Posted by Mark Brousseau
Given the slow economic recovery, outsourcing hit a plateau for most industries in 2010, though there were a few important bright spots, including financial services, which witnessed a number of large IT deals, and also the travel industry, as more hotel chains sourced their key technology functions, according to research from law firm Morrison & Foerster.
Following are a few highlights from Morrison & Foerster’s research:
... Market uncertainty continues: nagging high unemployment and near-bankruptcies of some European countries have left companies unsure about the value of entering into long-term outsourcing arrangements.
... As Business Process Outsourcing picks up, companies will increasingly demand innovation from providers, hoping to ensure more long-term and embedded value in the sourcing relationship. “Successful innovation can have a multiplier effect which can lead to increased savings going forward,” the report says.
... Cloud computing has become the biggest money-saving sourcing tool – but privacy concerns have generated industry-specific “private clouds.” Morison Foerster expects the development of a new niche market devoted exclusively to cloud computing security.
... Financial services bounced back in 2010 due to large restructurings and the adoption of outsourcing by middle market institutions. Regulators’ close watch on the industry means banks and insurance companies will insist on stable and creditworthy sourcing providers – who might even be called upon to assume responsibility for system failures at banks. Financial services outsourcing should also get a boost from implementation of the Basel II and III and Solvency II international finance accords.
... Heathcare and pharma deals hardly budged in 2010 but the new U.S. healthcare legislation should spur activity in the near future.
... As the recession eases and short-term cost-cutting is replaced by a longer outlook, “green IT” will become more popular, driven by corporate social responsibility agendas, government requirements, and bottom-line savings. More companies are holding sourcing service providers to green standards of energy efficiency and minimizing waste.
... In the U.S., a significant exception to outsourcing’s relatively tepid performance in 2010 was Legal Process Outsourcing, which law firms are adopting at an unprecedented rate. Further, the types of work being outsourced continues to increase in complexity and sophistication, suggesting a rosy future for LPO – something investors and other strategic buyers have noticed.
How do these findings compare to what you are seeing in the market?
Showing posts with label outsourcing. Show all posts
Showing posts with label outsourcing. Show all posts
Wednesday, January 19, 2011
Wednesday, June 30, 2010
On-premises versus the Cloud
Posted by Mark Brousseau
There is a lot of talk these days about on-premises versus cloud computing. Keyon C. Thomas (keyon@infostreet.com), reseller channel manager at InfoStreet, says the market is shifting:
I talk to VARs/MSPs all day long. One of the things I am always shocked by is how many of them don't know how little money they make selling on-premises technology and how much more they can make selling all cloud solutions. For some of my VAR's, I see an 82% profit increase. If that is not enough to get your attention then I don’t know what will. Let me break down why and see if it makes sense to you guys as well.
So let’s first look at a typical on premises install. You go in and meet with the client to make sure that you have the things they need. From there you order from your vendor, in most cases you sell at a set price with your commission built in. Plus you have to put money into technicians setting stuff up (and even if you are the tech your time is money because that time you are spending could be better spent on finding more clients). This is about a 5- to 6- day deployment with a combination of time at the client location and pre configuration at your location. Plus with most on-premises solutions, there is no recurring revenue unless you get a break fix support contract. Even if you have a break fix contract, when something goes amiss you still have to send someone out to the location to fix it so, again, you are eating into your overall profits.
Now let’s look at a cloud install using a combination of SaaS and HaaS. Your client’s network should already be in place just like it would have been in the prior example. If you can get the networking contract then you have minimal work there to set it up. Hardware would come from you HaaS vendor with the deployment specs provided to them. This is again a simple install since all the configurations were done before you received them decreasing your time at the client location.
Deployment of the file server, Exchange, SharePoint, and Communicator like environments for the clients can be deployed by the SaaS provider with a couple of clicks so you don't have to have a technician. There are even SaaS offerings of Accounting, MS office suite, and industry specific software. For most clients you're looking at about a 1 work day deployment. In both cases you are going to have recurring monthly revenue coming in before you add your support contract. When stuff does go down, if it is hardware you ship it back to the HaaS vendor and if it is software the SaaS provider is taking care of it, so you are not devoting man hours to it. Quite simply you are collecting the same if not more money but doing CONSIDERABLY LESS WORK per client. This frees you up to get more clients. Where you may only be able to support 7 to 14 on-premises clients you could support over 100 cloud clients. It just makes sense.
So my question to you is would you like to explore how to decrease your operational expenses while you significantly increase your bottom line?
There is a lot of talk these days about on-premises versus cloud computing. Keyon C. Thomas (keyon@infostreet.com), reseller channel manager at InfoStreet, says the market is shifting:
I talk to VARs/MSPs all day long. One of the things I am always shocked by is how many of them don't know how little money they make selling on-premises technology and how much more they can make selling all cloud solutions. For some of my VAR's, I see an 82% profit increase. If that is not enough to get your attention then I don’t know what will. Let me break down why and see if it makes sense to you guys as well.
So let’s first look at a typical on premises install. You go in and meet with the client to make sure that you have the things they need. From there you order from your vendor, in most cases you sell at a set price with your commission built in. Plus you have to put money into technicians setting stuff up (and even if you are the tech your time is money because that time you are spending could be better spent on finding more clients). This is about a 5- to 6- day deployment with a combination of time at the client location and pre configuration at your location. Plus with most on-premises solutions, there is no recurring revenue unless you get a break fix support contract. Even if you have a break fix contract, when something goes amiss you still have to send someone out to the location to fix it so, again, you are eating into your overall profits.
Now let’s look at a cloud install using a combination of SaaS and HaaS. Your client’s network should already be in place just like it would have been in the prior example. If you can get the networking contract then you have minimal work there to set it up. Hardware would come from you HaaS vendor with the deployment specs provided to them. This is again a simple install since all the configurations were done before you received them decreasing your time at the client location.
Deployment of the file server, Exchange, SharePoint, and Communicator like environments for the clients can be deployed by the SaaS provider with a couple of clicks so you don't have to have a technician. There are even SaaS offerings of Accounting, MS office suite, and industry specific software. For most clients you're looking at about a 1 work day deployment. In both cases you are going to have recurring monthly revenue coming in before you add your support contract. When stuff does go down, if it is hardware you ship it back to the HaaS vendor and if it is software the SaaS provider is taking care of it, so you are not devoting man hours to it. Quite simply you are collecting the same if not more money but doing CONSIDERABLY LESS WORK per client. This frees you up to get more clients. Where you may only be able to support 7 to 14 on-premises clients you could support over 100 cloud clients. It just makes sense.
So my question to you is would you like to explore how to decrease your operational expenses while you significantly increase your bottom line?
Wednesday, February 24, 2010
Not All Municipalities Outsourcing
By Mark Brousseau
While payments processing outsourcing has gained traction among government entities during the economic downturn, it's still not for everyone. A case in point: the Apache County Tax Collector (Arizona), which recently implemented a solution to automate the processing of its tax payments.
"We never really considered outsourcing," explains Apache County Tax Collector Chief Deputy Sandy Klinchock. She believes that in-house processing provides more control and better quality.
Known as the longest county in the country, Apache County runs 211 miles from the Utah border to just south of Alpine, Arizona. Two-thirds of the population, and over one-half of the land area, belongs to the Navajo Nation, the largest Native American tribe. Currently comprised of 70,000 residents, Apache County is growing : new subdivisions have been approved, permanent jobs are being created, and the county is investing in the services required for an expanding population.
With the Apache County Tax Collector committed to keeping its payments processing in-house, it knew it needed a solution for automating its tax processing. Previously, three employees processed the county's roughly 68,000 tax payments in about a three-week window. By automating, the county also hoped to streamline its deposits to improve funds availability and working capital management.
"We wanted to become more efficient, while enhancing our service to constituents," Klinchock says.
In late 2009, the Apache County Tax Collector implemented an image-enabled remittance processing solution from Creditron. The system includes a 3000t check scanner from NCR, courtesy and legal amount recognition (CAR/LAR), and the ability to deposit funds electronically via Check 21.
The Apache County Tax Collector selected Creditron based on its implementation of a system at nearby Navajo County, and on its willingness to meet the county's fast installation schedule; the Apache County Tax Collector went into production a few weeks after signing its Creditron contract. Navajo County handles back-end tax accounting on behalf of the Apache County Tax Collector.
As a result of automating its tax processing, and depositing funds electronically, Apache County Tax Collector now gets all of its funds to the bank the same day they are processed. In its old manual environment, it took the county two to three days to turn around its deposits. "Now, we can keep our money invested for a longer period of time," Klinchock says. "We also have a clearer picture of how much money we have in the bank, and whether we have to pull from investments to pay warrants."
The county also is able to make electronic deposits for all eight of its departments. And depositing funds electronically eliminated daily courier runs to the bank, which cost the county $350 a month. Additionally, there are fewer calls from customers asking why their check hasn't cleared sooner.
With results like these, Klinchock is surprised that so many government entities are outsourcing their payments processing. "If they take some of these arguments to their board, I think they will find a receptive audience," she says. "When our board heard about the benefits, they were all for it."
Creditron Founder and CEO Wally Vogel adds that the experience of the Apache County Tax Collector shows that government entities don't have to outsource to reduce costs or gain efficiencies.
While payments processing outsourcing has gained traction among government entities during the economic downturn, it's still not for everyone. A case in point: the Apache County Tax Collector (Arizona), which recently implemented a solution to automate the processing of its tax payments.
"We never really considered outsourcing," explains Apache County Tax Collector Chief Deputy Sandy Klinchock. She believes that in-house processing provides more control and better quality.
Known as the longest county in the country, Apache County runs 211 miles from the Utah border to just south of Alpine, Arizona. Two-thirds of the population, and over one-half of the land area, belongs to the Navajo Nation, the largest Native American tribe. Currently comprised of 70,000 residents, Apache County is growing : new subdivisions have been approved, permanent jobs are being created, and the county is investing in the services required for an expanding population.
With the Apache County Tax Collector committed to keeping its payments processing in-house, it knew it needed a solution for automating its tax processing. Previously, three employees processed the county's roughly 68,000 tax payments in about a three-week window. By automating, the county also hoped to streamline its deposits to improve funds availability and working capital management.
"We wanted to become more efficient, while enhancing our service to constituents," Klinchock says.
In late 2009, the Apache County Tax Collector implemented an image-enabled remittance processing solution from Creditron. The system includes a 3000t check scanner from NCR, courtesy and legal amount recognition (CAR/LAR), and the ability to deposit funds electronically via Check 21.
The Apache County Tax Collector selected Creditron based on its implementation of a system at nearby Navajo County, and on its willingness to meet the county's fast installation schedule; the Apache County Tax Collector went into production a few weeks after signing its Creditron contract. Navajo County handles back-end tax accounting on behalf of the Apache County Tax Collector.
As a result of automating its tax processing, and depositing funds electronically, Apache County Tax Collector now gets all of its funds to the bank the same day they are processed. In its old manual environment, it took the county two to three days to turn around its deposits. "Now, we can keep our money invested for a longer period of time," Klinchock says. "We also have a clearer picture of how much money we have in the bank, and whether we have to pull from investments to pay warrants."
The county also is able to make electronic deposits for all eight of its departments. And depositing funds electronically eliminated daily courier runs to the bank, which cost the county $350 a month. Additionally, there are fewer calls from customers asking why their check hasn't cleared sooner.
With results like these, Klinchock is surprised that so many government entities are outsourcing their payments processing. "If they take some of these arguments to their board, I think they will find a receptive audience," she says. "When our board heard about the benefits, they were all for it."
Creditron Founder and CEO Wally Vogel adds that the experience of the Apache County Tax Collector shows that government entities don't have to outsource to reduce costs or gain efficiencies.
Saturday, February 20, 2010
Compliance and Outsourcing
By Mark Brousseau
While new compliance, security and privacy regulations are likely to take a bigger bite out of operations budgets this year, most organizations believe they can meet the stricter rules without having to outsource their payments and document processing. Just 20 percent of respondents to a recent TAWPI Question of the Week said new compliance, security and privacy regulations would force their organization to consider outsourcing. Sixty-five percent of respondents said the tougher regulations wouldn't force them to consider, and 15 percent of respondents said they weren't sure.
The time and cost associated with meeting compliance, security and privacy regulations continues to rise -- giving pause to any company entrusted with sensitive data that must be stored and shared.
"Regulatory compliance is very expensive and extremely time-consuming," says R. Edwin Pearce (epearce@egisticsinc.com), executive vice president of sales and corporate development for eGistics, Inc. "Companies have two choices for meeting regulatory demands for privacy and security: assume the full expense of the resources and time associated with meeting each regulation, or work with an outsource provider that can spread the costs of meeting the regulations across its customer base."
Pearce also believes that organizations should ask themselves whether it makes sense to go through the cost and trouble of becoming compliant, when there are outsource providers that already are.
"Companies don't necessarily have to absorb the full capital burden of meeting various certification and compliancy tests," Pearce explains. "For example, organizations that store images and data for multiple years may have to meet PCI, SAS 70 and HIPAA regulations. Rather than engineer a data center environment that meets all of these requirements -- including policy and procedural standards -- it may make better sense for the organization to partner with a compliant outsource provider."
"The result is faster compliance, at a significantly lower cost," Pearce adds.
With new regulations on the horizon, this is a decision more organizations will have to make.
What do you think?
While new compliance, security and privacy regulations are likely to take a bigger bite out of operations budgets this year, most organizations believe they can meet the stricter rules without having to outsource their payments and document processing. Just 20 percent of respondents to a recent TAWPI Question of the Week said new compliance, security and privacy regulations would force their organization to consider outsourcing. Sixty-five percent of respondents said the tougher regulations wouldn't force them to consider, and 15 percent of respondents said they weren't sure.
The time and cost associated with meeting compliance, security and privacy regulations continues to rise -- giving pause to any company entrusted with sensitive data that must be stored and shared.
"Regulatory compliance is very expensive and extremely time-consuming," says R. Edwin Pearce (epearce@egisticsinc.com), executive vice president of sales and corporate development for eGistics, Inc. "Companies have two choices for meeting regulatory demands for privacy and security: assume the full expense of the resources and time associated with meeting each regulation, or work with an outsource provider that can spread the costs of meeting the regulations across its customer base."
Pearce also believes that organizations should ask themselves whether it makes sense to go through the cost and trouble of becoming compliant, when there are outsource providers that already are.
"Companies don't necessarily have to absorb the full capital burden of meeting various certification and compliancy tests," Pearce explains. "For example, organizations that store images and data for multiple years may have to meet PCI, SAS 70 and HIPAA regulations. Rather than engineer a data center environment that meets all of these requirements -- including policy and procedural standards -- it may make better sense for the organization to partner with a compliant outsource provider."
"The result is faster compliance, at a significantly lower cost," Pearce adds.
With new regulations on the horizon, this is a decision more organizations will have to make.
What do you think?
Tuesday, September 1, 2009
Choosing the Right Outsourced Services Provider
By Mark Brousseau
What distinguishes a quality outsourced services provider from the also-rans? According to Nancy Gessmann, senior vice president, Enterprise Solutions, for CDS Global (ngessmann@cds-global.com), a key factor is that they are constantly looking for ways to improve or enhance their clients’ business processes.
“Quality outsource providers understand and embrace the business needs of their customers. They are always on the lookout for value-added services and process improvements to help their clients,” Gessmann tells me. “These providers partner with their clients to become an extension of their business. They also reinvest in themselves and their clients’ processes, in turn, helping to grow the business.”
Gessmann adds that a good outsourcing partner should have at least a high-level understanding of a client’s business and their work processes. “There are some processes that don’t necessarily require an in-depth level of understanding, such as repeatable processes,” she says. “But with the right outsource provider, the outsourced services should be invisible to your customer or your customer’s customer.”
And there will be some business processes that an outsource provider may be better suited to fulfilling than your in-house operations, she said, noting an outsource provider might have advanced technology.
Other attributes Gessmann says companies should look for in an outsourcing partner include:
... Financial stability
... Staff experience and expertise
... Best of breed operational and technology systems
What do you think?
What distinguishes a quality outsourced services provider from the also-rans? According to Nancy Gessmann, senior vice president, Enterprise Solutions, for CDS Global (ngessmann@cds-global.com), a key factor is that they are constantly looking for ways to improve or enhance their clients’ business processes.
“Quality outsource providers understand and embrace the business needs of their customers. They are always on the lookout for value-added services and process improvements to help their clients,” Gessmann tells me. “These providers partner with their clients to become an extension of their business. They also reinvest in themselves and their clients’ processes, in turn, helping to grow the business.”
Gessmann adds that a good outsourcing partner should have at least a high-level understanding of a client’s business and their work processes. “There are some processes that don’t necessarily require an in-depth level of understanding, such as repeatable processes,” she says. “But with the right outsource provider, the outsourced services should be invisible to your customer or your customer’s customer.”
And there will be some business processes that an outsource provider may be better suited to fulfilling than your in-house operations, she said, noting an outsource provider might have advanced technology.
Other attributes Gessmann says companies should look for in an outsourcing partner include:
... Financial stability
... Staff experience and expertise
... Best of breed operational and technology systems
What do you think?
Friday, August 7, 2009
Hidden Benefits of Outsourcing
When most organizations consider outsourcing, Mike Smith of SourceCorp says the most obvious benefits come to mind:
... Cost containment through labor savings
... Increased accountability
... Leveraging the provider's extensive investment in technology, methodologies and people
... Reassignment and better management of in-house labor
Smith says more savvy organizations recognize that there are a myriad of less obvious, but just as vital, benefits, including:
... Reduction of overall management burden
... Access to specialized skills and industry best practices
... Improved credibility and images by associating with superior providers
... Increased flexibility to meet changing business requirements
... Improved internal management
... Increased security
"Given the capabilities present in today's marketplace, major outsourcing firms offer extremely high levels of security that oftentimes outperform those of the organizations seeking to engage their services," Smith says, adding that usually security is a perceived risk to outsourcing, but is not in actuality.
What do you think? Post your comments below.
... Cost containment through labor savings
... Increased accountability
... Leveraging the provider's extensive investment in technology, methodologies and people
... Reassignment and better management of in-house labor
Smith says more savvy organizations recognize that there are a myriad of less obvious, but just as vital, benefits, including:
... Reduction of overall management burden
... Access to specialized skills and industry best practices
... Improved credibility and images by associating with superior providers
... Increased flexibility to meet changing business requirements
... Improved internal management
... Increased security
"Given the capabilities present in today's marketplace, major outsourcing firms offer extremely high levels of security that oftentimes outperform those of the organizations seeking to engage their services," Smith says, adding that usually security is a perceived risk to outsourcing, but is not in actuality.
What do you think? Post your comments below.
Thursday, July 30, 2009
Regulations, Outsourcing Top Industry Trends
By Mark Brousseau
As TAWPI prepares to raise the curtain on its annual Forum & Expo in Washington, D.C. next week, payments and document management operations executives are grappling with mounting regulations, industry-wide over capacity, and pressure from senior management to outsource.
"As a result of the industry scandals, bank and broker/dealer failures, and stock market decline, increased financial services regulations are likely," says Edward Kinsella, second vice president, transfer agent, for John Hancock Financial Services (ekinsella@jhancock.com). "Companies will need to find ways to quickly and efficiently adhere to these new requirements," he warns.
Kinsella says the financial services industry also is facing significant over capacity. "This will likely lead to consolidation, and mergers and acquisitions," Kinsella says. "Companies will be challenged to combine their operations to broaden their product offerings, increase profit margins, reduce expenses, and create new efficiencies and economies of scale," Kinsella adds.
Kinsella also sees a greater push towards outsourcing: "As a result of the economic slowdown, companies are focusing on their core competencies and looking to outsource functions and processes that can be handled by third-parties. Companies must steer clear of functions that distract them from their core competency, or can be handled more cost effectively by others."
Mike Reynolds, executive vice president and director of sales and marketing at Cash Management Solutions, Inc. (mike.reynolds@cashmgmt.com), sees continued interest in outsourcing across all levels of financial institutions. "This is being driven by economics, cost pressures, footprint considerations, and platform replacement decisions," he says, noting that many banks are struggling with whether they should invest in newer lockbox technology. "Innovative banks are exploring combinations of outsourcing and in-house processing."
John Kincade, vice president of business development for J&B Software, Inc. (johnki@jbsoftware.com) also expects increasing customer interest in "hybrid" outsourcing solutions where the customer keeps some of its more strategic payment vehicles in-house, and outsources the labor-intensive functions. "Vendors will have to provide modular solutions that allow this," Kincade says.
Mark Stevens, president and CEO of Moorestown, NJ-based OPEX Corporation (mstevens@opex.com), expects significant consolidation in the retail lockbox market. "There are fewer and fewer companies doing this kind of work," Stevens says. "I believe that we will see three or four companies as the 'last man standing' in this space."
Kinsella says oversight and risk management is critical to the success of outsourcing.
Reynolds notes that for operations that stay in-house, the focus is on improving efficiency and productivity by taking a hard look at existing workflows, technologies, and analyzing staffing and capacity models.
“Companies are driving the last ounce of expense from the business as they strive to meet Wall Street targets,” agrees Bob Young of Manasquan, NJ (lcpard77@verizon.net). “The latest round of earnings releases the past few weeks prove this point.” Payments processing executives are challenged with finding ways to use their current technology – software and hardware – to make their operations more efficient, to satisfy upper management, Young added. “I have to think that the purchase of new processing systems is a low priority, given the economy.”
Reynolds adds that everyone -- service providers, technology vendors and end-user customers -- are seemingly squeezing each other on pricing. "I'm seeing renegotiation initiatives on almost every front as organizations try to better align pricing with volume and product deliverables," Reynolds says, adding that he hopes this eases as the economy improves.
As part of the push to reduce costs and gain operations efficiencies, Stevens believes shared services will become a hot topic. "We are seeing several remittance shops with scanners looking to do AP work for their organizations," Stevens said, adding that he expects this trend to continue.
Similarly, Kincade believes the convergence of forms and payments processing will accelerate next year, with customers moving to more sophisticated correspondence management systems. In some applications, payments can accompany correspondence 30 to 50 percent of the time, Kincade notes.
What do you think? Post your comments below.
As TAWPI prepares to raise the curtain on its annual Forum & Expo in Washington, D.C. next week, payments and document management operations executives are grappling with mounting regulations, industry-wide over capacity, and pressure from senior management to outsource.
"As a result of the industry scandals, bank and broker/dealer failures, and stock market decline, increased financial services regulations are likely," says Edward Kinsella, second vice president, transfer agent, for John Hancock Financial Services (ekinsella@jhancock.com). "Companies will need to find ways to quickly and efficiently adhere to these new requirements," he warns.
Kinsella says the financial services industry also is facing significant over capacity. "This will likely lead to consolidation, and mergers and acquisitions," Kinsella says. "Companies will be challenged to combine their operations to broaden their product offerings, increase profit margins, reduce expenses, and create new efficiencies and economies of scale," Kinsella adds.
Kinsella also sees a greater push towards outsourcing: "As a result of the economic slowdown, companies are focusing on their core competencies and looking to outsource functions and processes that can be handled by third-parties. Companies must steer clear of functions that distract them from their core competency, or can be handled more cost effectively by others."
Mike Reynolds, executive vice president and director of sales and marketing at Cash Management Solutions, Inc. (mike.reynolds@cashmgmt.com), sees continued interest in outsourcing across all levels of financial institutions. "This is being driven by economics, cost pressures, footprint considerations, and platform replacement decisions," he says, noting that many banks are struggling with whether they should invest in newer lockbox technology. "Innovative banks are exploring combinations of outsourcing and in-house processing."
John Kincade, vice president of business development for J&B Software, Inc. (johnki@jbsoftware.com) also expects increasing customer interest in "hybrid" outsourcing solutions where the customer keeps some of its more strategic payment vehicles in-house, and outsources the labor-intensive functions. "Vendors will have to provide modular solutions that allow this," Kincade says.
Mark Stevens, president and CEO of Moorestown, NJ-based OPEX Corporation (mstevens@opex.com), expects significant consolidation in the retail lockbox market. "There are fewer and fewer companies doing this kind of work," Stevens says. "I believe that we will see three or four companies as the 'last man standing' in this space."
Kinsella says oversight and risk management is critical to the success of outsourcing.
Reynolds notes that for operations that stay in-house, the focus is on improving efficiency and productivity by taking a hard look at existing workflows, technologies, and analyzing staffing and capacity models.
“Companies are driving the last ounce of expense from the business as they strive to meet Wall Street targets,” agrees Bob Young of Manasquan, NJ (lcpard77@verizon.net). “The latest round of earnings releases the past few weeks prove this point.” Payments processing executives are challenged with finding ways to use their current technology – software and hardware – to make their operations more efficient, to satisfy upper management, Young added. “I have to think that the purchase of new processing systems is a low priority, given the economy.”
Reynolds adds that everyone -- service providers, technology vendors and end-user customers -- are seemingly squeezing each other on pricing. "I'm seeing renegotiation initiatives on almost every front as organizations try to better align pricing with volume and product deliverables," Reynolds says, adding that he hopes this eases as the economy improves.
As part of the push to reduce costs and gain operations efficiencies, Stevens believes shared services will become a hot topic. "We are seeing several remittance shops with scanners looking to do AP work for their organizations," Stevens said, adding that he expects this trend to continue.
Similarly, Kincade believes the convergence of forms and payments processing will accelerate next year, with customers moving to more sophisticated correspondence management systems. In some applications, payments can accompany correspondence 30 to 50 percent of the time, Kincade notes.
What do you think? Post your comments below.
Wednesday, July 8, 2009
Recession Will Leave Its Mark
Posted by Mark Brousseau
The impact of the economic downturn has clearly been significant, however not all companies are equally affected by the recession, according to a study of executives at 570 leading global companies by Ernst & Young LLP. The comparisons with a similar study in January also reveal that while the white heat of the crisis has passed, the majority of companies are still focused on survival. However, a significant minority are looking to take advantage of the situation to pursue new opportunities.
The study finds nearly half of those surveyed (43%) said that their operating model had been permanently altered by the events of the last 18 months. A further 45% said there had been a temporary impact. Similarly 56% of the executives said that their risk management processes had been permanently altered, 33% temporarily. For 45% the regulatory framework for business had also fundamentally changed.
Other alterations to their business model – price sensitivity, profitability, competitive sensitivity and economic stability were viewed by respondents as more temporary although a significant minority – above 20% in each case – viewed the changes here as permanent as well.
“The impact of the market changes has clearly been significant and some business models have changed radically,” said Michael Rogers, Principal, Transaction Advisory Services, Ernst & Young LLP. “Company management is being forced to review their methods of organization due to a range of macro influences such as challenges from diversification, globalization, and (de)regulation. Businesses that emerge strengthened from the current crisis will be those that reshape intelligently, not those tempted to move quickly to extract additional value. ”
It is still really tough out there
Ernst & Young LLP carried out a similar study five months ago. The corporates Ernst & Young talked to then, and the thousands of companies it has discussed the research with since, are still seeing huge competition on price. Companies are still seeing significant numbers of bankruptcies and competitors withdrawing from their sector, but there was also an increase in those organizations reporting new entrants in their sector.
The overall mood is still somber. Although 64% of executives said they had been able to make cost reductions, 31% said they had improved revenues and more than a third said the environment was more positive in terms of making strategic acquisitions. A majority of executives had seen deterioration in revenues (58%) and profitability (56%). Only 20% had seen an improvement in investor confidence, and a similar low number saw any improvement in accessing affordable capital or credit.
“Perverse as it may seem, a period of crisis can provide an opportunity to drive change more rapidly and effectively than a period of prosperity,” noted Rogers of Ernst & Young LLP. “Company leaders are finding ways to take advantage of this economic climate. This survey shows 25% of companies are actively planning for growth, 34% are seeking strategic alliances and 36% plan to enter new geographies.”
Are we past the worst? A slight shift in emphasis from the responses from January gives some credence to the thinking that the worst ravages of the recession are behind us. At the time of the last study 82% said the focus of their business was on restructuring their business to deal with the recession and 74% were looking merely at survival of the present operations.
Those figures have declined to 74% and 65% - still remarkably high - but in conjunction with the fact that the proportion of companies who said that they were “taking advantage of the recession to pursue new market operations” had increased from 59% to 69% - suggest there are some more companies out there bargain basement hunting.
Cash is actually tighter
Back in January over a quarter of executives said cash was not an issue. That proportion has slipped to 18%. Respondents also highlighted an increase in communications to lenders and rating agencies. There was however less talk of companies disposing of assets purely to raise cash.
“Working capital is the lifeblood of a company, and the ability to manage it becomes even more important in a downturn due to falling revenue and restricted access to funds,” said Kevin Cole, Americas Accounts & Business Development Leader, Ernst & Young LLP. “Companies need to secure their position by identifying and resolving critical issues quickly to protect against value erosion, or to be well placed to take advantage of opportunities.”
How have companies responded in the short term?Over the last year 86% of executives said they had accelerated cost reduction programs, 52% had speeded up their restructuring plans and 38% had pushed the button on a “significant employee reduction program.” When asked about their key drivers in the short term there was increased scrutiny on profitability (73%), pricing strategy (55%) and their relationship with customers (52%). Internally it was no surprise that 38% had seen more investment in risk.What’s next in the longer term?In terms of looking post-recession, executives were pretty evenly split between expanding into new geographies, increased use of strategic alliances, acquisitions and speed to market and divesting non-core business. “Companies that maintain a sustainable business model through the current downturn will not only survive the downturn, but will emerge stronger and in the best position to take advantage of new growth opportunities as the economy improves,” said Cole of Ernst & Young LLP.
“The bottom line is, that in both good and bad economic conditions, successful organizations are those that have clarity around their proposition, strategic direction and brand positioning,” said Donna Campbell, Americas Advisory Performance Improvement Leader, Ernst & Young LLP. “A successful company also has an effective management information capability that is aligned with the business strategy to enable agility in responding to market or other environmental changes.”
What do you think?
The impact of the economic downturn has clearly been significant, however not all companies are equally affected by the recession, according to a study of executives at 570 leading global companies by Ernst & Young LLP. The comparisons with a similar study in January also reveal that while the white heat of the crisis has passed, the majority of companies are still focused on survival. However, a significant minority are looking to take advantage of the situation to pursue new opportunities.
The study finds nearly half of those surveyed (43%) said that their operating model had been permanently altered by the events of the last 18 months. A further 45% said there had been a temporary impact. Similarly 56% of the executives said that their risk management processes had been permanently altered, 33% temporarily. For 45% the regulatory framework for business had also fundamentally changed.
Other alterations to their business model – price sensitivity, profitability, competitive sensitivity and economic stability were viewed by respondents as more temporary although a significant minority – above 20% in each case – viewed the changes here as permanent as well.
“The impact of the market changes has clearly been significant and some business models have changed radically,” said Michael Rogers, Principal, Transaction Advisory Services, Ernst & Young LLP. “Company management is being forced to review their methods of organization due to a range of macro influences such as challenges from diversification, globalization, and (de)regulation. Businesses that emerge strengthened from the current crisis will be those that reshape intelligently, not those tempted to move quickly to extract additional value. ”
It is still really tough out there
Ernst & Young LLP carried out a similar study five months ago. The corporates Ernst & Young talked to then, and the thousands of companies it has discussed the research with since, are still seeing huge competition on price. Companies are still seeing significant numbers of bankruptcies and competitors withdrawing from their sector, but there was also an increase in those organizations reporting new entrants in their sector.
The overall mood is still somber. Although 64% of executives said they had been able to make cost reductions, 31% said they had improved revenues and more than a third said the environment was more positive in terms of making strategic acquisitions. A majority of executives had seen deterioration in revenues (58%) and profitability (56%). Only 20% had seen an improvement in investor confidence, and a similar low number saw any improvement in accessing affordable capital or credit.
“Perverse as it may seem, a period of crisis can provide an opportunity to drive change more rapidly and effectively than a period of prosperity,” noted Rogers of Ernst & Young LLP. “Company leaders are finding ways to take advantage of this economic climate. This survey shows 25% of companies are actively planning for growth, 34% are seeking strategic alliances and 36% plan to enter new geographies.”
Are we past the worst? A slight shift in emphasis from the responses from January gives some credence to the thinking that the worst ravages of the recession are behind us. At the time of the last study 82% said the focus of their business was on restructuring their business to deal with the recession and 74% were looking merely at survival of the present operations.
Those figures have declined to 74% and 65% - still remarkably high - but in conjunction with the fact that the proportion of companies who said that they were “taking advantage of the recession to pursue new market operations” had increased from 59% to 69% - suggest there are some more companies out there bargain basement hunting.
Cash is actually tighter
Back in January over a quarter of executives said cash was not an issue. That proportion has slipped to 18%. Respondents also highlighted an increase in communications to lenders and rating agencies. There was however less talk of companies disposing of assets purely to raise cash.
“Working capital is the lifeblood of a company, and the ability to manage it becomes even more important in a downturn due to falling revenue and restricted access to funds,” said Kevin Cole, Americas Accounts & Business Development Leader, Ernst & Young LLP. “Companies need to secure their position by identifying and resolving critical issues quickly to protect against value erosion, or to be well placed to take advantage of opportunities.”
How have companies responded in the short term?Over the last year 86% of executives said they had accelerated cost reduction programs, 52% had speeded up their restructuring plans and 38% had pushed the button on a “significant employee reduction program.” When asked about their key drivers in the short term there was increased scrutiny on profitability (73%), pricing strategy (55%) and their relationship with customers (52%). Internally it was no surprise that 38% had seen more investment in risk.What’s next in the longer term?In terms of looking post-recession, executives were pretty evenly split between expanding into new geographies, increased use of strategic alliances, acquisitions and speed to market and divesting non-core business. “Companies that maintain a sustainable business model through the current downturn will not only survive the downturn, but will emerge stronger and in the best position to take advantage of new growth opportunities as the economy improves,” said Cole of Ernst & Young LLP.
“The bottom line is, that in both good and bad economic conditions, successful organizations are those that have clarity around their proposition, strategic direction and brand positioning,” said Donna Campbell, Americas Advisory Performance Improvement Leader, Ernst & Young LLP. “A successful company also has an effective management information capability that is aligned with the business strategy to enable agility in responding to market or other environmental changes.”
What do you think?
Wednesday, May 6, 2009
Document Management in a Recession
Posted by Mark Brousseau
In order to stay competitive during the economic downturn, 51 percent of executives involved in document management say their company plans to reduce operating expenses while 20 percent say their organization will try to improve cash flow. Executives agree that effectively managing document processes can help meet these objectives, particularly with respect to reducing expenses.
These are a few of the findings highlighted in a survey from Oce Business Services
When it comes to outsourcing, a high number of respondents (74%) indicate that their company is taking this approach with at least one of the five document activities. The top three document activities that companies are outsourcing include mail and shipping, print/copy center, and document imaging. The top overall business benefits that the respondents report gaining from these outsourced document activities include lowering costs, improving operational performance and enabling a greater focus on core business.
Outsourcing activity may increase somewhat in the next 12 to 24 months as a number of companies (33%) are planning to outsource additional document processing functions, particularly document imaging. The top business goals driving their outsourcing plans are cost reduction, the desire to concentrate more on their core business, and the desire to improve operational performance.
In another key finding, a majority of survey participants (55%) indicate that their companies are measuring document process performance. These companies are measuring such performance elements as user activity and document processing timeliness and accuracy. A significant number of respondents (67%) specify that their organization's metrics for document performance are aligned with business objectives (such as increasing customer satisfaction).
"Whether managing document activities on an internal or outsourced basis, one thing is clear," said Joseph R. Marciano, president and CEO, Oce Business Services. "Enterprises are realizing the potential for document management best practices to yield benefits such as lower operating expenses, which can help them survive and thrive in the days ahead."
What do you think? Post your comments below.
In order to stay competitive during the economic downturn, 51 percent of executives involved in document management say their company plans to reduce operating expenses while 20 percent say their organization will try to improve cash flow. Executives agree that effectively managing document processes can help meet these objectives, particularly with respect to reducing expenses.
These are a few of the findings highlighted in a survey from Oce Business Services
When it comes to outsourcing, a high number of respondents (74%) indicate that their company is taking this approach with at least one of the five document activities. The top three document activities that companies are outsourcing include mail and shipping, print/copy center, and document imaging. The top overall business benefits that the respondents report gaining from these outsourced document activities include lowering costs, improving operational performance and enabling a greater focus on core business.
Outsourcing activity may increase somewhat in the next 12 to 24 months as a number of companies (33%) are planning to outsource additional document processing functions, particularly document imaging. The top business goals driving their outsourcing plans are cost reduction, the desire to concentrate more on their core business, and the desire to improve operational performance.
In another key finding, a majority of survey participants (55%) indicate that their companies are measuring document process performance. These companies are measuring such performance elements as user activity and document processing timeliness and accuracy. A significant number of respondents (67%) specify that their organization's metrics for document performance are aligned with business objectives (such as increasing customer satisfaction).
"Whether managing document activities on an internal or outsourced basis, one thing is clear," said Joseph R. Marciano, president and CEO, Oce Business Services. "Enterprises are realizing the potential for document management best practices to yield benefits such as lower operating expenses, which can help them survive and thrive in the days ahead."
What do you think? Post your comments below.
Tuesday, February 3, 2009
Thinking Outside the Box
By Mark Brousseau
The state of the economy has companies looking to optimize whatever solutions they have in place, according to Susan L. Terry (slterry@cds-global.com), director of business development, new markets and indirect channels, CDS Global, a leading provider of outsourced business solutions.
“Whether the optimization is in the form of supplier change, outsourcing, co-sourcing, service expansion or tighter integration with other phases of the supply chain, every opportunity for process efficiency is being reviewed,” Terry told me. “All options are on the table.”
Terry believes the pace of opportunity for outsourced services providers like CDS Global may slow down over the next 12 months, but the scope of opportunities will continue to grow. “As human beings, and as companies made up of human beings, our creativity is at its best when the status quo is removed,” Terry explained. “We are now managing our businesses in a state without status quo, which will enable creative approaches to solving business problems.”
What do you think? Post your comment below.
The state of the economy has companies looking to optimize whatever solutions they have in place, according to Susan L. Terry (slterry@cds-global.com), director of business development, new markets and indirect channels, CDS Global, a leading provider of outsourced business solutions.
“Whether the optimization is in the form of supplier change, outsourcing, co-sourcing, service expansion or tighter integration with other phases of the supply chain, every opportunity for process efficiency is being reviewed,” Terry told me. “All options are on the table.”
Terry believes the pace of opportunity for outsourced services providers like CDS Global may slow down over the next 12 months, but the scope of opportunities will continue to grow. “As human beings, and as companies made up of human beings, our creativity is at its best when the status quo is removed,” Terry explained. “We are now managing our businesses in a state without status quo, which will enable creative approaches to solving business problems.”
What do you think? Post your comment below.
Tuesday, January 27, 2009
Coopetition in the Payments World
By Mark Brousseau
According to the results of the Federal Reserve’s last two Payments Studies, electronic payments have risen from 43 percent of all non-cash payments to 66 percent of such payments over the period of 2000 to 2006. Conversely, checks have gone from 67 percent to 34 percent during this same period.
The message is clear: electronic payments are replacing check payments at a very rapid rate. So, it may surprise you to learn that one of the most common questions heard by providers of electronic payment solutions is, “do you have any capabilities for handling our paper-based payments?”
Why the continued interest in paper? Larry Jones of Cash Management Solutions, Inc. (larry.jones@cashmgmt.com) says the answer is simple: Although there are literally billions of payments that have migrated to electronic methods, the majority of high dollar and business-to-business payments are still made by check. This means that paper-based payment processing continues to be of great importance to many of the financial industry’s most prized clients, their corporate customers, Jones said.
Jones believes payments service providers must maintain their paper-based capabilities as they add alternative electronic channels. And, it is a well-known fact, he adds, that there is no system so efficient that it can overcome the inefficiencies of having to run it separately from, and simultaneously with, the system it is replacing.
“Until the landscape changes to the point where electronics replace all paper-payments, billers will continue to ask for methods and technologies that can affect a seamless convergence of these two distinct payment types,” Jones predicts. “Any payments service provider who is currently offering only paper processing should definitely be looking for the ability to offer on-line, direct to biller, bill payment services to their customers in a seamlessly merged deliverable.”
Likewise, any company that makes their living providing on-line bill payment systems or services should be looking for capabilities or partners who process paper payments and provide outputs that can be merged and delivered in a similarly seamless fashion, Jones adds.
What do you think? Post your comment below.
According to the results of the Federal Reserve’s last two Payments Studies, electronic payments have risen from 43 percent of all non-cash payments to 66 percent of such payments over the period of 2000 to 2006. Conversely, checks have gone from 67 percent to 34 percent during this same period.
The message is clear: electronic payments are replacing check payments at a very rapid rate. So, it may surprise you to learn that one of the most common questions heard by providers of electronic payment solutions is, “do you have any capabilities for handling our paper-based payments?”
Why the continued interest in paper? Larry Jones of Cash Management Solutions, Inc. (larry.jones@cashmgmt.com) says the answer is simple: Although there are literally billions of payments that have migrated to electronic methods, the majority of high dollar and business-to-business payments are still made by check. This means that paper-based payment processing continues to be of great importance to many of the financial industry’s most prized clients, their corporate customers, Jones said.
Jones believes payments service providers must maintain their paper-based capabilities as they add alternative electronic channels. And, it is a well-known fact, he adds, that there is no system so efficient that it can overcome the inefficiencies of having to run it separately from, and simultaneously with, the system it is replacing.
“Until the landscape changes to the point where electronics replace all paper-payments, billers will continue to ask for methods and technologies that can affect a seamless convergence of these two distinct payment types,” Jones predicts. “Any payments service provider who is currently offering only paper processing should definitely be looking for the ability to offer on-line, direct to biller, bill payment services to their customers in a seamlessly merged deliverable.”
Likewise, any company that makes their living providing on-line bill payment systems or services should be looking for capabilities or partners who process paper payments and provide outputs that can be merged and delivered in a similarly seamless fashion, Jones adds.
What do you think? Post your comment below.
Saturday, December 27, 2008
Economy Drives Shared Services
By Mark Brousseau
It has been a truly remarkable 2008 - for the world in general and for the shared services and outsourcing space in particular.
Sarah Clayton, head of strategy for Shared Services Online Network (SSON), comments: “With many organizations focused almost exclusively on the bottom line, a wave of discretionary projects are now well and truly on the back burner for 2009 as SSOs are compelled to do more – and better – with less. Meanwhile, areas such as working capital and supply chain management move into the spotlight as parent organizations struggle to cope with the most uncertain economic times for many decades.”
Jamie Liddell, SSON’s Online Editor, believes: “Next year more than ever, agility, efficiency and flexibility will be crucial to the survival of even the very biggest organizations. Great emphasis will be placed on solidifying core activities and cutting back on what might now be seen as unnecessary luxuries – which of course throws up plenty of opportunities for acquisitive-minded firms with healthy war chests. We’ve already seen the beginning of what may prove to be a deluge of hitherto captive centers being sold to major providers – who will also be looking to snap up a few of their less well-capitalized competitors.”
What do you think? Post your comment below.
It has been a truly remarkable 2008 - for the world in general and for the shared services and outsourcing space in particular.
Sarah Clayton, head of strategy for Shared Services Online Network (SSON), comments: “With many organizations focused almost exclusively on the bottom line, a wave of discretionary projects are now well and truly on the back burner for 2009 as SSOs are compelled to do more – and better – with less. Meanwhile, areas such as working capital and supply chain management move into the spotlight as parent organizations struggle to cope with the most uncertain economic times for many decades.”
Jamie Liddell, SSON’s Online Editor, believes: “Next year more than ever, agility, efficiency and flexibility will be crucial to the survival of even the very biggest organizations. Great emphasis will be placed on solidifying core activities and cutting back on what might now be seen as unnecessary luxuries – which of course throws up plenty of opportunities for acquisitive-minded firms with healthy war chests. We’ve already seen the beginning of what may prove to be a deluge of hitherto captive centers being sold to major providers – who will also be looking to snap up a few of their less well-capitalized competitors.”
What do you think? Post your comment below.
Sunday, November 9, 2008
Supersizing Your Business
By Mark Brousseau
Customers are a company’s most important asset, says Adam Osthed, president and CEO of metasource. And in challenging economic times, Osthed says companies can leverage their customer relationships to “supersize” their business – in other words, generate more revenue per transaction or customer relationship.
Osthed spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.
“During a downturn in the economy, a frequently overlooked way of making more money is increasing the value-size of your customers,” Osthed says. “Supersizing is a model of specific inter-related activities through which a company can create a competitive advantage – a chain of value creating, or value-added, activities.”
The secret to supersizing a business, Osthed says, is to understand its role in the value system: who are its customers, what do they need, and why should they buy from your company. To help your company understand its role, Osthed suggests using needs audits, process mapping, and quarterly business reviews. “Figure out what your customer wants,” Osthed says. “Instead of trying to get them to fall in love with your solution, figure out what they are trying to build, and tailor a solution to these needs.”
Once your company understands its role, there are two ways that it can grow its revenues from the value system: expand its reach to new levels in the value system (vertical integration), or expand its activities within existing levels of the value system (horizontal integration).
Vertical integration, Osthed says, is the degree to which a firm owns its upstream suppliers and its downstream suppliers. Meantime, horizontal integration is the acquisition of additional business activities at the same level of the value chain (selling to the same decision-makers). While each of these approaches may appear straightforward, Osthed warns that the benefits of scale and scope are often easier said than done. Moreover, the benefits are not spontaneous; they require a commitment from the top of a company. “And you have to be careful that you don’t more too far from your company’s core competencies,” he adds.
Have you tried supersizing your business? Post your comment below.
Customers are a company’s most important asset, says Adam Osthed, president and CEO of metasource. And in challenging economic times, Osthed says companies can leverage their customer relationships to “supersize” their business – in other words, generate more revenue per transaction or customer relationship.
Osthed spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.
“During a downturn in the economy, a frequently overlooked way of making more money is increasing the value-size of your customers,” Osthed says. “Supersizing is a model of specific inter-related activities through which a company can create a competitive advantage – a chain of value creating, or value-added, activities.”
The secret to supersizing a business, Osthed says, is to understand its role in the value system: who are its customers, what do they need, and why should they buy from your company. To help your company understand its role, Osthed suggests using needs audits, process mapping, and quarterly business reviews. “Figure out what your customer wants,” Osthed says. “Instead of trying to get them to fall in love with your solution, figure out what they are trying to build, and tailor a solution to these needs.”
Once your company understands its role, there are two ways that it can grow its revenues from the value system: expand its reach to new levels in the value system (vertical integration), or expand its activities within existing levels of the value system (horizontal integration).
Vertical integration, Osthed says, is the degree to which a firm owns its upstream suppliers and its downstream suppliers. Meantime, horizontal integration is the acquisition of additional business activities at the same level of the value chain (selling to the same decision-makers). While each of these approaches may appear straightforward, Osthed warns that the benefits of scale and scope are often easier said than done. Moreover, the benefits are not spontaneous; they require a commitment from the top of a company. “And you have to be careful that you don’t more too far from your company’s core competencies,” he adds.
Have you tried supersizing your business? Post your comment below.
Saturday, November 8, 2008
First Impressions Pay Off
By Mark Brousseau
For services and solutions providers, making a positive first impression is important, says Scott Swidersky (sswidersky@qualityassociatesinc.com), vice president, Information Systems Division, of Quality Associates, Inc. (QAI), a 300-employee, Fulton, MD-based provider of systems integration and outsourced services. And Swidersky has the sales results to prove it. After investing in a multi-story, 120,000-square-foot corporate facility two years ago, QAI’s revenues will grow 30 percent this year – in large part from the impact of bringing prospects to the company’s swanky facility.
Swidersky spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.
“It’s always difficult finding sales opportunities. And it’s difficult working these opportunities through the sales cycle. But it’s even more difficult to close sales opportunities. With this in mind, we started investing in our corporate facilities to distinguish ourselves from our competitors,” Swidersky says.
“Part of our sales strategy is trying to distinguish ourselves as an organization. We have a lot of competitors in the Washington D.C. area, and some of them are huge systems integrators – Lockheed Martin, EDS, and CSC," Swidersky explains. "We find that the positive impression our facility leaves on prospects is the single largest distinguishing factor in our sales cycle.”
In addition to helping QAI attract new clients, the facility also boosted employee morale. “And it helps in our ability to attract quality people as it shows that we are providing a career, not just a job,” he says.
QAI’s modern facility includes a learning center, where vendors can demonstrate new solutions and QAI can conduct client training; dedicated work spaces for client projects; and a lab that provides testing and product demonstration space for employees and clients alike. Since moving into the new space, QAI hosts periodic educational events for clients in its offices – providing education for the clients, while strengthening the relationship between QAI staff and the company’s customers.
“We are always inviting prospects and clients back to our offices,” Swidersky notes. “This demonstrates confidence. And confidence is a big part of the sales cycle.”
“We are proud of our facility, and it shows,” Swidersky says.
How has your organization invested in its facilities? Post your comment below.
For services and solutions providers, making a positive first impression is important, says Scott Swidersky (sswidersky@qualityassociatesinc.com), vice president, Information Systems Division, of Quality Associates, Inc. (QAI), a 300-employee, Fulton, MD-based provider of systems integration and outsourced services. And Swidersky has the sales results to prove it. After investing in a multi-story, 120,000-square-foot corporate facility two years ago, QAI’s revenues will grow 30 percent this year – in large part from the impact of bringing prospects to the company’s swanky facility.
Swidersky spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.
“It’s always difficult finding sales opportunities. And it’s difficult working these opportunities through the sales cycle. But it’s even more difficult to close sales opportunities. With this in mind, we started investing in our corporate facilities to distinguish ourselves from our competitors,” Swidersky says.
“Part of our sales strategy is trying to distinguish ourselves as an organization. We have a lot of competitors in the Washington D.C. area, and some of them are huge systems integrators – Lockheed Martin, EDS, and CSC," Swidersky explains. "We find that the positive impression our facility leaves on prospects is the single largest distinguishing factor in our sales cycle.”
In addition to helping QAI attract new clients, the facility also boosted employee morale. “And it helps in our ability to attract quality people as it shows that we are providing a career, not just a job,” he says.
QAI’s modern facility includes a learning center, where vendors can demonstrate new solutions and QAI can conduct client training; dedicated work spaces for client projects; and a lab that provides testing and product demonstration space for employees and clients alike. Since moving into the new space, QAI hosts periodic educational events for clients in its offices – providing education for the clients, while strengthening the relationship between QAI staff and the company’s customers.
“We are always inviting prospects and clients back to our offices,” Swidersky notes. “This demonstrates confidence. And confidence is a big part of the sales cycle.”
“We are proud of our facility, and it shows,” Swidersky says.
How has your organization invested in its facilities? Post your comment below.
Service Bureaus Tout Labor Savings
By Mark Brousseau
In light of the weakening economy, service bureaus need to change their sales message to emphasize their ability to reduce a company’s headcount and help them avoid capital expenditures, says Mario G. Duckett, CDIA (Mario@metasource.com), senior director, business development, for Bristol, PA-based metasource.
Duckett spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.
“Down markets are great for soft dollars and Software as a Service (SaaS) is an excellent way for someone who has had their capital budget way taken away to still solve their business problems,” says Duckett. “In this economic environment, a company that can’t afford a $100,000 capital expenditure will be interested in a $2,000 a month fee for SaaS. The key is to stress labor savings.”
What do you think? Post your comments below.
In light of the weakening economy, service bureaus need to change their sales message to emphasize their ability to reduce a company’s headcount and help them avoid capital expenditures, says Mario G. Duckett, CDIA (Mario@metasource.com), senior director, business development, for Bristol, PA-based metasource.
Duckett spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.
“Down markets are great for soft dollars and Software as a Service (SaaS) is an excellent way for someone who has had their capital budget way taken away to still solve their business problems,” says Duckett. “In this economic environment, a company that can’t afford a $100,000 capital expenditure will be interested in a $2,000 a month fee for SaaS. The key is to stress labor savings.”
What do you think? Post your comments below.
Texas-Sized Data Center Problem
Posted by Mark Brousseau
IBM Corp. has been given a month to fix service problems with a mammoth Texas state data center project or possibly have its $863 million contract terminated, according to an article in Friday's Austin American-Statesman.
The state notified IBM this week that the company has "breached its contractual duties and obligations to the State of Texas" and outlines specific issues with IBM's work.
"The current, unremediated situation is untenable for the State of Texas, as critical state data continues to be at risk," according to the notice written by Brian Rawson, executive director of the Department of Information Resources.
The Statesman says the most persistent problem involves the company's failure to back up data stored on agencies' servers as it consolidates 27 state agencies' data centers into two facilities in Austin and San Angelo. The objective is to streamline and modernize the agencies' technology operations while saving money.
But the company has been repeatedly warned by the state that it had fallen short on requirements in the contract and has been penalized $5.2 million, including almost $902,000 for the data backup problems. The company so far has been paid $175 million under the contract.
The notice, released Thursday, is the first required step to terminate the contract.
It is a serious move by the state, following Gov. Rick Perry's directive two weeks ago to stop work on the contract while a plan to fix the problems was developed. That plan is expected to be completed by Nov. 17.
"The governor expects the issue will be resolved to the full satisfaction of the state," said Allison Castle, the governor's spokeswoman, so that termination of the contract will not be necessary.
IBM spokesman Jeff Tieszen said the company has been working to address the data backup and recovery issues, and would respond accordingly to the state's letter.
"The state's data center infrastructure is more stable and secure now and we plan to work with (the Department of Information Resources) to continue to improve the system to better serve the state's citizens," Tieszen said in a statement.
Rawson wrote in a letter to Perry that he expects "IBM to have restored the confidence of the state leadership and the agencies upon implementation" of the governor's plan.
But Rawson said that the state must be prepared if the results are not satisfactory and said a contingency plan is being developed to ensure data center services without IBM.
IBM assumed responsibility for servers and mainframes at 1,300 locations across the state in April 2007 as it moves the work to the centralized facilities.
It must provide security, backup and disaster recovery at all of those locations. That is where many of the problems have developed.
This summer, the attorney general's office lost a significant amount of data in a server crash at its Medicaid fraud division in Tyler. IBM had failed to back up the data, as required by the contract.
Eight months of data files from the office's fraud investigations were initially lost because the office had stopped using its previous file backup software in November. Ninety percent of the data has since been recovered, but it is unclear whether all of that data is usable.
IBM Corp. has been given a month to fix service problems with a mammoth Texas state data center project or possibly have its $863 million contract terminated, according to an article in Friday's Austin American-Statesman.
The state notified IBM this week that the company has "breached its contractual duties and obligations to the State of Texas" and outlines specific issues with IBM's work.
"The current, unremediated situation is untenable for the State of Texas, as critical state data continues to be at risk," according to the notice written by Brian Rawson, executive director of the Department of Information Resources.
The Statesman says the most persistent problem involves the company's failure to back up data stored on agencies' servers as it consolidates 27 state agencies' data centers into two facilities in Austin and San Angelo. The objective is to streamline and modernize the agencies' technology operations while saving money.
But the company has been repeatedly warned by the state that it had fallen short on requirements in the contract and has been penalized $5.2 million, including almost $902,000 for the data backup problems. The company so far has been paid $175 million under the contract.
The notice, released Thursday, is the first required step to terminate the contract.
It is a serious move by the state, following Gov. Rick Perry's directive two weeks ago to stop work on the contract while a plan to fix the problems was developed. That plan is expected to be completed by Nov. 17.
"The governor expects the issue will be resolved to the full satisfaction of the state," said Allison Castle, the governor's spokeswoman, so that termination of the contract will not be necessary.
IBM spokesman Jeff Tieszen said the company has been working to address the data backup and recovery issues, and would respond accordingly to the state's letter.
"The state's data center infrastructure is more stable and secure now and we plan to work with (the Department of Information Resources) to continue to improve the system to better serve the state's citizens," Tieszen said in a statement.
Rawson wrote in a letter to Perry that he expects "IBM to have restored the confidence of the state leadership and the agencies upon implementation" of the governor's plan.
But Rawson said that the state must be prepared if the results are not satisfactory and said a contingency plan is being developed to ensure data center services without IBM.
IBM assumed responsibility for servers and mainframes at 1,300 locations across the state in April 2007 as it moves the work to the centralized facilities.
It must provide security, backup and disaster recovery at all of those locations. That is where many of the problems have developed.
This summer, the attorney general's office lost a significant amount of data in a server crash at its Medicaid fraud division in Tyler. IBM had failed to back up the data, as required by the contract.
Eight months of data files from the office's fraud investigations were initially lost because the office had stopped using its previous file backup software in November. Ninety percent of the data has since been recovered, but it is unclear whether all of that data is usable.
Service in the Sky
Posted by Mark Brousseau
Below is a link to an interesting article in the November 10 issue of Newsweek about cloud computing.
http://www.newsweek.com/id/166818
What is your organization's approach to cloud computing? Post your comments below.
Below is a link to an interesting article in the November 10 issue of Newsweek about cloud computing.
http://www.newsweek.com/id/166818
What is your organization's approach to cloud computing? Post your comments below.
IT Spending Getting Squeezed
Posted by Mark Brousseau
An article in yesterday's Austin American-Statesman says the fourth quarter could be even more disappointing than technology vendors already had expected. Businesses are cutting back spending by putting off equipment purchases and upgrades and laying off workers. Even software, considered a safer bet because it helps companies automate costly steps, is also likely to take a hit, the Statesman noted.
"It's inevitable that all technology companies, with varying degrees, will be running into the same thing," Stephen Minton, an analyst for research firm IDC, told the newspaper. "The reaction of businesses to the economic crisis is to stop spending money."
Technology makes up a big chunk of corporate spending. Of the total amount of money that U.S. businesses spend on fixed investments, which includes offices and factories, about 28 percent goes to computer and communications equipment and software, according to Commerce Department data analyzed by Bartels.
IDC expects very little growth in overall tech spending for the rest of the year and through most of 2009. Spending in the U.S. and Europe probably will be roughly flat, while emerging markets should continue to grow.
"One thing we learned in 2001, a lot of people in software said the recession won't have an effect," Minton told the newspaper. They were wrong. "What businesses do when a recession starts is they stop spending altogether."
The bright spots in the sector: Information-technology services and outsourcing — helping companies manage their computing — tend to be the least affected in a downturn, he added.
It is clear that a recession will hurt the tech sector, but things don't figure to be as bad as they were during the dot-com bust, which helped spark the last recession. This time around, there is no tech bubble to burst. So although corporate customers are temporarily putting projects on hold and delaying upgrades to weather the economic storm, Minton said that overall, "businesses are still optimistic about technology."
What do you think? Post your comments below.
An article in yesterday's Austin American-Statesman says the fourth quarter could be even more disappointing than technology vendors already had expected. Businesses are cutting back spending by putting off equipment purchases and upgrades and laying off workers. Even software, considered a safer bet because it helps companies automate costly steps, is also likely to take a hit, the Statesman noted.
"It's inevitable that all technology companies, with varying degrees, will be running into the same thing," Stephen Minton, an analyst for research firm IDC, told the newspaper. "The reaction of businesses to the economic crisis is to stop spending money."
Technology makes up a big chunk of corporate spending. Of the total amount of money that U.S. businesses spend on fixed investments, which includes offices and factories, about 28 percent goes to computer and communications equipment and software, according to Commerce Department data analyzed by Bartels.
IDC expects very little growth in overall tech spending for the rest of the year and through most of 2009. Spending in the U.S. and Europe probably will be roughly flat, while emerging markets should continue to grow.
"One thing we learned in 2001, a lot of people in software said the recession won't have an effect," Minton told the newspaper. They were wrong. "What businesses do when a recession starts is they stop spending altogether."
The bright spots in the sector: Information-technology services and outsourcing — helping companies manage their computing — tend to be the least affected in a downturn, he added.
It is clear that a recession will hurt the tech sector, but things don't figure to be as bad as they were during the dot-com bust, which helped spark the last recession. This time around, there is no tech bubble to burst. So although corporate customers are temporarily putting projects on hold and delaying upgrades to weather the economic storm, Minton said that overall, "businesses are still optimistic about technology."
What do you think? Post your comments below.
Friday, November 7, 2008
Companies Require Fast ROI
By Mark Brousseau
Russ Stalters, Information/Records Manager for BP America has a message for data capture solutions vendors: if your solution can’t solve an end-user’s business problem, or can’t help solve a problem, don’t even bother pitching it to the end-user.
Stalters spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.
In light of the current economic situation, end-users are solely focused on solving current problems, and achieving significant hard dollar savings. "Going into next year, companies like us will be head count constrained, and we're going to be looking for solutions to help us reduce costs and improve efficiency," Stalters said.
Similarly, if your data capture solution can’t deliver ROI in a year, forget it. “Companies like BP America simply aren’t looking at anything with a long-term ROI,” Stalters says. "We need vendor solutions to add value quickly and easily."
“Because of the economy, we are not going to be making big capital investments,"Stalters says. "And if I’m going to tell a business unit about an information management solution, and it doesn’t deliver hard-dollar savings, they don’t want to hear it. When you can prove it can solve a business problem, and deliver hard dollar savings, it will fly.”
As a result of the focus on fast payback, data capture solutions must also be up and running a quarter, or two quarters tops. “Business leaders are driven by time-to-market,” Stalters says. “And they are looking for ways to differentiate themselves from their competition.”
What do you think? Post your comments below.
Russ Stalters, Information/Records Manager for BP America has a message for data capture solutions vendors: if your solution can’t solve an end-user’s business problem, or can’t help solve a problem, don’t even bother pitching it to the end-user.
Stalters spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.
In light of the current economic situation, end-users are solely focused on solving current problems, and achieving significant hard dollar savings. "Going into next year, companies like us will be head count constrained, and we're going to be looking for solutions to help us reduce costs and improve efficiency," Stalters said.
Similarly, if your data capture solution can’t deliver ROI in a year, forget it. “Companies like BP America simply aren’t looking at anything with a long-term ROI,” Stalters says. "We need vendor solutions to add value quickly and easily."
“Because of the economy, we are not going to be making big capital investments,"Stalters says. "And if I’m going to tell a business unit about an information management solution, and it doesn’t deliver hard-dollar savings, they don’t want to hear it. When you can prove it can solve a business problem, and deliver hard dollar savings, it will fly.”
As a result of the focus on fast payback, data capture solutions must also be up and running a quarter, or two quarters tops. “Business leaders are driven by time-to-market,” Stalters says. “And they are looking for ways to differentiate themselves from their competition.”
What do you think? Post your comments below.
Users Focused on Productivity
By Mark Brousseau
The downturn in the economy has end-users looking at capture solutions to help eliminate the pain from their production environments, says Craig Laue (claue@abbyyusa.com), eastern regional manager, ABBYY USA.
Laue spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.
"Today's economy does not permit end users to think about adding head count," Laue says. However, users are being challenged by increasing costs for managing and processing content: increased amounts of content, tighter regulatory compliance standards, new workload demands for information sharing, and higher customer demands. "That's why they are looking at capture solutions," Laue says.
As users begin evaluating capture solutions, Laue recommends that they come to the table with their vision for what they are looking to get out of the technology. Some considerations: indexing, full-text search capabilities, customer access to information, image and data sharing and collaboration, and eliminating duplication.
What do you think? Post your comments below.
The downturn in the economy has end-users looking at capture solutions to help eliminate the pain from their production environments, says Craig Laue (claue@abbyyusa.com), eastern regional manager, ABBYY USA.
Laue spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.
"Today's economy does not permit end users to think about adding head count," Laue says. However, users are being challenged by increasing costs for managing and processing content: increased amounts of content, tighter regulatory compliance standards, new workload demands for information sharing, and higher customer demands. "That's why they are looking at capture solutions," Laue says.
As users begin evaluating capture solutions, Laue recommends that they come to the table with their vision for what they are looking to get out of the technology. Some considerations: indexing, full-text search capabilities, customer access to information, image and data sharing and collaboration, and eliminating duplication.
What do you think? Post your comments below.
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