Public sector (state and local) – technology trends and ideas

Increasingly “Voter ROI” is becoming important – investments that improve constituent/customer service, that in turn improves voter satisfaction. Government Financial Officers now consider environmental benefits in ROI calculation in addition to dollar benefits. Here is a quick look at the trends and some ideas.

Parking meter in Germany

Parking meter in Germany

Parking

I would really like a “system” that I could access on my browser-enabled phone to not just find parking spots but know which ones are available/full, and the cost. This will avoid me from driving around to find available parking. Further the data should be provided to FM/MSN traffic data for use in GPS (may be revenue source for cities). In addition it will be sweet to be able to use my smart phone to pay parking meters and extend the time without having to leave a meeting and walk downstairs. I would not recommend this for every city but this will be very useful in metros like Chicago and New York with parking scarcity.

Several airports and universities provide parking availability online. San Francisco is implementing a mesh of sensors that will be implanted on the roads to monitor availability of each spot.

To calculate ROI for Chicago consider how many people keep driving in to Navy Pier or the Zoo during summers to find out that the lot is full. I use public transportation if I have to go to the city during the week but I would imagine that such a service would be needed even more during week days.

Shared services, Consolidate, Standardize, Virtualize, Cloud and Software as a Service (SaaS)

Technology services don’t need to have the same boundaries as the government structure. Example – email  infrastructure can easily be shared across cities and counties with a method to bill-back. Similarly every library does not need its own independent system. This idea can be extended to servers and Enterprise Resource Planning (ERP) systems for financial management, human resources management etc.

Tucson AZ has already done a project to consolidate and standardize. Missouri consolidated data centers to realize a $2.4 million reduction in assessments to state agencies in FY06.

DC has implemented google apps so they don’t have to install and maintain email, document processing infrastructure etc. GSA provides a list of cloud computing apps on Apps.Gov.

Besides dollar ROI there are also green benefits for data center consolidation. I have not calculated the environmental benefit, if any, of cloud computing.

Social Media

Blogs can be used to improve communication with the constituents.

San Francisco has launched a twitter 311 program to provide an alternative to the phone service.

Wiki sites open up discussions and help identify solutions to problems.

Online polls help seek feedback and guage perception.

Online forms can be used to encourage whistle blowers to report corruption and wrong doing.

Professional groups on networking sites liked LinkedIn can increase communication between government officials beyond annual conferences to share ideas and challenges. School administrators, CIOs etc can all increase cooperation and collaboration.

Telecommunications

Voice over IP (VoIP) is a technology that routes phone calls over the internet instead of the traditional phone lines – this method typically has lower phone bills.  Also telecommunications companies are now much more open to re-negotiate contracts.

Mashups

Technologies can be combiner to create powerful systems. Geo-spatial software like Google or Microsoft maps can be combined with data about housing, crime, school performance etc to provide use information to the citizens. Another example is citizens using this technology to tell city about the location of potholes on a map. Seattle has mashup showing Fire911 calls at http://web1.seattle.gov/mnm/?tabId=2.

Online customer service

Online request systems can help reduce wait time on the phone and increase customer satisfaction.

Telecommuting

Telecommuting is not common yet in the public sector. The commercial sectors have seen a move towards shared workspace and telecommute to reduce real-estate expenses. Video conferencing is increasingly being used to limit travel.

Open source

Open source is increasing being used as budget pressures increase. It saves RFP process and licensing cost. However you need to focus more on support and training.

Transparency

Some state and local governments are making all kinds of data available online such as financial transactions (all purchases by government), crime statistics, building permits, and restaurant health inspections.

The truth about IT costs

Information technology (IT) budgets can seem big and “non-core to business”. Component business model techniques are often used by IT outsourcing vendors to identify what should be “given” to them. Before outsourcing or layoffs make sure you have leveraged your employees to the best extent possible. While some of the below considerations may appear to be common sense these are facts and not specific to IT only.

Internal-billing
Does your internal billing method require that staffing contractors be assigned to a single “internal customer”? If this is the case the “shared services” model may be very inefficient – especially, for example, if you on-board developers when business requirements are still being defined. A project may not need 100% of a contractor’s time during all phases of a project. You should be able to use them across projects during the under-utilized phases.

You get what you pay for
Don’ always look at cost as an hourly rate. What matters is the cost of the total solution or the cost of service provided to business. If you pay below market rate you may get people that don’t have the needed experience or skills. Learning on the job impacts turnaround time and quality – a cost that may not be directly visible.

What motivates people
Senior management is often measured by the size of budget and the number people they have managed. This model may not provide them an incentive to take the risk to reduce headcount or budget or negotiate better rates from vendors. Give them real rewards for improving efficiency within the bounds of acceptable service quality. Smart companies train and extend the expectation of “improving how things are currently being done” to all workers, not just senior management – they are the ones who know whats really happening on the floor.

Technology overlap and acquisition
One of the biggest benefit you can get from an Enterprise Architecture team is an enterprise-view of IT. This is immensely helpful during new technology acquisition and M&A. Give them the authority to identify existing and potential “waste” and standardize. A key step before acquiring new technology is to separate process benefits from tool benefits. ROI measurement for a new tool should not include benefits that can be achieved without the tool.

Measurement
Knowing the true cost of an initiative or project and the effort being spent on different tasks is worth it. Typically true cost of a project is not aggregated across departments and cost of employees may not be included. A good starting point is to record worker time at project/task level and to ensure there is a single common definition of how time is entered. Are the contractors entering the actual time worked for the week or what they are supposed to bill? The process for measuring correct ROI is a one-time effort that pays off tremendously in the long run. If you are not measuring you won’t know what to improve and you can’t reward people for improvement.

IT Management is not General Management
Its one thing to motivate people and manage “fires”. Managing IT for the optimal performance requires understanding IT in additional to General Management. Importance of source control, best practices, reusable components, and IT processes for your mission critical application may not be well understood by general managers. Within IT, operations management is different from product/application development. Ensure that your people are trained appropriately for the job.

Process and Quality
The goal of process and quality initiatives is to meet business objectives better. Sometimes process and quality initiatives are not implemented correctly, and people arrive to a conclusion that its an overhead. Ensure there is a clear linkage and measurement for how the goals are met.

Outsourcing
If you do decide to outsource part or all of IT, existing cost is only one decision criteria. What will be the motivation for the vendor to consistently leverage new technologies or process improvements to increase their efficiency? How will service quality be ensured, measured and improved? Are you locked-in or does the contract allow you to exit if you want to in-source or change vendors? What happens if expectations are not met?

IT is Business
IT is a part of business just liked finance is a part of business. You may outsource payroll but the essential function of finance is still to manage funds to increase profits. Similarly you may outsource IT infrastructure monitoring but the essential function of IT is still to manage technology to increase profits. And that is the question. Does your IT support requirements from business or is it part of business and together they come up with innovative ideas for competitive, top-line, and bottom-line improvement? The real goal is not to reduce the IT cost but to increase business profits.

No Olympics in Chicago, now what?

Foggy Chicago skyline

Foggy Chicago skyline

So we won’t get the economic boost from Olympics, lets move on. The issues at hand are economy, education, environment, crime, and corruption. Quick thoughts on the first two –

Economy

While the fortune 500 have been laying off, small companies have quietly generated 60 to 80 percent of net new jobs over the last decade. What Chicago and Illinois need to do is make life easier for startups, self-employed, and small companies. One of the big reasons keeping people away from going on their own is health insurance cost. While we are waiting for Federal health care reform lets change Illinois laws so people can group together and get lower rates.

Education

While the West is dissatisfied with its school system, the East is trying to follow the West. India recently eased the pressure on 10th grade students. May be grass is greener on the other side. One thing that we do know is that hard work pays. Reduce the summer vacation, it will be worth the investment.

Information Technology to realize Smart Grid vision

R&D as a % of revenue - National Science Foundation

R&D as a % of revenue - National Science Foundation

Electric utilities spend an amazingly less amount on R&D (0.2%) compared to other industries. Information technology (IT) will play a big role to realize the Smart Grid vision.

Enable active participation by consumers. The smart grid will give consumers information, control, and options that enable them to engage in new “electricity markets.”

Role of IT: Educate consumers through cost-effective online training, spread the word through online social media, provide online portals/dashboards to provide relevant information and applications to consumers.

Link buyers and sellers together – from the consumer to the Regional Transmission Organization. It will support the creation of new electricity markets from the home energy management system at the consumer’s premise to technologies that allow consumers and third parties to bid their energy resources into the electricity market.

Role of IT: Trading platform – eBay for peddling energy

Monitor, diagnose, and respond to power quality deficiencies resulting in a dramatic reduction in the business losses currently experienced by consumers due to insufficient power quality.

Role of IT: System to monitor quality and implement notifications and corrective actions in real-time

Optimize asset utilization and operate efficiently. Operationally, the Smart Grid will improve load factors, lower system losses, and dramatically improve outage management performance. The availability of additional grid intelligence will give planners and engineers the knowledge to build what is needed, when it is needed, to extend the life of assets, to repair equipment before it fails unexpectedly, and to more effectively manage the work force.

Role of IT: Asset Management system, Analytics/Business Intelligence Software

Anticipate and respond to system disturbances (self-heal). It will heal itself by performing continuous self-assessments to detect and analyze issues, take corrective action to mitigate them and, if needed, rapidly restore grid components or network sections. It will also handle problems too large or too fast-moving for human intervention.

Role of IT: Real-time monitoring of the operational environment with intelligence for actions

Operate resiliently against attack and natural disaster. The Smart Grid will incorporate a system-wide solution that reduces physical and cyber vulnerabilities and enables a rapid recovery from disruptions. Its resilience will create an image that intimidates would-be attackers. It will also be less vulnerable to natural disasters.

Role of IT: Support security, disaster recovery and continuity planning for all IT systems

Author: Rohit Arora
based on information from Department of Energy

The business ROI on green strategy

Patni_Noida_Building

Patni NOIDA India - largest building outside US to get platinum LEED rating

Several executives view sustainability and green initiatives as an increased cost. Its typically treated on the social responsibility agenda and not a core business strategy. Concerns include reduced competitiveness, and time and effort requirements.

On the other hand becoming environment-friendly may provide more benefits than expected. Several companies that started their “green” initiatives due to the push from environmentalists or regulators have discovered much bigger benefits. GE is an excellent example of a smart company that has moved from getting negative PR for polluting the Hudson river to a pioneer in environment-friendly products from bulbs to wind turbines with each business having an environment focused agenda.

  • Improving process for sustainability includes analysis of inputs and outputs. Its a smart business improvement method for improving top-line and bottom-line. Cisco now uses returned equipment internally, this step contributed $100 million to the bottomline in 2008.
  • Early movers will gain competitive advantage in innovation. Tide Coldwater from P&G avoids the need for hot water for washing clothes. This not only reduces the carbon footprint but also reduce consumer’s electricity bill in addition to providing P&G the competitive advantage.
  • Green products and services can create new market opportunities, and get higher selling price. For its printing business Fedex can now print at a local Kinko’s and deliver to the customer in the morning. It provides a faster turnaround time, less transportation cost, and is more environment friendly.
  • Reduced risk includes regulatory, supply disruption, energy price hikes, litigation, reputation, and environmental imbalance.
  • Positive public relations increases sales. Even though Clorox charges a premium for its Green Works line of non-synthetic cleaning products, the market has grown 100% to $200 million.
  • Reduction in absenteeism and increase in productivity and job satisfaction of employees.

China has a green agenda. What’s stopping your business?

eCommerce strategy for startups

Chess_boardLet’s start by agreeing that Amazon.com is not everything for everybody. Here are a few ideas to get you thinking about your eCommerce strategy.

  1. Be one of the best available
    Define your target customer. Whether you are selling horse saddles or daycare services, know your competition and strive to be one of the best in your category. The definition of best depends on what you are selling. You don’t always have to be the cheapest price provider.
  2. Prioritize
    Since the definition of best depends on the kind of product or service you are selling, your eCommerce strategy will be different than others. Identify the features you need for your business and prioritize the implementation plan.
  3. Try out new ideas
    Try out new features. There will be some that customers will find useful and some that they may not. You won’t know until you try. Try out different pricing as well. Lower pricing may increase sales volume and more than make up for the reduced margin. Or it may not.
  4. Listen to the customers
    Provide ways for your customers to provide feedback. Offer help while they are placing order, ask for feedback after they place an order, communicate if they can’t find what they are looking for, and ask for feedback after the order is complete. Acknowledge receipt of feedback immediately and act on the feedback.
  5. Pictures and Description
    The customer essentially selects a product or service based on the picture and description. They need to be good. Provide multiple pictures if applicable. Provide as much information as you can about the product or service and its usage.
  6. Customer feedback and ratings
    While the pictures and description help the customer select products, feedback from other customers really bolster their confidence. Keep in mind that getting customer feedback may not be possible for all business models especially for gift businesses.
  7. Referrals
    Give an incentive to the customers to spend their time to refer your site to their friends. Think about how much money you have to spend in acquiring a new customer, share the savings with the referrer.
  8. Let the customers find you
    Customers may have different ways to find you or your competition. You may need to be on the paid search like google adwords, organic search (SEO), comparison shopping, existing sites like Amazon and eBay, and media advertisement like radio, magazines, and TV. In addition if you have very specific target customers you may need to attend specific conferences, events, or trade shows.
  9. Keep it easy for the customer
    Keep the customer’s shopping experience as easy and fast as possible.  Provide the information (like specs and ratings) they need to make the buy decision, and enough payment and shipping methods. Offer combo deals, cross-sell, and up-sell so they don’t have to look around. Keep the delay in responding to emails or picking up the phone minimal. The order process doesn’t end after the order is placed – it ends when the customer is satisfied with the received product or service.
  10. Push information
    Don’t make the customer ask you for information like shipment tracking and delivery status. Notify them.
  11. Keep in touch
    Find ways to keep in touch with the customer. Inform them about new products or features, price drop notifications, event reminders etc
  12. Reduce returns
    Customers return because its not what they expected or there were quality issues. Provide as much information as you can about the product, usage, and specs. Monitor the quality of what you have sold and discontinue or improve as needed. Reducing returns not only improves bottom-line but also improves increase sales through referrals.
  13. Affiliate and Dropship programs
    Provide affiliate, corporate, and dropship programs to resellers if applicable. It could be a win-win situation. I know product companies that sell more through their affiliate and drop-ship program than through direct customers. Drop-ship and corporate programs also reduces the risk of credit card theft.
  14. Outsource
    Everyone outsources shipping even Amazon.com. Consider using a standard eCommerce application and hosting provider. There are plenty of ways to differentiate yourself and be the best. You will still need someone to manage it, only less. And your upfront cost will be a lot less. There is a minimum standard that customers expect in the look and feel of eCommerce sites, it reflects the quality of your product/service.
  15. Shipping cost
    Provide enough shipping methods as mentioned earlier. Don’t make shipping a profit center. Select the shipping provider with the best service, negotiate for the best deals, and pass the savings to the customer. If you have to select between better service and higher cost go for better service, its cheaper in the long run and the difference may be minimal for the customer.
  16. Don’t expect a profit on every order
    You may have to provide flat-rate shipping for simplification. You may also have to resend an order due to a lost package or incorrect delivery. Keep the customer happy. Accept your mistake and let the customer choose between redelivery or refund.
  17. Create customers
    I know of a company that sells to small businesses that make gift baskets. Not only do they sell the gear on their web-site, they also offer online classes and go around the country to educate potential customers on how to start a gift basket business. That is how you make customers before any one else.

Scalability: Six quick tips to handle growing load

800px-Truck_heavy_loadHandling more customers or revenue may not be as simple as putting in a bigger computer. You need to jump in and understand the business processes, user behavior, and technology design. Here are some tips –

  1. Unwanted load
    Identify and measure the different sources of system load. There may be extra load on the system than is really needed. Example – for a call center of an eCommerce company you don’t want customers calling in to find order status. Email them the shipping tracking# and status updates.
  2. Who is slow?
    The throughput of a system is determined by the slowest component. Identify the flow within the system and measure transaction times. The slowest components are your low hanging fruits.
  3. Automate
    Manual intervention is obviously slower than automation. I had a customer that had a 15% error rate to perform optical character recognition (OCR) of the incoming faxes. They had two full-time resources to manually handle the OCRs that failed. In order to meet the business growth they would have to hire 140 people to just manually fix the failed OCRs. The correct solution was to lower the OCR failure rate.
  4. User instructions
    Evaluate if user instructions can be improved to speed up the process or lower errors. I was able to reduce error rate in the above example by 15% just by improving instructions for users on how place the paper on the fax machine.
  5. Parallel processing
    Instead of one big sequential process the tasks can be broken down and performed simultaneously. Think of it like an assembly line. It would take much longer if you were assembling a car one task at a time.
  6. Skill requirements
    Consolidate technology and try to select ones for which people are readily available – you will have less variables and also lower cost. The more the technologies that make up the the system, the more the skill requirements for the team. Finding skilled resources takes up time and slows down the scalability work.

Author: Rohit Arora

Agility for world-class organizations

Agility_kelpieI define agility as the speed with which an organization responds to changes. Agility is even more important for small companies or new products because potential for growth is much higher than a large company or an established product. Ex – iPhone sales increased 500% last year, you wouldn’t typically expect that kind of growth for an established product.

Information technology has helped speed up operations. At the same time information technology systems can be slow to change due to the design complexity. There are two important situations for a world-class organization from an agility standpoint.

Top-line: How fast can you enable revenue recognition?

Examples –

Bottom-line: How fast do you learn lessons, reduce cost or downsize? Do you?

Examples –

  • How soon can the business stop using the old supplier after a better priced vendor is selected?
  • How soon can the business consolidate from three 3rd party logistics providers to one?
  • How soon can the business consolidate from five regional order management system to one global system?
  • How is the variable cost of IT budget adjusted when business revenues are expected to dwindle.

Agility is not something that you accomplish overnight. Here are some tips –

The soft side of a world-class agile organization

  1. Agility comes from the design. You have to define your agility goals and design your systems around these goals. Example – When I was at Motorola our agility goal was to be able to speed up divestitures. We designed the systems so there will be minimal disruption when they are outside the firewall and owned by the company they are sold to.
  2. Contrary to common belief there may not be an additional cost to design systems to be agile. The reason some IT systems are not agile is not usually because they were designed in a hurry to meet business need but because someone else designed another system that does a similar thing – and now you have two systems to maintain thereby reducing agility. I have seen a situation where the company ended with 50 different ways to send a Purchase Order to 50 vendors because every new vendor was treated as a new project.
  3. Reusability and Services Oriented Architecture (SOA) are hot buzzwords. However you will not achieve reusability or agility just by buying SOA technologies. The trick to achieving reusability is to identify an “owner” for a business process or department that is responsible for agility of its IT systems. Individual project teams should look up to this individual to identify reusability opportunities at the start of a project. Agility requires department/enterprise knowledge, individual project teams may not be able to accomplish it on their own.
  4. Expect each manager to consistently improve their process and efficiency. Identify opportunities to automate, reduce waste, and speed up information access. Read our case study on how we reduced cost and turnaround time of a large-scale global program by 50% while delivering 500 projects on-time.

Technologies for the world-class agile organization

  1. Cloud computing and Software as a Service (SaaS) models allow for faster scaling up and scaling down of your infrastructure.
  2. Agile programming allows for faster turnaround and lower cost of building applications compared to traditional waterfall model.
  3. Virtualization and provisioning technologies automate and speed up infrastructure deployments.

Author: Rohit Arora

Does twitter help sell smartphones?

phoneSales

According to Gartner, mobile phone sales in Q2 dropped by 6.1% from the same period last year. During the same period, smartphone sales increased 27%. Apparently despite the recession smartphones market is growing and the trend is expected to continue.

Nokia continues to lead with 45% market share. However Nokia lost smartphone market share. The leaders in terms of smartphone sales growth were Apple (iPhone), RIM (Blackberry), and HTC (G1). Interestingly these three companies also have the largest number of twitter followers.

twitterPhone

Apple (iPhone) leads the pack for number of twitter followers and enjoyed an astonishing 500% growth.

The number of twitter followers may be too less to draw any conclusion towards its role however it does seem to provide an indication of how much interest the phone manufacturers are getting from current and potential customers. The “ecosystem” with supporting applications and tools is a big factor in the success of a smart phone. You gotta be cool and be perceived as useful. Social technology like twitter may help if it is selected and implemented correctly. Check with Chicago Mentors how we can help you to IMPROVE business.

Interview with Innovators – Meet Stephanie W. Wang-Taillon: Creator of CRAISINS

CraisinsInterview with Innovators – Meet Stephanie W. Wang-Taillon: Creator of CRAISINS and full of ideas for business improvement and growth

Stephanie is a leader in marketing. Most recently she managed and improved the Red Carpet Marketing

Program for United Airlines and generated over $8 million in incremental revenue in two years.

She moved to US from China at the age of 12. Learning English was a challenge. She ended up with an MBA in Marketing and Finance from Kellogg and a MS in Food Science from University of Massachusetts. She has an undergraduate degree in Public Health and Nutrition from University of North Carolina.

I had the opportunity to meet Stephanie over lunch. She shared her experiences and thoughts while she ordered tea and I had a sandwich. She had an improvement recommendation for the restaurant to add desserts menu. She thinks they are missing out on the customers like her with a sweet tooth.

Arora: Whats the story with CRAISINS?

Wang-Taillon: When I was at University of Massachusetts, Ocean Spray approached us to create a cranberry product that can be used year round. I developed the prototype that was marketed later as CRAISINS.

Arora: How would you explain Marketing to a layman?

Wang-Taillon: Marketing is all about managing feelings. For example I feel very differently about Nike shoes than I feel about shoes at a discount retailer. That’s why I pay a premium price. Chinese have a preference for American products because they associate their personal feelings with American products strongly due to historic reasons. BMW understood this feeling and introduced its cars in China as an American car.

Arora: How did you start with food and nutrition and end up in marketing?

Wang-Taillon: After my masters in food I worked at a hospital. They had a notice board where they would erase the names of people that die. The names on the board changed a lot. I asked them where are all the people with just a broken leg. Unfortunately my skills were needed only in the not-so-healthy departments and I didn’t enjoy the environment.

Arora: What advise would you give to the small and medium businesses?

Wang-Taillon: Use your marketing dollars wisely by targeting to your potential and current customers. Two months ago I was considering refinancing. My banker happened to call me with an offer to

reduce my mortgage rate at the same time. I usually ignore marketing calls and mails. Somehow they had the customer intelligence to know my need, they called at the correct time, and retained me as their customer.

Arora: Is the new technology like twitter helping organizations?

Wang-Taillon: You have to be selective with the social media like face book and twitter. Its not for everyone. Obama campaign used it very effectively to promote him as a person. It can be tricky how large organizations may use it. Perhaps it could be used to build a CEO’s self-image or a product brand.

Arora: Do you think selling to the global customers is different than in US?

Wang-Taillon: If you are selling a lotion in US you want to sell its positive features like how it will make your skin softer, smoother, make it glow etc. If you are marketing the same product in China you want to sell how it avoids wrinkles, hides age etc.

Arora: Speaking of China how can companies in US increase trade with China?

Wang-Taillon: There is a lot of demand for American products in China however language is definitely a barrier. You need a Chinese language web site and local distributors for example. Secondly there are lot of Chinese like me in US that need native food that is not yet available in US. There is also a need for better ways for people in US to send gifts to China and also other countries like Australia and Japan.

Arora: Whats your opinion on work-life balance?

Wang-Taillon: Work is like a rubbery ball, and your family is like a crystal ball. If you drop the rubber ball, it will bounce back and may be even bounces back higher. However if you drop the crystal ball, it will shatter.

Arora: What are your future plans?

Wang-Taillon: I find Travel, Food, Pharmaceutical, and Cosmetics industries very interesting. I would continue to help small and large organization in these industries achieve their growth objectives.

Arora: Thank you so much for your time. Sorry they didn’t have a dessert for your lunch.

Wang-Taillon: Never mind. I had a dessert at Starbucks before coming over. I do have recommendations for them to improve their coffee.

Craisins is a registered trade-mark of Ocean Spray.