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February 22, 2010

Early feedback from our customers

Had discussions with few of the IT directors and IT managers of our customers to get the vibes from their end users on the new Windows 7 operating system post the Pilot rollout. What has really excited the business users is the responsiveness of the OS. Few of the business units has come clearly stating that the “time for a user to be productive” once in office has really shortened post the Windows 7 implementation. This is by faster startup and efficient way to access data and applications capability of Windows 7. The time for user to be productive has improved by around 40% from the previous implementations.  The faster shut down time and efficient sleep modes has been eulogized by the IT and business and they have been truly daunted by the overall power management capabilities.  These are real good signs and can further strengthen the need for a better OS for other enterprises who are into their planning phase for Windows 7 adoption.

February 19, 2010

Simplicity is an acquired taste. Mankind, left free, instinctively complicates life.

This is not a blog around a sermon on how we need to live as humans. I came across this quote today morning in a mail forwarded from a friend of mine who herself has 1 blackberry, 1 iPhone, an iPad, a laptop, a desktop at home and a desktop in office…and maybe more - that I do not know; what an irony!

However, most important point is that this triggered my thoughts around what we do in business day in and day out. Some of the thoughts here are disconnected and since I am myself not clear of the ‘right’ way; you will find certain level of cross movements.

The idea of any IT system is to simplify the business processing for the end users while making the end product which will provide real ‘value’ to them. This ‘Value’ is what need to be thought through; is this –

  • Cost of running a transaction
  • Time taken to complete the transaction
  • Effort spend in completing the transaction
  • Number of people involved in completing the transaction
  • Manual steps and ‘out-of-system’ steps involved in completing the transactions
  • Complexity of doing the transaction

I think the last one is actually a summary of all the aspects above that. Anything which takes more time, cost and effort and involves number of people or ‘out-of-system’ steps basically add complexity to the transaction. So, I would focus my thoughts on ‘Complexity’ as of now.

If I have realized the disease, how do I treat it?

While treating a disease, we need to first get the diagnosis right. Here the symptoms are known and are quite apparent; but does that means the solution is also simple. Maybe not!

In an organization running a big business the software solutions (be it ERP, CRM, Custom built, best of breed, On Demand, etc.) are meant to help ‘streamline’ the processes. Out of these the ERP packages have over time become so industry focused that they have kind of built in ‘rigidity’ in the name of ‘industry best practices’. If these ‘industry best practices’ are the way to solve the business issues (which is akin to a ‘template driven solution’ – you have headache, take aspirin), then the ‘competitive advantage’ and ‘USP’ are contradictory paradigms. I have blogged on similar thoughts earlier that you can see here.

There is a need to identify each client as an individual and the business that they run as their ‘own’. The processes and organization traits are the DNA of that client and the solution should be such that it does not alter this DNA. The medication need not have side effects. In some of our clients, we have seen the continuous tussle between ‘best practice’ and ‘my practice’. Once the basic organizational maturity of running business has been established, the software solutions are meant to just help them in achieving ‘improvements’ and not the ‘best practices’. The best practices should be left to be discussed and only the one which are ‘relevant’ need to be included. This brings to the point of bringing the ‘application closer to the business’.

In Microsoft Dynamics space, I have seen that the ‘framework’ nature of the product (I had blogged on this too earlier; you can check that here) can help a lot in helping client achieving this objective of simplicity. There is a need to respect the business for the things that do it the best. The simplicity needs to be maintained so that all end users accept the new system and do not see it as a hurdle in the path of them doing their business.

How many times have you heard this (specially in service oriented organizations; which by the way none of the industries are untouched with) –

  • There is no way I can transfer this till the manager closes this in systemworkflows and approvals should not be taken to extreme in fast turnaround times and need to have an exception path
  • Your name is not here; please send your details and we need to create you as our customer to give you this special discountthis is because the customer creation process needs to capture 30 fields and I front desk person is not aware of that. A simple email registration with delayed update in the process step can help
  • Please tell me the complaint reference number and time of call to help you with the resolutionthe tagging in the system should be with case number; but then at least hear the person out and have a process of email follow-up and which need to be tied with the case finally
  • I have the stock in Inbay; but there is no reference document receiving process need to be flexible to allow temporary storage before put away and matching with PO. In real business, there could be situations where there is a lost PO / Delivery receipt

Point is, have you foreseen the scenarios and seen what matters to your business the most. What are the business values that you need to maintain and then you define your processes (and the flexibility in it too) and let the software solution be the ‘enabler’ in making life simpler for you. I am sure each business would have its own set of desired level for this ‘simplicity’ in the organization DNA.

Are you game for this new paradigm?

February 15, 2010

SaaS makes financial accounting easier

It’s been so much talked and written about technical benefits of Cloud computing. I thought of looking at it from financial accounting point of view. Comparing the traditional IT expenses with Cloud computing expenses especially SaaS model, might give a different picture of the income statement. Before I go ahead and try putting forward my interpretation, want to make a disclaimer that I am no way finance or accounting expert, this is just a plain interpretation of what I understood. Comments and suggestions are most welcome.

I would like to explain my interpretation with an example. Let us consider a manufacturing organization with an imaginary name “OrgABC”, where it wanted to implement an ERP system for better process management. OrgABC invested $120000, in hardware and software to implement this new ERP system.  For the simplicity let us assume OrgABC has some consistent income statement per annum like below.

Line Item
Amount
Sales
$1000000
Cost of Goods Sold
$200000
Gross Profit
$800000
IT Depreciation
X
Operating Cost
$100000
Net Profit Before Tax
$700000-X

Above is the simplest version of any income statement which you would have seen so far. The idea is not discussing about the income statement but gauge the impact of traditional IT spending versus Cloud IT spending.

Now the important part, you could see I have kept IT Depreciation cost as X which is a variable and whole of my academic life I have tried to find out its valueJ, here also the question surfaces again. The value of X here can be calculated with a simple straight line method of depreciation.

Depreciation Value p.a. = (Cost – Residual Value) / Useful Life in Years
For simplicity let us assume Residual Value of H/W and S/W as zero, which is close to the actual hence the new formula
Depreciation Value p.a. = Cost / Useful Life in Years

 

OrgABC accountants and IT people come to a conclusion that the useful life of the hardware and software of ERP system is 3 years and hence the depreciation value comes out to $40000 per annum which in turn makes Net Profit before tax as $640000. But you could argue why it has to be 3 years only it can be 4 years, which makes the depreciation value as $30K per annum and net profit before tax to $650000 which is around 1.5% improvement.

There are lots of cases of using this technique to play around the numbers and show it improved for some benefits where as the numbers are as it is. Accounting and IT team could decide to assume the useful life as 12 years and showing the profit before tax as $690K instead of previously calculated $640K. According to the accounting practices there is nothing illegal here, it is completely the assumptions and biases which we have to make to factor the capital investment using depreciation. Any other stake holder might question the depreciation value and the useful life of the assets which might create friction within the stakeholders.

So, what’s the deal with cloud computing and SaaS model? You might have guessed it. In the SaaS model, we as a customer do not invest anything upfront instead it is pay as you go model like a utility service. Suppose OrgABC plans to buy an ERP service as a SaaS model, they would get a bill generated every month/year for their usage and that’s what they have to pay and account for. No guess work which might have caused wrong impression about the income statements with depreciation in place. SaaS model investment makes the accounting much more transparent as compared to the traditional IT investment where organizations have to show the investment as depreciation. Do accountants think much when they have to account for a telephone or internet bill? Obviously not!! It is very simple and straight forward, so as the case with IT investment in SaaS model.

There are plenty of benefits of SaaS model, transparent and easy accounting cannot be the only reason to go for SaaS model. But in case you are going to buy services as SaaS model, it would definitely make your accounting easier.  SaaS model helps to make the accounting of the IT spending as simple as accounting for a telephone bill, making your accounts transparent, unquestionable and less judgmental.

February 10, 2010

VS 2010 RC and Office 2010 RC

Both VS 2010 RC and Office 2010 RC are now available. If you have access to MSDN Subscriber download site, you can get VS 2010 RC from it. For general public these bits will be available today (Feb 10). Like Beta 2 bits, these bits also come with "go live" license. If you had earlier bits, you will need to uninstall those before installing RC. I was trying to figure out if RC to RTM will be an upgrade path, but haven't found specific information on this as yet. If you know, do write back.

However Office 2010 RC isn't available via MSDN download as yet, but is available on connect site for specific users. If haven't got a specific invite to access Office 2010 RC, then both on connect site or msdn download site you will still find Office 2010 Beta bits.

February 5, 2010

Win 7 - KB954430 installation issue

Recently Windows update had a security update for Microsoft XML Core Services 4.0 Service Pack 2 as KB954430. Like all updates I got prompted to install it, which I did and happily continued to work. But this update had a mind of its own and it would keep popping up again and again and again....

Every time I would shutdown my Win 7 Laptop, I would see the exclamation icon on the shutdown button showing that an update was pending installation. I also went to Windows update screen and installed it directly from there. Every time it would give a success message, but would popup again shortly. So much so, that I have it reflecting close to 30 times in my update history.

Finally searching online gave some hints. Most queries were for Vista, but I assumed that the solutions may work for Win 7 as well. What worked for me finally was to go to add remove programs wizard, uninstalled MSXML 4.0 SP2 (KB954430) and then installed this update again. Since then, I have been able to rest in peace :-).

February 4, 2010

Touch Typing

This topic has got nothing to do with Win 7 and Touch that I have been discussing in some of my earlier blogs, but is more about typing style. Check details here. I came across this interesting blog today, that talks about various typing styles and how the fingers move across the keyboard. Personally I have been using the touch typing style for many years now. Having the ability to type at a speed matching your thoughts can make a person highly productive and efficient.

If you ask me, I feel that everyone working with computers should learn typing.

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