EVS Blog

In October 2008 my wife and I unexpectedly came across a house in Boulder that we decided had to be ours; 45 days later is was. The issue was our old house, we hadn’t really planned to buy a new house so we weren’t prepared to sell our old house.

I’ve sold other houses in the past and was hesitant to use a real estate agent because my past experiences were that they did very little and were paid a lot. After trying to sell the house FSBO I eventually I caved and hired an agent. This person came highly recommended to me by our tenant.

Like any real estate agent, this guy looked at comps and gave me his recommendation on where the price should be, unfortunately it was 10% lower than my appraisal. We split the difference and listed the house – after 3 months we had no viable offers. When the listing contract was up, I told the guy that I would extend his contract for one more month if he did an open house…yes, in three months of listing, he didn’t do one open house. He declined, as it was too much work for the price at which the house was listed.

Two months ago I engaged a neighbor from the old neighborhood. I hesitated to do business with her because she and my wife were friends. Again, I caved and let her list our house. Fortunately, that was the single best decision I’ve made for a long time. This agent (we’ll call the “expert”) did comps similar to the first guy (who we’ll call the “novice” though both have about the same number of years in the industry) evaluated the neighborhood and worked with me to determine the best price to offer the house. Before we listed the house she had some of her colleagues look at the house and get their feedback.

The feedback was that in order to sell the house for the price we were asking we needed to replace our kitchen counters, replace a broken ceiling light and get rid of a broken branch from a tree in the lawn. The agent helped us decide the best value of counter tops, found an electrician and found a tree trimmer for us. She was the project manager for these as well as many other smaller items that came up through the sales cycle of the house. To complicate things more, we had renters in the house. This agent took the initiative to work the the tenants and their schedules to keep everyone happy; which she did beautifully.

Within two days of listing, we received an acceptable offer and closed two days ago (that’s why I haven’t had a post for a couple days).

In this case, the expert knew what we wanted to sell the house for and told us how to achieve that goal; the novice took the house as-is and wanted to discount for flaws and offered no suggestions for improving them. The expert saw issues with our house and took the initiative to project manage and get them fixed; the novice was hands-off with the house. The expert was engaged with the sale, the novice wanted a quick turn at a cheap price.

The result; with the expert we sold the house quickly and the difference between what we actually sold our house for and what the novice wanted us to list it for was greater than the sales commission on the house. The expert added real value to the sales process.

Regardless of what service you need from professionals, you are always better off with an expert than with a novice. Don’t be fooled by someone who has been in the business for a long time. The difference between a novice and an expert isn’t tenure, as a novice can make the same mistakes for a long time and still be a novice.

There are many reasons why everyone at EVS uses a Mac; speed, usability, flexibility, etc. As I read my favorite social media site (www.mashable.com) today I noticed an article titled“”Malware Attack Targets iPad Users.” http://bit.ly/ajV3Jz

The last sentence read as follows: “Once again, this targeted attack only affects Windows users; if you use a Mac, you’re fine.”

How much time and money did EVS save by not having to deal with this malware? If someone accidentally installed the virus, how much time and effort would it take to get rid of it?

Reason #745, why to own a Mac – no Malware.

As many of you have seen in the last couple days, EVS is offering a free upgrade from the Sage Warehouse Automation (aka Scanco Barcoding) to our O2 Mobile Warehouse. Many resellers have asked why we are doing this. The answer is simple “the people have spoken.”

The arrangement between Sage and Scanco was on OEM agreement which is very common and healthy for the ERP industry. I know that Sage and the reseller channel were diligent in letting customers know that the warehouse automation was a third party application. Unfortunately the cancellation of this agreement between Sage and Scanco immediately stopped some of the benefits that customers thought they were buying into. What I have seen/heard from some is that they bought this system because Sage was behind it and there was one number to call for support.

There were also feature and other issues that were mentioned but those points will not be discussed here. The bottom line, enough people asked me to provide a solution for their customers so we did. This promotion, highlighted on our website www.evs-sw.com, will be presented tomorrow, Tuesday April 27th at 10:00 am Mountain Time. If this affects you, please feel free to join; you can register on our website.

Anytime the masses speak loud enough, aggressive solutions usually happen.

As I wrote in my first “You’re the CEO” challenge, CEO’s are constantly asked to make decisions. Here is your challenge #2:

One of your star employees has been with you for a year and a half. One day he comes into your office and notifies you that he has a great offer with a competitor and will be leaving in two days. Your efforts to talk him out of it fail and two days later he is gone.

Three months later he shows up in your office, “I made a terrible mistake,” he says to you “this is the company for me and I am committed you and this company from now on.”

You, as CEO, respond with …….

I write contracts for consulting services at EVS nearly every day. It makes me crazy that the industry standard for ERP implementations is time/cost estimate then time and material billing.  Because the nature of these agreements an hour worked is an hour paid.  These agreements have a goal in mind, however there are no actual legal guarantees binding the actual project goal to achievement. In other words, people sign up to receive a resource to do work, with hopes it gets done — in the meantime, they pay for the resource on an hourly basis.

If you’re truly an expert at what you do, why not charge a per job fixed fee? Sure there are variables that could change the project but again, if you’re an expert you will know how to write an agreement with a scope that’s locked down. If changes to the plan happen (as they sometimes do), write a PCR (Project Change Request).

With a fixed fee, an expert is rewarded by having the best and most efficient resources on the project. On an hourly billing plan, a thorough but slow working resource is the most rewarded.  The same inverse and twisted relationship exists with project management; when a project is in control and run tightly to plan, the amount of project management hours decrease. When a project is out of control the hours spent managing it increase drastically. These are hours you’re paying for on a time and materials contract!  Again, why would you provide cash incentive by paying more hourly fees to a project manager running your project out of control?

Stop the insanity of rewarding sub-par work performance from your vendor(s); hire an expert, check the references and pay on a per project fixed bid basis. Shift (or share) the burden or risk. Be weary of any “expert” not willing to go fixed bid on a well-defined scope of work.

Henry Ford once said that you can have any color of car you want as long as you want black. Today, you can own a car in multitude of colors as well as black. Ford eventually came to the realization, probably through competition, that people want some level of personalization with their car.

Personal ERP – sounds like an oxymoron. ERP has traditionally been impersonal, one-size fits all: you can have any sales order screen you want, as long as it’s the one we provide.

As users become more demanding on specific features, ERP publishers continue to cram more features into their one screen. What ends up happening is that 10% of the features on the screen are used for most transactions by most people.

I love my iPhone. My first screen is for widgets that I use frequently, the second is for news widgets, the third for my social media widgets and the fourth for my daughters games…ok so I play some of them too. My iPhone is personal, I decided what widgets apply to me an how they should be arranged.

For my Twitter widget, I was able to chose from about 30 options with various features. Personally, I liked the simple, easy to read and use version, some people prefer the completeness of Tweet Deck. If Apple told me that they had one Twitter screen and it has every feature ever asked for in a Twitter widget, I would probably pass.

Wouldn’t it be amazing to have the flexibility to chose from 30 different sales order screens for your ERP? Since we are dreaming, what if we could own multiple sales order screens – one for quick entry/counter sale, one for international sales and maybe one with line level controls. What if 90% of the features on the screen were used and 10% were for common options? And what if I could access the widgets that apply to me from a layout that makes sense to me?

How would that improve efficiency of data entry? How would that improve the amount of costly ERP implementations? How would that improve the ability of your ERP to change with your changing business?

Thanks everyone for the feedback on my first CEO case; Sales Team. As a CEO there is no “right’ answer so you have to analyze the case, weigh the effects of various decisions and keep your moral compass at hand.

Here is my thought on this case:

First, you have a sales manager and you need to honor his position and authority over his employees. Your response should be to him and not to the employee directly. The sales manager should be compensated on profitability so he should be incented to make a good decision for the short-mid term.

I’d want to know whether #1 or #2 generated their own leads that closed, it’s unknown whether the margin was from the original leads or from new leads, I would assume that #1 generated and closed at least one self-generated lead.

With #3 spending all of his time on the two leads, the $7,000 margin was probably a “blue bird” and he simply took the order. If by chance the two leads closed, what would salesperson #3 work on next? You can’t build a sales team on “hope” and blue birds. I would image that the salesperson is getting a salary so every month that the deals don’t close cuts into the margin of those two deals. The margin doesn’t seem to be terribly high on the product so you don’t have much time to make a decision.

I would recommend to the sales manager to find out how #1 has become so successful; how he’s generating leads and managing his pipeline. I’d also suggest that he reassign #3’s leads to #1 and help #3 with his resume.

Obviously there are many factors that are unknown and there isn’t a “right” answer. But as CEO we need to know the questions to ask, the people/positions to honor and be able to make good decisions frequently.

The ERP paradigm of feature rich has become feature before function.

This concept has manifested into transforming ERP publishers into machine(s) doing nothing more than pumping out features, inadvertently introducing bugs, increasing implementation time and costs, inventing features and reports we never knew we needed.

Most ERP publishers are large — having spent 10 years of my career at a company that employed over 300,000 people — I understand large and what it means to innovation. Large often lacks the focus on the human factor of technology, rather the focus on making technology, for technology’s sake.  They often lack personality or character; the large strategy: make features to sell, people will adopt these features, their policies, their perceived infinite wisdom… there is no “me” in technology. So, it leaves me wondering, who are they writing this software for?

Revolutions of government, culture and technology have been about  one thing, people. What we’re about to see in the ERP space will again be about people.. has it already begun?

I have a library full of books on entrepreneurialism and sales; many very good. In my opinion of being an entrepreneur/salesperson for over 13 years, the most realistic and insightful book I’ve read is Dr. Seuss “Oh the Places You’ll Go.” It’s one of the few (maybe the only one) that takes you on the true entrepreneurial journey.

The book (written in classic Seuss style of second person and future tense) is about a young man (“you”) who chooses to break out of the ordinary and become an entrepreneur. He realizes that “You can steer yourself any direction you chose. You’re on your own and you are the guy (girl) who’ll decide where to go.” He faces ups and downs, trials and tribulations and scary situations, but he keeps moving along victoriously.

I read this book to my 4 year old daughter every chance I get because there is so much wisdom and experience in this simple short children’s’ book. If you are an entrepreneur, you will probably recognize the ride, if you aspire to be one, this is what it will be like.

So for you aspiring entrepreneurs, “Today is your day! Your mountain is waiting. So….get on your way!”

As an owner of a company, I am faced with making many decisions on a daily basis; some significant, some less significant. I thought it would be fun to have my reading audience become a CEO and work through a decision making process with me. Give me your decision by commenting to this blog.

Scenario:

Your company sells ERP systems and puts it’s salespeople through extensive training. It is estimated that sales training costs the company $10,000 for each salesperson. Three new recruits join the firm and go through training. After the training, the salespeople are given qualified leads; the first gets 5 leads, the second 3 the third 2; all deals are estimated to the about the same size and the average sales cycle of an ERP is 6 months.

In the first six months the results were as follows:

1) The first salesperson provided a net margin to the company of $70,000 and is still working 3 of the original leads
2) The second salesperson provided a net margin to the company of $30,000 and is still working 1 of the original leads
3) The third salesperson, shows tremendous long-term potential but has only brought in $7,000 of margin, none from either of the two original leads. To ensure that the two leads he was given close, he is spending every waking hour on those deals.

As CEO, how would you advise your sales manager?