Tag: outsourced IT management

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Turn Risk into Opportunity: Focusing on Value and Supporting Profitability

Turn Risk into Opportunity:

Focusing on Value and Supporting Profitability

Most businesses accept that they have “customers”, people who pay for the products and/or services that the business provides.  However, the customer many businesses fail to recognize is the “internal” customer – the consumer of services delivered internally to the organization.  These customers, most frequently recognized as co-workers and team members, depend upon the services delivered to them in order to do their jobs for the company.  This dependency represents the value of the service, and every organization has a need to get as much value as possible for the cost they expend for these services.  When the business approaches these internally delivered services as profit centers rather than pure cost centers, the impact to the business could highly beneficial as the application of resources gets focused on building strategic benefit for the company and not simply on supporting status quo.

Calling a part of the business a profit center doesn’t mean it’s going to sell services externally for money.  Rather, it means that the activities of the department can have a direct and meaningful impact to business profitability, and are participants in the development and facilitation of business strategy.  Profit centers can come in many flavors in a business, and may be identified as managers and owners reflect on areas of the business where changing conditions may introduce business risk.  Risk often translates to opportunity at some level.

A fairly obvious example of this is in the placement of IT departments and services within an organization.  If information technology is viewed purely as a cost-center and a “necessary evil” of doing business, it is more likely that IT services will have a perceived higher cost and lower level of value, as the technology is not considered a player in business strategy.  When technology is leveraged more directly to realize the strategic vision of the business, and is applied in ways which assist in delivering higher levels of service at a reduced cost while providing a means for market differentiation, the positive impacts in efficiency and profitability can be great.

A not-so-obvious example of a cost center which could be re-oriented towards increasing strategic positioning while making a positive improvement in internal service delivery (resulting in increases in performance and profitability) is the area of sales tax compliance.  Particularly with the emerging complexities introduced with cloud and Internet services, and with the lack of standards being the only consistency across the country, sales tax compliance is becoming a significant consideration and risk factor for businesses seeking to adopt cloud services and SaaS application solutions.

“Don’t just think of the tax department as a compliance shop,” says Waterfield. “It should also be considered a profit center. If given the proper resources, and access to information, it can provide the company the ability to become competitive in the marketplace either from assistance in calculating the proper price point or reducing overall tax expense on purchases.”
CFO.com (http://s.tt/1n56t)

Unless the tax compliance department is a direct participant in the consideration and adoption of cloud IT and other services, the business could end up with a significant liability and risk exposure that was not expected or allowed for.  Rather than finding this out after the fact, reviewing these types of potential impacts should be part of that same process which considered the adoption of the solution in the first place.

Accounting and tax professionals can find additional value to deliver to their existing and prospective clients by placing focus on these very important aspects of operating and managing a business.  As technology and globalization introduce more, and more complicated, issues relating to sales taxes and reporting compliance (which even the smallest of businesses must address) accounting and tax professionals should help their clients meet these changing requirements by offering proactive consultative guidance and support.

Make sense?

J

Read more about Should you be paying sales tax on your cloud solution?

Read more about Cloud FAQs for CFOs: CFO.com

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Discussion on hosted service options at The Sleeter Group ASC 2012

Discussion on hosted service options at The Sleeter Group ASC 2012

Are you having a hard time understanding the best approach to hosting your business applications – wondering why it costs what it costs, and why some applications seem harder to get hosted than others?  While installing applications on your desktop seems pretty straightforward, it may seem like nothing short of rocket science to get an application installed with your hosting provider.  And, to make matters worse, a handy little software widget you just bought for $20 now means you must have your own entire virtual server just to run it in the cloud? What’s up with that?

There is a lot of confusion regarding application hosting services, what customers expect from them, and what service providers are reasonably able to deliver.  Unfortunately, software developers, customers and service providers are not always on the same page when it comes to trying to solve the problem or making it easier for businesses to adopt the service.

To attempt to address the issue, and to (hopefully) provide some clarity and guidance around the application hosting service model and its use in your business, I will be presenting a session on application hosting, including QuickBooks hosting, at the 2012 Accounting Solutions Conference, presented by the Sleeter Group and being held this year in Anaheim, California on October 22-24.  The discussion will include information on typical hosting provider models, as well as application issues and considerations businesses should be aware of when looking to have their software and systems delivered by a 3rd party.

In all fairness, I will not be recommending specific providers, nor will I suggest that any one provider is better than another.  Each hosting company has their own strengths and weaknesses, which is true with all businesses.  The focus of the session is helping attendees learn what they need to know to begin a basic evaluation of whether or not hosting of their applications makes sense, and to recognize those factors which will impact cost, performance, and usability.  Further, I’ll also be talking about how hosting isn’t a standalone solution, and how cloud-based applications and services may be combined with hosted application services to deliver the necessary functionality for the best value (“can you say chunkify!” to use a Doug-ism).

So, I guess you need to come to Anaheim in October to learn some stuff, and then take a day at Disneyland.

Make sense?

J

Get ASC 2012 conference session information here

read more about the confusion over hosted licensing on The Progressive Accountant http://www.theprogressiveaccountant.com/tech-tips/confusion-over-hosted-licensing.html

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Price Of The Cloud Still Out Of Reach For Small Businesses? Commercial QuickBooks Hosting Providers offer competitive pricing, but are still largely unknown.

Price Of The Cloud Still Out Of Reach For Small Businesses?

Price Of The Cloud Still Out Of Reach For Small Businesses?

Commercial QuickBooks Hosting Providers offer competitive pricing, but are still largely unknown.

In a recent article on Forbes.com, contributor Gene Marks contends that, for most small businesses, the most cost effective way to run their business IT is locally and not in the cloud.  The contention is that software features and functionality businesses demand isn’t yet available in affordable SaaS solutions, and outsourcing the hosting and management of desktop applications is more costly than doing it yourself.

Because the cost of a cloud solution like the one I have is still too high for most small businesses like mine!  The setup I have would normally run me about $100 per user per month.  Which means that a typical small business with a ten user network would be paying $12,000 per year.   Yes, you read that right.  It’s a great service.  But is it worth that much?  Not to my clients – all thirty of them who considered this option turned it down.  At least for now.  Forbes.com

http://www.forbes.com/sites/quickerbettertech/2012/01/23/price-of-the-cloud-still-out-of-reach-for-small-businesses/

What this author did not take in to account is the aggressive pricing model which evolved around the hosted QuickBooks desktop editions, and how the community of Authorized Commercial Hosts for QuickBooks offer “full meal deal” hosting of those business applications most small businesses know and love.  Because the QuickBooks desktop editions have such a large market of integrations, add-ons, plug-ins, etc. it was necessary for most of the hosting providers to accept hosting of a wide variety of these applications in order to get adoption of the hosted QuickBooks product with ProAdvisors and accountants as well as their clients.

One of the Authorized QuickBooks Hosting providers, Cloud9RealTime.com, offers both shared hosting of QuickBooks desktop applications and Microsoft Office, as well as virtual server environments where customers may run whatever mixture of desktop software solutions the business already has.  By allowing businesses to place all of their licensed products in a managed environment, where installation of software updates and helpdesk support is part of the service, it enables organizations to have the benefits of remote access and high availability service without having to build the capability themselves – and for a fraction of the cost.  Cloud9’s pricing model is far less than described in the article, with services for businesses being available for half (or less) than the $100 per user cited by the author.

The Authorized Host for QuickBooks program and community of providers seems to be fairly unknown amongst small businesses, but owners and managers should look more closely at providers like Cloud9RealTime.com and see what pricing and services are available.  It may change your mind, and show that the cloud isn’t out of reach for small businesses.

Make sense?

J

read more about the confusion over hosted licensing on The Progressive Accountant http://www.theprogressiveaccountant.com/tech-tips/confusion-over-hosted-licensing.html

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Understanding the Customer Journey: Know More and Assign Proper Credit

Understanding the Customer Journey: Know More and Assign Proper Credit

There is a fascinating video of a presentation by Neil Hoyne (self-designated “student of the customer journey”, and Global Program Manager at Google) where he discusses customer attribution and how businesses should more closely measure, analyze and understand customer behavior to understand why some people do or don’t click, buy, or come back for more.  While the conversation focuses on website performance and link tracking, the underlying message applies to all aspects of business relationship development.  In short, it doesn’t usually take just one thing to compel someone to do something.

Neil’s session “encouraged companies to identify more actionable performance metrics and build stronger industry relationships as the advertising market continues its rapid evolution away from last-click valuation.”  In concept, it means that there are many interactions that may occur before someone makes that decision to actually click or buy.   They likely received impressions from various sources (ads, word of mouth mentions, etc.), or performed searches or perused various discussion or information sources at some point before that final “click”.  So, why is that “last click” considered to be most valuable?

If you compare online sales and marketing to people-based sales and marketing activity, you’ll find that users will follow similar paths and interact in similar manners with both mediums.  This is due to the fact that, as Neil puts it, “every customer has a story”, and each is taking their own individual journey.   The path they follow is as individual as the person, but there are ways to identify trends based on how users interact with the business if the data can be appropriately captured and analyzed.

If we turn the conversation to customer management, similar truths are revealed.  For example, in many businesses sales success is attributed solely to the sales team, and compensation plans support the belief that the front line is the essential source for new revenue.  However, the truth may be that the sale was made based on a personal referral from a satisfied customer or perhaps due to a discussion where the service and support was said to be exceptional, or even because the login portal is a pleasant shade of green instead of a dull grey.  Not giving appropriate credit to all of the factors which impact the sale presents a risk to the business, because changes in the approach may result with unintended negative consequences.  Remove the element which supports or encourages the action and you may lose the action, which is more likely to occur if the business doesn’t really understand why it happens in the first place.

For example, a business may decide that a direct sale approach is better than giving up revenue to affiliates or resellers.  However, the business may very well find that it takes the involvement of that affiliate or reseller in order to get the sale.  Pouring more money and resources into the direct sales force won’t make up the difference if the target customer isn’t connecting, or if the company isn’t offering the additional service or value-add delivered by the partners.  Also, if the sales organization is focusing exclusively on new business, where is the attention to current customers?

Businesses are spending tremendous resources in time, money and personnel to try to find ways to reach new customers and markets, yet often fail to fully understand what it took to get the existing customers on board.  Even worse, many businesses resist analysis of EXISTING customer behavior, not taking the time to understand how that customer interacts with and uses services provided, and failing further in identifying and delivering additional value to keep the customer satisfied and coming back for more. Many businesses only address existing users from a support standpoint, yet fail to explore ways to improve retention or up-sell revenues through front line sales efforts.  Again, it is the failure to understand when and why people take action that causes investment and effort to be misplaced, and desired results to not be achieved.

The whole point of this is that the business should KNOW MORE about the various ways users interact with them, and GIVE CREDIT to all of the elements involved in the chain.  If every user has a story, then the business should closely listen to those stories to learn how to increase reach and service delivery to customers of a similar theme (what the customer needs now), and to keep listening and learning in order to understand what the customer needs next.

Make sense?

J

Link to Neil’s presentation here: http://googleaffiliatenetwork-blog.blogspot.com/2012/08/accelerate-deeper-look-at-attribution.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+GoogleAffiliateNetwork+%28Google+Affiliate+Network%29&utm_content=Google+Feedfetcher

Is great customer service the entire customer experience?

You know those car commercials on TV, where the sales person is telling the customer about how great the warranty on the vehicle is?  Yeah – the one where the customer wants to know if they should buy a good car, or buy a car with a good warranty.  Makes you think, doesn’t it?

Read more about using the cloud to extend your access and collaboration beyond traditional boundaries.

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Should you be paying sales tax on your cloud solution?

Should you be paying sales tax on your cloud solution?

There are a lot of undefined issues relating to whether or not sales taxes should be charged and collected on “cloud” services and online applications.  Traditional approaches aren’t quite right, because there isn’t a clear delineation of what is “service” versus “product”.  For example, an online storage service may be “service”, but when you are charged for bandwidth or other elements, it starts to be more product oriented and taxation may apply.  Online applications or cloud hosted software?  In some cases, the platform may be service, but the subscribed application may be taxable software.  It’s a clouded issue for service providers and their customers, alike.

‘Kelley Miller of the law firm Reed Smith, who specializes in technology law and specifically tracks how states have been enforcing cloud taxes, says it’s been a tough issue for states. The DOR says in its ruling that the market is evolving “at a rapid pace.” Traditionally tax laws just don’t work for this new era of cloud computing, she says, because there is not a tangible transaction of a disc or piece of hardware. Massachusetts seems to have echoed findings from other states though, she says. “The essence of the question is, are you buying software that people bought in a box at the store 10 or 15 years ago,” she says. If so, then Massachusetts, and other states, have claimed a right to tax it.’

A recent article on CIO.com discusses Massachusetts rulings on the subject, joining a number of other states in attempting to bring clarity to when cloud computing services should and should not be taxed.  The decisions sound almost as complicated as the underlying issues, so “clarity” obviously doesn’t mean simplicity.

Read the entire article here

Make Sense?

J

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Cloud FAQs for CFOs: CFO.com

There’s an amazing article on CFO.com called Cloud FAQs for CFOs and every business owner, manager, accountant, CFO and CIO should read it.

Here is one of my favorite Q/As from the article:

“Q: But I’m a finance officer, not a technologist. Can you guarantee that the total cost of ownership for the cloud is lower than what I’m already spending for my on-premises IT?
That depends upon what you’re already spending. Do you know?

According to Forrester senior analyst Dave Bartoletti, most companies are not all that good at knowing how much it really costs to run an application because IT departments “are still seen as cost centers.” The company buys the servers, the storage, and the applications, and flips the switch. “What does it cost to run?” Bartoletti asks rhetorically. “Who knows? You just depreciate the assets over a certain amount of time and after they’re fully depreciated, you buy more.” Even organizations that account for staff costs, maintenance, energy — all the indirect spend that goes into producing a service the business needs to run — will probably not be able to cost out individual applications with any degree of accuracy. How much, for example, does your e-mail cost? “If your CIO can’t tell you it’s x, y, z, per box,” Hotels and Resorts CIO Mike Blake tells CFO, “that’s a problem.”

“Enterprises are making significant investments in cloud technology in pursuit of lower costs,” says Dave Zabrowski, founder and CEO of Cloud Cruiser, a provider of cost analytics for cloud consumers, but “if you can’t see what you’re spending, there’s a good chance you’re spending too much.”

And that problem, that financial black box, has been the bane of the finance officer’s life in the IT age. The cloud, if nothing else, presents an opportunity to open that black box”

 Read more on CFO.com (http://s.tt/1jGJU)

Make sense?

J

read more about the confusion over hosted licensing on The Progressive Accountant http://www.theprogressiveaccountant.com/tech-tips/confusion-over-hosted-licensing.html