October 14, 2011
The latest video from CPA, VeraSage Fellow and professional comedian, Greg Kyte, makes a brilliant point about how risky it is to pay your attorney, CPA or technology consultant by the hour. You might as well be buying lottery tickets at the local convenience store.
Tired of playing the lottery with your technology projects? If so, then we can show you what it’s like to work with a Firm of The Future…forget about the lottery and work with certainty.
January 25, 2011
AccuForce Staffing Services, LLC, a staffing company in Kingsport, TN has been a Sage MAS 200 user for the past few years. Although technically a customer of Aries, the management team at AccuForce had not used our services for quite some time, preferring to perform all of the accounting setup in MAS 200 themselves. However, in December of 2010, their new CFO, Sarah Fleenor, contacted us inquiring how they might accomplish several goals with their MAS 200 system. Though Sarah initially contacted us simply because she was told by Sage that Aries was their “MAS reseller”, it quickly became a closer, more positive and strategic relationship as it became evident that the Aries business model would be a good fit for their company. They understood the value of Aries’ fixed, upfront, money-back guarantee pricing approach to projects. “I like the fixed price model and am all about planning and testing before going live,” commented Sarah about the Aries model.
AccuForce and Aries team members worked collaboratively to scope the projects, breaking them into smaller projects to fit their budget and timeline. Our first project was to redesign the General Ledger chart of accounts. Due to many of the accounts being set up incorrectly from the start, financial statements were not accurate. We provided AccuForce with a fixed, budgetable price for the project and agreed on a timeline for completion of the project to coincide with their producing year-end financial statements.
Future projects include providing ongoing technical support, a MAS 200 upgrade which will allow them to take advantage of new features such as PositivePay for Bank Reconciliation, and eliminating manual entry of payroll transactions by using MAS 200’s Visual Integrator module to automatically import those transactions. These projects will allow AccuForce to run their business more effectively and efficiently.
“AccuForce Staffing Services, LLC is a world-class, technology-forward staffing company committed to helping individuals find the careers they desire and assisting companies find the kind of employees to make their business a success by concentrating on talent and fit.”
March 12, 2010
Join us for a Webinar on August 11| Title: | PlanetTogether’s Scheduling Optimizes your Resources | |
| Date: | Wednesday, August 11, 2010 | |
| Time: | 11:00 AM – 12:00 PM EDT |
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Reserve your Webinar seat now at:
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August 17, 2009
While visiting Charleston, SC this past weekend, my family and I stopped by the Cathedral of St John the Baptist. It’s a beautiful Gothic cathedral which began construction in 1890 and is still a work in process. Currently, its Connecticut brownstone exterior is being renovated and a spire is being added.
What also caught my attention are the markings on each and every one of the brownstone bricks. Since there obviously were no electronic time keeping systems in the 19th century, the stone masons kept track of their time on an honor system. For each day of work they completed, they would imprint one star into a brick. The church elders were confident that none of the workers would cheat on their time because they were working on a church. Who would dare to pull a scam on God, right?
Unfortuntely technology projects are not churches. Time sheets and billing by the hour are fertile territory for cheating. Rarely are time sheets accurate which means that you rarely receive an accurate bill from a consultant who bills by the hour. In almost every situation, a consultant is compensated based on the number of billable hours she or he generates. Where does that put you if you are their customer? In a very unholy position!
How do you avoid being in this predicament? Insist on an up-front, fixed price for every project before you move forward. The consultant should be focused on your desired results and should not care how long it takes to accomplish those goals.
May 22, 2009
Ken Nelson at The New York Times wrote a great article about pricing innovation from the San Francisco Giants baseball team. The article is titled Baseball Tickets Too Much? Check Back Tomorrow. Here is a bit of what Ken says:
Setting ticket prices to sports events requires that one hope for the best but prepare for the worst. Teams want prices high enough to cash in if they play well, but need them to be low enough to draw fans if they falter.
But because teams set their prices months before opening day and resist changing them later, they have trouble reacting to the unexpected, like the weather, winning and losing teams or, this year, the ferocity of an economic downturn.
The San Francisco Giants are experimenting with a possible solution – software that weighs ticket sales data, weather forecasts, upcoming pitching matchups and other variables to help decide whether the team should raise or lower prices right up until game day.
How many of us have reexamined and rethought our pricing philosophies lately? I think the current economic conditions present a great opportunity for all of us to look for more creative pricing strategies.
Pricing is definitely an art and not a science. Therefore, it can be an experimental endeavor and we can’t be unwilling to risk making mistakes along the way. Most of us have never really thought about pricing as a core business competency.
For us, it was whatever Sage somehow magically decided was retail price for software plus an hourly rate for our services that our customers certainly did not have any input in determining (who would dream of such a thing!). That wasn’t much of a strategy and was certainly more prone to mistakes because it was basically a random approach to pricing. We were saying: one size fits all. I don’t know of any two companies that are exactly alike so that strategy couldn’t possibly have worked.
At the Giants level, implementing pricing software to assist with setting prices probably makes sense. However, for most of us I think pricing strategy will still be set by people. I like the idea of establishing a pricing group within the company and involving people from different areas of the company (not just the sales department). I think it is valuable to include people who are outside of your company. We continue to take this approach by asking customers how they would like to do business with us.
An economic downturn is the perfect time to introduce innovative thinking into your business and innovative pricing is the most powerful change you can make.
May 15, 2009
An example of how the billable time model doesn’t work in the real world. Imagine if the airlines priced based on billable time:
The Knoxville businessperson stepped up to the airline ticket counter and asked to buy a ticket for a flight to Atlanta.
“No problem,” said the clerk, “but before I issue the ticket, I should remind you of the new way we charge for tickets. This year we have adopted a ‘basic rate’ of three dollars a minute for our flights. The clock starts when you check in at the gate and stops when you pick up your luggage. We mail you a bill about two months after the flight.”
“Well, I guess that’s okay,” commented the businessperson.
The clerk continued, “Remember, we call it a ‘basic rate’ because we sometimes adjust that rate up or down if the flight is very empty or very full. Too, we may multiply that rate if our expert pilot finds a tailwind. We also adjust the rate according to what you will be doing in Atlanta. You look like a businessperson, so I’ll assume it’s very important that you get there by plane, so we quadruple the basic rate. Another thing, how much is your annual income? You see, if you earn a great deal and it turns out the plane crashes, we will have to pay more on your spouse’s damage claim, and we have, of course, to consider that increased risk of the airline.”
The astounded businessperson choked, “But how much will this trip cost me? How do I know you don’t slow down on purpose? How do I know your bill will be correct?”
The clerk stared down over the end of his nose. “I can see you’re not familiar with the complexities of airline work. There are so many things we just can’t know in advance – the winds, traffic delays, the weather, the routing. Airlines are a business, and we have to make a profit to stay in business. Now don’t worry, we’re very honest and sensitive about all this billing business and I am sure you’ll be pleased with our fully itemized bill when you get it. If there’s any question just call.” Then the clerk whispered, “But just so we understand each other, if you don’t pay the bill in full and promptly, you’ll never fly on this airline again.”
“Oh,” grunted the Knoxville businessperson, “is there anything else I should know?”
The clerk smiled thoughtfully and murmured, “On your flight there is a new copilot in training, and we charge an additional 50 cents a mile. Copilots are really very important, you know, to carry the pilot’s charts, to fly on clear calm days, even to land the plane if the pilot is busy with other matters. Too, if you fly with us again, your copilot may have become your pilot. Wouldn’t that be great? One other thing, if the copilot uses computerized flight routing there will be an additional $75 charge. But of course computerized flight routing is almost standard charge with technologically advanced airlines.”
“But I just wanted to get to my meeting in Atlanta and come home. Now I don’t even know if I should fly at all,” groaned the businessperson.
The clerk smiled again. “Mature passengers come to understand that flying is just a cost of doing business. They never know how much it costs ‘til we bill them. But then, there’s really no choice, is there, since that’s just the way it’s always been done?”
“No,” conceded the businessperson, “I guess not.”
And then the businessperson tried again. “Why can’t you just give me a fixed price and I’ll decide if I’ll go or not?”
The clerk frowned. “But we can’t do that. That wouldn’t be fair to you. We might overcharge you and then you’d be unhappy. Or we might underestimate and then the airline would lose money and couldn’t maintain the planes, and we certainly don’t want that.”
And so the Knoxville businessperson came to hate airlines and took his revenge by regaling acquaintances at cocktail parties about the new pitfalls of airline travel.
Adapted from Richard C. Reed Billing Innovations: New Win-Win Ways to End Hourly Billing. Chicago: American Bar Association, 1996.
The idea of airlines charging for their time seems ridiculous, right? However, that is exactly how most technology and software companies want to treat you. You are expected to accept uncertainties regarding the price and timeline of a project as if it is a normal part of running your business.
These companies want you to believe that you are paying them to spend time working on a technology project. However, what you really want is knowledge and experience that will be put to work solving your business issues and making your company more competitive and more profitable.
There’s no reason to come to hate technology and software companies. Rather it’s a matter of working with a company who is more interested in your company than simply covering their rear ends by hiding behind billable time.
May 13, 2009
You really need to look hard at what your prospective software vendor actually is selling. Most of the time – it is not what you are looking to buy.
You require results. You value those results so much you are willing to invest your time and your company’s capital to achieve the results. You want to maximize profits, capture information, increase productivity, reduce costs, decrease turnover and improve communication. This is what you want to buy.
You begin to look at software systems and the companies that install and support them. We’ll call those companies software resellers. You analyze the features and functions of the packages. You compare the solutions to the results you require. You narrow the choices to a few software resellers and ask them to quote you a price.
What comes back really defines what the software reseller is selling. And you need to be very careful or else you will open your company up to risks that you do not need to take. What is listed on that quote is what is being offered by the software reseller, nothing more. And if what is offered is not what you want to buy, then you will purchase a result you do not want.
Most software resellers and consultants are in the business of selling time. That is why they quote hourly rates. That is why they quote time estimates. That is why they invoice hours & expenses. The longer they spend on your project, the more they invoice. They try to convince you that the longer they spend on your project the more valuable it must be to you. The basic assumption is time plus physical presence equals value.
Is that what you truly value? No. You value the original desired results. That is what you wanted to purchase. But if that is not what was quoted or invoiced, then that is not what you purchased. If you purchased the software from a reseller who bills for their time then you bought time plus physical presence. Don’t take on the risk of purchasing something that adds no direct value.
So ask to see example invoices before you ask for a quote. Like your company’s quotes and invoices, listed out is what the software reseller is selling. Is it a software package plus time & expenses? If so, ask yourself, is that what you really want to buy? A software package is simply a box with disks and a manual. Time & expenses? How does that add value to your company?
Require the software reseller to sell you the products and results that add value to your company. If they don’t sell results and they don’t stand behind what they sell with a volunteered 100% money-back guarantee then break off the engagement in the sales cycle. After all, they are not selling what you want to buy.
May 11, 2009
Many websites post FAQs or Frequently Asked Questions. While helpful, the answers to those questions don’t really help you determine what system or partner adds the greatest value to your company.
What follows is a list of five questions we believe are more critical for you to ask of your potential service or system provider. The answers will greatly assist you when choosing how to leverage a partnership to achieve your goals and unlock your results. Listed after each question is a brief description of why you need the answers.
What value do you, the software reseller, bring to this engagement beyond the software features and functions?
This is one of the most important questions you need to bring up with any vendor or partner. You are going to be charged a premium above the costs of the actual product. What does the company bring to the table and, far more importantly, do you value what they bring?
What do you, the software reseller, actually sell?
What the company sells is what is detailed on their invoices. If the invoices state travel expenses, per diem expenses, software cost and hours worked then that is what they sell. A look at what the company internally measures and how it holds their employees accountable will give you a much better understanding as to what they actually sell.
What support options do you, the software reseller, offer?
Many companies look at the current project and don’t address the long-term support that project will require. Make certain that what can be offered for future needs matches what you require before you engage the partner. Will you require support hours beyond normal business hours? Will you require weekend support? Will you require multiple training sessions or customized training? Explore what you will need with your partner and determine if they can support you.
How do you, the software reseller, stand behind your work?
This is a confidence question. Companies that provide good value are everywhere. Companies that provide great value stand behind their promises with guarantees. If the company is not confident enough in their own work to explicitly volunteer a guarantee, why should you be confident in them to deliver the promised results?
Should I look for a short-term, transactional relationship or a long term, strategic partnership?
This is a fascinating question that is often completely ignored in the process of finding a new system. Really, only you can answer this question, as you know what type of relationship works best for you and your company. Asking the question, however, will determine whether the partner you are interviewing aligns with your vision of the relationship.
May 8, 2009
When performing your diligent research, be sure to articulate what type of relationship you want with your system provide.
You’ve come to a decision. You need a new system. You are not getting timely or accurate information. The current processes are too manual and require too much hand-holding. You are losing opportunities. You are growing. You need a new system.
One of the first decisions you need to make is often never addressed: “What type of relationship do we want with the new system provider? Do we want a strategic partnership or a transactional vendor relationship?”
A transactional vendor relationship is non-intrusive. Your goals and required results are unknown to the system provider. You research the features and functions of the new system. You purchase the system. You learn it, implement it, customize it and get it running. You find issues and determine workaround procedures. Any issues that you cannot solve are sent to the system provider’s tech support number on the box. You alone are accountable as your company grows to keep the system evolving to maximize your investment.
A strategic partnership is altogether different. You share your goals with a strategic partner and leverage that partner’s knowledge to achieve the required results. It is more intrusive than a transactional vendor relationship and there delves much more deeply into your processes and information. It is a collaborative effort; a shared responsibility. As issues arise, you work personally with the partner to find the best solution. As you grow, your partner keeps pace with your new goals and feeds you information on how to best maximize your system.
There is nothing wrong with either kind of relationship. Your choice, however, needs to be deliberate. You need to understand the consequences of your choice. You need to articulate the value you expect from your choice to your team. Ignoring, or avoiding, the discussion will lead to confusion, frustration and very often failure.
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