed, network bandwidth consumed, etc., then allocate the remaining costs (i.e. Service Desk, data center operations, etc) as a surcharge against this base price. In Phase 2 and subsequent phases, continue to expand the number of services covered by consumption-based charge-backs.
Another dimension of maturity is the approach to charge-backs. In Phase 1, you may want to just publish costs (i.e. cost transparency with no dollars changing hands). In Phase 2, you may want to provide invoices that show consumption and a hypothetical charge-back amount but stop short of consummating the transaction.
Finally, in Phase 3, implement the actual charge-backs. This gradual approach will allow the business to adapt and prepare for a new way of interacting with IT.
By establishing and communicating a roadmap, you can start IT Financial Management today and be better positioned to manage the IT budget.
About the author: Reg Lo is the VP of Technology Solutions at Third Sky Inc. He has over 14 years of IT consulting experience in ITSM/ITIL consulting, research compliance and healthcare, and custom solutions. He is a frequent speaker at itSMF and HDI events and a contributor to "The Forum", the offical newsletter of itSMF USA.
When you're a start-up company or a small business, you enjoy a key freedom: You don't have any legacy equipment and you can make sure your IT dollars drive innovation.
But over time -- as your staff, network and application infrastructure grows -- you'll wind up spending more and more IT budget on maintenance rather than innovation.
According to various estimates, mature businesses spend anywhere from 80 percent to 90 percent of their IT dollars maintaining systems they already have in place. That's pathetic. And it's also impractical. Small businesses must either innovate or die.
So, how can a small business remain focused on innovative IT solutions? I've found the answer in my own company. Generally speaking, we outsource just about every piece of IT possible. Here's how we do it:
1. Get Predictable: We seek managed service providers, web hosting companies, developers and other partners who can handle day-to-day maintenance issues at a reasonable, predictable monthly cost.
More than 90 percent of PC and network issues can now be solved remotely, according to ConnectWise CEO Arnie Bellini, whose company specializes in professional services automation (PSA) software. With that fact in mind, small businesses can depend on managed service providers for the vast majority of their support needs. Plus, MSPs typically have technicians they can dispatch to fix any on-site issues that aren't resolved remotely.
2. Build Assets, Not Technology Temples: Empowering your employees with the latest technologies can be fantastic. But that doesn't mean you necessarily need to "own" the technology.
Through leasing programs and managed service programs, you can ensure your technology tools remain ahead of most rivals. And you won't need to open your wallet for big hardware upgrade cycles every few years.
3. Explore Hardware as a Service: Yes, even your network hardware (switches, routers, servers, desktops) can move to a managed service model. Fact is, small businesses can't afford to "buy" many of the latest hardware and broadband solutions. But they still need the capabilities of those services.
A prime example: Small businesses can't build out $300,000 TelePresence centers. And they often can't afford to fly to all corners of the world meeting customers and business prospects. Still, those same small businesses can use shared TelePresence locations (available in more and more hotels) to network with peers across the global.
4. Oh, And Innovate: Now that you've shifted all the "maintence" issues to a service provider, you can focus on driving new innovative applications across your organization.
My small (but growing) business, for instance, leveraged a mix of contract developers and MSPs to launch a series of major media Web sites. We "own" the completed Web sites, but all of the site underpinnings (the content management system, database, server, broadband, etc.) are outsourced to managed service providers and data center partners.
The result: We did not purchase a single piece of software or hardware to launch immensely popular, profitable Web sites. And yet those sites run on state-of-the-art software and hardware.
With the help of our managed service providers, we'll keep innovating.
Gartner analysts recently identified the top ten key technologies -- and related trends -- that they believe will be strategic for mainstream organizations. The analysts presented their findings during Gartner's Symposium and ITxpo.
Gartner defines a strategic technology as having the potential for significant impact on the enterprise -- within the next three years. Factors for significant impact include a high potential for disruption to IT or the business, the need for a major financial investment, or the risk of being late to adopt.
The technologies were chosen because they could affect an organization's long-term plans, programs and initiatives. They are deemed strategic because they’ve matured to broad market use, or because they enable strategic advantage from early adoption.
Gartner's top 10 strategic technologies for 2009 include:
Virtualization; Cloud Computing; Servers (beyond blades); Web-Oriented Architectures; Enterprise Mash-ups; Specialized Systems; Social Software and Social Networking; Unified Communications; Business Intelligence and Green IT.
As you consider each of these technologies in turn, and the associated applications within your own business environment, it would be wise to reconsider the notion that embracing a new technology always must equate to a financial investment in infrastructure.
In this context, is the purchase of an on-demand managed service an investment, or is it more accurate to characterize it as an expense? Let's consider the Gartner description of Cloud Computing, as an example.
"Cloud computing is a style of computing that characterizes a model in which providers deliver a variety of IT-enabled capabilities to consumers. The key characteristics of cloud computing are 1) delivery of capabilities 'as a service,' 2) delivery of services in a highly scalable and elastic fashion, 3) using Internet technologies and techniques to develop and deliver the services, and 4) designing for delivery to external customers.According to Carl Claunch, vice president and distinguished analyst at Gartner, "Companies should evaluate these technologies and adjust based on their industry need, unique business needs, technology adoption model and other factors."
Although cost is a potential benefit for small companies, the biggest benefits are the built-in elasticity and scalability, which not only reduce barriers to entry, but also enable these companies to grow quickly. As certain IT functions are industrializing and becoming less customized, there are more possibilities for larger organizations to benefit from cloud computing."
Lowering the Barriers to Progress
Perhaps one of those other factors would be an candid assessment of what advantages are being gained by competitors who have already chosen to take action. Meaning, can you make a determination of the direct and indirect cost of your potential inaction?
Moreover, by utilizing a selective out-tasking model, it's now possible to minimize the financial impact on new technology pilots and full deployments, while at the same time creating the environment to maximize the strategic impact.
The perceived barriers that may inhibit you from taking action have essentially been lowered.
I was interviewed today by a journalist from one of the CIO-oriented pubs who surprised me by asking a series of questions which came back to many of the same fundamental misconceptions about Software-as-a-Service (SaaS) which I thought I had dispelled in a BusinessWeek commentary I published in 2006.
The first misconception the journalist had was that SaaS solutions are not robust enough to satisfy large-scale enterprises, as well as small- and mid-size businesses (SMBs). I pointed out to him that large-scale enterprises have been leveraging SaaS solutions for a long time, but have only recently begun to talk about their successful experiences.
One of the most recent announcements of a major deployment of SaaS by a large-scale enterprises was by Flextronics who is adopting Workday's on-demand human resource management (HRM) solution to support its 200,000 employees.
Real Total Cost of Ownership
The second misconception the journalist revealed was the old "buy vs. lease" argument against subscribing to a SaaS solution. This argument suggests that after 2-3 years it doesn't pay to subscribe to a SaaS solution because it costs more than it would to simply purchase a perpetual software license.
This argument doesn't hold because the cost comparisons are flawed. In order to do a more accurate side-by-side comparison, IT and business decision-makers must calculate the full cost of deploying and maintaining a software application, and also calculate the risks associated with these processes.
Some research firms have suggested that it can cost as much as ten times the original software license fee to install and maintain the application. They have also found that over a third of enterprise software deployment projects fail to be completed and of those which are fully deployed many are under-utilized.
Avoiding the Old Software Trap
In addition, many organizations do not implement software updates and upgrades because they are afraid they will disrupt their operations. As a result, they are not taking advantage of the vendor's latest software enhancements.
SaaS eliminates the upfront software costs, and additional deployment and maintenance costs. It also eliminates the implementation and utilization risks. SaaS also ensures that every customer benefits from the vendors' latest updates and upgrades.
Finally, this journalist asked why a organization of any size should subscribe to a SaaS solution if they have an inhouse IT team that is talented enough to deploy and maintain software applications themselves.
My response was to ask why should today's overworked IT people waste their time simply deploying and maintaining software applications when they can be performing more valuable tasks supporting their organizations' strategic initiatives or enabling new business innovations?
If you are an IT or business decision-maker, you should be asking yourself the same question in these increasingly challenging economic times.
Today could have been a really bad day for my one-year-old company, Nine Lives Media Inc. My New York office suffered a broadband outage.
If our Web sites, network, email, phone and application systems were all centralized in that office we would have been dark all day. But our small business didn't skip a beat. Why's that? The three-word answer: Redundant managed services.
Our New York office has a redundant managed broadband connection. Plus, we depend on a range of decentralized managed services and SaaS (software as a service) solutions to keep our business growing. Here's a look at the services we're leveraging today -- and a few that we hope to leverage in the next six months.
Managed and SaaS services we're currently leveraging:
- Hosted Email: I don't know why any small business would consider an on-premise system these days. Hosted email is cheap (it's a commodity, in fact), reliable, fast and accessible from anywhere in the world. It's so cheap I can't remember the annual price.
- Hosted Web Sites: At my first start-up, all of our web servers were located in our own data center. Our network administrators wanted to "touch" the servers and work on them right in our own offices. These days, the smarter option for many small businesses is to pay a low monthly fee for a shared or dedicated server managed by a data center provider. We started our business using a shared server (about $89 per month) but recently moved to a dedicated server (about $250 a month) because our traffic has been growing fast.
- Phone service: We depend on hosted voice-over-IP and we don't own our phone equipment. Our service provider does. Over time, I expect our service provider to introduce new unified communications services, which will ease my life from the road. (Scroll down for our future plans for unified communications).
- Software as a Service: This list is getting pretty long. We're depending on a range of SaaS solutions to build our customer database and drive viral marketing. Inexpensive, reliable options include SurveyMonkey (free for basic service, about $200 annually for unlimited service), a great way to survey existing and target customers; WordPress (free open source content management, which you can customize); WebEx and FreeConference (online collaboration and teleconferencing; MyPodcast.com (hosted podcasts).
- Mobile Broadband: If you drink coffee and travel a lot, sign up for Starbuck's WiFi service. It's a life saver when you're on the road and your hotel or conference center has lousy Internet service. For about $30 per month, you'll be able to find a strong WiFi signal in virtually any Starbucks location.
- Public TelePresence: For about two years, I've been predicting that TelePresence (next-generation video conferencing) would find its way into hotels and conference centers. Our small business can't afford to build out a complete TelePresence location. But we can -- and will -- use Public TelePresence centers. Cisco is introducing such centers right now, and signing up to use one sounds easy. As more public locations launch, I suspect we'll use managed TelePresence to communicate with clients across North America, Europe, India and Australia.
- Mobile Unified Communications: I fell for the iPhone the day Apple started selling it. I love the iPhone App Store. And I generally like the iPhone user interface. But I want better integration between the device and a range of services (hosted email, hosted VoIP, remote application access). Slowly but steady, those services are coming. Azaleos and other managed service providers are introducing Microsoft Exchange-to-iPhone integration. And the iPhone also supports Cisco's VPN technology. So I'm seeing progress. But I want to see more and more corporate services, managed services and "follow me" unified communication services touching the iPhone.
- Hosted Customer Relationship Management: We're looking at a range of options here. Salesforce.com is the best-known option. But Zoho (which often competes with Google Apps) has an interesting on-demand CRM strategy.
Because of the expanding growth and complexity of communication networking, and the risks presented by a new breed of skillful hackers, serious security threats are an unfortunate certainty within the highly interconnected office environment of today.
These threats are very real and the results are costly to those businesses that have been affected. Apparently, the victims aren't entirely at random, which is often assumed to be the case.
According to the 2007 CSI Computer Crime and Security Survey, almost one-fifth (18 percent) of those respondents who suffered one or more kinds of security incident further said they had suffered a "targeted attack" -- defined as a malware attack aimed exclusively at their organization or at organizations within a small subset of the general population.
Beyond the Virus Threat
Moreover, financial fraud overtook virus attacks as the source of the greatest financial losses. Virus losses, which had been the leading cause of loss for seven straight years, fell to second place.
In today's global marketplace, every business needs to be vigilant in pro-actively protecting its corporate assets. Gone are the days of simply scanning for viruses. Today a comprehensive, layered approach is required to secure the network and company resources from multiple types of threats.
Small and medium-sized businesses (SMBs) are particularly vulnerable because they typically do not have expert resources on staff to ensure the network is secure, that regulatory compliance issues are being properly addressed, and that network monitoring and updates are effectively maintained 24 hours a day.
Alternative to the In-House Solution
Managed service providers can help SMBs secure their network by deploying a layered approach that uses various advanced technologies and solutions, protecting the network, and anticipating multiple types of potential security breaches -- from Trojan horse attacks and spyware, to data tampering and information theft.
Managed security services create a resilient multilayer defense:
- Prevention -- proactively keeps the intrusions out
- Detection -- identifies when an intrusion is occurring or has occurred
- Response -- takes action to defeat a potential intrusion once detected
The Challenge to Stay Current
Frankly, a large enterprise IT team can also benefit from an out-tasked network security solution, as the demands to ensure that in-house staff is staying current increases exponentially over time.
Ask a managed service provider to help you assess your security needs and design the best solution for your business. A comprehensive security audit is often the first step in this process.
By all means, be prepared for the unexpected, and keep your business safe. However, this is a complex task that's best left to the experts, while you free-up time to focus on your core business objectives.
Managed services, Software-as-a-Service (SaaS) and 'cloud computing' are gaining increasing attention in the press and among IT and business decision-makers because they promise to alleviate many of the day-to-day hassles of deploying and administering technology and applications.
While these new forms of remote and web-based services have demonstrated many tangible business benefits, they have also disrupted the traditional value-chain of the technology industry.
Traditionally, technology vendors relied on channel partners to extend their reach into market segments they couldn't address either by offering lower costs of sales or by delivering more customized solutions. Often the channel partner also took on the role of pre-sales consultant and on-site support provider.
This model worked well when customers needed help with the initial planning and design, as well as the installation, integration and ongoing maintenance of the hardware and software. And, customers needed plenty of help in all these areas because of the complexities and costs of traditional hardware and software.
A Different Set of Challenges
Today's SaaS solutions and cloud computing services were designed to eliminate, or at least substantially reduce, these challenges. They have been architected so that the vendor now operates the hardware and assumes responsibility for the deployment and ongoing availability of the software functionality. This approach fundamentally changes the relationship between the customer and vendor, and raises questions about the role of the channel partner.
However, while the burden for the success of the 'solution' has shifted from the customer to the vendor, THINKstrategies believes that there is still plenty of room for channel partners to play a role in this relationship. Once again the SaaS and cloud computing vendors cannot afford to help individual customers with adopting their solutions to meet their unique requirements. They also cannot afford to customize their solutions to address these requirements. Channel partners can help with these tasks, as well as helping their customers with change management and training.
However, those channel partners who are wedded to the past formula of hands-on software deployment and maintenance will be adversely affected by todays' SaaS and cloud computing movements because these new services substantially reduce these opportunities.
Adapting to the Change
Even the many channel companies who have tried to transition their businesses from traditional on-site support to remote managed services have found the shift difficult.
Rather than sell the value of their rapid response to system failures or software problems, channel partners must demonstrate their ability to keep customers' systems and software up and running with limited on-site presence via managed services. This requires a different set of service systems, skills and operating policies.
The Right Skills for the Task
For IT and business decision-makers within customer organizations, today's new service alternatives represent an important time to reevaluate their supplier relationships to ensure that your traditional service providers are adjusting to the new market opportunities and challenges.
I'm in Orlando, Fla., this week "on vacation." As a small business owner, I can't afford to fully unplug from my business. Sure, managed service providers keep my company running even when I'm focused on family time. However, I still need a mix of unified communications and mobile technologies to really keep the business optimized.
Here are three key technologies that can give me -- and my customers -- peace of mind while I'm (mostly) unplugged from my business.
1. iPhone 3G: I wasn't a big fan of my iPhone 3G when I initially purchased it. Dropped connections seemed quite common during the first few weeks with the device. But the iPhone 3G has proven to be a great device for my business travel. I can monitor our company Web sites, Internet traffic patterns, reader loyalty, reader comments and more from the iPhone's browser.
My family cringes when I open a laptop during vacations. But smart phones can let you quickly check in with your online business operations during long waits in amusement park lines or during other natural "breaks" in the action.
This week, my laptop hasn't escaped from my travel bag. And I'm typing this blog from a multi-user terminal at the hotel. Thanks to Web 2.0, most of the applications I need to access live up in a cloud rather than down on my laptop.
2. Managed Services: Our company Web sites serve thousands of readers worldwide each day. I don't have time to manage those systems during vacation. Nor do I want to worry about optimizing their performance, keeping systems patched, and safeguarding everything from probing eyes.
Our managed service provider hosts everything for us; automates system patch updates to our database, application server and content management systems; and backs up all of our systems daily as part of a fixed monthly fee.
We know exactly how much our managed Web services are going to cost every month, and we don't get distracted managing system optimization efforts. We leave that to the experts.
3. 'Follow Me' Unified Communications: I must admit, I'm not using this service yet. But I need "follow me" unified communications to make sure urgent calls and inquiries are routed automatically to me. Customers with urgent needs don't care if you're asleep or on vacation.
For urgent matters they want rapid response. I've adjusted my voicemail to let customers know I'm on vacation. But some sort of follow-me service -- routing urgent calls right to my iPhone or my current location -- is a natural next step for my next vacation.
And that reminds me: It's time to get back to vacation.
Growing concerns about the business implications of the turbulent economic climate and intensifying credit crunch are driving companies and non-profit institutions of all sizes to thoroughly reevaluate their corporate priorities, capital expenditures, operating budgets and sourcing strategies.
In addition to the "Four High-Tech Steps SMBs Should Consider Now," here are two more technology trends companies and non-profit institutions of all sizes should seriously consider and capitalize on:
Software-as-a-Service (SaaS): Web-based, subscription-priced, 'on-demand' services are experiencing significant growth because they can be deployed easily and quickly without the risks and added costs associated with traditional, on-premise, 'legacy' software products. End-users and business executives alike are recognizing the business benefits of SaaS solutions which range from Google Apps and WebEx for collaboration to Salesforce.com customer relationship management (CRM) solutions.
While these solutions are still far from perfect, they have proven to be a viable alternative to the headaches of dealing with legacy applications. IT/network professionals are also discovering a growing array of SaaS applications which can help them with their day-to-day management needs.
Cloud Computing: These are a wider array of web-based development tools and services that are enabling start-ups and enterprise software architects to leverage virtual data processing and development environments without the upfront capital expenditure and at a fraction of the ongoing cost of traditional data centers.
These cloud computing services are fulfilling some of the promise of the utility computing concept that was popularized at the start of this decade. While cloud computing services have experienced some outages, they are evolving quickly and will become more reliable over time.
The bottomline is that IT and business decision-makers have a growing array of technology alternatives with attractive pricing and packaging features at their disposal to help them contend with the serious challenges of today's economic environment.
The structured approach of Business Technology Management (BTM) is a proven methodology that seeks to unify business and technology decision-making at every level within a company.
Originally conceived to address the needs of large enterprises, there are now very apparent benefits for both small and medium sized businesses. Let's consider the growing body of evidence that supports that business case.
Put simply, BTM is applied to ensure that a company's business strategy can be realized by the technology it deploys. This approach is used by business leaders to align, synchronize and even converge technology and business management for the purpose of ensuring better execution, risk control and profitability.
The Path of Total Convergence
Clearly, these are the type of guiding principles that should transcend all businesses, regardless of their size. Let's explore the meaning of those three states of progression.
Alignment is defined as a state where technology supports, enables, and does not constrain the company's current and evolving business strategies. It means that the IT function is in-tune with the business thinking about competition, emerging threats and opportunities.
Synchronization implies that business technology (BT) not only enables execution of current business strategy, it also anticipates and helps to shape future business models and strategy. In this state, BT leadership, thinking, and investments may be ahead of business needs.
The state of Convergence includes both alignment and synchronization, with technology and business leadership willing and able to operate simultaneously in both spaces. Essentially, the disciplines have merged in both the strategic and tactical senses. A single leadership team working together to orchestrate one intertwined agenda.
A Business Impact Case Study
Does this seem like an academic exercise? Consider the following facts, and then you decide.
According to the BTM Institute, in research covering 50 industries, companies with a more converged business technology management exhibited superior revenue growth and net margins relative to their peer group:
- 12% average annual revenue growth vs. 4% for their industry groups.
- 36% average annual earnings per share growth vs. 7% for their industry groups.
- 6% higher EBITD margins than those delivered by their industry groups.
- 4% average higher return on equity, 8% average higher return on assets and 14% higher return on investments.
"Cost cutting" is a popular topic during today's uncertain economic times. You can hide in fear and close your wallet. Or you can take these four steps to gain more predictable operating costs -- while driving your business forward.
1. Move to a managed services contract: If you're using an IT consulting firm or solutions provider to maintain your network and PC infrastructure, ask them about so-called "managed services." Many consulting firms now offer flat monthly fees to maintain, protect and optimize business desktops, servers, network infrastructure and applications.
This flat-rate approach will eliminate those "surprise" emergency IT repairs that can throw off your company's monthly budget or hinder cash flow.
If you're not familiar with the managed services, here are some key questions you should ask as you seek information about the industry.
2. Rethink business travel: Notice I'm not suggesting that you eliminate business travel. Face-to-face engagements are still important when meeting new clientele or pitching new business.
But for established business relationships, consider transitioning your face-to-face meetings to the virtual world -- especially if you need to communicate on a global scale. Convene online meetings using WebEx, unified communications and other tools that drive rich discussions. Make sure your business's web site includes a simple instruction page to help all of your employees -- and your customers -- get started with these collaboration tools.
And lead by example: Your top executives should be hosting the collaborative gatherings from time to time.
3. Find Your TelePresence: Conventional wisdom says TelePresence -- a rich, comprehensive video conferencing technology -- is too expensive for small businesses. But that's a misnomer.
For about the price of a one-week business trip, it's now possible to deploy a personal TelePresence system in a central office or a branch office. (In fact, the concept of Personal TelePresence dates back to at least 1994.) Each time a TelePresence system eliminates a business trip, you're essentially pay your company a dividend or freeing up cash for marketing, sales, research and development -- or other revenue-lifting activities.
4. Head for Home: If you still offer company cars to some employees, it might be wiser to invest those corporate dollars in your employees' home offices. Your company will spend less dollars on rising energy costs; employees will eliminate commute times and related expenses; and at home TelePresence and collaboration tools will make staff members far more productive.
I'm not suggesting that you eliminate company cars for your road warriors, top revenue producers and field service experts. But take a look at the numbers -- and ask your employees -- to see if they'd prefer to reduce their travel expenses in return for at-home TelePresence.
Some pundits think that at-home TelePresence won't gain momentum until 2010 or so. I disagree. I think leading-edge users are already making the move. I'll be looking for an in-home TelePresence system myself in the first half of 2009.
You have nearly 10 months of operating expenses to review from 2008. Take a close look to determine how your company is spending its travel dollars. Then, shift a portion of those dollars to collaborative tools.
Your company will gain improved productivity -- while earning a financial dividend -- every month in 2009.
The trend of globalization, and the need to connect remote employees, now touches nearly every segment of American business -- regardless of organization size or industry. Here’s a case in point.
Founded in January 2001, Illinois-based Kirix began as a data analysis specialist for the recovery audit industry. They've done a lot of data analysis and software development work in that time and have had a particular specialty in identifying duplicate payments and other overpayment errors in large corporate accounting systems.
More recently, by generalizing their tool set and incorporating Web connectivity into their software, they apply that analytical firepower to all kinds of data -- regardless of where it is located -- even data that's on the Web.
The Borderless Communication Challenge
Benjamin Williams, one of the company founders, had been planning to relocate to Germany. As a valuable asset to their corporation, Kirix wanted to retain his services, but wasn't sure how the international transition might work -- particularly with the potential latency of connecting a Voice over IP (VoIP) phone halfway around the world.
Kirix turned to Geckotech to provide a fully hosted communication solution to enable their corporation to utilize Ben's services overseas, without compromising the quality of their voice and data network.
In this scenario, one feature has proven to be very beneficial -- four-digit extension dialing. This enables simple "internal" calls by dialing the last four digits of a direct-dial number -- even if that employee works in a different country, in another continent.
Unified Communications for the Teleworker
By using Geckotech's outsourced IP phone system, Kirix has been able to retain a key employee while conducting business overseas. The corporation's staff has been pleasantly surprised by the actual quality and reliability of their voice and data network.
"Four-digit dialing to my co-workers from Germany is obviously tremendous, but the quality of service is unbelievable," marvels Mr. Williams. "All that was required was a DSL broadband connection and my Cisco phone and I was making perfectly clear calls to my U.S. office as if I was in the next room over."
As more companies entertain the idea of employing the best talent that's available globally, the demand for the out-tasking of multinational IT and networking services will escalate. It's efficient, it's effective and infinitely more flexible to adapt to the changing communication and collaboration needs of a geographically diverse organization.