Organic Growth in Business..

Lean Construction : Utopia ?

noreply@blogger.com (Dr. Clarensyst) — Tue, 12 Jun 2012 17:57:00 +0000

About technology, business & management issues..

Much has been written and read about the latest fad in the construction industry: the lean approach taking back some principles of lean manufacturing. It's funny how a methodology designed and implemented for the manufacturing industry tend to expand to other industries or service companies.

The construction in Mexico is not immune to this phenomenon: during the last 25 years people have tried to reinvent the wheel. Since the consolidation of professional project management, for over 30 years in America and Europe, and with as little over 20 years of introduction in Mexico's construction industry has tried to implement different philosophies in order to standardize their processes . If we look at history we could find two major events: the certification of ISO-9000 type and the philosophy of "total quality in construction."

In the early 90 `s in Mexico everyone spoke of the ISO. There were many certifiers and companies invested substantial financial and human resources in order to achieve certification. Construction in Mexico was not an exception. While it was thought that by means of defining processes, policies and specifications within the company people will adopt these changes, through a simple induction, reality faced a complicated situation. At least 80% of the workforce (permanent or temporary) in a structure of a construction company is cheap labor and low skilled. The rotation of staff is permament so there was no interest in the companies to invest in training their workforce (as opposed to manufacturing) and this meant that the process could never be faithfully adopted. The result was an oversight of the certification years later. As of today it is difficult to find a major company that has an ISO type certification.

Later, by the late 90's, there was the fashion of the overall quality of construction. More than a methodology, it was a philosophy of work that included extensive rework by companies in their planning and design stages. If you spent time on this, it was said, the savings are considerable and the value added of the final product would make a difference. ¿Planning?, Many owners felt hives at this.

While philosophy was more readily applicable to the construction industry it involved a series of policy changes that aimed at standardization and professionalization of the company. The latter did not happen in Mexico. How could it be if the building is almost an art and a craft process?,-Said some clueless managers out there. Now the consultants and similar species are trying to move the concepts of lean manufacturing into construction field. Now talk of "zero waste", "alignment of customer needs with the company", "generation of added value" is the new kind in town.

It's funny but if you read any book of project management you´ll find that these concepts are mentioned there. What's new with lean construction anyway ? - Nothing, it's just another fad in which several employers will fall to only realize after a few years that this philosophy it is exactly the same thing they had previously been trying to implement.

It's the same dog but with a different name.

www.clarensyst.com.mx

Project Manager: the wrong idea.

noreply@blogger.com (Dr. Clarensyst) — Tue, 05 Jun 2012 17:14:00 +0000

About technology, business & management issues..

The concept of the Project Manager has varied greatly over the last twenty years in almost anywhere in the world. Originally it was thought that the project manager was responsible for the planning, execution, closure and implementation of a project.

Typically these projects were related to the fields of engineering in industrial areas such as construction and mechanical equipment. In recent times some other industries have systematized execution models as service companies or software developers have adopted the role of project manager in its operations. However in the last decade in Mexico, thanks in part to the professionalization of processes within companies, consultancy has idealized the idea of the project manager in a somewhat romantic role but certainly not really aligned with the status quo mentality that prevails in many Mexican companies, particularly those engaged in industrial construction and property development.

- "The Project Manager should be in charge of the business unit," say pompously consultants and business leaders in Mexico. The idea is that the Project Manager is responsible for all areas of a project such as administration, sales and marketing. However, this domestic model enhances the whimsical minds of business owners but does not tackle the real problem.

Reasons? Lots ofthem: directing & supervising the operations of marketing, finance and management within a company involves a knowledge of the business that not all project managers (with a more technical background) do not fully master. Moreover, the project manager works mentally for projects, from conception through implementation and ending with the closing. Being aware of other business areas involves constant attention and dedication that you are more likely to apply to a CEO role than someone who sees life through a series of projects.

On the other hand, perhaps the strongest reason passes for real empowerment in decision making. In theory, the project manager has the power to make financial decisions, resolve operational and sales process issues, but in reality the micromanager that all owners have installed in themselves is constantly blocking the PM do his work which undermines any attempt to develop as a business unit and turns the PM into a simple coordinator or much-alike a personal assistant.

The funny thing is that the tendency to view the PM as the "cornerstone" of the business is still valid no matter how often they hit themselves against the wall.

www.clarensyst.com.mx

Risk & Commodities

noreply@blogger.com (Dr. Clarensyst) — Mon, 28 May 2012 18:03:00 +0000

About technology, business & management issues..

During the last decade the commodities markets have experienced sharp fluctuations particularly strong price rise in oil prices, grains and some precious metals. This has led to farmers, industry, mining and petroleum related industries to suffer from year to year uncertainty.

The reasons are many: from long and protracted drought in the prairies of Russia and China, as the depletion of oil reserves in the Gulf of Mexico to the announcement by the U.S. government to support ethanol production based on corn. So, how to establish mechanisms for producers, intermediaries and distributors to ensure a profit margin and create a foundation to grow their business?

Aristotle mentioned Thales of Milete as the inventor of the concept of futures contract by menas of an olive harvest in ancient Greece. Thales was such an accurate predictor of how the conditions of the olive harvest would be months before it and this allowed him to establish price contracts with producers which in turn guaranteed in advance the price of it, avoiding both the vagaries of the market wreck at harvest.

But these financial vehicles not seem to have done to implement in many industries whether unions or organizations associated regulators have decided not to implement or have not been able to craft the right model for it.

There is a whole opportunity for the development of financial engineering vehicles to establish conditions for protection against the risk of volatility commodity prices.

The question remains whether there will be no other interests, which are clearly blocking the establishment of such vehicles.

www.clarensyst.com.mx

The eternal micro manager.

noreply@blogger.com (Dr. Clarensyst) — Mon, 21 May 2012 17:57:00 +0000

About technology, business & management issues..

It was over a restructuring process within the company in which I had collaborated for eight years when I realized it. Senior Management had hired a consultant who worked out a pretty decent proposal and rationale for the size of the company at that time. "We are building the foundations of the enterprise for the next 20 years," said one of the managing partners.

The idea seemed perfect: professionalising the business, find performance metrics of the contributors to avoid subjectivity and to define roles and processes within the company. Create a structure in order to create a career path within the company itself (¿naive?).

But the owners could not get rid of the micro manager buried deep inside of them. That little devil in all of us that constantly tells you that you do not need to delegate anything to your subordinates (nobody can do it better than you !) that you need to check them out all the information generated or passing through them (why trust them?) and that planning meetings are merely a constant exercise of accountability that only strained relations between owners and delegates.

How to avoid the cancer that exists in virtually all businesses in the world? I think it is impossible to eradicate it: every business owner feels like he is the next incarnation of Steve Jobs so their bad manners and contempt and capricious treatment are fully justified.

Perhaps an effective tactic, as mentioned by the founders of 37 signals in his book REWORK, is to avoid the maximum weekly meetings. As Jason Fried mentioned it, they have no particular target, people do not come prepared, are ambiguous in their objectives and always, always a fool wants to get the attention in the meeting and he thinks he has to share his wisdom with all.

www.clarensyst.com.mx

Agile business.

noreply@blogger.com (Dr. Clarensyst) — Tue, 15 May 2012 20:09:00 +0000

About technology, business & management issues..

It's been 11 years since Martin Fowler and 17 other programmers released a manifesto called Agile Software Development. The manifesto, a highly praised ideological tool for people in the field of technology was a simple document which sets out some principles of a methodology to develop software more quickly and objectively.

Since that time the term and concepts have been applied to various aspects of enterprise development, particularly in start ups. Arguably, the lean start-up is a unique version adapted from the principles of ASD but with their particular characteristics.

The ASD emphasizes software development and the creation of a methodology that contrasts with the waterfall model which implies the full development stage of software before its testing phase has started.

If we make the extrapolation of these concepts to the idea of starting a business or a personal project, this is a valuable tool since it allows the flexibility to make changes to the business model necessary to ground the idea in a practical and concise way, without dogmas of faith or prejudices who die hard.

Figures determine the premises, but once put them on paper, developing and implementing action processes should be a dynamic exercise and constantly changing to adjust as needed. This would be like a properly calibrated weighing scale industry or a simple called action to just tune into your favorite radio station.

Test, tweak, edit and start over. It should not be so complicated.

www.clarensyst.com.mx

The business model: theory and reality.

noreply@blogger.com (Dr. Clarensyst) — Wed, 09 May 2012 02:49:00 +0000

About technology, business & management issues..

About ten years ago arguing with a former employer, a group of young people in their twenties ,who were part of the management team that run the projects where the company was involve, were not really keen on his claim. Those meetings stressed out the fact that the business model of general corporate and the one of individual projects must be realistic and that these changes should be communicated to those affected. - "The projects are just perfectly in theory, in real life the dynamic is different, "- he said frequently.

The memory came to mind after talking to several people who are frequently faced with the grim reality of the business or a single investment project that has not been undertaken as they had planned in their minds. The reality was very different from the theory.

The reasons are many and countless: the entry of an unexpected competitor (in business with few barriers to entry), lack of funding (no more personal & family savings), volatility in prices (for projects that invest in commodities ) excess in sales and marketing budget(if you want to get into horizontal markets) and to the impossibility of finding a profitable business model in the short and medium term (tech-related companies).

The funny thing is that people get scared as if this were not the common denominator of any venture that has been started, as if fate had taken a fancy to make them fail.
The reality is that when this happens the easiest thing to do is understand the dynamics of business and make the proper adjustments to pull it off. This is especially important in technology companies that handle many dogmas as excess investment (usually raised capital) or reaching profitability in the long term.

Many of the lean startup philosophy applies in these situations. Applying common sense, if decisions are quick and assertive, if you remove the dogmas of the mind then you can adjust on the run the business model and surprisingly fix what was supposed to be broken.

www.clarensyst.com.mx

every.cloud

noreply@blogger.com (Dr. Clarensyst) — Mon, 30 Apr 2012 03:19:00 +0000

About technology, business & management issues..

It's funny how ideas arise in the minds of people. While spending hours in front of my computer in a room of 5 x 5 meters in a cold room of a university town in Wales ideas seemed to come from nowhere. Maybe it was the cold wind from the North Sea, perhaps it was loneliness that allowed the ideas flowing.

How to harness the trend of "cloud computing" in the context of SMEs in a developing economy like Mexico? How to make it accessible, easy to use and that met the Mexican reality? Under these assumptions the idea of every.cloud was born.

The idea was to create a platform where SMEs could create their own collaborative ecosystem. The goal was for companies to use the Internet to communicate, generate information, reports, data exchange, creating value in the sales process. How to create something simple and useful, without pretensions or ambitions beyond delivering excellent customer service ?

Many questions and no answers at all. What target market? How to communicate the idea? What is the real possibility of adoption by SMEs? Does the service must be paid or a free one?

After months of thinking about it, chewing it, rejecting it, adjusting it, discussing it and finally achieve it in a couple of real products that originated every.cloud as a web platform.

Coming soon it will be available through the web and then we can verify that it complies fully with the purpose for which it was created: to provide a web tool to micro, small and medium enterprises in Mexico.

Businesses & social networks. Overrated?

noreply@blogger.com (Dr. Clarensyst) — Sun, 22 Apr 2012 20:42:00 +0000

About technology, business & management issues..

Earlier this week I was checking the contents in several journals on politics, business, marketing and technology. Not surprisingly I found the common factor in virtually all of them: the use of social networks and support in political campaigns, social partnerships between businesses and individuals and as a means of online advertising for small businesses.

A couple of days later I read the article about a company in northern Mexico created by young entrepreneurs. The company has created a platform which offers various products (from a social network which enhances relationships between transport´s suppliers to car wash dealers). The products and their quality varied greatly: some looked like pretty good ideas and some just had no reason to be or didn`t appear to satisfy any demand for any particular market.

The funny thing is the advertising they set out: in all of them it created a social network among its users and, depending on the case, with third parties. After thinking a bit I asked myself: what is the added value or competitive advantage for using or subscribing to an online service that allows me to make contact only with suppliers of steel products for car-manufacturing industry and not to join any other group specialized within a social network like facebook, linkedin and Google +?

My logical answer was: nothing at all. Perhaps at that time was that I thought that many services that offer mere social networks are overrated. The social network offering should be integrated with another value within the same platform they offer. This integration can be a management inventory web tool, a database based on human resources, a forum for buyers and sellers of commodities or whatnot. Any other tool that will help the company improve its status quo as the social network will hardly alone do it.

No doubt if the creators of these services do not understand that social networking is more a means than an end in itself then the products will be doomed to failure.

No need to reinvent the wheel. Connecting people with similar tastes, interests and relationships is already happening. The services are being offered by the big players. If you do not add something else to the social network then there is no tangible value that any client may perceive as valuable and necessary for their business.

www.clarensyst.com.mx

Microcredit & connectivity

noreply@blogger.com (Dr. Clarensyst) — Sun, 15 Apr 2012 19:08:00 +0000

About technology, business & management issues..

It was in the early 70's when Muhammad Yunus started the project of granting small loans to lower-class in impoverished Bangladesh. This exercise regimen introduced in late 70' & early 80's consolidated Grameen Bank in Bangladesh. Thereafter and in many developing economies Grameed Bank has given billions of dollars in microcredit.

The objective of the Grameen Bank is lending to people who do not have assets that serve as collateral or have previous credit history. Obviously these people do not have stable jobs.
Microcredit does not establish formal contracts so that only the borrower is expected to honor his word to restore his credit and interest which, in comparison with commercial banks, are insignificant.

One could argue whether microcredit is a panacea or not to all problems of the disadvantaged economies or if the credit actually encourages the creation of more SMEs and generating jobs. Certainly it is an instrument that helps a lot but that alone will not solve all the problems in poor countries.

Recently Yunus has emphasized, together with other experts in the field, the need for affordable sources of credit for people and with favorable conditions for subsequent payment. Just spoke about the need for emerging countries to ensure coverage of Internet and mobile telephony.
It is easy to understand that a facilitator in the creation and maintenance in SMEs is communications. The clearest example is not far from Bangladesh: in India there are over 900 million mobile phone users and just over 100 million Internet users. This has caused the average growth of the domestic economy of India in the last 15 years to be greater than 5%.

It is strange to see how some analysts decry the fact of cheap credit and access to telecommunications as a growth factor and job-generation in a developing economy.

No doubt the fact that there is a capitalism with a social objective which cannot harm the economic interests previously established and whether it offers a window of opportunity to many people trying to improve its economic environment.

www.clarensyst.com.mx

A cash flow problem in the cloud..

noreply@blogger.com (Dr. Clarensyst) — Sun, 08 Apr 2012 22:43:00 +0000

About technology, business & management issues..

Following the very first companies offering services such as web apps or e-business through the cloud, the first problems of the business model began to emerge to the surface.

As a fact the American market has a strong stock market and vast amounts of venture capital. Many investors eager to invest in technology companies began to dictate the rules of business model: the first rule was to have money hand over fist.

With the promise of capturing major market segments, venture capitalists gave large amounts of money to companies for marketing spending and its market positioning. In many cases the product or service was not yet finished, much less proven. The latter caused a significant resource investment in the first months of lifeblood of the business thereby sought to profit long term.

Many argue that this only caused a distortion in the market that eventually provoked the downfall of many companies that had no solid foundation to succeed in the market.
In either case, these guidelines prompted one of the very first premises in technology industries which has cast strong roots in the subconscious of the leaders of the tech industry: give away the product or service initially and then cash for it.

The latter created the concept of the free trials and freemium services within any tech company, mainly driven by Web 2.0. current trend. While the main idea was to get a significant number of users and then make them fall in love with your product and keep them indefinitely and then convince them they now had to pay for what they had been receiving it for free. Now it was a financial problem.

While it makes sense that many companies invest massive amounts of money on advertising and then offer their services free for a while in fact this model does not make sense for other companies.

Like any other business, the business should focus primarily on generating revenue and become profitable in the shortest time possible. Any other statement would only be playing a fools´game and basically only cause a distortion of the market that does not help the industry or customers who expect a solid product and a sustained customer service.

Is taken into account to understand the concepts and develop business models that other companies in other cultures and contexts have previously incurred. However, should always be a framework to adjust in order to suit the reality in which one develops.

Regardless of this globalized world, it is difficult to get by the dogmas created in another situation, in another context.

www.clarensyst.com.mx

Facing the Status Quo

noreply@blogger.com (Dr. Clarensyst) — Sun, 01 Apr 2012 21:16:00 +0000

About technology, business & management issues..

Any company or business should be concerned about the place that its business should occupy within a market, many times, fragmented and highly competitive.

In traditional industries (trade, construction, industrial, financial services) positioning is closely related to focusing on niche markets. That is, big players dominate the bulk of the market so you can only steal a little slice of the pie.

Al Ries & Jack Trout mentioned in his still-relevant classic book Positioning the beauty of entering new markets that allowed you to fill this gap in the consciousness of public opinion. Be the first one, no matter whether you were the best or the most capable, it will mean everything if you are concerned to position yourself in the market.

Other strategies used by many technology companies and other businesses, is to enter into direct conflict with market leaders. In doing so, as marketers preach, you would play yourself as underdog, a David against Goliath. In a globalized world it rather seems than victimize your company is the best market strategy that any business could ever make.

But on the other side, What do you do in a fragmented market where there is no clear market leader who dominates the scene? What if you decide not to go against this leader?

Only in that case the battle gets harder and, clearly, an ideological one . You will have to face the status quo. The business will have to be portrayed as an innovative one, focused on customer service and maximizing the value added to them.

Sounds like a piece of cake, but then who or defines the status quo of a particular market?

www.clarensyst.com.mx

Family, Friends & Fools

noreply@blogger.com (Dr. Clarensyst) — Sun, 25 Mar 2012 18:57:00 +0000

About technology, business & management issues..

In the world of personal finance there is the concept of FFF (Family, Friends &Fools) as initial funding source for anyone wishing to start a business or develop a project that will generate some wealth in a given time.

Interestingly, both in consolidated markets, such as the American or European who have developed powerful stock markets and where, until recently, had more than enough capital to risk. However, borrowing money or finance your ideas with your parents, friends or any known, without fear of taking risks, remained the first choice of financing.

The reasons? Just the emotional factor plays a crucial role here. Family and friends are people who might be interested in developing your personal aspirations(especially your family) while friends see an opportunity to solidify your relationship as they could, tentatively, to have some sort of benefit. In either case a third party (fool) would be more interested in the factor of the potential financial rewards that helping you develop your personal desires.

However, it is the easiest way, without bureaucracy, without many formalities to access a modest amount of capital to start your business.

As with any risky investment, the latter could jeopardize your relationship with your family and friends in case things do not go well. You have to remember more than 80% of businesses do not survive beyond 4 or 5 years. Over 50% you will not have a higher life beyond 12 months.

In any case, any relationship will invariably be modified by entering the factor of money into the equaton.

Have to think twice if the journey is the reward after all.

www.clarensyst.com.mx

Feedback.

noreply@blogger.com (Dr. Clarensyst) — Sun, 18 Mar 2012 20:06:00 +0000

About technology, business & management issues..

Last week we started with the final testing in our web application named Carleon which has been developed and will be part of Clarensyst´s core Every.Cloud portal that will include some tools designed especially for the SME market in Mexico.

Consciously the web app was sent to multiple end users whose status ranged from friends, work colleagues, IT industry professionals, lawyers, vendors and ending with CEOs of construction and real estate companies.

As expected feedback has been mostly valuable because it allows us to understand how an end user can prejudice a tool based on their professional background and the objective that the user thinks that the tool should pursue.

We could classify the feedback in several categories, but the simplest is to group it like this:

a) Feedback based on functionality.

Users who have previous experience on web apps relatively easily found the tool simple & intuitive to use. Although they suggested improvements they also had no trouble understanding its functionality. By contrast, users who are not related to this market found it hard to manage it

This is a clear example that you cannot design tools to serve "all the people all the time."

b) Users who are related to the industry quickly suggested improvements as to the information captured by the tool as it is better deployed.

In this case the feedback is not based on the tool´s functionality but rather on the added value perceived by users based on the quality of the information managed by it.

As an example one could say that a salesman only needs to "monitor" the process of selling as systematic and simple as it should be but a lawyer would be more satisfied if the tool allows him to check out all the paperwork included in a closing sale.

In the end, as the old saying goes “one cannot meet the needs of everyone on the first try”. As a new-born baby, the tool provides an approach, a philosophy, an idea of how to do things.

The problem is that whether or not this idea seems good enough for many people.

www.clarensyst.com.mx

Freemium.

noreply@blogger.com (Dr. Clarensyst) — Sat, 10 Mar 2012 19:36:00 +0000

About technology, business & management issues..

Since the early eighties software developers began to look for ways to efficiently cover marketing and production costs for products and services delivered.

In those years it was easy to obtain “free” copies of computer games or basic-purposed enterprise software. The same companies "gave away" these copies as a way to advertise their products to their customers in hopes of them for eventually buying the "official" versions and thus generate relevant income for the company.

With the advent of the internet and specifically with the Web 2.0, this particular business model has started to rise again through the suppliers of products and technology services. Since the cost of generating these technology products is considered negligible compared to manufactured goods, technology gurus like Chris Anderson and Tom Evslin argued the benefits of it.

Specifically targeted for technology products, the model proposes, for example, to develop business software deployed through a platform that could be used by hundreds of thousands of users (economies of scale), this software will have basic functionality that users can used without any problem.

In theory this approach will allow the adoption of the service / product by thousands of users without need to invest in expensive marketing campaigns and relying heavily on word of mouth advertising.

Eventually, as the user adoption was complete, it could offer an improvement (upgrade) in the service or functionality of the platform. The difference is that now, this upgrade would cost for the user. This service would be able to generate income.

It is easy to imagine and understand this model if you think of LinkedIn, the social network that brings together the professional profiles of millions of users around the world.

However, the model has its critics who emphasize the feasibility of opting for this type of model, in which high costs are incurred early in hopes of generating income in the long term. There are many venture capitalists who prefer a model scheme that focuses on generating revenue as quickly as possible.

Whatever the case, the model is here to stay. At least until the cycle of Web 2.0 comes to an end and the model has to reinvent itself.

Crossing the Chasm.

noreply@blogger.com (Dr. Clarensyst) — Sun, 04 Mar 2012 20:42:00 +0000

About technology, business & management issues..

A few years ago Everett Rogers coined the term "diffusion of innovations" which has been much studied and debated over time to determine the stages of adoption of new technology, whether it is a business model, a gadget or enterprise software.

In his book "Crossing the Chasm", George Moore discussed more in detail the ideas originally proposed by Rogers. Moore in this analysis focuses particularly in the point between the early adopters (enthusiasts) and the early Majority (pragmatists).According to Moore there is a space (gap) that most of the products or services does not seem to overcome frequently. Moore calls this gap as a chasm which is needed to successfully cross the product is adopted by a majority of potential users.

Unlike Everett, Moore proposes techniques and strategies to try to cross this threshold successfully. In fact the techniques are more focused on proper marketing, in this sense the theoretical framework of the 4 P `s (Price, Product, Positioning and Promotion) is totally admissible to achieve what you want to try to get an adoption of the public mainstream.

However, where Moore´s suggestions to focus is on selecting a specific niche in which to apply these strategies. As Jason Fried of 37signals say people cannot develop products "to meet all possible needs" and ending with "not a product at all".

It is curious that this point is ignored all the time. No successful business or technology guru has ever first recommended not to launch the product / service aimed at a particular niche market. This will allow you valuable feedback, so you can correct errors and provide better service to your customers in a particular market.

Time will tell whether the product will go to a more horizontal market and can be adopted by thousands of people. What is a fact that it is better to cross a relatively small gap to try to cross many chasms at the same time.

www.clarensyst.com.mx

Lean Startup.

noreply@blogger.com (Dr. Clarensyst) — Sat, 25 Feb 2012 19:24:00 +0000

About technology, business & management issues..

It is possible that when the engineer Eric Ries coined the term "lean startup" never thought his concept would cause such a stir within the academic and professional field of business.

The term of "lean" methodology is related to the Japanese "lean manufacturing" as the series of processes, policies, quality control within a production line that minimize or completely eliminate the waste within a production process.

The lean manufacturing has been used primarily by automobile assemblers worldwide, with Toyota as the company who acts as a poster boy.

In his writing, Ries lined up this concept and transfer to the field of entrepreneurship. The "lean startup" stressed the need to create basic concepts (prototypes) of products or services that may be continually tested commercially in order to receive feedback from the market and to make the adjustments necessary to define a product that fits completely.

In many ways, Ries suggests that this framework provides a methodology that will allow startups a competitive advantage over its competitors: the ability to respond and set changes, creating cycles (iterations) continuous trial and error to the ideal product or service without wasting time or resources so unnecessary (waste).

These tactics, although they may be employed in medium and large companies, invariably need a hierarchical structure that rewards and empowerment of subordinates eficientize decisions regarding the development and products or services. If the process becomes entangled in a bureaucratic or authoritarian hierarchy, the lean startup will fail hopelessly.

We will have to wait a little longer to see if the ideas and approaches developed by Ries acquire the status that many proponents of this philosophy are looking to achieve: full recognition of academic and business worlds.

www.clarensyst.com.mx

Customer Retention.

noreply@blogger.com (Dr. Clarensyst) — Sat, 18 Feb 2012 21:23:00 +0000

About technology, business & management issues..

Within the technology industry is a term in the cost structure that employers are aware at all times: the cost of acquiring a customer (Customer Acquisition Cost of CAC). As with any cost analysis for a company to be healthy it should keep this cost at the appropriate level otherwise this amount will be incrementally reducing the profitability of the business.

The concept itself is not absolute, the metric has many variations depending on the type of customer, representing the average income and the time in which the client is committed to the service offered. Either way one of the strategies that many SMEs are developing successfully is to try to retain the customer captive through various tactics.

The point at issue is not whether the cost of acquiring a new customer is much greater than the cost incurred to retain a client who is currently committed to service and / or product offered. Many studies and statistical information set that the cost of holding captive customers is by far less than the cost of acquiring a new customer.

The tactics to achieve retention vary widely but it's worth paying attention to banking services to realize how this kind of specialized marketing functions, from tracking the financial performance of its clients, to offering personal lines of credit or sale of life insurance and property. If you have a bank account cross-selling coming straight from your bank on your person is relentless; everywhere trying to get you a credit card.

In technology companies, something similar happens. If you have a business solution, your provider will be looking for you to increase the bill of their products through upgrades of the same app or a functional increase of any particular tool. These companies are extremely efficient on segmented trends and consumption habits of their customers because they know that if they lose you it will cost them double or triple the effort and cost to acquire a new customer.

Although it sounds a concept that only medium and large companies could land effectively in reality the most remarkable results are given in small and micro enterprises: they offer more products and services to its customers. If you sell building materials may be a matter of expanding your product range to provide waterproofing and industrial paints. If you sell computer equipment you may have to consider to offer network services and telecommunications hardware as well.

It's a matter of developing and offering your customers a platform to solve most of their issues by means of one-stop shop.

The Right Approach.

noreply@blogger.com (Dr. Clarensyst) — Sun, 12 Feb 2012 20:56:00 +0000

About technology, business & management issues..

On a regular basis one can read many articles, books, journals or blogs about technology companies and businesses. All of them mention a feature that most of the authors are quite clear on : the ability of applications and technology tools to achieve alignment and grow together with the companies to which they provide a service.

This approach is constantly striving to companies that provide business solutions: the constant change in business processes makes the business´s needs a constant change, which leads directly to the developers of the solutions to modify, upgrade or renew their products. This approach is costly for both sides. On the one hand the companies that develop technology platforms have to modify their products and services. In marketing terms can be defined as an "upgrade" which seeks consensus among the various end-users on what would be the "improvements" that companies are sued. This causes companies to invest heavily in R & D in order to push these upgrades.

Of course, the end user ends up paying the cost when this move reflected the increase in the renewal of their software licenses.

In contrast, some young, independent developers, especially those who display their products through cloud-like platforms, have adopted a more practical approach to the issue. Companies like 37signals talk about developing software for users which contains an approach and a philosophy behind it ( opiniated software ).

That is, seeking that the software meets the basic needs that all users within a company needs to make more efficient processes . This type of philosophy enforces the idea of avoid making "upgrades" unnecessary and concentrate to give customers a far better service experience.

This philosophy has been criticized by the status quo of technology developers in the sense that they feel that this approach limits the legitimate aspirations of the business of acquiring product enhancements.
Even with this ferocious attack by the establishement, companies like 37signals have been able to satisfactorily serve millions of users who are happy to adopt the philosophy that has been proposed.

Perhaps not entirely unreasonable to philosophize about business processes as it is about riddles of life. May lead you to a successful conclusion.

www.clarensyst.com.mx

Pull Strategy

noreply@blogger.com (Dr. Clarensyst) — Sun, 05 Feb 2012 20:06:00 +0000

About technology, business & management issues..

Any contemporary book that focuses on managing the supply chain (supply chain) has a specific definition for the strategy called "pull-push" theory.

In terms of logistics theory tells us that the market is seeking the services or products you are suing (pull) while the production focuses on producing those goods or services demanded by the market (push). However, the same theory can be applied to other branches of business, including technology and marketing.

Several visionary entrepreneurs have applied this methodology in their companies to be able to achieve a platform on which customers "extract" information, product or service they need at that moment. This allows the company to manage a complex system of forecasting demand, try to minimize or eliminate the inventory (just in time) and more efficient supply chain to achieve delivery times shorter than its competitors.

The case of Dell computers is the classic example of this business model. Dell has established a platform that has managed to capture the information your market is demanding at that time. This allows you to create a string with endeavors to produce and quickly deliver customer a computer at a time and lower cost compared to its competitors.

Some business analysts pontificate much about this point and in a sense they are right. How can we find a way to add value to the products we produce for our customers? As we reduce the cost, delivery time and improve the quality of feedback that gives us our market at all times.

According to these authors, the key is simply to create a concept of service to be aligned to the needs of your market. It requires investing resources and time to understand customers.

When we were developing a Clarensyst`s web app that eventually christened Carleon we constantly asked ourselves how the needs of realtors, sutlers, insurance salesmen, sales of building materials are satisfied? How to create a product that aggregates a value, which allows you to control and effectively concentrate the efforts of vendors, enabling it to verify the performance of the sales force, control and manage the database that the company has created and to help sellers to promote and send advertisement for the products they offer?

We hope Carleon ´d offer an answer to these questions.

www.clarensyst.com.mx

We do not sell products, we sell credit lines.

noreply@blogger.com (Dr. Clarensyst) — Sat, 28 Jan 2012 20:24:00 +0000

About technology, business & management issues..

In a previous blog there was some mention on the change in business model that some companies in Mexico and around the world are implementing. This new strategy is to use its established platform to turn their business into a provider of financial services.

In the blog above mentioned particular reference was made to several companies in Mexico such as Ara, Casas Geo & Homex which core business actually is no longer the build and sell low-cost housing projects. The business name is now called to get the credit (end) so the user can buy his home (mean). While this strategy has been cleverly used by these companies, they the first nor the most effective in carrying it out.

In fact companies like Electra & Coppel could give some advice on how to convert your business from a basic supplier of goods into a model focused on the sale of a financial instrument. These companies have several common features:

a) They are companies that sell consumer goods and services to a mass market, and generally a low-income base.

b) They have hundreds of thousands of captive customers. Electra gradually began to give credit to their customers through weekly payments. Credit is dedicated to the sale of appliances, they started out when no one else was doing it. That allowed him captive to a huge base of loyal customers who were the first target market once opened Banco Azteca ( owned by Electra ).

c) The same scheme handles Coppel who after establishing their stores across the country they have been engaged, through Bancoppel, to give credit for the purchase of a variety of products and services.

People might view this as a business opportunity impossible to achieve. The vast majority of SMEs in Mexico do not have a customer base of that size. However, competition among banks to capture customers is increasingly difficult so that they are open to partnerships with mid-sized businesses to provide financial products and services to end users (credit lines, credit cards etc).

If a business succed to pass the barrier of understanding that in the end their products and services are just a means to reach an ultimate goal: to create customer satisfaction and customer value. This business will have taken a clear step into its consolidation.

www.clarensyst.com.mx

Turn-key Business Model

noreply@blogger.com (Dr. Clarensyst) — Sun, 22 Jan 2012 20:07:00 +0000

About technology, business & management issues..

Turn-key Business Model.

The concept of turn-key business model has been too long identified with a tactic within the project management realm. In construction and real estate development industries is widely used: it is aimed to outsource a service or finished product through a third party. The point is that this product is in turn composed of a number of disciplines, processes and raw materials.

Using the concept of turn- key makes sense in some industries and in others less so. For a real estate developer in Mexico, a small or medium size firm, its core business is providing financial returns to its investors or business owners, so they can focus on buying land bank to develop their projects instead of focusing on construction & sales processes. From the point of view of their business model, doing so will only lead to problems and do not leave any real value to their business: providing a financial instrument acceptable to their owners.

In simple terms one can see it from different perspectives. If you are making a birthday party for your child age 7, would not you like to hire one person, even with a higher price to take care of absolutely everything?, ie from the room arrangement, through invitations, music, games and ending up with the cake. This would prevent you had to hire 3 or 4 different people to do everything individually and hardly would be coordinated among themselves.

Of course, this concept does not apply if your business is treated by customers as a commodity, ie the lowest selling price is usually what determines one company to get the largest market share. This is well know by companies like Wal Mart or Tesco as they have developed and negotiated the supply chain with all its suppliers so that their prices are always lower than competitors.

In Mexico, companies like Casas Geo, Homex or Ara have developed the same strategy and operational way as they not only buy the land but also build the housing projects & urbanization through qualified suppliers who provide them with even the construction materials of housing. The same, thanks to economies of scale, cause their final selling prices to be the lowest in the market.

In conclusion, although the concept of "turnkey" applies perfectly in small and medium businesses, where the operational complexity and the final price is not the key business, it is also true that there is a tendency for large companies to move this concept in its supplier development program.

The challenge looks rather a tricky one.

www.clarensyst.com.mx

Guerrilla Marketing: Evolution.

noreply@blogger.com (Dr. Clarensyst) — Sat, 14 Jan 2012 18:55:00 +0000

About technology, business & management issues..

While the concept of Guerrilla Marketing has evolved considerably since JC Levinson was coined by his literary work, it has undergone a conceptual evolution that takes a different path from the original idea of Levinson.

The Guerrilla Marketing started out as a strategy implemented mainly by small and medium businesses that did not have sufficient resources to deploy a marketing campaign to position themselves within the market. The main approach of Guerrilla Marketing focuses on innovation and the optimization of the basic resources (effort, time and energy of people). The tactics are well understood: from stickers pasted all over the city, to create false situations in public places (demonstrations, protests) until facing the customer directly at their doors. Anything is worth trying, goes the old adage, if it helped to position your product in the minds of people.

However, this same practice has been considered now by large retailers worldwide and therefore, in its peculiar way, began to be packaged and implemented in their respective businesses. Now marketing gurus call this approach "market saturation" and walks away a little from the spirit of the original idea.

Big chains like Starbucks, Dominos Pizza, KFC seek to eliminate their competition to exponentially increase its presence through franchises in almost any city in the world. Just as chains such as Seven Eleven & Oxxo fight each other to get the best street corners where people trafficking is significant so as to occupy a strategic space before your competition does.

Another clear example of market saturation is implemented by Office Depot as they open their mini espresso-type branches which are located mainly in residential areas and thus customers do not have to drive on for several minutes to get to an Office Depot if they just need to get a pack of white sheets. Now the concept is to be closer to the customer, increase service quality while physically occupy the same space that could have been taken away from competitors.

Wal-Mart, Soriana and large retailers in Mexico are now getting the message and start building smaller stores, nicer and closer to people (mainly in the urban zones). If the client does not come to you, then you should go to them.

Interesting variation of a strategic Guerrilla Marketing. Who would have thought that an strategy for micro businesses could be transformed into a powerful tool for large industry?

www.clarensyst.com.mx

Amazon: The long-term profitability.

noreply@blogger.com (Dr. Clarensyst) — Sun, 08 Jan 2012 20:13:00 +0000

About technology, business & management issues..

Amazon: The long-term profitability.

Since its release the book by Richard L. Brandt called "One Click: Jeff Bezos and the rise of Amazon.com" it has been criticized by several readers eager to discover something new about the company or the personality of the founder. It is logical that they would feel disappointed: the book does little or nothing new that has been previously written about Amazon.

Once the clarification is done, the book has several interesting approaches that makes reading it (just over 200 pages) worth the effort. Brandt focuses much of its energy as writer trying to differentiate Jeff Bezos apart from other founders of technology companies, particularly in the middle of the nineties with the advent of the internet mass, and to some extent achieved the task.

According to the book, Bezos stressed out the need as a company that Amazon should have a long-term vision before thinking about the profits in the short run. Bezos' obsession was to incorporate a seamless supply chain, with little or no inventory at all, an innovative technology platform quite powerful for its time and an incredible customer experience. Of the three pillars Bezos has always been more attracted to the last: its goal is for the company that has the best customer service of any industry.

But Brandt also recounts the hardships that Bezos has been through to achieve that mission. It aims to avoid short-term care but the latter brought him a number of issues, from media criticism specialized in technology and supply chain to the eternal pressure from investors who had put their resources in a company that after 5 years had billed hundreds of millions of dollars but did not have a penny of profit and reported millions in losses every year, even after getting a dominant position in the market.

This leads to reflection on the idea that many entrepreneurs or business owners trying to do with their own businesses. Few people are willing (or allowed) the delay positive outcomes of their business in order to provide a competitive advantage over its competitors or improve the product or service they offer to their customers, much less think about trying to improve their business processes to meet the best possible customer retention and achieve the same that allows an insight into the minds of consumers so powerful that it could hardly be beaten.

In a world in a hurry, where resources are increasingly more expensive, competitors increasingly well prepared and where short-term expectations are the order of the day, the vision and precision of Bezos and his Amazon´s team are an oasis in the desert.

www.clarensyst.com.mx

Locked-in : seller´s dilemma

noreply@blogger.com (Dr. Clarensyst) — Mon, 02 Jan 2012 22:12:00 +0000

About technology, business & management issues..

One of the most successful strategies developed in business is to keep your customers captive through your products or services.

The clearest example is that of printing equipment. The business is not just in selling the equipment but in the consumables (ink cartridges injectors, spare parts) and after-sales service (repairs, maintenance).

Of course there are many more examples in other industries. From Guillette´s razors that actually make their profit rather selling blades than razors themselves. Same thing happened to cell phone companies which slowly understood that the business was in the sale of prepaid cards rather than the sale of mobile handsets.

In English, the term is known as "locked-in" and is widely used in the technology industry. The clear and convincing example is undoubtedly that of Microsoft, as the default operating system for PCs, it requires you to renew the license or the same operating system to a newer version. This has caused undue Microsoft capitalize on its dominant position in the market for operating systems, which has a platform for users who are hundreds of millions, to be charging extra for the new version of their product.

Some companies take this practice to the very end. It is said that the Amazon Kindle Fire retails at a price even lower than that of his own manufacture (though this may seem absurd) because Amazon gains mostly from the sale of content which can be accessed by purchasing the device.

The latter can be seen in a company like Google where many of its products on its platform are free because the income come from other sources (advertising sales) via products offered on the platform. In this case the apps are mere vehicles for reaching a mass market that will produce revenue through other means (advertising sales).

It is certainly an interesting strategy, especially in industries that minimize costs through economies of scale. However, the scenario should be thoroughly analyzed and the ability of the company to bear the costs with the aim of bringing long-term strategy to fruition.

Getting rid of the middleman.

noreply@blogger.com (Dr. Clarensyst) — Sun, 18 Dec 2011 18:54:00 +0000

About technology, business & management issues..

Surely you have purchased an item online through your computer. Just as you have probably bought a plane ticket or an entrance for the next concert of your favorite artist. It is valid to believe that most Internet sales are composed of small items or products with little value per se.

But perhaps you´ve been a little more risky and decided to buy a laptop online. Surely the name that has come to you is that of Dell. Why would you buy a highly specialized product, like a laptop, at Dell´s? What if you better go to some of the stores selling electronic equipment in the shopping mall closer to you ?

The advantage of Dell, which is the basis of his success as a company selling computers, is that it can provide products of good quality at a relatively affordable price rather than buying the same computer through a retailer. The secret? as simple as the strategy in the Dell supply chain: got rid of the dealers or brokers of their products, which causes the product to be charged an extra fee on the sale price you normally would on the shelves of stores specializing in electronics.

In theory this is very simple: after you enter the Dell website you can choose from one of the models offered by the company or literally create and order to build your own computer based on the requirements that you need. Once done, you go to pay your computer via your credit card and it immediately sends an order to Dell's manufacturing sites worldwide. Your computer is built, shipped and delivered through a courier company within days at the door of you house.
This approach in the supply chain has allowed Dell to reduce its inventory times to a minimum of three days. Usually the electronic equipment industry handles inventory up to 35 days. The savings resulting from efficient management of supply chain coupled with the elimination of distribution channels (retailers) is reflected in a considerable decrease in the price of Dell computers compared to their competitors.

This business model has been somewhat taken by various companies in various industries. The owners of car manufacturers like Ford or GM have modified their distribution channel of cars and often dispense with traditional distributors, even without going beyond the financial service which they provided via commercial banks to offer their own financing facility. One could argue that this has not necessarily led to a substantial decrease in the price of cars per se but it has led to an increased generation of options for people who are thinking about getting a car. Options that only 15 years ago were unthinkable.

Other companies like Cemex started selling their products such as cement or concrete through its stores named Construrama. Same approach taken by some large franchise chains (Alsea, Pharmacy Savings, Mc Donald's) that have created a scheme where otherwise control their outlets franchisee without using a third party to deliver and distribute their products ,that extra saving cost´s reflected in the selling price plus the advantages of direct control of the business.

No doubt the idea of Michael Dell to cut out the middleman was difficult and took time to develop. Obviously it is impossible in many businesses to eliminate traditional channels of distribution that, I would say that 90% of cases, do not add any value to the end customer.

If you can develop a strategy where somehow you can eliminate the middlemen in the supply chain it will definitely generate a competitive advantage in your company which is very difficult if not impossible, to surpass even by your most fierce competitors.

www.clarensyst.com.mx