Change: Opportunity or Agony

“Embracing change” is a common mantra. However, experiencing change is a certain reality. With it comes a series of choices for everyone involved. Perhaps, the game of Jenga(tm) demonstrates these choices. As you may know, Jenga consists of wooden blocks shaped like tiny beams. The game starts with the beams stacked tightly, three per layer, alternating them vertically and horizontally. The object is to manually dislodge any block from the tower and place it on a new layer at the very top; expanding the tower upwards until it topples from lack of support below or is blown by a strong gust of wind.

Like Jenga, a business also grows using its assets, strengths and opportunities to build customers and market share.

To continue comparing Jenga to running an enterprise, perhaps you could use two different perspectives. The player of the game is like the executives of the organization, moving around structural blocks to expand the organization. This executive has a 360 degree view of the tower with the ability to stress test the blocks before dedicating them for the move; and can scope the environment for threats to the construction such as a shaky playing table or strong winds.

The contrasting view is that of the employees impacted by the move within an organization; perhaps visualized as tiny ants clinging to the moved block. These individuals have an intimate knowledge of this specific block. They know each dent, scratch and slight change in color. They know how snugly it fits against the neighboring blocks (the nitty-gritties necessary to accomplish a job) and how it informally interacts with others. But this internal perspective lacks the comprehensive view. From within the safety of the tightly-built fortress, workers may not sense the unstable foundation or feel the gusts.

As a block is selected those associated with it can be hurled into significant change. One’s first reaction at the vibration may be to grab on as hard as possible to the comfort of the block. Despite the desperation, it takes very little time to see that the forces are overpowering and a significant change is imminent. At this point, there are really two broad choices: resist or cooperate.

The consequences of the first choice, resistance, can lead to demise. To explain this, let’s consider the two forms of resistance – denial and defiance.

Denying the seriousness of the changing forces will severely cripple the industry. Current examples of underestimating the impact of an impending change are seen with traditional media. After reluctance, newspapers, magazines, local broadcast television and radio eventually adopted the Internet. Through applying their respective traditional medium’s paradigm to the Internet forum, they used it as the broadcasting and publishing vehicle. Newspapers, for example, started by replicating their publication online and updating the sites daily after street publication. Internet users expecting more immediate news discontinued their subscriptions to the physical newspapers and started viewing news on new Internet news sites that refreshed content frequently.

The other form of resistance, defiance, could cause alienation with peers who tire of negative attitudes. Excessive defiant behavior could lead to dismissal from those who perceive it as obstructive.

In contrast, the option of cooperation, could lead to quite different outcomes. If the change is from competitive or industrial pressure, adapting to the changes’ new opportunities could put you in the driver’s seat. Those Internet sites that enabled the viewer to customize content offer an example of seizing the opportunity to lead the industry. In Jenga, a beam moved to the top is exposed to uncomfortable drafts, unfamiliar elements and added visibility. The gusts and vulnerability could be threatening. Also, the fall is farther if knocked off. However, the experiences gained are the essence of leadership.

Another recent example is the trend to stop travel expense. Geographically dispersed employees, trainers and consultants can overcome this obstacle by mastering the various technologies to be productive remotely. As organizations adopt these methods, the paradigms of phone etiquette, correspondence and meeting presentations will morph into new standards. Those of us who have adapted will benefit professionally.

Other gloomy headlines tout that many companies have fallen, or as in Jenga, the towers have toppled. Those who have fallen into the heap are left with the challenge to adapt to a new reality. After some brushing off, skills can be applied to participate in a new tower. Existing knowledge and tools will be augmented by wisdom for the next cycle of industrial changes.

As professionals, we need to recognize that external forces will cause us to make some hard decisions. To react with leadership, we should seek opportunities in the changes, communicate the realities and urge others to accept them.

Budgeting from the trenches

Have you ever noticed how text books understate the budgeting process? They tend to gloss over the topic as four steps:

1. Determine revenues
2. Forecast expenses
3. Adjust
4. Communicate

Some text books suggest that that the process has iterations. This general outline of the process rings true, but its oversimplification makes the budgeting process sections meaningless when it comes time to map one out. I have found that undertaking the budgeting challenge is different between organizations. The process design is similar to perhaps how Generals draw up battle plans. The available personnel, supplies and equipment are assessed and the desired outcome is clear. However, the details of the approach are dependent on the specific terrain and rely on the latest tools and information. For this reason, organizations tend to see its budgeting strategy as unique.

Strategy is a fair term to use in budgeting as its outcome has a great deal at stake. Every staff member submitting input for calculations or making a request for funds has credibility on the line. Without complete information the profitability of a product, service, region or division is at jeopardy. And, day-to-day performance of the organization can be besieged from the pressure and time consumption when gathering intelligence from the field.

There is a point where this analogy between a battle plan and a budgeting process falls apart: That is, a battle will end and budgeting does not. A budget plan will play itself over and over. This exposes a point of vulnerability in the budgeting process as it was designed for a set of conditions that most likely has changed. It may no longer be sufficient to budget annually. Reporting requirements may change. Consolidations in the industry confuse the financial results. Or, new competitors, products, clients, regions and staff render the plan obsolete. When there is such a difference between the framework and reality, the budgeting framework cannot be trusted for strategic forecasting.

In the wake of the global financial crisis as organizations seek to maximize cash reserves, evaluate expenses and eliminate risk; the budget process surfaces as a key strategy. Those giving strategic input and making decisions have unprecedented pressures to assure accuracy and agility in cost cutting. Those who need to find opportunities for revenue are at a loss for validating an option’s viability. An organization is likely to forgo an opportunity without the ability to articulate its profitability, avoiding the risk of catastrophe.

Today’s battlefield is dynamic and most participants are deep in the trenches. We know that this gloomy economy will end and we intend to abandon the trench to take new ground. Our challenge is timing and selecting the method to move forward. While we are trenched, let’s review the budgeting tools and design a system giving us the agility to adapt to the changing markets, locate opportunities and operate effectively.

Enterprise e-Commerce on a Shoe String Budget?

Image courtesy of Flickr

While inexpensively built and operated mom and pop e-commerce websites are as common as snow in New England in January, is it possible to build and operate an enterprise grade e-commerce site on a shoe string budget? E-commerce at an enterprise level is not simply slapping a shopping cart to your website and calling it e-commerce enabled. The demands of an enterprise solution may require:

• Integration with legacy systems
• Integration with supply-chain systems
• Support for multiple currencies and tax codes
• Multiple store-fronts
• Profile and history driven offer management
• Integration with a content management system
• Business user control over promotions and pricing
• …and more

Challenges of integration with existing systems alone are daunting enough never mind the fancy e-commerce functionality that is often considered vital for competitive differentiation. No wonder why starting an e-commerce venture or an upgrade is considered a seven figure expense. The cost of an enterprise grade e-commerce product alone can easily account for twenty to forty percent of the budget. The other option is to go with a hosted or SaaS based approach and avoid capital expense for software and infrastructure – not a bad approach for testing the waters but in the long run, charges and fees can really add up.

A well executed e-commerce site can provide great returns on the investment by generating new revenue streams, enhancing existing ones, or reducing operational expenses – and that can’t be too bad for the budget or your career. However, in tough economic times the challenge becomes harder as getting approval for large complex projects becomes difficult and even the approved budgets can get slashed. If your budget gets cut, is there a way to still implement enterprise grade e-commerce? Can an open source e-commerce solution be the answer to the “do more with less” mantra? Is open source e-commerce ready to play with the big boys in the enterprise domain? Let’s explore these questions and the capabilities of the open source e-commerce solutions.

Let’s start with a common misconception that an open source e-commerce product requires significant customizations and the cost of customizations more than offsets any savings from not having to pay license fees. Implicit in this assumption is the notion that a commercial product requires little or no customizations. However, the real-world experience shows us that this is not the case. Even the best commercial products cannot be used out-of-the-box unless you decide to adopt their look and feel and their model of e-commerce. The cost of customizations can add up just as rapidly in a commercial product as they can in an open source one. Therefore a prudent approach would be to adhere to the industry standards and best practices and use out-of-the-box functionality in areas which are not competitive differentiators. Heavy customizations should be limited to the aspects of the website that are true differentiators and result in a unique user experience. This guiding principle applies regardless of the decision to use an open source or a commercial product.

There are a lot of inexpensive and open source e-commerce products out there; however, most of them are nothing more than a simple shopping cart. They are only suitable for the most basic needs of a simple web site. However, Apache OFBiz and Magento are two promising contenders that break from the pack and compete in the enterprise space. In this article we will primarily focus on OFBiz.

Apache OFBiz is actually an integrated suite of products that does not only include e-commerce capabilities but also provides support for accounting, order management, warehouse management, content management and more. An enterprise e-commerce implementation cannot exist as a point solution. It has to integrate and work well with other back office processes and applications. OFBiz’s integrated suite can be used to automate and integrate most back office functions. Even if you decide not to use the built-in functionality it can still be integrated with other existing systems albeit with more effort and cost. It provides enough e-commerce functionality out of the box to match most enterprise needs and the rest can be customized if needed. Here is a summary of our assessment of OFBiz:

Technical Capabilities

#	Criteria	Rating	Comments
1.	E-commerce capabilities	B+	Provides Robust e-commerce capabilities OFBiz e-commerce capabilities include: catalog management, promotion & pricing management, order management, customer management, warehouse management, fulfillment, accounting, content management, and more.
2.	Sign-on and Security	B	Granular and robust security framework The OFBiz security framework provides fine grain control of the security including multiple security roles and privileges. Roles can be used to control access to screens, business methods, web requests (URLs), and/or entire applications.
3.	Technical flexibility & ease of use	B	Very flexible but complex  OFBiz is an application development platform that can be used to build applications and as such provides a tremendous amount of flexibility.  The use of the entire framework (which includes the database, an Object Relational Mapping (ORM) layer, business object layer, scripting support, and UI tools) is optional.
4.	Integration with other apps and locations	A	Multiple integration methods  OFBiz business services can be exposed as services and accessed by multiple methods including Remote Method Invocation (RMI) and XML Web Services.  Integration directly with the OFBiz Relational Database is also possible.
5.	Scalability	A	Highly Scalable  Java systems are highly scalable provided a production architecture that is designed to support heavy load.  A load balancing device and redundancy at the web, application and database servers can redundancy and scalability.
6.	Relational database integration	A	Support for all major database platforms  The most popular OFBiz database platforms are PostgreSQL and MySQL (both of which are open source).  OFBiz has also been tested with Oracle, DB2, Sybase, and MS SQL Server.  The default installation uses an Apache Derby database which is not recommended for production use. Our research indicates some problems with MS SQL Server database – this should be investigated further prior to selecting that database platform.
7.	Skill Set to support	NA	OFBiz framework and application are based in the following technology components: XML Web Development: HTML, CSS, AJAX/JavaScript, Apache Java Development: Java, JSP, Freemarker, BeanShell, Tomcat application server (possibly) Database Development and Administration: MS SQL Server (possibly), SQL, JDBC Long term support of the application would require knowledge and familiarity in each of these technology sets.  While these technologies are mainstream and skills should be readily available in the future, skills and experience with the OFBiz framework that is built upon these technologies may not be.

Business Position

#	Criteria	Rating	Comments
1.	Financial stability	B	OFBiz is a “top level” project in the Apache Software Foundation.  The Apache Software Foundation provides support for the Apache community of open-source software projects. The Apache projects are characterized by a collaborative, consensus based development process, an open and pragmatic software license, and a desire to create high quality software that leads the way in its field.
2.	Maturity of product suite	B	Open For Business (OFBiz) was initially launched in 2001.  In early 2006, the project went through the Apache Foundation’s “Incubation” process to review projects for quality and open source commitment.  OFBiz was promoted to a top level Apache project in December 2006.The community for OFBiz is very active.  The major web posting board receives between 20-40 postings per day relating to OFBiz.  The original contributors are very active in monitoring these sites and sharing knowledge.
3.	Reference Accounts	B-	Total number of installations is unknown due to the nature of open source software. The OFBiz websites lists more than 70 companies that use their software. However, there are very few marquee names.

Implementing an enterprise e-commerce solution can be expensive and complex process that requires analysis and investment in people, processes, and technology. While it would be insincere to say that an enterprise e-commerce solution can be implemented on a budget in the ballpark of a mom and pop e-commerce store, the budget can be significantly reduced by:

• Carefully crafting business requirements
• Adapting the business model to match industry’s best practices
• Reducing and carefully planning data migration and application integration
• Keeping the customizations to a minimum
• And using an open source e-commerce platform

OFBiz provides a viable open source e-commerce stack that can be used to implement enterprise grade e-commerce. When combined with good implementation practices and solid execution the combination can result in slashing costs by twenty to forty percent — which sometimes can make the difference between getting funded or getting shelved.

Enterprise Information Strategy in 2009

If you’ve been in an IT-related role for more than 10 years, you’ve likely enjoyed the boom and bust the economy has provided. Healthier times enhance business capabilities in the form of multi-million dollar, cross organization implementations, while leaner times like these afford only the most critical needs to be fulfilled. So while the volatility wreaks havoc on your organization, one IT spend continues to stay strong. Strategy.

Strategy is a sound investment in prosperous times since the confirmation it provides protects the investment of larger scale initiatives. For example, a company committed to providing better customer service and market additional products into its customer base will undertake a 2 to 3 year set of tactical CRM initiatives. Success factors include the three usual suspects, ‘People, Process and Technology’, and aligning each with an ideal future state vision is critical.

A well executed strategy provides an education for stakeholders and builds consensus among individuals who may have never sat around the same conference room table before. It coalesces and prioritizes goals and objectives, drafts a future state architectural blueprint and describes business processes that will endure, and establishes a long term Road Map that orchestrates incremental efforts and illustrates progress.

So if strategy is a safe bet in better times, why invest in one now?  For executives I’ve met with most recently (Q3 and Q4 2008), a popular form of strategy is analogous to grandma’s attic. At some point, it may have occurred to you to look in grandma’s attic for something that may be useful, and if you’re truly fortunate, there may be something extremely valuable you hadn’t counted on. For C-level executives looking for ways to improve their bottom lines, the same treasure hunt exists in the corporate information they already possess.

To understand whether your enterprise information holds hidden treasures, explore these 10 questions with your organization. Answering ‘No’ or ‘Not sure’ to any questions that have exceptional relevance within your organization may suggest looking into an Enterprise Information Strategy enagement.

1. Do visionaries within my company have visibility to key performance indicators that drive revenue or lower costs?
2. Do I understand who my customers are and which products they own?
3. Am I able to confidently market additional products into my existing customer base?
4. Do I possess data today that would provide value to complimentary industries through new information based offerings?
5. Will my information platforms readily scale and integrate to meet the demands of company growth through acquisition?
6. Am I leveraging the most cost effective RDBMS software and warehouse appliance technologies?
7. Do I understand the systemic data quality issues that exist in the information I disseminate?
8. Do the organizations I support understand the reporting limitations of my current state architecture?
9. Is there an architectural blueprint that illustrates an ideal 2 to 3 year business intelligence future state?
10. Does my company have visibility to a Road Map that timelines planned projects and the incremental delivery of new business insights?

Building a Collaborative Enterprise: Twitter (Part 2)

This is the second post in a series of posts covering collaborative tools that can make an impact on your business. If you’re new to Twitter, I’d suggest you read part 1 first.

Why Twitter?: Internal Collaboration

Honestly, many of the very creative ways Twitter can be used as a real-time communication platform probably haven’t been invented yet. Here are some creative ideas we came up with using an internal poll on our Sharepoint site:

• Server or systems uptime monitoring and alerts (tying into Twitters excellent SMS capability with major cell phone carriers)
• Corporate workflow integration and notifications – new business notification / blasts, integration with development workflow, etc.
• Events planning and communication – for companies that sponsor annual users’ group meetings, setting up a dedicated Twitter account to communicate details and updates to attendees

Enterprise Use

Especially for large companies, something like Twitter can even take the place of other solutions (such as Office Communications Server), or (as in many companies I’ve seen) public IM services such as Yahoo or AOL. IM services that function outside the company may present serious security risks, including exposure to vicious worms or malware.

Companies such as Yammer and Present.ly are springing up, providing Twitter-like services running for private intra-company enterprise use. These provide the benefits of Twitter, including collaboration and greater dissemination of information, while retaining privacy that enterprises mandate.

While the market for corporate Twitter-like products is still in flux, examining the options available should be an important part of your enterprise collaboration strategy. With recent management changes at Twitter, it is highly likely that Twitter will be introducing a for-pay Enterprise service in the near future. Twitter CEO Evan Williams recently stated that

There is commercial value, not just personal value [to Twitter]

Integration

Twitter provides a very rich series of web services that can be used to integrate Twitter accounts with many existing back-office systems – both for receiving incoming tweets (imagine your Twitter feed integrated with salesforce.com, for example), and for outgoing tweets (imagine integrating QuickBase or Microsoft Dynamics to drive marketing campaigns). The Twitter web services can easily be integrated into existing Java, .NET, or Ruby on Rails infrastructure.

Downsides

Because Twitter is a realtime mass communication mechanism, gaffes can hurt you very quickly, since bad or inappropriate twitstream content will assuredly ripple through the as Internet fast as possible. Additionally, Twitter serves as a very rapid sounding board for poorly vetted social media ideas by aggregating feedback from thousands of users or consumers.

A very recent example of this from November 15-16, 2008 was the very strong consumer backlash to Motrin’s new advertising campaign. Immediately after the advertising campaign was released, negative comments on Twitter began piling up, causing Motrin to decide to pull the ad from its online media campaign.

On many corporate blogs, and certainly traditional “press release” communications outlets, content is reviewed, re-reviewed, and approved many times over before being released for public consumption. Part of a corporate Twitter strategy should include a good understanding (and documentation) of rules of engagement and proper Twitter etiquette, since a traditional review process would be cumbersome and reduce the “immediateness” of responses.

Name Squatting

With the uptick in corporate attention being paid to Twitter, “Twitter squatting” is starting to be noticed by corporations. Much as “domain squatting” happened in the early days of the Internet, Twitter squatting could be potentially either damaging or expensive for companies that don’t own their name. Twitter doesn’t yet have an official policy of releasing names to trademark holders (unlike, for example, domain squatting); however, they will release “inactive” accounts, and I’d bet they will have a policy on this issue very soon.

Should You Twitter?

In the current highly-connected and collaborative business climate, companies must have a social media strategy. Companies must understand all of the major social media platforms and identify how they will bring value to the business.

Twitter has provided a unique service, and many companies, especially ones that deal with B2C services, should consider a strong Twitter presence.

Next in our series of blog entries covering collaborative enterprises: Facebook.

Building a Collaborative Enterprise: Twitter (Part 1)

This is the first in a series of blog posts focusing on ways to integrate specific collaborative technology platforms into your enterprise.

We’ll do this by examining cutting-edge companies who have embraced collaborative technology, and provide some suggestions as to how these technologies might be applicable in different industries.

If you’re new to collaboration in the enterprise, we suggest you read this post by Edgewater’s Ori Fishler, reviewing McKinsey’s research on “enterprise 2.0″ collaborative technologies.

What is Twitter?

Twitter is a public, free microblogging service. It allows users to publish short — 140 characters or less — updates to anyone who chooses to listen (the Twitter term is “follow”). Here’s a video to explain more succinctly (and humorously!) than I can:

Chances are, your company already has a public corporate blog presence (a recent study says over 55% of companies do). Your corporate blog is probably much like ours, providing insights, expertise, and guidance to your customers and potential customers. Blogs are generally written in an expository, formal style, providing rich and deep content, and an ability to converse through comments.

Contrast this with Twitter, where the 140 character limit profoundly restrains the amount of detailed dialog your can provide to (and have with) your followers. Companies like Southwest Airlines, Dell Computer, and Comcast have embraced this communication mechanism. The Wall Street Journal recently declared that Twitter is going mainstream. Why?

Why Twitter?: External Collaboration

While much of the focus around Twitter has been on enhancing interpersonal relationships, Twitter serves a unique niche for enterprises that early adopters can take advantage of. It is very difficult (or expensive) to get as close to your customers as Twitter allows through other means.

Areas such as customer relationship management, engagement, and marketing strategy are well-served by the opportunity provided through Twitter.

Brand Monitoring

Much like traditional media outlet monitoring, companies are advised to set up a strategy for watching Twitter for tweets about them.

Since Twitter is often a channel for stream-of-consciousness writing, mentions of companies are often interrelated with visceral experiences, both positive and negative. Delving into the subconscious is a savvy marketer’s dream come true!

A nascent industry has appeared with all sorts of tools to monitor companies’ mentions on Twitter, allowing them to be aware of what people are thinking. Smart companies such as Southwest and Zappos have taken this monitoring a step further, to an intervention approach.

“Today, whatever you say inside of a company will end up on a blog.” — Rusty Rueff

Much like blog/website watching services (such as Google Alerts), tweets regarding layoffs, client information, and other sensitive data must be carefully monitored so that information leaks can be identified before they lead to serious consequences (data or confidentiality breaches at worst, PR nightmares at best) for the company.

Customer Service

Twitter allows for a uniquely personal approach to customer service, providing customers with a way to bypass your standard support structure and (at least have the appearance of) talking to a real, live person. Unlike standard support or CRM systems, however, by default all Twitter conversations are public.

This openness allows a company that is willing to invest in well-trained and highly disciplined customer-focused service to shine in a way that was impossible before Twitter. Your concern for, and engagement on, customer issues will be visible for the whole world to see.

Many companies using Twitter for customer service make wise use of the Twitter direct messaging feature to bifurcate between directing responses containing personal information privately to the requester, while directing less sensitive responses as general replies for the public to see.

Marketing

While the ability to drive a rich marketing campaign through Twitter is limited to 140 characters, it’s possible that, by building a robust following through the techniques previously mentioned, you can deliver a strong message to your company’s followers, who are also likely to be your most ardent supporters.

Zappos created great, low-cost buzz when they randomly selected 10 of their 1,000+ followers to receive free pairs of shoes – brilliant marketing strategy targeted at their most loyal fans. Dell Computer Corporation regularly distributes exclusive coupon offers to their followers.

Sales

While there aren’t a lot of good examples of deals being brokered via Twitter, a couple bigger companies are experimenting and have shown marked success.

An Irish insurance company, FBD Insurance, has begun using Twitter to provide auto insurance quotes and other product information to potential customers.

Dell Computer Corporation launched its @DellOutlet Twitter account in June 2007. By the time 1 year had passed, Dell could trace over $500,000 in sales to links clicked through its twitstream.

To be Continued…

In our next post on Twitter, we’ll cover enterprise options, other creative uses, and potential downsides.

Related Links

• Twitter How-To, by Adam Covati