Posts Tagged ‘Return on Investment’

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.

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Tagged as: active garage, business intelligence, data center trust, IT Finance, matt carmen, Matthew Carmen, Return on Investment, ROI

Business Intelligence or lack thereof?

by Brian Beedle, Mar 29, 2010

In these tough economic times, it is imperative that organizations make strategic changes rapidly. Traditionally, business leaders are focused on the profitability and the lower rungs don’t have the business intelligence to make serious impact. The answer lies in implementing a performance management system. Brian discusses some key factors you need to be cognizant of before you take the plunge. more…

Leadership Cancers #3: The myth of peak performance

by Gary Monti, by Mar 30, 2010

You know the story of Apollo 13. The entire ground team worked round the clock for several days to bring the astronauts back. The team performed at the peak level. Realistically, you cannot expect this team or any team to perform at that level continuously. There is a normal performance level and we need to strive to improve the normal performance level. But striving for peak performance all the time will burn people out and will setup the team and the organization for failure. more…

Timing the Flood

by Guy Ralfe, Mar 31, 2010

Timing is everything. It involves being at the right place at the right time and then evaluating the offer’s risk vs. opportunity. Guy’s current situation has put him in the right place for offers to be made. And he is evaluating the offers within his current capability. more…

How to handle any situation

by Vijay Peduru, Apr 1, 2010

Life is nothing but a series of situations. How we handle them determines how our life shapes up. We can approach situation will resignation or anger. But these are not powerful moves and will not enhance your life. Deal with situations in a mood of possibility and see a new and wonderful world open up for you. more…

Author’s Journey #15 – Crafting the perfect book proposal

by Roger Parker, Apr 2, 2010

Your book proposal for your first book is among the most important documents you’ll ever prepare. The purpose is two fold: 1) Sales pitch 2) Marketing plan. A typical proposal has seven sections described in this article. Think of your book proposal as an investment. more…

more…

Tagged as: active garage, brian beedle, business, business planning, Business Strategy, Communication, entrepreneur, gary monti, Innovation, Leadership, management, possibilities, Return on Investment, roger parker, vijay peduru, Writing for Business, www.activegarage.com

My article this week is about timing. There is an old saying “Experience is what you get, right after you needed it”.

There are things that you can time, the coffee maker, the bus schedule and so forth. There are many more things that you cannot time and attempting to time them is a mistake.

For Example: timing the stock market, similar to gambling in Las Vegas, where everyone knows the game is rigged and plays anyway. Attempting to time the stock market will eventually get you if you are playing alone. That’s why successful stock brokers get paid no matter the outcome of your transaction with them.

Timing certain types of projects is also a mistake. I work in the large scale software industry and if a project is an addition to an existing product, timing makes sense and indeed is necessary. If, on the other hand, we are building something completely new to the world, we cannot time it, and we are almost never able to resist the urge.

For things that are new to the world, much must be learned, therefor the time required is the time needed to acquire the knowledge to complete the project; be that brain surgery or a new software product. The knowledge and the skill must be acquired over time, a practice must be developed that retains that skill and then the project can be timed. Usually at that point you have completed at least the first pass and are ready to move on. Only after you have the experience can you time the next iteration, and even then, if you are doing something that is new to you, your team or the world, you need to take the time to learn.

I’ve said is almost all of my articles, you will not get where you are going alone, you need help. Help can come in many forms: parents, friends, acquaintances, government structures, business structures, etc. The number one thing that, as business people, we can find to help us are teachers. Find someone better at what you do than you are and learn from them. Learn everything you can, from everyone you can. Be discriminating in your teachers though, find the best, if you find someone better, switch. Move fast and learn to learn fast.

With learning comes obligation. As I said before, you need to learn from great teachers, you must have something to offer them in return like money, time, etc. In return you must spend some of your human capital to learn: time, lost opportunity, money etc. Education comes with a price, you must pay it. When you stop learning you are finished.

Another point about the obligation of learning; you must teach. There is a Buddhist maxim “To know and to not do is to not know”. Teaching cements your knowledge, it is a mechanism of our minds that when we teach we learn as well, the subject we are teaching. So to learn, you must teach, find a student, and be a student.

Go find something new to learn! Stretch your mind and teach someone else something new! Do it for yourself.

Tagged as: Action, Branding, Communication, execution, Intellectual Property, leaders, Leadership, possibilities, purpose, Return on Investment

This weeks article addresses the strong desire for people to fall into the trap of “I didn’t invent it, it’s not as good as it could be” or “Not Invented Here”.

Both of these attitudes usually have some merit and at the same time are usually flawed.

In an earlier article on when good enough is good enough, I made the point that at some point you have to stop development and ship the product or service, before that you have no knowledge of the viability of your product or service. You have to ship/deploy and get feedback from your marketplace, before that you are guessing.

Proof of your accomplishment is after shipment/deployment.

To that end we must as business owners be aware of the landscape surrounding our businesses, our competition, our customers, and our own needs, and what help is available to us at little or no investment. So the question “do I need to do it all from scratch?” is posed here. What parts can you get elsewhere and will it help you to do that?

For example, Matthew Lesko has made a big business out of publishing a series of books on government available loans, grants and funding, and if it works for you, the cost is very low.

There are professional societies for every profession that are a great source of help and ideas. Surprising though it may seem, you can even get help from your competition.

For the technology crowd there is slashdot and sourceforge; for the science minded products and services there is the IEEE with societies for nearly anything you can imagine and Symetry for the more scientifically minded. I would encourage your to sign up for one or more of these, at least take a look to see what’s there and if it is usable.

All of that said, there are countless places to find help in the marketplace, and as I’ve said in nearly every article I’ve written: in business you need help, and not just any help, you need the best help you can get, and help will cost you, the best help costs a lot.

So take a look around you both physically and in your marketplace and find your help, it may be surprising where you find it. Watch out for the “Not Invented Here” trap in yourself and your employees, it can raise your costs and lengthen your delivery times and thwart your chances of success.

Tagged as: active garage, Branding, Business Management, business planning, Business Strategy, entrepreneur, Entrepreneurship, execution, Leadership, management, Return on Investment

Now, admittedly, the title might have confused you a bit as just about 3 weeks ago, Himanshu posted an article titled It is the ROI, not the ROC, stupid! The simplest explanation for this seemingly contradictory titled post is… the ‘C’ in Himanshu’s post was Cost whereas in my post, the ‘C’ in the ‘ROC’ stands for Communication.

While talking to my father on the phone the other day, I had a breakthrough. Not the kind my therapist would like to see, alas, but one that answered a major business question: “Why do so many managers treat communication tools like they’re made of gold and not use them every day?”  It all comes down to how we measure the ROI (Return on Investment). Maybe we sometimes need to measure the ROC (Return on the Communication) instead.

I was trying to ask some pretty serious questions about his health and Dad kept trying to avoid the conversation and wrap it up. Finally, he said “Look, this is costing you money, so we should talk about this another time…”. Now you, I and just about everyone you know has an unlimited calling plan. Talk for two minutes or twenty, it doesn’t really matter- it’s just not a concern for most of us any more. But because all he could hear was the meter running, my dad didn’t want to get into a long drawn out conversation. Remember this is a guy who taught us to call person-to-person collect for ourselves so he’d know we got to our destination safely and we wouldn’t have to pay for a long distance telephone call from a payphone- he’s a bit frugal to say the least.

That kind of thinking affects managers and organizations as well, and has a direct impact on how they use communication tools with their remote teams. Here are some common examples:

• “We pay per minute and per connection, so we’ll save webmeetings for when it’s really important” I have numerous clients who have invested in webmeeting platforms, and then refused to let people practice with them, or need to get budget approval to hold a meeting in order to keep costs down. Then they are surprised that people don’t utilize the tool or use it poorly. No one will ever practice or get proficient with a tool that they can’t use at will without the accountants watching. By the way, if you’re still paying per minute per connection it’s time to have a serious talk with your provider…they’re treating you like you’re my dad.
• “We don’t waste time on chit-chat. Keep it business” In this age of Agile, virtual, matrixed and under-resourced projects – time is money.  The myth is that the less time you spend talking the more time and money you’ll save and people can get on with the “real” work. This is a perfect example of measuring something that doesn’t indicate real results. You can’t easily measure the amount of risk-management, proactivity and trouble-shooting that good, frequent and rich communication gets you. Of course, if you really want hard metrics, measure the amount of rework, lost productivity and project overruns from not staying in constant contact with your team. Take the time to find out what’s really going on with them and who else is sucking up their time.
• “We didn’t cut the travel budget just to spend it on IT”. Okay, we all agree that the reason we need these tools is our travel budgets were slashed and they are NOT coming back anytime soon (at least not in the foreseeable future). That doesn’t mean we don’t need to communicate effectively and that there is no cost of doing business. Just because people work from home doesn’t mean (magically) it doesn’t cost anything to have them on the payroll. By the way, if you look up from the “telecommunications” line item in the budget you’ll see that you can pay for a lot of bandwidth, webmeetings and telephone calls just with the money you used to spend on drinks for the team when they could get together or put more subtelly … Psssst… “It’s really not that expensive.”

Effective questioning, timely feedback and sharing information have value to an organization and a team. We need to focus less on the dollars spent and more on the value created by those interactions. Sometimes we need to focus on the Return on Communication

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Tagged as: active garage, budget, Communication, Greatwebmeetings, investment, online communication tools, Return on Communicaiton, Return on Investment, ROC, ROI, telecommunication, Wayne Turmel, web meetings

In the last article we discussed the need to create a cohesive IP strategy, in this article I’ll discuss the first step in creating your strategy.
Like every article I’ve written on this topic, I’ll remind you that you need help, and you need the best help you can get.

Strategy Creation:
A few guidelines to help things along:
1. Be clear on why you are creating an IP strategy. All reasons are valid, some will work better than others. For example: if your goal in creating an IP strategy is to to tell all of your friends how many patents you have; you may want to think a bit more deeply about what you will do with those assets (make no mistake they are assets if treated right) and how much you are planning on spending to create them. On the other hand if you plan to exploit what you have invented, create a new business, and bring new products to the marketplace, then you are thinking in the right direction for strategy development.
2. Determine the direction you want your IP portfolio to grow into, find your market landscape. For instance; if you are making wire coat hangers and you suddenly come up with a new idea to make them cheaper, faster or in some other way better for the same cost, that’s a great invention in your current market landscape. If, on the other hand you make coat hangers and you come up with a great new telescope design, you may want to think about the new invention within the direction of your market landscape and the way you prosecute that innovation in the marketplace. Is it a different marketplace? The direction component of your strategy helps to keep costs under control. Costs can include nearly everything you can think of, from time spent thinking about the innovation, to the actual patent write up and filing fees, and everything in between.
3. Determine what areas you are NOT going to explore, such as a wire coat hanger manufacturer working on auto parts cleaning machines. It doesn’t matter what limits you put in place but you must at least think about them, and draw limits that suit your situation and remember they are your limits, you can change them any time you wish.
4. Determine when you will start, never when you will stop, and start. Create consequences for not starting, and rewards for getting going. Innovation should never stop, it must be continuous if you are to be successful in the long term.
This all sounds like a lot of work and, that said, it’s not a trivial task. However, as humans, we are what we practice, and our practices define us. Therefore you need to develop a practice of creativity, and a practice of managing your strategy.

So, having read all the above; It’s time to get moving!

Tagged as: Business Management, business planning, Business Strategy, Entrepreneurship, Innovation, Intellectual Property, purpose, Return on Investment, Strategy, technology, www.activegarage.com

As an entrepreneur, whatever product or service that you sell, it is critical to look at not only how it helps your customers; but also to look at how it might hurt your customers. Most of the offers that exist in the marketplace end up being ordinary and have little value associated with them, because they end up “hurting” customers at places which have serious consequences for them. The “hurt” can be of different types (and depending on what the level is, it hurts the marketability of the product or service) and you want to stay as far away as possible from the one that comes with the serious consequences for your customers.

Here’s a little personal story of mine: I recently bought a new bed frame from one of the discounted retail stores. It was a beautiful wooden (brownish) frame; both my wife and I loved it. While my wife strolled around to the other parts of the store, I walked around the bed inspecting it and marveled to myself how it’d look in the room we were thinking of putting it in. While I was mentally playing taking this beautiful piece of furniture home, I heard my wife call me from the other aisle. As I started walking towards her casually; I felt a sharp pain under my kneecap and immediately sat down. That’s when I noticed that the bed had a protruding part on the corners of it (the corners where the legs would go) which could easily go unnoticed (Hello?) and “hurt” people. Suddenly, the beauty, the wooden frame and the comfort vanished from my mind and all I could remember was the “hurt” that I felt from my little accident with the bed frame and how “dangerous” it could be for people in the house. The product (or service) called “The bed” immediately lost its marketability with me, its customer.

While you are designing your product or service for providing the fantastic help that it’ll provide your customer, be sure you give a thought to how it might “hurt” your customers. While one can argue that it’s impossible to come up with a product/service that is “Perfect” in all aspects and causes no “hurt”, one can surely design it in a way so that the “hurt” is kept to a minimum. Here are a couple of levels of hurt to consider while you think of the design of your offer:
1. Fundamental Hurt – This is what I call the “Deal Breaker”. This is the hurt that will instantly kill any marketability of your product or service. It wouldn’t matter how aesthetically tasteful your product is; it wouldn’t matter how practical it is or how valuable it is. If your product or service hurts a fundamental concern; it will, in all likelihood, not be very marketable. My example, above fits the bill for “fundamental hurt”. The bed, regardless of how comfortable and elegant it was, was dangerous to the fundamental concern of my body. The moment that dawned upon me; the offer was outta-the-door for me.

2. Derivative Hurt – This is something that the customer sees as not impacting his or her core concerns and thus, is open to a cost-benefit analysis of whatever product or service it is that he or she is considering buying. It’s like your offer gets a Second-chance-at-least kind of hurt. This is where most of the “good” products or services fall in. They all “Cost” something (which obviously hurts the customer in a way since it eats into his or her resources) but if the Return is good, the Cost is viewed as more of an investment and the conversation suddenly centralizes around the ROI, and not just the “Hurt”. As an example, offers such as entertainment magazines and Television fall in this category. They provide customers with a sensation called “Relaxation” and “Fun” in return for the money and time they cost the customers.

When you are designing your products and services; look closely for what kind of “Hurt” they might cause your customers… and stay away from the “Fundamental Hurt” as much as possible!

Tagged as: active garage, business, cost, derivative, design, entrepreneur, Entrepreneurship, fundamental, help, himanshu jhamb, hurt, investment, offer, offering, product, Return on Investment, ROI, sales, service

In my earlier post on June 10, 2009 I shared an example of what ROI looks like. In this post, I am writing about if ROI is not seen as ROI, how your possibilities get killed even before you start to act on them. This happens when customers confuse the ROI (Return on Investment) with the ROC (Return on Cost).

ROI is a constitutive component of how we measure Value; so needless to say, it is a critical part of how we choose to transact (or not), in any situation. Then there is the Investment which is a critical part of the ROI. The biggest pitfall is how this shows up for your customers. Consider this example:

You are at the crossroads of your career. You work very hard at your job, day in day out… day in day out… day in day out… you get the picture. The more hard work you put in, the more of the same results are being produced (e.g. getting only a 2-5% raise year after year after year… ). There is no certainty of the promotion you’d hoped you’d get in your upcoming review. You met your goals, you fulfilled your promises and all that happens at the time of review cycle is you’re told the company did not meet its numbers so you’ll just get a 2% raise or worse, nothing at all.

At this point, you say “This is not working”. I need to go learn some new things. I need to look for where I can get more education… different education and with that you set out looking for it. Then you come across two choices; one education costs $20,000/year and the other $2,000/year. This is the crossroads at which you make a choice and the importance of this choice is huge because it will have an impact on perhaps your entire life.

The choice is made in how you think about this. Before I go further lets clearly distinguish that the “I=Investment” IS NOT “C=Cost”. Cost is usually thought of as something you have to pay in order to get something else RIGHT NOW. Investment is thought in the context of something you have to pay in order to get something bigger (than what you paid) in the future .

Most people look at the ROI as the ROC and that conversation closes the opportunity there and then. So, when you are talking to your customers about the value of what you are offering, make sure you CLEARLY bring forth that the price tag associated with your offer, is not a COST to them, it is, in fact an INVESTMENT, that they are making into a future possibility that will MORE THAN cover the investment they are making at that point.

If they still insist on looking at the “I” as the “C” ask them a simple question: “It is clear that you have considered the Cost of doing this. Have you considered the cost of NOT DOING IT!”

Try this in your next conversation. It works in bringing forth the ROI very clearly… and the results will show for themselves.

Tagged as: active garage, business, Compensation, cost, himanshu jhamb, investment, Money, offer, raise, Return on Investment, Transaction, value

Documenting Inventions

In my last article is wrote that a laboratory notebook is an effective method for ensuring that you protect your intellectual property during development. This article comprises guidelines to help protect the integrity of the contents of your notebooks such that the contents are without reproach.

In patent law it is generally the first to conceive of an idea that is awarded the patent, a properly kept notebook is often the first documented evidence of a concept, development or process.

Generally speaking it is adequate to have a small drawing and some descriptive text to document a concept. The lab notebook aids with extending that concept in a protective manner.

Guidelines:

1. Take your notes contemporaneously with your development, as close to the time of your research or lab work as possible.

2. Remember that you are working to make sure that someone with your skill level can recreate what you’ve done, solely from the notes in the notebook.

3. Very few people organize their notebooks efficiently, with the possible legal outcome in mind. Remember: the lab notebook is your first line of defense.

4. If you need to have a blank page for some reason, draw a diagonal line and write “Void” on the line, initial and date the line. It is best however to avoid blank pages.

5. VERY IMPORTANT: IF you make a mistake, do not scribble over it, draw single line through the error and initial and date the line. you can do this for large areas by lining through at a diagonal and, again initialing and dating the line. At no time is it acceptable to remove any part of or all of a page. This will call into question the contents of the notebook as a whole.

6. When spanning multiple pages use “(Continued)” or “(Cont)” at the top of the page to denote a continuation from the previous page. If you are continuing something from an earlier page use “(Continued from page #)” or “(Cont from #)”.

7. Avoid fragmentary notes, make sure you use as complete a description as you can.

8. All entries are either in ink or printed and attached to the page with tape or glue. If attaching a page to the notebook, draw a line across the boundary of the attachment and the page and initial and date the line, this ensures that the date of the attachment is in congruence with the dates in the notebook.

9. Your writing must be legible. If someone else can’t read it, it must be redone. If it is illegible it might as well not exist. Remember you are writing to the future in your notebook, it must be clear.

What To Put In the Notebook:

1. Table of Contents. Leave room at the front of the notebook if there isn’t an explicit table of contents. Keep this up to date. This helps with finding information quickly in the event of a search through multiple notebooks (a very common occurrence).

2. Include a list of your assumptions as you begin.

3. Include any formulae or calculations that are important to your work.

4. Data, drawings, sketches, processes, procedures, notations, corrections, part numbers, assemblies, code snippets, tests, test results, etc. In General your thinking.

All of the above items are relatively easy to maintain once you get the mindset that you are writing to the future, in addition to the present.

Go get a notebook, set down and innovate, create and invent! It’s fun!

Image Courtesy: Paul Watson on Flickr

Tagged as: Copyrights, Entrepreneurship, Innovation, Intellectual Property, possibilities, Return on Investment, Strategy, technology

Everyone does not view social media with the same lens. Different people have different stands about social media. For some people it’s a nuisance and for others it’s their life.

I have grouped the kinds of relationships people have to social media in seven categories. You may be able to identify yourself in one of them or somewhere in between. You will notice that the investment you make and the returns you get are directly influenced by the approach you take.

As you can see, only in the last two kinds of relationships can you expect reasonable ROI from social media.

So, here are the seven kinds of relationship in detail:

1. Despise

You hate social media and social networking. You might even think it’s a nuisance. You think it’s artificial and you just keep thinking about the old days when people could really meet and talk. This new kind of building relationships seems so fake to you. Some of you may think that this is a fad that’s going to go away sooner than later. So why bother?

None of you in belonging to this category have any plans for participating in the social media. Some of you may question the intelligence of others who are participating in social media. Obviously, you can’t expect to see any returns from social media with this attitude.

2. Distant

You don’t hate social media but you don’t love it either. You are standing at a distance and watching all the action. You are sometimes amused, sometimes surprised and sometimes shocked with what’s happening there. When you read a success story you are encouraged to begin your journey but you stop yourself saying that you may not be ready to make that BIG commitment of time, energy and mindshare into this without being fully clear about the return on that investment.

Some of you in this category may be afraid that you might abandon the ship prematurely if you are not fully equipped before you start. Whatever be the reason to keep the distance, you can’t expect any returns from social media with this stand.

3. Dream

You are more open to participating in social media but the right time has not come in yet. You know what you will do when you finally start engaging in social media. In your mind, you have a grand plan but the time to execute has not come yet. Even here, your ROI from social media is not much for you as the marketplace rarely places a premium on people’s dreams. Dreams are important but action is even more important.

4. Deal

You are someone that had no choice but to jump into social media. Someone posted about you or your company on a blog. Someone tweeted about you or your company on Twitter. You are now forced to respond, especially if you feel the article or tweet was not backed with facts. You jump into the social media to set the record straight. This is a reactive approach rather than a proactive approach. However, you can still benefit from dealing with the situation on social media. People appreciate that there is human touch from the company. You might decide to engage proactively from now on or you might again go back to the sidelines and come back whenever there is a need.

5.  Dabble

You are definitely on the social media side of the fence. You are experimenting on various tools, techniques and tactics albeit without a clear strategy. You act as if the latest tools that surfaced were the missing piece in the puzzle. You embrace new tools with vigor but you don’t follow through with the same vigor as new tools in the marketplace continue to distract you.

While you may not get a long-term return using this approach you do see some benefit as you start making and building relationships on the web.

6. Dedicated

You are committed to participate and engage in social media. You are active on various networks, ask and answer questions and do everything to engage with community. People know you as not only competent in your domain but also as a “nice and helpful” person and probably will reciprocate back when you are in need. You are on the path to building long term relationships that matter.

This is where you start seeing serious returns from social media.

7. Dance

This is social media mastery at display. You know what it takes to “dance” in the social media. You not only help – you ensure that your help is “valuable.” You not only give away stuff but you ensure that what you are giving away is “SIGNFICANT.” Whether it is an article, eBook or a tweet, when you talk people listen and they are thankful that you are there in social media and you are accessible. You change lives via social media and make things happen.

Your returns from social media skyrocket with this stand.

If you are not engaged in social media, I urge you to start engaging with the view to “dance” someday. That’s where all the magic is.

Tagged as: active garage, engage, facebook, flickr, linkedin, Rajesh Setty, relationships, Return on Investment, ROI, significant help, Social Media, Twitter, youtube