by Elizabeth Hines | Feb 16, 2012 | Blog
As a strategic advisor in the high-tech space, more often than not, at some point the conversation turns to technology and the use of technology to “solve” some particular set of short-comings or business process issues.
To these technology questions, I have a set of hard and fast rules that dictate the purchase and deployment of technology within a business segment or organization:
- When it comes to corporate IT strategy and IT platforms, be sure you are aligned with corporate strategy before you go down an evaluation path for a particular business segment level application. The corporate IT groups are the “keeper of the keys” in this area. They should have a road map that will either confirm your place or suggest an alternate path for you to follow. Either way, it will save you time and money if you gain alignment early on in the process.
- In that same area, if you are on the corporate IT strategy side, be sure that only IT projects that align with the corporate strategy are allowed to pass the first gate or check point on the path to approval and funding. This may sound simplistic, but, look around your organization. You will see may “pet” IT projects that are one-offs to solve a specific process issue and have nothing to do with the larger strategic IT agenda. Sure, they may have been cheap, but the maintenance, dependency and legacy baggage that come along with them suck vital IT resources in the long term.
- Any IT investment that is eventually made must lead to, enhance, and support the corporate objectives. Said another and simpler way, will you make more profit by making this IT investment. If the answer is not a clear and loud “yes”. Look for an alternative to the IT investment.
- Be determined to build one technology platform for your ENTIRE organization. Sure, it is easier said than done. Especially if you are growing by acquisition or on a limited IT budget. That said, in the case of acquisitions; always look to rationalize the IT platforms early in the process. It will pay off in the longer term in big, big, ways like ease of use, information analysis, budgeting, and the financial period end roll ups. If you are “boot-strapping” your IT platforms, discourage the “buy it now” mentality for the more disciplined road-map approach. Again, this will save time and money in the longer term.
- Whichever platform you choose, be sure to get the reporting module that goes along with it. So often I see companies’ cheap out in the reporting area when they purchase IT platforms. Sure, the users are adept at manipulating the software, but if the business folks can’t access the data to drive the business forward, it’s an orphaned platform. Business knowledge is business power…enough said.
- Lastly, don’t forget social media. Yeah, it’s for businesses too. I continue to learn this lesson the hard-way.
Most organizations waste time, money and miss profit opportunity by letting their IT platforms organically grow and develop. Having a well aligned IT plan with your corporate strategy pays dividends in the short and long term.
by Elizabeth Hines | Feb 10, 2012 | Blog
Being in the strategic advisory space, I get a lot of exposure to various business strategies, strategic plans, and sales plans, both internally to organizations and from outsiders looking to raise money or gain influence.
What I have found is that most of these “plans” spend far too much time on what I like to call “creative accounting”. That is, the artful creation of financials that match and make numerical sense, but have very little credibility in the real world because the important business details are left out.
Businesses spend far too much time creating numbers and spreadsheets and devote too little attention to information that really matters. As a result, any plan that cannot be substantiated outside of a spreadsheet is doomed to be discounted…and so are the presenters.
Don’t get me wrong, you need to have a financial base and rock solid financial modeling in your planning efforts or all bets is off. But alongside of that, spend some time on building credibility in those numbers by focusing on what interested parties need to know outside of the spreadsheets in order to make an informed decision…one that’s in your favor.
Specifically, I encourage clients to focus on these items in order to build credibility in their financial plans:
1) What is the opportunity? What the business will sell, who is buying, why are they buying, how much are they buying now, and how much and how fast will their buying increase (or decrease) and why?
2) Who are the people involved? The internal team, the external team, any outside resources or partners providing key services or important resources, contingencies for the partnerships and the switching costs involved if needed.
3) The financial context. How will interest rates, buying trends, competition, demand, and for that matter, supply shape the financials of the plan.
4) The up-side and the down-side risk. What can go right or wrong, to what extent (up or down) and how will the team or company adjust to the increased revenue opportunity as well as the opposite…the decrease in the need for the product or service. Do these risks and rewards make sense in real world scenarios?
Gone are the days where financial engineers can develop models without operational integrity. Models that make sense financially and operationally are now in vogue…thank goodness.
by Elizabeth Hines | Jan 30, 2012 | Blog
I was recently involved with a client’s business planning process for 2012 through 2014. You know the one, the typical 2 year process where after the first 12 months of forecasting, the data really starts to get fuzzy.
When I asked my client why they were so confident about the first 12 months and so ambiguous about the second 12 months, her reply was “we always go by our gut instincts that far out”. I then asked what results this “gut instinct” had gotten her organization. To this, she replied, “that’s why you’re here”.
From there, it was pretty straight forward. The client’s first 12 months of data was iron clad. Sales revenue, expenses, contingency planning, headcount…all buttoned up nicely. The second 12 months, not even a shred of data. When I asked her why, she replied, “I never ask for data that far out.” That’s when things started to click for her….
In forecasting or any kind of business planning, your results are going to be as good as the data you build your model with. As a manager or executive, demand proof of data and look closely at the assumptions. Data is easy to produce; accuracy is the tougher piece, so look at the assumptions and see if they make sense. If it’s a new program, encourage a simulation or better still, a pilot. You can learn a ton from live pilot programs, all before you go “really” live.
Using the “trust but verify” method with your team will streamline your planning process and yield more accurate and better results.
by Elizabeth Hines | Jan 18, 2012 | Blog
Running a strategic consulting business for the high-tech supply chain, I encounter many companies who ask me to institute the “best-practice” for their particular need or business segment. The term “best- practice“ has almost become synonymous with success. I hate to be the one to break the bad news to these executives, but nothing could be farther from the truth. Sure, I can take a concept from any one of the successful companies I have worked for and slam it into your organization, but does that truly guarantee success?
Generally, when an executive client wants to take the best-practice route, I ask them these three questions:
1) Can they afford the down-side associated with the so-called best-practice? Sure, it worked elsewhere, but not all business environments are equal. In fact, none are. Using a best-practice process is great, but this is also an opportunity to assess any down-side this process change will create and mitigate those areas ahead of time in order to drive the maximum benefit from the change.
2) Can the industry leader who developed the best-practice truly attribute their success to this one business practice? Probably not. I usually encourage my clients to take a holistic approach to change rather than a “me-too”, one and done best-practice strategy.
3) Can the best-practice be transferred to your organization? In order for a best-practice to make the impact anticipated, the environment it is being implemented into needs to have certain similar characteristics of work force and business model to the company that developed the best-practice. If not, I usually suggest a strategy that will work in my client’s organization today, with a migration plan to the best-practice go forward. In this way, the client company gets the best of both worlds. Success today and a platform for continued success for the future.
In short, adopting best-practice strategies are great, but getting the best result for your organization should drive your overall strategy when considering this option.
