IncTechnology.com > Troubleshooting IT

Visibility: The Strongest Link in the Supply Chain

Mike Gorsage — 2009-11-19T14:09:40-05:00

For many organizations, the supply chain is their very lifeblood. Its impact is massive, affecting business processes at every level -- from manufacturing to packaging, distribution, and customer relations. As companies grow larger and more global, their supply chains become more complex. Greater complexity leads to vulnerability.

The key to reducing risk and mastering supply chain management is visibility. It’s a complex, yet critical component that helps to reduce costs and improve efficiencies across the organization. The technologies to gain supply chain visibility are out there, but they must be chosen with great care.

The case for visibility

With today’s technology and ease of communication, the world certainly seems like a much smaller place. But for businesses, adapting their supply chains to a global marketplace can lead to sprawling networks where disruptions are common, along with waste, inventory build-ups and shortages. If you don’t know where critical sets of supplies are at any given point in the chain, it directly affects your ability to deliver products and serve customers.

It’s likely that most organizations already have some hardware or software in place to manage their supply chains, such as inventory management and barcoding systems. All are typically part of an overall enterprise resource planning (ERP) application suite. But why do so many of these IT solutions fall short of expectations?

The likely culprit is not the technology itself, but poor planning. When supply chain systems become too complex, it’s easy to lose focus. In an attempt to fix a problem or implement a new solution, organizations may implement too many point solutions and technologies without regard to how they fit together.

Integrating technologies

Any successful supply chain management solution today requires a holistic approach. It must be as simple as possible, taking into consideration all of the various systems that both you and your trading partners are using.

Look first at integrating your technologies. For a retail organization, that involves the order system, the warehouse management/inventory system, and the ERP system. Next comes the technology around scanning, such as barcodes and radio frequency identification device (RFID) chips.

RFID is an emerging technology that uses passive or active chips to tell you, at any given point in time, where pieces, parts, inventory components might be and how many you have. For a retail organization, it shows which items are moving the fastest and when you need to reorder or restock. A passive RFID chip is read by independent scanners and is often found in high-end retail items, computer components and drug supplies. This type of scanning is limited by distance, accessibility, and lighting.

An active chip, on the other hand, can send out radio signals which enable you to track items from a greater distance, even hundreds of feet away. This gives you good visibility into inventory without having close-up scanning capabilities. Consider the advantage from a warehouse perspective, particularly when these functions are automated and integrated. Someone unloading a truck can quickly find, offload, and ship a particular set of products. Improving efficiency this way reduces your inventory carrying charges, thereby driving up revenues.

RFID is a very strategic tool in terms of your ability to manage. Because of its relatively high cost, it is currently used on larger, higher value added items. But as the technology progresses, the cost per tag is coming down, which will soon make it a more universal technology.

When these systems all fit together, they help you develop a single book of truth which gives you insights into your inventory, cost structure, manufacturing and product availability. Many of today’s platforms promise a single solution for these functions, but they cannot deliver on that promise unless they are properly implemented and maintained. That includes the human element -- having the right people assigned to various projects and aspects of the supply chain to ensure success.

Collaborating with partners

An often overlooked aspect of a fully integrated supply chain management system is collaboration. Some organizations become so blinded by their own technology and so insular in their approaches that they neglect the critical aspect of sharing information and processes with supply chain partners.

Remember that partner suppliers may not own all of the supply chain, so some of their components may come from other sources. By working closely with supply chain partners you can access up-to-the-minute information such as when products, pieces, or components are shipping. You can also automate and accelerate invoicing and payments. Having access into your partners’ systems and allowing access to yours is a critical success factor for streamlining processes and minimizing risk and waste.

As you look to improve your supply chain management, remember that anything this complex and potentially rewarding is worth the investment in good planning, thinking and execution. As you review and select hardware and software, stay focused on the goal of improved visibility through integration and collaboration.

Mike Gorsage is a Partner and Leader of the Business Operations and Technology Practice for Tatum LLC. Tatum is the nation’s largest executive services firm, providing financial and technology leadership nationwide.

The Era of the Electronic Medical Record

Mike Gorsage — 2009-09-28T14:02:39-05:00

No matter where you stand on healthcare reform, one thing is certain: change is coming. It’s time for the industry to prepare. That means changing attitudes and adopting new processes to improve care and efficiency. Enter the electronic medical record (EMR): the future of healthcare.

Few topics generate as much debate today as healthcare reform. Despite months of deliberation in Washington, there is still little indication of what form new legislation might take. However, one point of consensus has emerged: the current system is unsustainable. Significant change is coming, particularly in how healthcare is financed and delivered.

What does this mean for the healthcare industry? Along with change come new challenges, opportunities and risks. The key to adapting is preparation -- shifting mindsets and strategies to improve care, access and efficiency. The centerpiece of this process will doubtlessly be new technology, particularly deployment of the EMR.

EMR: a healthcare must-have

The EMR is a tool that promises to pull together disparate healthcare information into a broad, critical mass of information, both in the in-patient setting, and the ambulatory. The goal of EMR is to move healthcare to focus on outcomes and create the “evidence based medicine” approach to providing healthcare. This move will impact overall cost in the long run. It generates an electronic record that is consistent and complete, following a patient through the full cycle of care: from the physician’s office to the specialist’s office, then to the hospital and back to the physician.

Between now and 2017, there could be major incentives to execute the EMR in terms of Medicare reimbursements and payments to physicians, providers, hospitals, and nursing homes. Paper based providers, on the other hand, will see slower and lower reimbursements. The challenge with this incentive occurs with doctors, most of whom are independent of the hospital and therefore not officially paid by them.

The implications of the EMR are enormous, as is the technology behind it. It touches every component of the healthcare delivery spectrum -- all the way from physician to nurse, even to the person transporting an individual inside a hospital. Every process, be it clinical or business, links back to the EMR. While that process should be streamlined and faster, building and implementing it takes time.

Re-inventing the business of healthcare

The use of the EMR means a complete shift to electronic information. And because you’re eliminating paper, all of the processes will change, which affects every person who touches the document. Such a shift has an enormous impact on back-office administrative costs, workflow, the number and types of staff required, and the kinds of skills they need. Consider a typical week-long hospital stay, which generates about 10,000 pieces of paper and even more opportunities for error. When you convert that to electronics, it is much easier to get accurate information to the right individuals. With the workflow analysis that goes into the EMR, you’re changing process, which is why people, process and technology must be well-integrated.

Such a major change does breed complexity. Many health systems use hundreds of applications that may be departmentally focused, so the level of effort and the complexity of integrating all of the relative technologies and points of contact for a patient become very complicated. From a people perspective, consider a typical hospital of 500-800 beds, where as many as 5,000 people are employed. Because they are all involved directly or indirectly with patient care, every one of them would be affected. Complete training and implementation might take up to three years, depending on the hospital’s level of sophistication and how aggressively they pursue the EMR.

As for cost, complete implementation and integration and process redesign and re-engineering could range anywhere from 25 to 50 million dollars -- no small investment. That means planning, strategy, implementation, process redesign, and re-engineering become critical components.

Going completely electronic also makes issues like privacy, security, confidentiality critical. There are familiar rules around these topics, such as the Health Insurance Portability and Accountability Act (HIPAA) and the HIPAA guidelines. There are many more, and they are becoming more important. For example, unlike having a diagnostic procedure at a hospital or ambulatory center, more sensitive types of medical care like psychological care, or HIV treatment go through extra levels of security and privacy regulations.

Shifting to evidence-based medicine

Through the EMR, there are standard protocols attached to different procedures or methods of care. In the case of the removal of a gall bladder, for instance, information is carried about the patient in terms of whether there are allergies, post-operative infections, the extent of recovery, any complications, and so on. That kind information is part of the incentive program that health institutions and physicians will be working with in the future.

Evidence-based or outcomes-based medicine are derived around a common set of data elements, which makes data warehousing and business intelligence crucial component pieces of the EMR. Data quality will also become critical – it’s a good way to determine if a new protocol is safe and to compare its cost to other protocols.

No matter what shape healthcare reform eventually takes, every hospital, physician, provider, insurance company and the government must be prepared for change. They must become laser-focused on the quality, accuracy and integrity of patient data. Whether you view the EMR as an opportunity or a challenge, it is clearly emerging as the most powerful tool for bringing the business of healthcare into the future.

Tech Talk: Music Firm Distributes Digitally

Elizabeth Wasserman — 2009-09-10T11:57:52-05:00

IRIS Distribution, founded in 2003 in San Francisco, is a music industry marketing and distribution company that sends out audio, video, and album-cover artwork to websites, music reviewers, social networks, and Internet radio stations on behalf of independent record labels. IRIS tried a variety of ways to send these files, including snail mail, e-mail, and FTP but settled on a file-transfer service, Bryn Boughton, chief marketing officer, tells IncTechnology.com

Elizabeth Wasserman: What does IRIS Distribution do?

Bryn Boughton: We are a digital music distribution and marketing company that works for mid- to large-sized independent record labels to get their music distributed to 430 retail outlets around the world, including all the big names, such as iTunes, Napster, Rhapsody, and anywhere you would purchase music digitally. On the client side, we work with 650 record labels, varying in size. Most have different niche audiences -- electronic, rock, jazz, blues -- but they specialize in independent music.

Wasserman: What type of technology issues do you grapple with?

Boughton: On the distribution side, a lot of issues stem from lack of standards. We deal with hundreds of different stores and there is not an established standard for delivery specifications, encoding, transcoding, or delivery of the files. We have to convert all our audio, artwork, and meta data into all these various formats. It's a big issue in the industry right now. In the general music space, a lot has been going on with music. There's been a transition from physical product to digital product with peer to peer technology enabling people to share music. It's really led people to re-evaluate how music can be monetized.

It's also the fact that so many artists can make their music available for sale right now. It used to be that distribution was a problem because there was a chokehold by the major record labels. Now that barrier has been taken away and independent artists and even music hobbyists can make their music available online. There has been a real recognition of the importance of marketing music online.

Wasserman: You encountered problems in distributing these large-sized music files. What did you do to resolve those problems?

Boughton: We resolved that by building a dynamic and extensible encoding system. We are very efficient and can handle all those distribution formats effectively. We handle the distribution of all our promotional files through YouSendIt, which we started using three years ago. Previous to that we mailed physical copies for promotional use. That was very expensive in terms of mailing costs and packaging and labor.

Wasserman: What do you use the service for?

Boughton: We use it on the distribution and marketing side. Some record sites want to submit files to us for distribution from musicians and record labels. FTP is available but some aren't comfortable with navigating that technology. We enable them to deliver it to us through YouSendIt. On the marketing side, we actually send out materials to writers, online publications, music discovery sites – anywhere people can review music or are posting music for free downloads. It's important for us to send multiple types of files. That was one limitation of other services. There are other services specific to music delivery but all they deliver is audio and they're proprietary so journalists would have to log in. That's another step where you're likely to lose someone's attention. We want to make it as easy as possible for someone to grab a file and listen to it.

Wasserman: How does it work?

Boughton: Everything is campaign specific. In some cases, the label is concerned about protecting music from being leased ahead of release date. So we'll make sure a file is password protected. We're able to track who is downloading it. In some cases, we want music to get as far and wide as possible, so we make a link available. On the other side, when labels send files to IRIS Distribution, they feel comfortable because the site is branded as IRIS. They see our logo and they can upload their files to us. It's similar to FTP but a lot more intuitive.

Wasserman: What have the results been?

Boughton: We've been really happy. Just going from a physical promotional campaign to digital saves thousands of dollars on a campaign. There are still some journalists that just prefer the physical materials, but we've definitely cut a big chunk of that out.. ON the labor side, we've been able to cut out a lot of the human resource time involved with people using FTP and making people feel comfortable using that technology.

Managing IT Costs during a Recession Part II: Improve Asset Utilization

Mike Gorsage — 2009-08-24T16:45:56-05:00

Although the economic tide may seem to be turning, a solid recovery could take years to come to pass. What does this mean for your organization? As we discussed in Part 1 of this series, your organization’s survival and ultimate success depend on your ability to implement new strategies for managing IT costs.

Though most organizations have made numerous changes and sacrifices in the past year, you likely have more room than you think to bump up savings and streamline processes. Think of this ongoing crisis as an opportunity to innovate. To get the most from your IT dollars, turn your sites toward developing comprehensive strategies for improving the way you utilize IT assets and manage demand for IT services.

IT assets: use them or lose them

How does your organization currently utilize its IT assets? Answering this question honestly can yield surprising cost cutting opportunities. Improving asset utilization is all about identifying and acting on opportunities to cut projects, more tightly managing demand, and reducing service levels without impairing the business. It also involves virtualizing, consolidating, and reducing IT assets to improve processes and efficiencies, rebuild profit margins, reduce costs, and alleviate near-term debt compliance issues.

Begin with a thorough assessment of your IT components (hardware, software, and processes), identifying those with the highest cost. Compare those with the potential savings from proven new technologies and processes, considering associated costs, risks, and dependencies. This approach can help you explore ways to reduce spending on or eliminate outdated technology.

As you review your use of IT assets, explore new strategies, such as converting telecom and data transmission services to the Web and utilizing virtualization software to reduce the servers needed to run existing applications. Also consider using transaction software delivered as a service or outsourcing hardware operations and maintenance.

Assess people and projects

The next step is addressing issues of underutilized staff and excess capacity. Identify ways to cut staffing on routine support functions. When it comes to projects, create stringent criteria for project funding, review in-flight and planned projects, then eliminate or consolidate redundant projects and those that can’t produce sufficient value. Capture as much value from interim deliverables as possible and avoid threatening key capabilities or creating undue risk.

Another strategy is to tighten management of demand for IT services. Compare your current service level agreements with the priorities of various user groups and create new types of services, such as lower cost response for non-critical fixes and help desk calls. Also assign IT costs to business group budgets to encourage appropriate funding and cost reduction.

Unravel IT costs

This critical step involves revamping your company’s planning and budgeting processes to create transparency and business-driven management of IT demand. An important part of this process is changing how IT is perceived in your organization. There must be a shift toward the idea that IT is in business to produce products and services, not merely to carry out tasks and responsibilities.

First, build a catalog of products and services that IT currently delivers, identifying near-term opportunities to rationalize and simplify them. Next, forecast the quantity of these services that the business is willing to “buy” and determine resources to produce them and rates to be charged. Then create a business plan that includes revenues and funding sources. The plan should define service levels, assign direct and indirect costs to each product or service and scrutinize costs intensely.

An exercise such as this is rarely easy. When done properly, a brutally honest self-assessment often uncovers long standing inefficiencies and long wasted funds. Its benefits can be invaluable: greater spending discipline and a clear illustration of services and their costs. With the cost transparency you create, your business users better understand what IT provides. You also create a market for internal services that can be compared to external providers -- in short, you begin running IT like a business.

Until a true recovery occurs, remain in survival mode. When you know exactly how your IT assets are being used and how to better manage demand, you are at a distinct advantage. You will be better equipped to develop strategies to lead your organization successfully through this next phase of the recession and prepare for future growth.

Mike Gorsage is a Partner and Technology Practice Leader for Tatum LLC. Tatum is the nation’s largest executive services firm, providing financial and technology leadership nationwide.

Personal Tech Checklist for the Workplace

Kim Boatman — 2009-07-30T12:26:20-05:00

Increasingly, most people have an expectation of seamless connectivity these days. The boundaries between work and personal life blur as employees sign onto Facebook at work and access company systems from home.

But those blurred lines can have security implications for your small or mid-sized business. Do you allow workers to load workplace applications onto personal iPhones? Do you permit the use of social networking sites at work? Is it okay for an employee to use a work-issued smartphone for personal matters?

The chances are your business hasn’t adequately addressed these personal tech issues, says Mark D. Rasch, co-founder of Secure IT Experts, which advises businesses about security. “What I’m seeing people do about it is a lot of nothing,’’ Rausch says.

Don’t overreact

Your first reaction might be to firmly establish distinctions between work and personal use. For instance, some companies ban the use of social networking sites at work and on work devices. But that’s not likely to work, say Rasch and Andrew Storms, director of security operations for nCircle, an IT security vendor.

“Today, everyone is highly connected and many workers see very little difference between work and personal time,’’ says Storms. “Companies need to understand this new paradigm and adjust their approach to security accordingly. Fighting to bring clear separation between work and personal space just eats up scarce IT resources and leaves IT as the bully that won’t allow people to get their work done.”

Your time is better spent crafting a common-sense approach that acknowledges the nature of communications today, along with your security needs. Rasch and Storms offer a checklist of steps you should take:

Establish or re-evaluate usage policies. Many businesses wrote Internet usage policies a decade or so ago and haven’t revisited them, says Rasch. These businesses make the mistake of not recognizing the unique nature of social networking, with its casual, conversational tone, the sheer volume of communication involved and the lack of privacy, Rasch points out. “It’s not the hardware, it’s the people,’’ Rasch says. “The social network is much more dangerous than the computer network.”
Evaluate how you expect employees to use – or not use – social networking. After all, there can be a business benefit to your employees’ presence on Facebook or Twitter. Spending time on Facebook at work is part of the job description for Chanelle Cotton, an account executive with a Brooklyn, N.Y., strategic marketing firm. Cotton uses her personal Facebook account to promote business. She often invites friends to join the fan page for the marketing firm, and the company uses Facebook to promote upcoming events. But while socializing on Facebook is considered business-friendly, Cotton’s employer doesn’t allow her to use her cell phone to text or talk to friends while she’s at work. “Establish policies but be personable about them,’’ says Storms. “Most companies already have enough legalese to cover them in terms of liability. If you take the stance that your employees want to do the right thing, it behooves you to take the time and speak plain language to them.”
Inventory employees and equipment. Keep track of the level of access granted to each employee. After all, points out Rasch, a line worker operating a drill press in a manufacturing plant has no reason to access Twitter during a work shift. On the other hand, a sales rep drumming up business for your company can make a legitimate case for open access. In the same way, it’s important to track applications or devices you won’t allow and to inventory the level of access you permit on office and remote equipment.
Understand the security implications of your policy. For instance, says Storms, allowing employees to install proprietary information on their personal devices is a high-risk proposition, while permitting access to social networking sites at work is less risky. However, the nature of the information your employees post could affect business. Salespeople might unwittingly reveal information about calls through Tweeter. Hackers might use personal information gathered through Facebook to pose as an employee and gain access to a system.
Educate users. It’s not enough simply to establish plain-language guidelines. If you want employee buy-in, explain why certain actions are limited and what the consequences could be. In some cases, businesses limit personal communications because of the lost time involved. You’ll make a stronger case, though, if you clearly outline potential security implications. “Most employees don’t intend to introduce security risks. They just don’t think about security very often,’’ says Storms.
Involve IT. It makes good sense to vet policies and practices through the people that keep your systems going. Involving IT in the conversation often helps provide best-case solutions. How can your employee make it to his kid’s soccer game yet finish work at home on sensitive material? Having IT personnel engage employees in conversation breaks down barriers and fosters understanding on both sides.
Give yourself wiggle room. Create that clear usage policy, explain it, and publicize it. But give yourself leeway, say Rasch and Storms. “You want to write policies in a way that they have flexibility and allow you to evaluate individual circumstances,’’ Rasch says.

Finally, understand that evaluating and updating your usage policy is going to be an ongoing process. “Every significant change in technology creates a whole new set of legal issues,’’ Rasch advises.

Tech Talk: TV Frame Maker Shares Files

Elizabeth Wasserman — 2009-06-17T11:08:44-05:00

HD Envy is a business that started less than two years ago in Florida to design, manufacture, and sell custom frames and mounts for flat panel TVs. Sean Thorp, managing officer of the company, tells IncTechnology.com that by outsourcing management of files and servers the company was able to avoid having to hire IT staff while enabling employees in different locations to collaborate and work on the same files.

Elizabeth Wasserman: Tell us about your business.

Sean Thorp: We've been in business for about a year and a half. We have offices in St. Petersburg, Largo, and Sarasota in Florida where we manufacture, sell, and distribute frames for flat panel televisions. If you want a wall-mounted flat panel TV, and the black frame doesn't match your décor, we make frames that fit right over your screen that allows someone to basically match their television to their décor. It's kind of going back to what televisions used to be when they came in a cabinet and looked like a piece of furniture. It used to be that manufacturers understood this and would try to provide different frames but if they do that now it's more of a hassle. They have to stock one red and one blue of each television in their distribution centers. That's where we step in. We base our frames off the Video Electronic Standard Association (VESA) standard so that they fit right over the television and the wall mount.

Wasserman: You have staff working in a variety of locations. What kind of IT problems did this create?

Thorp: We have nine employees right now working in a variety of locations in Florida and overseas. We're geeks at heart. We understand there were going to be some problems. When we first started the business, we didn't even have an office. We were working from home. So we started using Google Apps, which was a fantastic service that cost $50 per user per year. That took care of e-mail and documents. Then we started looking at Microsoft Exchange servers and Sharepoint. But to use those products we would have needed to hire an IT staff and at that point we didn't have any money. How can you convince someone who needs to be making $80,000 a year to work for free? One of the problems we ran into is we started having these documents in PDF forms with non-disclosure agreements and we had to figure out where we could store those so that we could call them up and access them from anywhere we were. If my partner, Howard Hochhalter, was in Sarasota and I was in Palm Harbor, or if we were dealing with a business partner in China, how could we share these documents that included photographs of our designs? Google Docs couldn’t handle those.

Wasserman: So what did you do about it?

Thorp: At first, we started an FTP server off the domain. We tried that for three weeks and it was a nightmare. We had multiple versions of documents all over the place. So then we went shopping for a solution. We figured we couldn’t be the only people who needed to look for something better. We did some online searches and found Egnyte. It wasn't an FTP server. It was a hard drive that was online. We could access the same version of a document from our different office locations. In a business with a large office, you have a shared document folder. But we weren't in the same office. This also blossomed into a service through which we could send documents to people, such as if I have a DVD and I want to send it to a new retailer interested in selling our products. I can't send an 8-gigabyte file in an e-mail. So I just create a link from my hard drive and share it explicitly with them. They have a download location, but they can't access anything else on our hard drive. They just get to see what we let them see.

Another great thing is that we can create a folder for a vendor such as Best Buy and drop stuff in there when we put new information out and they have access to that information immediately. They can't see anything else. But everything they need is dropped in there in real time.

Wasserman: What have the results been?

Thorp: We haven't had to hire an IT staff. That is the first thing. The next thing is the actual hours we need to spend managing this have been cut down. When we were using the FTP server, we were spending at least two hours per week each doing file management. That added up to four hours of wasted time a week when we should have been focusing on running our business. We operate very lean because we want to keep our prices down. This has enabled us to offer our products at a low cost because we don't have to pay for an IT staff and don't have to pay licensing fees to Microsoft.

Tech Talk: Handbag Retailer Deploys DIY Tech

Elizabeth Wasserman — 2008-12-19T10:08:41-05:00

LunaBoston.com, a Boston-based handbag retailer, launched in 2004 and now operates a storefront and a Web-based business. By using a do-it-yourself website design, CIO Alex McCollom tells IncTechnology.com that the company was able to customize features -- such as creating a Touch & Feel Meter to give visitors a sense of the texture of each bag -- and better serve customers.

Elizabeth Wasserman: What is LunaBoston?

Alex McCollom: LunaBoston is in its fifth year. It's an accessory retailer, focusing almost entirely on handbags. We started out with emerging and up and coming designers. Not Louis Vuitton, but names more along the lines of Rebecca Minkoff and Kooba. When we started, this was a small industry. But now the big boys have caught on with these brands and so it's more competitive. We have a store front in Boston but we're also an e-commerce company. We currently have six employees.

Wasserman: How did you build your website?

McCollom: We built it ourselves. If you're a retailer and you want to do business on the Internet, you have to have good inventory control practices. If you're going to sell something, you have to make sure you have it in stock. There were no off-the-shelf packages that could do inventory management and put in the customizations features that we needed. One of our big customer services is that we will deduct 50 percent off the price of a bag if the one you wanted wasn't in stock. If you can't control your inventory when you get a nice big Black Friday, you're going to have a lot of upset customers. We not only built a website but we also developed our point of sale system, a process for getting the product into inventory, and managing customer lists.

Wasserman: What's the most important thing a small business should know about building a DIY website?

McCollom: It's expensive but you will get that money back in flexibility. You should know that it's going to cost you more to build it yourself than to use an off-the-shelf system, but you will get that back in terms of what you're able to do. If you want to run a promotion for buy one/get one free, you can. If you bought a program and they don't support that, you're up a creek. The other thing they should know is that it never ends. The development process becomes your business. That becomes a priority in terms of resources. Do we have enough time to put certain features in before Christmas hits? If you simply bought off the shelf, you're stuck with that you got. But the possibilities are endless when you do it yourself.

Wasserman: In fairness to other business owners, you've got a background in technology.

McCollom: That's right. For my day job, I'm an IT infrastructure manager. It's not really for everybody. You need that technical background. You have to be able to host the website. You have to know the hardware side of things, about security implementations, etc. You're storing people's credit card information so you have to understand what the regulations are regarding that.

Wasserman: What type of unique features have you been able to build into your website?

McCollom: We have the Touch and Feel Meter. For any e-commerce site, what you're trying to do is get the customer as close to the product as you can. In the store, you can tell so much more about the product. You can touch it and feel it. We came up with the Touch and Feel Meter so that you can understand the texture of the bag. You can click and get that information for any product. We're looking at features for our next release that will allow you to match a handbag with an outfit to see if this will go with that you wear. We're also looking at new ways of comparing products quickly. A customer will come through and look at 50 bags in 20 minutes. How do you remember and keep track of what you liked and what you didn't like? We want to enable you to keep track of what you looked at using comparison tools.

Wasserman: Have you seen any return on investment?

McCollom: It's hard to say what the ROI is on all these little pieces. You cant' calculate ahead of time if you know cost you in labor is $10,000 to develop a new product comparison tool, it's hard to say when you get that back. It's another thing to draw traffic. .It's another thing that people will remember you by and make them come back instead of going to someone else.

Good Match: Choosing an IT Services Vendor

Michelle V. Rafter — 2008-10-24T17:30:55-05:00

IT services providers are like car mechanics. A good one can keep your company’s computer network running like a well-oiled machine. A bad one can mid-diagnose a problem, put in a bad part, and leave you limping along even worse than when you started.

You wouldn’t take your car to any old mechanic, so neither should you entrust the information backbone of your small business to any old outside IT vendor.

Picking an IT services company that suits your needs and your budget requires careful planning, rounding up a qualified candidate pool, performing rigorous due diligence, and once you’ve found a good match, continually monitoring the relationship, according to IT industry consultants and other experts.

A good time to shop for an IT services company is before you have issues that need to be addressed, so you’re not working in panic mode to find a quick fix to a serious problem, the experts say. They recommend having the following on hand before a search:

A network map -- This document describes everything there is to know about your company’s computer hardware, software, networks, and bandwidth provider. If you’re negotiating with an outside party that will be assuming responsibility for running the network, this type of document should also include information such as which employees can access to which files and how remote users connect, according to Michael Kraner, CEO at Primary Support, a 10-year-old New York City IT services firm that works with small and mid-sized businesses. A network map also comes in handy when you’re transitioning from one provider to another, Kraner says.

A statement of work -- A statement of work outlines exactly what functions or processes an outside IT services company will be responsible for. When it comes to this document, there’s no such thing as too much detail. If an outside firm is being hired to work on a project, for example, a statement of work would describe what’s to be done, how the outside vendor will work with various company personnel, and how the contractor will be paid, says Rocky Vienna, a long-time in-house IT manager and currently president of Vienna Technology Group in Palo Alto, Calif.

Where to find IT services candidates

Once you know what you need, start looking for prospective candidates. IT consultants and managers suggest consulting the following:

Friends, former colleagues or fellow professional association members -- If they run businesses that are the same size as yours or are in the same industry, these contacts are in a good position to commend vendors they know or use.

Board of directors -- Consult your board for the same reasons you’d consult friends or former colleagues, they may already know a firm that’d be a good fit.

IT industry executive recruiters -- Recruiters maintain enormous contact networks in order to fill in-house IT management jobs. Chances are some of those contacts are IT vendors that’d be interested in contract work, according to Vienna, whose firm does contract IT work for companies of all sizes. If you use a recruiter, however, be prepared to pay a premium for the service, he says.

The Internet -- Don’t underestimate the power of a good old-fashioned Google keyword search to find prospective candidates, Vienna says. He also recommends scanning IT blogs for mentions of IT professionals who could be candidates.

Check references and then some

Once you’ve narrowed the field of potential candidates down to a couple, check references. Contact the references the IT vendors give you, but dig around a little to find other customers too. “References are going to be the vendor’s customers who are the happiest, so you’re only getting one side of the story,” Vienna says.

In interviews, go beyond the standard questions and ask about things that can’t be answered with a simple yes or no, Vienna says. Some examples:

If there was a contract negotiation, how did it go?
What were some issues that you weren’t pleased with, and how did you resolve them?
What areas of the contract did you have trouble managing?

Andre Preoteasa, a former IT consultant and currently IT director at Castle Brands, Inc., a New York City importer of fine liqueurs, also suggests giving a potential outsourcer a hypothetical IT situation that pertains to your business. If they can't give you a good explanation of how they'd solve the problem, and sound excited about the prospect of working on it, they wouldn't know or care enough to do it justice, Preoteasa says.

When negotiating a contract, make sure to include service level agreements that spell out the specific level of service you expect the contractor to provide, such as how often system backups will be performed and what the acceptable rate of maintenance downtime will be.

As for paying for IT services, you can either keep an outside firm on a monthly retainer, or pay as you go, according to Preoteasa, the Castle Brands IT manager. It’s tempting, especially for cash-strapped small businesses or start ups, to forego keeping an IT services firm on retainer because of the expense. But not having steady support could end up costing more in the long run, he says. By paying for monthly services you may fork over more initially, “but you can sleep at night knowing all your IT issues will be resolved,” Preoteasa says. Wait until something breaks and you run the risk of paying an outside firm $150 to $200 an hour to fix something without knowing how long it could take to get the job done.

Never pick an outside vendor just because they’re the cheapest, Preoteasa says. “My previous company made a lot of money fixing problems previous IT consultants caused” because the clients didn’t spend what they should have in the first place, he says.

Virtually There

Andrea Peiro — 2008-10-24T17:24:41-05:00

The need for a flexible business style is very much part of today’s small business world: entrepreneurs work very odd hours and in very odd places in order to maintain an acceptable balance between personal and professional lives.

Information technologies have drastically changed how productive people can be when away from their office, making in many cases a virtual presence a very close substitute for actual presence on the job. Information age entrepreneurs can literally have their virtual office move wherever they are by leveraging technologies such as voice over Internet protocol (VoIP), Web-based software applications, online data storage, smartphones, and 3G data networks. In many cases, though, the importance of the physical office as a primary workplace remains substantial. The main office often is where the majority of the work gets done, and where most of the business resources are.

Some very clever and quite inexpensive technologies can help bridge the need for a flexible work life and the importance of being present at the office, allowing us to remotely access the IT infrastructure of our main workplace and consequently most of its business resources, just as if we were there.

There are two primary technologies that allow us to achieve that objective: virtual private networking and remote desktop access.

Virtual private networking

Virtual private networking is capable of using the Internet to provide remote offices or individual users with secure, direct access to their organization's internal local area network (LAN). A virtual private network (VPN) server or gateway connected to the LAN and to the Internet allows for external users to log into the network and access all physical and logical resources, such as shared files, databases, printers or an internal email server.

The VPN server software can be either hosted in an actual computer or built into a dedicated appliance. Microsoft Small Business Server provides VPN capability, but the most popular free VPN server for Windows is OpenVPN.

Most networking device companies offer appliances that provide VPN functionality, although they almost always require proprietary software to be installed on the remote clients, imposing licensing fees per each remote user. Since these devices only support a limited number of concurrent external connections, it is very important to assess prior to purchasing how many concurrent remote users your business expects to have at any given time.

The appliance approach tends to be quite simpler to setup and manage than the server option, although I recommend having a professional IT expert take care of your VPN installation and configuration, due to the general complexity of the technology.

Once the VPN connection is established, the experience is truly seamless, as long as the internet connections are sufficiently fast. Business-grade DSL and cable Internet access are good enough for acceptable performance.

Remote desktop access

Remote desktop access technology allows instead to take full control of an individual Internet connected PC from anywhere. Since the host computer is taken over, the remote client user feels exactly as if it was sitting in front of the host, having access to all its software, files, and resources. A typical application consists in taking control of a desktop located in the main office while using a laptop from home.

Products in this category generally leverage the technology in two different ways: peer-to-peer direct connection or Web-service connection. In the first, case the product is purchased as licensed software and the connection occurs directly from the client to the host. In the second, case the product is purchased as a service and the connection between the computers occurs through a secure web site.

In both cases, software needs to be installed on both computers to make a secure connection possible.

In the first category, the undisputed leader is Norton PCAnywhere by Symantec. The product though has lately been transformed more to be a tool for providing remote IT support than to manage the occasional remote desktop connection, and the price point has gone well up, making it mostly a choice for professional users. The second most popular, and now probably better suited for simple remote desktop control is Laplink's Everywhere. Other offerings include Anyplace Control and Access Remote PC.

The second category, Web-based tools, is quickly growing in popularity thanks to its great inherent flexibility and ease of setup and use. The most popular products are: GoToMyPC, Log Me In, PC Now from Webex, and RemotePC. All provide some form of free basic service, but the most comprehensive no cost offering is definitely the one provided by Log Me In.

If already using VPN technology, Windows XP and Vista include a Terminal Services client that performs exactly the same function at no extra cost for computers within the network. MS Small Business Server provides enhanced functionality using the same service, allowing for very simple setup and management of connections. Otherwise TightVNC is a great open source product, even if it has some issues working with Vista.

Enjoy your freedom without changing your work habits. Remote office access technologies are here to stay.

Andrea Peiro is a recognized authority, author, analyst and speaker on high-tech marketing and use of information technology in small and mid-sized businesses. He has been frequently interviewed and featured in such media outlets as The New York Times, The Wall Street Journal, and Inc. You can reach him at us.andreap@gmail.com.

IT Mistakes: Failure is Not an Option

Michelle V. Rafter — 2008-10-01T14:54:14-05:00

Andre Preoteasa still remembers the business owner who missed a project deadline because his old computer was too slow. As the businessman’s IT consultant, Preoteasa had earlier recommended switching to new, faster machines. But the advice had fallen on deaf ears. “He cried in front of me. There was nothing I could tell him. He didn’t upgrade,” Preoteasa says.

Now IT director at Castle Brands, a New York City fine spirits importer, Preoteasa relates the story to explain how IT mistakes can hurt a small business. It’s a good lesson for bad times: when money is tight and customers are precious, IT can make or break a business.

The bad economy is only underscoring what savvy business owners already know about IT, says Michael Kraner, CEO of Primary Support, a 10-person IT consulting firm in New York City. Whatever business you’re in, you’re in the technology business, Kraner says. If you can’t collect on overdue bills because your computer crashed and you didn’t back it up adequately, you’re hurting yourself financially, and that’s not a good situation to be in, especially in tough times. “If you don’t protect your network, you’re going to have problems,” he says.

Chronicling IT mistakes

According to Preoteasa and Kraner, here are some of the biggest IT mistakes small businesses make and what they can do to solve them:

Keeping old equipment -- Old computers break down more often so they cost more to maintain. Plus they can’t run today’s graphics-intense programs as quickly as newer machines. Not to mention how upset employees get when it takes 30 minutes to open Microsoft Outlook and a couple other programs, Preoteasa says. New machines are so cheap, “I can’t see why a company can’t spend $450 on a desktop and $200 for an IT company to set it up and you’re good to go,” he says.
Spending too much or too little on e-mail -- Go with cheap, Web-based e-mail and you could quickly outgrow it. But buy an expensive e-mail server that an IT vendor has to maintain and you could pay for more than what you need. For companies starting from scratch, Preoteasa recommends finding an online e-mail vendor that supports Microsoft Exchange. “You get the same benefits of an expensive e-mail server but it’s not located on premise and the online company manages it day to day,” he says.
Losing data -- Whether it’s a denial of service attack on your server or an employee accidentally deleting important files, losing data is one of the most damaging things that can happen to a business. The best way to mitigate lost data is with a well-tested plan for backing up information. Smart companies do regular backups to disk, tape, or online and have some type of back up off site too in case their offices are hit by a hurricane or flood. They also provide different levels of back up for different types of employees: the CEO’s desktop might be backed up every day but other machines only once a week, Kraner says.
Failing to create a disaster recovery plan -- Whether it’s a storm, bandwidth glitch, or server crash, any time a company’s computer system goes down it’s a disaster. To be prepared, companies need an emergency recovery plan that spells out exactly what to do to recover, including things like which functions need to be brought up first. “A lot of companies take technology for granted until there’s a problem. That’s a pitfall. You have to be proactive,” Kraner says.
Failing to take adequate security measures -- It’s not enough to install a firewall and anti-virus program and think your network is secure. Attackers are getting smarter, and companies’ responses to them need to be smarter and broader too, Kraner says. In addition to firewalls, companies should use other monitoring tools like intrusion prevention systems (IPS) to detect and block a variety of attacks from outside and inside a company’s network. Whatever the devices or programs, make sure they’re updated as soon as new patches or upgrades come out, he says.
Not keeping tabs on in-house IT staff -- Companies with a small IT department might not have the resources to make sure staff is doing what they should be. For that reason, Kraner suggests hiring an outside party to do periodic IT audits to make sure proper polices and procedures are in place and staff is following them.
Hiring the cheapest outside IT firm -- Don’t hire IT firms on price alone because you’ll get what you pay for, Preoteasa says. “My previous company made a lot of money fixing problems caused by other IT consultants.” Another mistake: using a reputable IT firm but selecting their cheapest package “and then not getting what you want because you don’t want to spend more,” he says.
Failing to monitor data practices of external vendors -- You may do everything right when it comes to your company network, but does your bookkeeper or tax preparer? If they don’t properly back up client data and someone breaks into their system and steals their Quickbooks files, you’ll pay the price, Kraner says. He counsels clients to quiz their key vendors to make sure they have adequate backup and security systems in place.

What worked a few years ago isn’t good enough for today. You don’t have to be the first on the block with every new tech toy, but you do need to keep up with the times, Preoteasa says. Five years ago logging on to your company’s network remotely was an expensive, cumbersome process; today it’s easy and free. A couple years ago, setting up a new computer took a couple hours; today it’s a couple minutes. Keeping equipment up to date helps productivity and morale “Slow computers don’t please anybody except the accountant,” he says.

Sidebar: More Cautionary Tales

Want to learn more from other companies’ IT mistakes? Here are a few websites that spell out what can go wrong:

TechCrunch Deadpool -- The same blog that chronicles Silicon Valley start ups keeping a running tally of businesses -- primarily Internet companies -- that didn’t make it, all the better to keep still healthy companies from repeating the same mistakes.
IT Project Failures ---When Michael Krigsman, isn’t busy as CEO of Asuret, a Brookline, Mass., IT consulting firm, he writes about IT failures at this ZDNet blog.
Boiling the IT Frog: How to Make Your Business Information Technology Wildly Successful Without Having to Learn Anything Technical (BookSurge, 2007) -- Author and speaker Harwell Thrasher specializes in the human side of IT and uses the book to explain common myths and mistakes.