Posts in ‘IT Finance’

Corporate Communication: Shoot in all Directions

by Matthew Carmen on August 29, 2011

Any company – whether it’s two people or 200,000 – must have a coherent internal communications system in place, enabling it to thrive on every level within the organization.  As with many things, it all begins with a plan. A good communications plan will include processes that allow all employees to both hear the message and be heard as well.  Succeeding with that communications plan also means the senior management team must fully comprehend and embrace the ‘message’ related to corporate policy and new strategic initiatives to all employees in a way that they will understand.

Corporate communications can take many forms: email, memos, website announcements, manager conversations and town hall meetings, and the like.

Let’s look at an example: A company needing to implement a revised strategy for growth.  The first method of communications will likely be in the form of senior management explaining the new plan to their direct reports – the VP and director-level management staff – in a management town hall-type format. Other useful first methods might be an offsite management retreat, or a memo explaining the new strategy and what the responsibilities of certain corporate functions will be. This first communication must be followed by other reinforcing communications, such as the ones that were mentioned above , if the new strategy is to become successful.

The key to a successful corporate communications plan is that all employees must: a) receive the message, b) understand the message, c) understand how the message will affect their way of doing their job, and d) know that they can communicate back up the chain of command when needed.  This last point is very important in order for a new strategy or other initiative to be successful.  Employees who are actually doing required work are closest to the actual processes involved with that work, and thus tend to know – better than those in leadership – what does and what doesn’t work well.  Therefore, a successful corporate communications program allows employees to communicate their issues and ideas up the chain of command and allow for more successful implementations or provide more timely knowledge that can change a failing program.

So whether we’re talking implementation of a broad-reaching corporate strategy, or a successful personal relationship, communications is the name of any successful game.  Either way, in order for everyone involved to be on the same page and work towards the same goals, communications needs smart planning and must go in all. Ready…aim…

Matthew Carmen launched Datacenter Trust along with Marc Watley in February, 2010 and serves as Co-Founder & COO as well as Managing Partner of their Financial Intelligence practice. Datacenter Trust is a recently-launched consulting and services delivery firm, providing outsourced server hosting, bandwidth, cloud services, and IT financial intelligence and analysis services to growing businesses. Follow Datacenter Trust on Twitter @datacentertrust
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The role of Key Performance Indicators (KPIs) in the organization is to provide internal and external clients with actionable metrics in easily accessible, customizable formats they can use to increase the effectiveness and efficiency of their operations. What differentiates KPIs from the wealth of metrics that can be generated from any business is that they are key leading and lagging indicators that can be used to reflect the strategic performance of the organization.

In selecting your KPIs it is important not to be tempted to label as KPIs the “top 40” metrics but rather generally at the top level you should limit yourself to the top 1-3 KPIs per strategic objective. These should only include those metrics that are essential to the success of the organization. In addition, each department will have their own contributing KPIs. The departmental KPIs should be selected so that they can be rolled up in support of the overall strategic goals.

The effectiveness of KPIs can be directly related to the care with which they are defined and implemented. Critical questions to consider when developing your KPIs include:

  1. How does this measure contribute to the strategic goals?
  2. Is it quantifiable?
  3. Is the data currently available?
  4. Can current performance, benchmarks, and target values be defined?
  5. How will it be used as a management tool?
  6. What is the high level plan for the establishment of reporting?
  7. Is there an outline for how continuous improvement activities will be implemented?
  8. Has a cascading plan to all levels of the organization been developed?

A brief discussion of the detailed considerations for each of the above questions is included to assist with the process of initiating a KPI program.

  •  How does this measure contribute to strategic goals? -  The success of using KPIs will be dependent on how effective they are at contributing to a better understanding of what drives the success of the organization. Keep in mind that KPIs will differ based on the type of organization and its goals. For example, a non-profit organization such as a school or a hospital will have different fiscal KPIs than a publically traded company. Each KPI should reflect the mission and goals of the organization.
  • Is it quantifiable? – A common mistake in developing KPIs is to take too general a statement such as “Improve customer service” as a KPI. To be effective it needs to be specific and measurable so “improve customer service satisfaction scores or increase customer repeat order rates” would be more appropriate measures.
  • Is the data currently available? – Another factor to be considered is whether the data to be used for each potential KPI is currently available. The expense of gathering additional data including system changes should be weighed against the value that the measure will provide.
  • Can current performance, benchmarks, and target values be defined? – To be effective a KPI must define a clear target so success can be determined. Industry benchmarks can often be useful in setting these targets. For example, an IT department may have as a target 99.999% availability of key systems. Meeting this target in turn will enhance customer satisfaction, ordering functions, etc. and support the other strategic objectives.
  • How will it be used as a management tool? – A clear understanding of how this KPI will be used, how improvement opportunities will be developed, and consequences for deteriorating performance should all be clearly mapped out before implementation.
  • What is the high level plan for reporting? – Publishing and reporting of KPIs is critical to monitoring progress. Formats for reports should be customized by role and function so that executives will see a summary view while department heads would have a much richer set of detailed metrics. Consideration should be given to the mix between dashboards, scorecards, detailed reports, and self-service tools for ad hoc analysis.
  • Is there an outline for continuous improvement activities? – A process improvement process allows the KPI values to be used to identify where focus should be placed to enhance performance.
  • Has a cascading plan been developed? – Each level of the organization needs to understand how their operations support the overall strategic goals. Cascading the KPIs clearly delineates their contributions and their opportunities for improvement.

Implementing a well thought out and comprehensive set of KPIs is the first step to a more proactively performance- based operation. This program will provide all levels of the organization clear targets and objectives with the ultimate goal of materially contributing to the success of the organization.

Written by Linda Williams who is partnered with Datacenter Trust and also has a Business Intelligence consulting practice where she provides businesses with assistance in performance measurement, process improvement, and cost reduction.
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Budget Season! Time to Start Thinking about 2012

by Matthew Carmen on May 23, 2011

Well here we are in May. 2011 seems to be flying by – the year is almost half over, and in the corporate world you know what that means:

Time to start planning for 2012.

This is that time of the year everyone dislikes. For operations and the overall business, it is essentially time away from what they want to focus on, and for the finance teams, it is that time when they find themselves refereeing battles between operations and business for the finite amount of dollars.  All in all, this time of the year is where the challenges of the year ahead are discussed, strategized around, and hopefully addressed.

The three distinct groups – business, operations, and finance teams, each play a role in ensuring a successful budgeting and planning season.  In the case of the business, each area – whether a business unit, product line or service; needs to have its strategy fully developed by the executive team and communicated to all levels of the business.  By doing this, each person – from the lowest level all the way up – will know:

  • What the corporate strategy is, going forward,
  • How their work will help move the company towards the goal, and
  • It will provide management teams the direction in which to plan programs and projects.

By establishing a clear direction across the board, the business will be able to have conversations with the operational areas (such as IT) to make sure that the needs of the business are top priority for everyone.

No Personal Agendas

In my experiences, which have taken place in each of the three distinct areas, one thing has always been paramount to success, “Don’t come to the negotiations with a personal agenda”.  The more emotion that is brought to the table, the longer and more drawn out the negotiations become, and feelings are hurt at the end of the process.  Many times these feelings carry forward and the working relationships between people, groups and departments can be irreparably harmed.  This definitely does not help the long-term growth of a company.

The IT Operations View

In the case of the IT operations groups, this time of year is typically focused on two major things;

  1. The planning of programs and projects that benefit the business, and
  2. The planning of the IT organization.

In the case of the second point, IT has to weigh the benefits to the business versus the needs of the IT organization.  This means that with a finite amount of budget dollars available, the IT department needs to find the right mix of dollars for the benefit of the business while having enough budget to make sure the IT department is able to do the things it needs to do to ensure the business survives long term.  This internal IT spend will likely include: disaster recovery, continued infrastructure modernization, replacement systems for facilities, server and storage growth and refresh, etc.  These areas of spend need to be voiced to the business and discussions need to take place at this time of year, at times, the business seems to forget that ongoing operations need to be sustained and this costs money. May and June are critical communication months in the budgeting and planning season.  Communicating now means that once the finance team is ready to open the budgeting tool, usually right after the July 4th holiday, the whole budgeting project goes more smoothly.

The Finance Team View

The finance team always hopes for a smooth budget season.  Depending on the work they do in these early stages of the process, this smooth season is possible.  At this time of the year, the finance team needs to make sure that its message is communicated as well.  The finance team needs to make sure that all of the business and operational groups know and understand the process by which the budget will happen, what the key dates are, what the budgeting system will include and what business and operations will need to add to it.  These are all very important, the more the business and operational groups understand about what they are responsible to do at this point and throughout the whole budgeting process, the easier it becomes for everyone.

Another area that the finance team needs to be working on at this point is the final testing for its budgeting system.  Changes to the system from previous years may have been done due to upgraded equipment and upgrades in software functionality.  If a completely new system has been implemented (Hyperion and Cognos-TM1 are the two largest systems currently in use by midsized and large companies), the work becomes even more challenging.  Lastly, on the finance side of the budgeting triangle, training the usage of the system must be planned for.  All planning sessions need to be calendared, and anyone who will use the system including: cost center managers, department managers, executives and financial representation should be included in the training. (Either a complete training on a new system, or in the case of the use of the same system, a refresher course will be needed as well as complete training for new users.)

Plan Ahead for Success

Just like most endeavors, the more work that is put into the early phases of the annual planning exercise, the easier it become to achieve success.  The easier the complete budgeting process is, the less evasive to all areas involved it is.  Remember, for most people involved, the budget process is an addition to their “regular” job.  Remember, throughout the whole process, nothing is personal, it is all about moving the business forward…the right way.  Lastly, there are professionals, like myself, that can help with anything from questions to process and system integration.  We are here to help and make your business grow.

Matthew Carmen launched Datacenter Trust along with Marc Watley in February, 2010 and serves as Co-Founder & COO as well as Managing Partner of their Financial Intelligence practice. Datacenter Trust is a recently-launched consulting and services delivery firm, providing outsourced server hosting, bandwidth, cloud services, and IT financial intelligence and analysis services to growing businesses. Follow Datacenter Trust on Twitter @datacentertrust
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I’ve spent many years as a consultant helping companies analyze their business to improve performance and reduce costs, Clients large and small often ask questions regarding outsourcing/managed-sourcing. They’ve often read case study after case study showing how companies of their size/in their industry have shown real cost savings from their IT outsourcing programs, but their own initiative seems to be lacking in some fashion, often experiencing cost overruns and sub-par service levels.

I always come back with the same answer – A question:  Did you have the right information to make this business changing decision, and did you enter into your agreement from a position of strength?  The prospective client’s answer is usually slightly defensive, wondering why I’m questioning that company’s decision-making ability.  Which essentially I am – clearly something is amiss. At this point, the wheels are in motion and a serious conversation about how the agreement was entered into can take place.  This conversation is meant to figure out what has gone wrong and how it can be fixed.

Here are the main points where an outsourcing agreement can go wrong:

  1. Is the true cost of IT known and understood?
  2. Was proper due diligence performed and a business case developed?
  3. Did you open negotiations to multiple companies so as to get the best deal for your enterprise?
  4. Are you enforcing the contract?
  5. Has your company had any changes that would affect your agreement.

If these five questions can be answered, your company will be well ahead of the game and can facilitate changes that will help resolve the issues you may be experiencing. Lets look at these a bit more:

Understanding the true cost of IT

Many companies think they understand the true cost of IT, but most don’t.  It’s not just what is in the budget, it’s what isn’t as well.  Since every employee is part of the larger family, things are often done in a way that wouldn’t necessarily be the case with an outsource company.  For example, IT support staff would likely service a broken computer while they happen to be in that particular location to fix something else; an outsource company won’t (and unless on-site, can’t) do that.  There are hundreds of other “off book” examples (an ad-hoc server repair in the datacenter without a ticket being called into the help desk, perhaps) that, once outsourced, will no longer occur.  These are true costs of doing business that are challenging to foresee and don’t always get accounted for internally, however with an outsourced vendor these types of activities become chargeable events. In a large organization, this can lead to millions of dollars in additional outsourcing costs.

Performing Due Diligence to get the best deal possible

Knowing the true cost is the first step in the due diligence process.  Other things need to occur, including:

  • Prioritizing which functions should be run internally and which should be run by experts that can drive costs out of the equation
  • An understanding of which parts of the labor force will be affected either by being re-tasked to the outsourced vendor running the operations or being relieved of their positions entirely
  • Service levels need to be agreed to internally; and
  • Building a business case that supports the initiative, this includes noting all assumptions so as to be able to go back and audit.  By doing this, the company knows what is expected and then study the agreement forensically to uncover why the initiative is not proceeding as planned.

Handling Negotiations to Secure the “best” deal possible

Each company has their own process by which they procure goods and services.  The key questions to ask here are:

  • Were your company’s policies and procedures followed?
  • Were RFI’s and RFP’s constructed properly and submitted to all viable vendors?
  • Did your company negotiate purely on price, and were factors such as the Service Levels (mentioned above) taken into consideration?
  • Did you do research on the providers, talk to their current clients, etc to make sure they were the right fit for your needs?

All of these questions need to be given consideration up front, or you’ll risk the likelihood of compromised service down the road.

Enforcing the agreement with the selected vendor

This is key. Your company, when entering an outsource agreement, must establish a structure to allow for monitoring of the agreement and related SLAs. Is the vendor living up to their end of the agreement? If no, are steps being taken to alleviate the issues?  If you are not monitoring your agreement, you are as much at fault as the vendor for any perceived failures.  The agreement and the activity associated with it need to be continually monitored, and analyzed.

Knowing the changes in business conditions that might affect your outsourcing agreement

These business conditions can take many forms, and some affect all business – the current downturn in the economy, for example.  Perhaps your company may not have grown at the rate assumed in your business case and therefore in your negotiations with your chosen outsource vendor.  Other condition changes to consider include mergers and acquisitions, perhaps you are using more computing power then you estimated and did not take into consideration when purchasing another company.  Have you come out with an incredible new product that has driven growth within your organization? This is a good affect, but one that may not have been included in the portion of the new products business case that deals with internal costs such as IT, manufacturing and supply chain management.  All of these reasons and many others can affect the actual agreement, therefore it’s a must that your agreement be continually monitored as I noted earlier.

Conclusion

Several reasons can result in your company essentially leaving dollars and services on the table with respect to outsourcing.  There’s no such thing as too much thought when evaluating an outsourcing initiative.  If you need help, there are many experts available to you who can provide guidance and help develop a sound strategy tailored to your organization. Whatever your size or complexity of project, we’re here to help.

Matthew Carmen launched Datacenter Trust along with Marc Watley in February, 2010 and serves as Co-Founder & COO as well as Managing Partner of their Financial Intelligence practice. Datacenter Trust is a recently-launched consulting and services delivery firm, providing outsourced server hosting, bandwidth, cloud services, and IT financial intelligence and analysis services to growing businesses. Follow Datacenter Trust on Twitter @datacentertrust
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ROI for Business Intelligence

by Matthew Carmen on January 3, 2011

When beginning or continuing an investment in a Business Intelligence (BI) system, a company must look at how it will be able to garner the largest Return on Investment (ROI) for such an initiative.  There are many factors to take into consideration in reaching the largest possible ROI.  These factors can be grouped into direct and indirect benefits:

Direct Benefits

  1. Quantifiable cost savings related the more efficient access to data.  This allows analysts to spend time analyzing and not gathering information.
  2. Automation of process, leading to real time savings and greater productivity.
  3. Shorter budgeting and financial planning cycles with reduced effort, allowing staff to continue doing their jobs.
  4. Improved efficiencies in operational groups such as inventory management, IT, facilities management, etc.
  5. Reducing support costs associated with reporting while terminating legacy reports and systems that go unused.

Indirect Benefits

  1. A single version of the “truth”, official company records and reports, leading to less rework and manipulation of data by individuals to justify differing views of what that data means to their groups.
  2. Facilitates containment of costs based on targeted areas as opposed to just saying every group’ cuts costs by 20%, as an example.
  3. Allows for the ability to run “what-if” analyses, the results of which often lead to better decision making.
  4. Improved customer service, resulting in increased sales.
  5. Allows for the long-term alignment of operations and strategy.

There are many other direct and indirect efficiencies and benefits that can be realized through the proper planning and implementation of BI tools and systems.  The more end-user groups that participate in the planning of a company’s BI system, the easier it becomes to change the ultimate corporate culture. Once the buy-in from the users is attained, the real savings begin, and a platform to accelerate corporate growth now exists.

Matthew Carmen launched Datacenter Trust along with Marc Watley in February, 2010 and serves as Co-Founder & COO as well as Managing Partner of their Financial Intelligence practice. Datacenter Trust is a recently-launched consulting and services delivery firm, providing outsourced server hosting, bandwidth, cloud services, and IT financial intelligence and analysis services to growing businesses. Follow Datacenter Trust on Twitter @datacentertrust
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Reaching Corporate goals using Business Intelligence

by Matthew Carmen on December 20, 2010

Most companies have a mission.  This mission, many times, is some morally high statement that the company will, say, help all the people of the world live in harmony.  While this is a noble gesture, is it realistic?  Unless you’re the Bill & Melinda Gates foundation, probably not.  What a company really needs is an actionable strategy that leads it to meeting and/or exceeding business goals: those of higher revenues, margins and market shares, amongst many others.  A company can still be benevolent, like Ben and Jerry’s Ice Cream for example, who give a portion of their profits to charity.  This is a fantastic thing they do, but their shareholders want value for their investment as well.

What is more important is the corporate strategy that allows a going concern to reach its goals.  The main problem with any strategy is that the people who make it happen very rarely know what it is.  The “workers”, which make up probably 80 percent of employees only know that the company making money is good, and that losing money is bad (and this is probably all they really care about too).  These “workers” however, are the operational portion of the company.  Since the operational portion of the company has little or no knowledge of the company’s strategy, and probably cares about it just as much, how does a company’s leadership align its operations so as to reach its corporate goals?  Many tools are needed, including leadership, management of human and financial capital, logistics, etc.  All of these tools are fed by information and the better the information, the more intelligent the tool’s results. Business Intelligence (BI) is key to successfully aligning corporate operations with its strategy in order to achieve its goals and mission.

What exactly is BI?

Ask 5 people, you will probably get 6 answers.  Wikipedia defines BI as: “computer-based techniques used in spotting, digging-out, and analyzing business data, such as sales revenue by products and/or departments, or by associated costs and incomes.”  I guess this is one way to explain it.  My view:  BI is the use of technology to intelligently analyze raw data which is collected from each operational group.  This analysis is performed in many ways;  reporting, online analytical processing, analytics, data mining, business performance management, benchmarking, text mining, and predictive analytics are just some of the many techniques used.  Once all of the raw data is mined, processed, and analyzed, it becomes usable information that can be reported on, ‘dashboarded’ and presented.

This information often reflects a company’s competitive intelligence or advantage in the marketplace, and one way in which a company can differentiate itself from is competitors.  For example, Netflix and Harrah’s Entertainment are two companies that have benefit from BI initiatives.  These two companies collected raw data and utilized BI tools to analyze that data, ultimately resulting in advantage gains against their competitors – they were able to lead their industries in profit margin, sales and customer service, according to the book, Competing on Analytics by Davenport and Harris.  By efficiently analyzing sales data through the use of BI, a company can make sure that stores in different geographical areas keep the right products on the shelves.  One example of this is Kroger:  they were able to keep the right varieties and quantities of soup in colder weather stores.  Some of BI is basic common sense that is taken to the next level, this is the starting point.  Experts in BI need to take a company to the next level and beyond.

The keys to a successful BI implementation include:

  1. Realizing that your company does not use the data it has to make decisions and wanting to change the dynamic.
  2. Bring in experts where helpful (for example, Stixis and their BI Center of Excellence) to ask the right questions and properly architect and launch BI initiative.
  3. Make sure employees and management participate in the development of Key Performance Indicators (KPI’s), designing dashboards, and providing input to the system designers.
  4. A company must decide on BI deployment, maintenance, and continuous improvement.  By doing these things, a company will be able to gain a competitive advantage over competitors and lead its industry.

The key to successful implementation and usage of a company’s new or expanded BI environment is complete buy-in from all employees and communicating corporate mission, strategy and operational need.  Through this effective communication with the workforce, employees will become contributors of the new corporate culture and help move the company forward.

Matthew Carmen launched Datacenter Trust along with Marc Watley in February, 2010 and serves as Co-Founder & COO as well as Managing Partner of their Financial Intelligence practice. Datacenter Trust is a recently-launched consulting and services delivery firm, providing outsourced server hosting, bandwidth, cloud services, and IT financial intelligence and analysis services to growing businesses. Follow Datacenter Trust on Twitter @datacentertrust
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Project Accounting – Do you really need it?

by Matthew Carmen on November 22, 2010

Let’s save answering the question posed in the title, for later on… lets first address a more fundamental question – What exactly is project accounting?

Project accounting is the act of tracking total costs of a project, from concept through implementation. This means all of the expenses, labor and capital expenditures related to completing any operational or strategic project. This project tracking can be done in tandem with the corporate accounting department (usually the case in large companies) or separately (as with small and midsized companies, when these companies actually perform project accounting). Depending on the size of the projects that a corporation is undertaking, the complexities of project accounting grow.

As the complexities of project accounting grow, technology plays a greater role. The business may be able to get away with Excel spreadsheet models – at least in the early stages of proving its concepts. This can continue to be useful for small companies that have small straight forward projects that are usually expense related. Once the use of internal labor, software development, and capital expenditures come into the mix, additional resources should be considered – irrespective of the size of the company – in order to reach conclusions successfully.

These added features include:

  1. Project accounting software – There are many packages on the market, from inexpensive versions that allow a small company to track their costs, to large modules that plug into a company’s SAP, Oracle, or other enterprise-class financial system. The larger and more expensive the software package, the more time and energy it will take to integrate into the company’s technology environment.
  2. Legal expertise – As a company’s projects become more intricate and complex, the project accounting office will need to understand things such as tax implications, capitalization of assets and labor, etc. The company’s legal and corporate finance teams will need to get involved.
  3. Information Technology – In most cases, new servers will need to be leased or purchased, power usage in the company’s datacenter will need to be reviewed (either with owned or outsourced datacenters). The datacenter strategy itself may need to be reviewed (depending on the size of the project, A large project may not fit into the company’s current datacenter), as well as any related labor costs going forward.
  4. Financial – The actions in this area of the company include the creation of a business case, business intelligence initiatives, the ability report on the successes of the project, activity based costing, budgeting, etc.
  5. Regulatory – depending on a company’s business, there may be regulatory issues that make project accounting necessary. Some regulatory programs may be tax deductable, while others just have to be done. Tracking regulatory projects is necessary to show that these are one-time costs associated with doing business.

Once a company has implemented the project accounting system that works best for its size and needs, something amazing things starts to happen, information that can be acted upon to make operational and strategic decisions is created. For example: In large scale projects – those that take place over years and have multiple layers of complexity – costs can be looked at by repeatable activity (i.e. labor during a certain stage of the project that happens at different locations) and ways in which these costs can be minimized become apparent. Business intelligence is then created to illustrate that having the right labor in the right place will minimize costs and keep the project on or below budget.

Conclusion

The time has come to finally address the question in the title! Project accounting, whether implemented on a small or large scale, can provide great value to more efficient management of the business. In these challenging economic times, managing a business at the highest level of efficiency is more important than ever. Reporting on and containing costs is a priority and should be pursued with great care and scrutiny. Not only do you need to have solid Project Accounting in your organization, your organization’s long-term success DEPENDS on it!

Matthew Carmen launched Datacenter Trust along with Marc Watley in February, 2010 and serves as Co-Founder & COO as well as Managing Partner of their Financial Intelligence practice. Datacenter Trust is a recently-launched consulting and services delivery firm, providing outsourced server hosting, bandwidth, cloud services, and IT financial intelligence and analysis services to growing businesses. Follow Datacenter Trust on Twitter @datacentertrust
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Week In Review: Oct 24 – Oct 30, 2010

by Magesh Tarala on October 31, 2010

3 Ways to Save money and Increase Productivity

by Matthew Carmen, Oct 25, 2010

Save money and increase productivity need not be an oxymoron, especially in the IT department. But if that strategy starts with cutting the labor force, it will be detrimental to the company. Matthew suggests several ways to achieve these seemingly conflicting goals and some of them may be applicable to your situation. more…

Chaos and Complexity #7: Black swans, Randomness and your Career

by Gary Monti, Oct 26, 2010

If you believe in sustained stable outcome in complex situations, you will be doomed. Chaotic systems (like our life and career) have deterministic, interrelated rules producing nonlinear, unpredictable results. In order to be successful in your career, you need to practice a form of cognitive dissonance and learn to carry two streams of thought simultaneously : What is the best outcome and what is the worst outcome. more…

Social Media and Tribes #18: Better than Google

by Deepika Bajaj, Oct 27, 2010

Every tool has its purpose and each tool has its strengths and weaknesses. Once you get accustomed to using a tool, the tendency could be to to use it for purposes it is not effective for. Google is great when you need information, but it may not relate to your situation. That’s where your friends can come to your aid on Facebook! more…

Flexible Focus #25: Assessing your situation with a Mandala SWOT analysis

by William Reed, Oct 28, 2010

The SWOT Analysis model is originally attributed to Albert Humphrey from his work at Stanford University in the 1960s and 1970s. This gives you more clarity, but risks leading to 2-dimensional or checklist thinking. A better way to go beyond is to use a Mandala Chart. You can start by using the downloadable A-frame Mandala SWOT Chart. more…

Cloud: A truly nebulous term

by Marc Watley, Oct 29, 2010

The term “cloud” is one of the most over-used technology terms in recent times. We have been using the so called “cloud” for a long time. Think about Yahoo!, Hotmail, Gmail, Facebook, LinkedIn, etc. So what exactly is the meaning we are trying to convey when we use “cloud”? The answer is simply “on-demand”. more…

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Cloud: A truly nebulous term

by Marc Watley on October 29, 2010

Yes, yes I know…ol’ Marc has subjected you to yet another bad pun. You’ve got to admit though that it fits the bill here. The term “cloud” is, in my book, one of the most over-used technology terms in recent memory, and it’s high time for change.

(Ridiculous sidebar: Anyone else watch Science Bob conjure that “cloud” on Jimmy Kimmel Live the other night? Hilarious!)

The thing is, almost all of what we use on the web today exists ‘in the cloud’ at some level or another. Think about it – your mail isn’t fed from a server sitting in your basement is it? No, it’s typically one of a cluster of mail servers in the “cloud” – perhaps located within your company’s datacenter or provided by Yahoo!, Hotmail, Gmail, or the like.  What about shopping? Our profiles, containing our shipping addresses, purchase preferences, and credit card numbers, likewise exist in the “cloud”.  The social utilities we’ve come to depend on for business and fun – LinkedIn, Facebook, Salesforce, Twitter, Foursquare, etcetera, are also services used almost entirely in the “cloud”.  The technology that powers the various “cloud” solutions continues to advance rapidly.  This, along with increased availability and reduced costs worldwide for high-speed Internet access, has allowed the service offerings to evolve as well.

The fact that both individuals and growing businesses can tailor solutions from the breadth of available “cloud” services is fantastic.  The issue at hand is the term “cloud” itself: an umbrella term most often used to describe and present ‘hosted’ or remote services – services which have expanded rapidly during the last two years. The term “cloud” has simply reached a point of causing confusion.  For example, though commonly referred to as “cloud computing”, it’s not always actually computing, is it?  We can now select from solutions allowing us to compute, store/archive/recover data, manage content, send/receive mail, place calls, conference, and network with colleagues, friends, and prospects – all with a moniker of “cloud” attached. “Cloud” is descriptive in this sense, sure, but only mildly so. My $0.02 is that the term “on demand infrastructure” – or simply “on-demand”- is more reflective of available solutions and less confusing than the term “cloud”.  Adopting the “on demand” term virtually eliminates the need for wonder, fretting, or quarrel over the best flavor of the solution – public/multi-tenant (Amazon EC2), private (your own VMware or Terremark Enterprise Cloud instance), Platform (Salesforce), or hybrid form. Whatever the end solution, simply think of it as on-demand infrastructure; the level of access, control, and security needed upon deployment are completely up to – and configurable by – the user.

I’ve noticed in the past several months that several technology companies including Oracle, F5, Servosity, and Rackspace have begun to use “on demand” (seemingly in place of “cloud”) to describe their services, features, and benefits. I think it’s a smart move, but who knows where this will end up; the term “on demand” might work best for everyone. Might not.

Anyhow, Cloud: you’ve served us pretty well…thanks. Now it’s time to bid adieu and bon voyage.  Oh, and when you reach wherever it is that you Internet buzzwords fade away to, please do say hello to our old friend “Web 2.0”, will you?

Written by Marc Watley, Co-Founder & CEO of Datacenter Trust and CMO at Reppify. Datacenter Trust is an IT consulting and services delivery firm, helping growing businesses make smart decisions from sound financial analysis and business intelligence. Reppify is a leading-edge technology company pioneering the use of social media data to drive better business decisions. Follow on Twitter: Datacenter Trust @datacentertrust and Reppify @reppify
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3 Ways to Save money and Increase productivity

by Matthew Carmen on October 25, 2010

For most companies, Information Technology is not their core business.  IT is, however, one of the biggest factors by which a company can differentiate itself from its competitors.  By using technology wisely, companies can automate many of their processes, allowing its labor force to focus attention on new products and services for both external and internal clients.  Capital funding is required to accomplish this, and in this economy this means reallocation of current funds, not an addition of new funds for a companies IT department.  It is a proven fact that good investments in IT facilitate rapid company growth.

As with most other departments within a corporation, IT runs on human resources – labor.  Therefore, the last thing a company should look to do when wanting to save or reallocate capital is to cut its labor force.  Once the labor force is cut, it is very hard to get back the productivity in the future.  When this happens, most IT departments become very reactive – they end up fighting the many fires that crop up and have little time to implement new technologies that could benefit the entire company.

Decimating a labor force – though providing significant short term financial savings – inhibits corporate growth.  With this in mind, what areas within IT should companies consider to free up funds for growth initiatives?

  1. Managed sourcing options for routine activities.  By routine activities I mean regular processes such as batch computing, monitoring of the IT environment, network connectivity and maintaining the physical environment.  Most of these are important areas that tend to be labor-intensive activities.  Within IT, the monitoring, network and physical management of the datacenter tend to have the largest staff of any group.  By considering managed services, a company can get high quality service and typically good pricing areas as well.  With the savings, labor can be added to groups that are doing application development and other innovative services which stimulate business growth.
  2. Implement tight asset management procedures.  By tracking a company’s software and hardware assets, existing assets can then be utilized more efficiently.   On the software side, a company needs to know what it owns, what piece of equipment it is running on, and how much of the total purchase it owns is actually being used.  Having an inventory system will allow the user community access to all of this information, and encourages the use of existing inventory instead of always buying more simply because a new project has budget money.  By implementing a rigorous asset management system, companies waste a lot less – often as much as 20% – on new purchases and maintenance of those new purchases.  These savings can likewise be used for continued corporate growth.
  3. Going green can provide great cost savings. One way companies can become “greener” is through server virtualization.  By vitalizing servers, companies can save much needed capital on two fronts.  First, by having fewer physical devices in your datacenter, less electricity will be used, thereby lowering the company’s electricity costs.  Secondly, many states and utility companies offer rebates and/or lower rates for electricity for companies who virtualize their server farms.  For example, one utility in Wisconsin offers a rebate of $250 per virtualized server.   Through the use of VMware or similar product can, if engineered correctly, reduce the physical presence of a server farm down by as much as 20 percent – serious savings can continue on well into the future.

All in all, there are several ways in which a company can save much needed capital without reducing the workforce, then reallocate the capital in such a way as to stimulate new growth.   Yes, certain positions may be deemed as unnecessary and the workload shifted to managed service providers or the like, but overall, the company will be able to use more of its skilled teams for forward-thinking growth opportunities. Such initiatives, which can be funded by cutting wasteful spending, work seamlessly with careful planning and execution.

Matthew Carmen launched Datacenter Trust along with Marc Watley in February, 2010 and serves as Co-Founder & COO as well as Managing Partner of their Financial Intelligence practice. Datacenter Trust is a recently-launched consulting and services delivery firm, providing outsourced server hosting, bandwidth, cloud services, and IT financial intelligence and analysis services to growing businesses. Follow Datacenter Trust on Twitter @datacentertrust
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