Doug Neeper's Blog

DFN: Adaptive Planning and Host Analytics are to Budgeting & Forecasting platforms, on a SaaS (Software as a Service). They compete with Essbase, Cognos, Outlooksoft, etc. SaaS reside out somewhere in the ‘cloud’. SaaS is a ‘per use’ product, Essbase is you buy it / install it / use it on your own servers. An installation of a Saas product might run $250K, an installation of an Essbase like product $1M. Of course both platforms compete with Excel, which might run $250. The allure is that these products will help you plan better, quicker, etc. All these platforms require some maintenance, and they don’t run themselves.

Adaptive Planning Announces Record Results for 2009 and Major Momentum in Adaptive Planning Blog
https://community1.adaptiveplanning.com/ap/blogs
Posted by Greg Schneider Jan 19, 2010
Today we are very pleased to announce that 2009 was the strongest year in Adaptive Planning’s history. Some of the many records and highlights include:

•70% revenue growth vs. 2008

•A 70% win rate in qualified deals

•Over 660 total clients

•Notable new customers, including Bunzl Distribution, Catholic Charities USA, CORT — A Berkshire Hathaway Company, Embraer Aircraft Holding Inc., International Power America, Jigsaw Data Corporation, NANA Management Servicess LLC, Odyssey Healthcare, San Francisco Ballet, Terdayne and Vail Resorts

•Major distribution relationship with NetSuite

•Release of Adaptive Planning 6.0, with multi-dimensional planning capabilities and best-in-class NetSuite integration, as well as the introduction of a new benchmarking initiative

•Expanded local language support, which now includes English, French, German, Japanese, Chinese and Russion

•Prestigious awards, including the Software and Information Industry Association’s CODiE Award for Best Business Intelligence Solution, the Red Herring 100 North American Award, the Technosium Hot Company Award, the BeyeNetwork Vision Award for SaaS BI, and Think Strategies’ Best of SaaS Showcase Award. Additionally, the company was named a CRN Emerging Vendor, and was the only multi-tenant software as a service (SaaS) provider to be awarded Core Vendor status in BPM Partners’ annual Pulse Survey, where we also achieved top-tier customer satisfaction marks.

•Appointment of experienced executive Hamid Bahadori as Vice President of Engineering and Hosted Operations

As described in our announcement, the challenging economic environment over the past year highlighted our unique value proposition. First of all, the high level of economic uncertainty has increased finance organizations’ requirements for more frequent and accurate re-planning and what-if analysis, which allow them to make better-informed decisions with greater agility. And secondly, in this environment our affordable, quick to implement and easy to use solution is an ideal fit. It fits’ companies’ budget realities, and goes live quickly, which allows teams to have an immediate impact on their businesses.

0 Adaptive Planning Announces Record Results for 2009 and Major Momentum in Adaptive Planning Blog
Posted by Greg Schneider Jan 19, 2010
Today we are very pleased to announce that 2009 was the strongest year in Adaptive Planning’s history. Some of the many records and highlights include:

•70% revenue growth vs. 2008

•A 70% win rate in qualified deals

•Over 660 total clients

•Notable new customers, including Bunzl Distribution, Catholic Charities USA, CORT — A Berkshire Hathaway Company, Embraer Aircraft Holding Inc., International Power America, Jigsaw Data Corporation, NANA Management Servicess LLC, Odyssey Healthcare, San Francisco Ballet, Terdayne and Vail Resorts

•Major distribution relationship with NetSuite

•Release of Adaptive Planning 6.0, with multi-dimensional planning capabilities and best-in-class NetSuite integration, as well as the introduction of a new benchmarking initiative

•Expanded local language support, which now includes English, French, German, Japanese, Chinese and Russion

•Prestigious awards, including the Software and Information Industry Association’s CODiE Award for Best Business Intelligence Solution, the Red Herring 100 North American Award, the Technosium Hot Company Award, the BeyeNetwork Vision Award for SaaS BI, and Think Strategies’ Best of SaaS Showcase Award. Additionally, the company was named a CRN Emerging Vendor, and was the only multi-tenant software as a service (SaaS) provider to be awarded Core Vendor status in BPM Partners’ annual Pulse Survey, where we also achieved top-tier customer satisfaction marks.

•Appointment of experienced executive Hamid Bahadori as Vice President of Engineering and Hosted Operations

As described in our announcement, the challenging economic environment over the past year highlighted our unique value proposition. First of all, the high level of economic uncertainty has increased finance organizations’ requirements for more frequent and accurate re-planning and what-if analysis, which allow them to make better-informed decisions with greater agility. And secondly, in this environment our affordable, quick to implement and easy to use solution is an ideal fit. It fits’ companies’ budget realities, and goes live quickly, which allows teams to have an immediate impact on their businesses.

Doug

Filed under: Business | Tagged: Business Planning | Leave a Comment »

DFN: Insightful information about the wine business and generally applicable to starting any business.

How to Start a Winery
3 simple steps to be a winning vintner
Fri, 12/11/2009 – 11:43 am
http://www.mademan.com/how-start-winery

Considering breaking out of the office rat race and heading into business for yourself? Why not start a winery? If you tour fertile valleys in California and Washington, you’ll run across plenty of small boutique wineries. You’ll likely even get to meet the owners, at which time you’ll think, “If these schmucks can do it, why can’t I?” Here are the steps you need to take to get started.

Define the type of winery you want

Consider your winery business. Will you be growing your grapes or purchasing them? Obviously, growing your own grapes, requires the land to do so, along with some farming expertise. Such a location is referred to as an Estate Vineyard or Estate Winery. This option also affords you a great deal more control over your business, as you are ultimately responsible for the quality, supply and type of grape. Location of your business is very key. You’ll be looking for an area with good soil and adequate water. Your grapes need a climate with high and low temperatures. Ideally, the pests in the area will be manageable and the land will be close to utilities. To keep your land purchase costs down, and avoid competition, consider markets less served by wineries (ie go to Idaho or Montana and stay away from California).

Be ready to pay, $6k-$15k per acre, and wait, for your grapes, as vines generally require 3-5 years to mature and produce a usable product, according to the Arizona Wine Growers Association. For any business, the SBA recommends starting small, thus purchasing grapes will be the quickest method to get your wine to your customers. This will allow you to establish your business and brand while your own crops readies. Research the quality of local growers and look into the terms of contracts they offer. You could learn a bit about farming from your relationship with the grape producer as well.

Make a business plan

After you get a sense of the commitment (time and money), necessary, you must outline your company. Creating a business plan accomplishes two goals. First, it will force you to spend time truly researching and detailing your winery – organizational structure, marketing, distribution, staffing, financial info, etc. Second, the plan will be used to convince banks and/or investors that you are a great place for their money. Think about your cheap uncle, the banker; he is the one you want to try to impress. If you are winning over people you know to be skeptical, that is a sign of a good plan. In the book “Small Business Management,” Michael Ames writes that a lack of money is one of the most common reasons for failure. You may need to convince a number of sources to ensure you have adequate funds.

Find your niche

While formulating your plan, consider what wine market you intend to serve. Will you be producing premium or economically priced products? Research your intended geography to see what the area(s) demands or is currently missing. Talk to restaurant owners and get to know distributors. Both of these groups will be vital to the success of your winery. Restaurants can request wines they enjoy from distributors and distributors will carry wines they believe will make them money. Learn about your state’s alcohol laws. Most states differ, some wildly, from each other (another terrible hangover from prohibition). This is also key to understand if you plan to sell into multiple states.

With a pile of grapes in one hand, and cash in the other, begin putting the pieces together. Secure your land and equipment. Let your target market know you are in business and will be serving them soon. Also, ask for help. Dogfish Head Brewing Company owner Sam Calignone mentions in his book, “Brewing up a Business,” that although he understood he could make beer that people would love, he lacked other business skills. To solve this issue, he formed a board to assist with important decisions concerning the company. If you know all about wine, but nothing about agriculture, you’ll need to seek out an expert. Maybe you have the business licked, but must hire a top winemaker. This is not an admission of inferiority, but rather a savvy business practice that will lead to the sale of many cases of vino. Go now, find that fertile frontier.

Of course, it is best not to call your boss during such a vacation, shortly after an extended tasting, and declare your independence. Head back to the office, and mull a few things over first.

The Small Business Administration (SBA) reports that about 70 percent of firms last two years, about half make it to year 5. Assuming you do not want to shamefully beg for your job back, you’ll want to weigh your chance of success. Once you realize that owning a business does not necessarily equate to working whenever you want, do you have the desire to put in long hours? Are you willing or able to sacrifice income if you must. The SBA warns of such situations. Not afraid? Cheers!

Filed under: Business | Tagged: Business Planning | Leave a Comment »

DFN: Simple questions to ask and answer before starting a business.

Nine Questions to ask before starting a business
by Ali Hasan
Dec. 03, 2009
http://article-niche.com/launch/Nine-Questions-To-Ask-When-Writing-A-Business-Plan.htm

If you are planning to start writing a business plan, the very first thing is to research about your competitors. Every business has competitors and it is crucial to give detail information about them in your business plan. Do not simply list the names of your competitors, but also it is necessary to give their background information, the product, or service they are selling, their strengths and weaknesses and how they are operating their business. If you have done a deep and thorough research about your competitors, you will be able to launch a better product and starts a better business then them.

When start writing the competitive analysis of your business plan, ask yourself the following nine questions:

1. Have I comprehensively listed my direct and indirect competitors? If you have missed any, it can poorly affect your business.

2. Make sure you have all the data on your competitors. Check and ask yourself have you gathered all the facts regarding your competitors?

3. Have I gathered all the strengths and weaknesses of my competitors? Your competitive analysis must contain both the strengths and weaknesses of your competitors. Consider more on their weaknesses because their weaknesses may be your strengths.

4. What is my competitors target market?

5. Is there a part of the market that my competitors are failed to notice? This will act as a potential niche market for you.

6. What are the services that my competitors are not providing to their customers? By this, you will be able to provide services to your customers that your competitors are not offering.

7. What is the anticipated market share for me?

8. What prices my competitors are offering? If you are selling your product at high or low price, do not forget to explain why you are doing this.

9. Do I have enough capital that I can run a successful business in a competitive market?

Competitive analysis is used to distinguish yourself from your competitors. It helps you to launch and run your business better than them. Make sure to do a proper and careful competitive analysis if you want to gain a competitive share of the market.

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DFN: A primer outlining a process striving for making better business decisions.

How To Think Like Bill Gates
Dec, 2, 2009
http://sourcesofinsight.com/2009/12/02/how-to-think-like-bill-gates/comment-page-1/#comment-30373

Over the years, I’ve asked various people at Microsoft about how Bill Gates thinks. I’ve asked people from his speech writers to people that have gone survived his executive reviews, where Bill is known for his grueling interrogations. I was always curious how somebody of that caliber flexed their mind and used their skills to slice and dice problems.

Bill Gates sees and thinks differently than most people do. He has an amazing ability to find the flaws, or see opportunities, or connect the dots. He can zoom in to details with precision or zoom out to the big picture. He can flip back in time or fast forward to the future. He also has the ability to focus on the merits of the idea or innovation before worrying about the business case. Chances are, you could benefit from Bill’s thinking skills, even if it simply means getting a new perspective on your problems. Whether you’re trying to change the world, or you want to unleash your best, it doesn’t hurt to be able to leverage the thought patterns of a billionaire and one of the world’s most influential philanthropists.

10 Ways to Think Like Bill Gates
While I don’t think Bill will lend you his brain, you can do the next best thing. You can take some of this thought patterns and practices for a test-drive. Here are ten patterns to get you started:

Prioritize. “What’s the next best thing you should be thinking about?” It starts here. Time is your most limited and precious resource. This is about asking whether the problem is even worth your time. Before you throw cycles at it, figure out whether it’s worth it. Is it significant? How much time should you spend on it? For an example of how Bill Gates figures out how to prioritize, check out the following video: Bill Gates on Mosquitoes, Malaria, and Education.

Ask smarter questions. If you want better answers, ask better questions. Rather than getting stuck in one line of questioning, such as “what’s wrong with this?” or “what’s right with this?”, you can explore your thinking more deeply, by asking a range of questions. One of the skills we learn at Microsoft is Precision Questions / Precision Answers. In this approach, there are 7 categories of precise questions: 1) Go / NoGo – Do we need to talk about this? 2) Clarification – What do you mean? 3) Assumptions – What are we assuming? 4) Basic Critical Question – How do we know this is true? 5) Causes – What’s causing this? 6) Effects – What will be the effects? 7) Action –

What should be done?
Make data-driven decisions. This is one of the toughest switches to make. By default, most people make emotional decisions and then find data to support the decision. This means asking questions like, “what’s the data say?” This means getting informed, before you make your decision. This means evaluating the sources of data. It’s an extreme exercise in emotional intelligence to pause your emotional response, while you check your logic and critical thinking.

Divorce your ego. This is where you separate yourself from the problem. This is also about separating yourself from the solution. Instead, you hold the problem or solution out in your hands and inspect it from different angles. Rather than focus on whether you’re right, it’s about whether the solution is right. It’s about being able to beat up the thinking, without taking it personally.

Frame the problem. Framing a problem is simply how you look at a problem, just like how you frame a picture. It’s about choosing what to focus on, what’s in and what’s out. When you frame the problem, you bound it. Framing also helps you get a better perspective on the problem, as well as share the problem more effectively with others. Some questions to help frame a problem include: Who’s the customer? What are their needs and priorities? What’s happening in the market? What are competitors doing?

What are our options for responding? How do we differentiate? How is technology changing and what possibilities does it offer our customers? What are the priorities for our business?

Get perspectives on the problem. This means being able to switch your perspectives. Rather than see the glass half-full or the glass half-empty, you should see both. Challenge yourself to switch back and forth from finding flaws to finding opportunities. If you only know how to play the Devil’s advocate, you have a limited view. Like a multi-faceted diamond, you should be able to look at the problem from different angles. This also means being able to broker in experts and get other people’s perspective on the problem. Problem solving is a team sport. It’s also about leveraging smart people without domain expertise. For example, you can take a dev manager in consumer devices and have him/her move into the enterprise or business applications.

Model the problem. By abstracting the problem into a model, you can think about it in simpler ways, without being bogged down by the implementation details. One of Bill Gate’s favorite tools is his whiteboard. A whiteboard makes it easy to sketch out ideas and visualize them. A whiteboard can help whether you’re trying to map out the problem or draw a solution. Keep in mind that George Box taught us that, “all models are wrong, but some are useful.”

Think of the system and the ecosystem. Bill Gates has an engineering mind. He can see the problem as a system. You can map out the system by asking yourself questions along the line of, what are the bits and pieces? … How does it work? … How do the bits and pieces work together? … what’s the flow through the system? … what are the inputs and outputs? After you have a handle on the system, you can ask yourself about the ecosystem or the system of systems. You can think about the

Think of the problem over time. It’s easy to look at the problem and just see it as a static snapshot. The challenge is playing out the problem or your solution over time. Time can dramatically change what it looks like. Consider the impact of trends. Consider sustainability. Some things that look good only temporary, and really break down when you apply time to them. Sometimes time is on your side. You might find that there may be better windows of opportunity.

Think strategically. Strategy guides your actions. You can think strategically along different lines. Consider the core of what you do (mission, vision, values, and goals.) Consider internal analysis (strengths and weaknesses, resources and capabilities, and benchmarking.) Consider external analysis (competitive analysis, opportunities and threats, and industry conditions.) Consider the organization design (structure, controls and incentives, culture and people.) Consider execution (roles, responsibilities, resources, action plans, measurement, and accountability.) Consider functional strategies (marketing and sales, operations, human resources, and R&D.) Consider strategic choices (corporate strategy and business strategy.)

If these thought patterns and practices don’t stand out as different or extraordinary, contrast them with some common default patterns:

less focus on emotional intelligence and more driven by emotional reaction
more likely to start thinking about a problem before asking which ones
more likely to ask a limited range of questions, from one specific angle or perspective (such as Devil’s advocate)
more likely to get lost in the details of the problem rather than step back, model it, and play with possibilities, unlikely to see the challenge as a system or think about the ecosystem (the players, the key levers, the centers of gravity … etc.)
unlikely to think about the problem over time (especially larger time frames like 1 year, 3 years, 5 years … or consider trends)
unlikely to think strategically over tactically, or get mired in tactical details before evaluating strategic options and differentiators, strengths, or weaknesses.

The good news is, thinking is a skill and there are plenty of resources that we can use to improve our thinking techniques. One of my favorites is Edward de Bono’s Six Thinking Hats.

Filed under: Business | Tagged: Business Planning | Leave a Comment »

DFN: If you don’t know where you’re going any road will do.

A GPS for business

November 27, 2009 by Stan Maupin
http://www.richmondbizsense.com/2009/11/27/guest-opinion-a-gps-for-business/

The views expressed in Guest Opinions are those of the author and do not represent BizSense or BizSense reporters.

Have you ever started out on a long trip using a set of directions from Google or MapQuest and found yourself off the path or found that the road was closed? Once that happens, your only choices are to retrace your steps or stumble along, hoping to get back on track.

Many growing businesses face the same situation in today’s uncertain economy. They know where they are, and they know where they want to be, so they develop a business plan that provides great directions to their destination. But somewhere along the way, they run into a roadblock or take a detour, and their business plan is no longer as useful.

In the past, the biggest complaint about business plans was that, once they were finished, they were “put on the shelf” and never looked at again. Today, it may not even make it to the shelf. It might be saved to a thumb drive and thrown in a drawer.

Today, even if management tries to use a plan to keep it heading in the right direction, the pace of change in business today means it will probably need major revisions time and time again.

Think of the telecommunications industry. The telephone didn’t change dramatically for most of the latter 20th century. It had one application that allowed you to talk on it. Just a couple of decades later, it has 85,000 “apps” that allow you to spend hundreds of hours looking for new uses that will save you hundreds of minutes by using your phone to improve your productivity (or unproductivity, as the case may be).

Now, try to imagine what the phone will look like in 10 more years. How do you develop a business plan for that?

To bring that example closer to home, think about INM United. This company was founded by Joel Erb, who started his entrepreneurial career in his mid-teens. (He is way up in his twenties now.) Joel’s company develops apps for the iPhone, so he has to develop and execute his plans in an industry that has 85,000 new products in a little over a year.

How can businesses stay on the right track in this environment?

I think that Tom-Tom and Garmin have the answer.

Instead of thinking of business planning as a set of direction or a road map, we need to think of it as a navigation system that provides directions but, more importantly, “recalculates” those directions whenever we got off the path or the road ahead is closed.

A GPS system even gives you periodic updates on your progress in a pleasant and calm voice.

The idea for GPS-like planning came about in discussions with Mike Appleby, the founder and CEO of Charlottesville-based Mikro Systems, Inc. Mikro has developed a lithographic molding technology that has applications in many industries. With a number of current contracts in place, and with opportunities appearing every day, Mike and his team have recognized that they need to be disciplined in the way they allocate their time and resources in the next few years if they want to reach their long-term goals.

We quickly realized that, in such a fluid environment, a traditional business plan would be out of date before it made it to the shelf.

Our answer was to focus on developing a planning process rather than a plan. Like a GPS system, the process will record and communicate the company’s destination, but it will also be proactive in keeping Mikro on the path to that destination and recalculating the path when needed.

Keep in mind that even the best GPS system needs to have a clearly defined destination in order to be effective. The most important step in developing any business plan is still agreeing on where you plan to go.

I know that male business owners will like GPS planning. They won’t have to stop and ask for directions.

Stan Maupin is a managing director with Transact Capital Partners and has worked with technology and emerging growth businesses in Virginia for more than 25 years. He is also a founding member of the Richmond Venture Forum and the Greater Richmond Technology Council.

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DFN: See my previous blog that tees up the patent case:
http://dougneeper.com/2009/11/07/supreme-court-case-could-stifle-innovation/
Essentially the issue is whether business processes / software should or should not be eligible for patents; right now they are, but, should the Court rule otherwise, that could lead to repeal of past patents, which as I said before could be catastrophic.

Justices Show Supreme Skepticism About Broad Business Model Patents
By Mike Masnick, 11/10/2009 @ 9:09AM
http://www.techdirt.com/articles/20091110/0111136865.shtml

You never know how they’ll actually rule, but in hearing the oral arguments in the Bilski case over the patentability of business models (and, most likely, software), one thing became quite clear: nearly every Supreme Court Justice was seriously skeptical of outlandish patent claims. We’ve noted, of course, that the Supreme Court over the past few years has taken a renewed interest in patent law, pushing back time and time again against the Federal Circuit (CAFC), who in the 80s and 90s seemed to take the position that more patents was always a good thing. Sensing that, with Bilski, CAFC even pushed back on its own earlier rules, and it appears that the Supreme Court at least agrees that the era of crazy business model patents should end now. The full transcript is worth reading, but Justin Levine did a nice job summarizing some of the highlights in the questioning by the Justices:

JUSTICE GINSBURG: But you say you would say tax avoidance methods are covered, just as the process here is covered. So an estate plan, tax avoidance, how to resist a corporate takeover, how to choose a jury, all of those are patentable?

MR. JAKES: They are eligible for patenting as processes, assuming they meet the other statutory requirements.

JUSTICE BREYER: So that would mean that every — every businessman — perhaps not every, but every successful businessman typically has something. His firm wouldn’t be successful if he didn’t have anything that others didn’t have. He thinks of a new way to organize. He thinks of a new thing to say on the telephone. He thinks of something. That’s how he made his money. And your view would be — and it’s new, too, and it’s useful, made him a fortune — anything that helps any businessman succeed is patentable because we reduce it to a number of steps, explain it in general terms, file our application, granted?

MR. JAKES: It is potentially patentable, yes.

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DFN: Interesting discussion by the author of "Getting to Plan B", uses Steve Jobs and iTunes as an example of moving away from Plan A. Also discusses why Plan A fails and what to do.

Discover your Plan B
Q&A: John Mullins, associate professor of management practice at London Business School
Amit Ranjan Rai / New Delhi November 10, 2009, 0:15 IST
http://www.business-standard.com/india/news/discover-your-plan-b/375844/

Ask an entrepreneur, if he had stuck to his original business plan and done well. The answer most likely will be “No”. Most well-known companies — say, Google, Starbucks, PayPal or even Pantaloon in India — have done well only after making radical changes to their original business plans. Entrepreneurs and start-ups must realise that the probability of their original business plan failing is very high, and thus they should be prepared to quickly get back on their feet and morph or change the original plan with a better one, says John Mullins, associate professor of management practice at London Business School and co-author of the book, Getting to Plan B, (with Randy Komisar of Kleiner Perkins Caufield & Byers). Mullins who was in Delhi recently, spoke to Amit Ranjan Rai on the uncertainty new businesses are fraught with and the way to go about changing the original business plan to Plan B.

Your book strongly asserts that the original plan with which a company starts off usually fails. Why do you say so?
I think it is widely known that Plan As usually fail, but it is not widely talked about. When this book came out and entrepreneurs saw the title, they said, “Oh, yes, it is about Plan B.” If you ask investors, how did they make money, they’ll tell they didn’t make it on the original plan, but on the second or third when the entrepreneur adapted the original plan and found a better plan. Rarely do initial plans with which entrepreneurs begin work the way they have been planned. Almost always there are twists and turns on the road.

Companies that created fabulous business models did so mostly on their second, third or fourth try, in the case PayPal, its seventh try. It took PayPal’s Max Levchin seven tries to found the right model to monetise effectively his crypography expertise.

But why do original plans fail?
That’s because it is practically impossible to predict exactly what will happen. You can’t usually predict what customers will buy, when they will buy, and what will they be ready to pay. You can’t predict what it will cost you to attract that customer in the first place or the competitive challenges that will surface as you develop your ideas.

There is just so much that you don’t know, you can plan all you want and you can plan to death. As Dwight D Eisenhower once said: “Plans are worthless, but planning is everything.” So you’ll have to plan, but you have to understand at the same time that your initial plan is going to go wrong. Now, that’s difficult for many people to accept but that’s the truth. In stable well-understood environments, planning works well but in unstable or uncertain environments, like those in which entrepreneurs usually operate, planning is more likely not going to be right.

But a lot of research and ground work goes into reading the markets correctly and finding the right business model.
Most entrepreneurs don’t spend a lot of money on consultancies. It’s the big companies who think they can plan everything to death and be correct. And that’s in part why there is such a big innovation gap in big companies today. Innovation that comes along with planning is mostly not very successful — you just cannot understand enough about the future. I bought my first PC in 1984, if you would have told me in 1984 that by 1990 I will have five PCs in my home, I would have said you are plum crazy. And guess what, in 1990, I had a laptop, my wife one, my two daughters one each and we had a desktop too. Who could have planned that? You can’t plan for it, you have to be adaptive.

Shouldn’t the emphasis be on making a better Plan A (than moving to Plan B), so that the initial investment that goes in is better utilised?
The challenge is not to make a better Plan A, the challenge is to recognise that however good your Plan A is, it is probably not very accurate. So your mindset, as you enter a process, should be to work out the best plan and at the same time, to get beyond that initial plan. Get it into the market and see if the market can tell which parts of that plan are correct, and which are off base, so that you can quickly adapt to the reality. Plan As are mostly partly correct, but not completely correct.

So, how should entrepreneurs move from Plan A to Plan B? Is there a framework?
You have do a couple of things. You have to look back in time and see what people have done before. We call these analogs — examples of other companies that have done something similar to what you are going to do. There are many analogs out there, portions of which can be borrowed or adapted to help you understand the economics and various other facets of your proposed business.

Next, you should also consider what we call antilogs — examples of companies that have done things in a way they should not have. Learn from their mistakes and be sure not to repeat them. For instance, there were some MP3 players already existing when Apple created the iPod. One of them, called the Diamond Rio, was the clunkiest and least user-friendly device one can imagine. Apple’s Steve Jobs looked at it and said we’ll build an MP3 player, but it’s not going to be anything like this.

Then probably, you will have to take some leaps of faith — beliefs you think hold the answers to your questions despite having no real evidence that these are actually true.

Leaps of faith…. Can you explain with an example?
When Steve Jobs turned Apple from an innovative design-led PC manufacturer that wasn’t making much money into a music industry powerhouse, he had to wrestle with the fact that he didn’t knew certain things. He didn’t knew if people will pay to download music over the Internet when they were actually stealing music through Napster and similar applications. Jobs looked back on what had gone before and said, Sony has sold 300 million walkmans, so there is a market for portable music. But Napster had 26 million users downloading music everyday. So, was there really a market for selling music over the Internet?

His leap of faith was that he can get customers to pay ¢99 a tune for at least some of the music they download. But he had to test that leap of faith, so he called up The Eagles’ drummer Don Henley and said he wants to put the Eagles library on the new thing he is going to do at Apple called the iTunes. Would he do it for a price of ¢99 a tune?

Jobs got a few musicians on board and went to the record companies and said that artists want do this and that he needed them on board to solve this problem that Napster has created and make some revenue through online music. Apple is a different company today, more than half of its business comes from music.

Any example of an Indian company that moved from Plan A to B that you find striking?
Kishore Biyani’s Pantaloon is a good example. Biyani was in the business of making men’s pants and he thought that the retailers were so bad that he can do a better job himself. He began studying retailers from other countries such as Walmart and Marks & Spencer. His genius was that he took the best from some of the western concepts and applied them in a uniquely Indian way.

For instance, the first Big Bazaar stores he opened were very neat and orderly. But then he realised that the stores were so orderly that people would just walk through them and never stop to pick anything up. So he decided to mess up the stores a bit and create a more bazaar-like environment to make them more comfortable for Indian shoppers who were used to the chaos of the bazaar.

So Biyani’s genius was in copying the backend, the supply chain efficiencies from Walmart and Marks & Spencer, and changing the front-end in-store experience to one that Indian consumers were more accustomed to.

Filed under: Business | Tagged: Business Planning | Leave a Comment »

DFN: If companies don’t get patents on business process / software the pace of innovation will slow. It would be disastrous if this ruling is retroactive versus going forward.

Patent case before Supreme Court could have major implications for software
By: JOELLE TESSLER
Associated Press
http://www.washingtonexaminer.com/economy/ap/69462867.html

11/07/09 12:35 PM EST WASHINGTON — With the technology industry looking on, the Supreme Court on Monday will explore what types of inventions should be eligible for a patent in a pivotal case that could undermine such legal protections for software.

A ruling that sides with the Patent Office could bar patents on processes and methods of doing business, such as online shopping techniques, medical diagnostic tests and procedures for executing trades on Wall Street. And it might even undercut patents on software.

In a worst-case scenario for the high-tech industry, the ruling could invalidate many existing software patents or at least make them more difficult to defend in lawsuits. And it could make such patents harder to obtain in the future because software is generally patented as a process for doing something rather than as a physical invention.

"Technology companies care about this case because it will define what you can and cannot get a patent on," said Emery Simon, counselor to the Business Software Alliance, which represents large technology companies including Microsoft Corp. and Intel Corp. "The scope of patentability could have ramifications for the path that technology takes."

It’s impossible to know what products might never have come to market without patent protection for software. But tech companies say these patents have played a critical role in keeping the U.S. at the cutting edge by giving people control over their inventions for nearly 20 years.

"The software industry would lose an important incentive to innovate if the government ceased issuing software patents," warned patent attorney James Carmichael, a former judge on the Patent Office board of appeals.

Although technology companies insist they’ll keep innovating no matter how the high court rules, an unfavorable outcome might force them to write patent applications in a different way or rely more on copyright and trade secret protections. And it might even draw Congress into the debate.

The facts of the case are not about software.

The roots of the dispute go back to 1997, when inventors Bernard Bilski and Rand Warsaw tried to patent a method of hedging weather-related risk in energy prices. That process, which powers energy billing services offered by a Pittsburgh company called WeatherWise USA, can be used to lock in energy prices, even during an unusually cold winter.

The Patent Office concluded the process was too abstract and denied the application. So Bilski and Warsaw took their claim the U.S. Court of Appeals for the Federal Circuit, which upheld the Patent Office decision last year and said a process is eligible for a patent only if it is "tied to a particular machine or apparatus" or if it "transforms a particular article into a different state or thing."

The Bilski filing, the court found, did not meet the test.

Now, the question facing the Supreme Court is whether that "machine-or-transformation" test is the right standard.

The answer should settle a long-running debate over whether business methods should be eligible for patents.

Some of the best-known business-method patents in technology come out of electronic commerce, including Amazon.com Inc.’s "1-Click" tool for completing online purchases and Priceline.com Inc.’s "Name Your Own Price" model. Yet many big companies, particularly in technology and financial services, argue that such patents are too broad and too often used as weapons in costly infringement lawsuits to extract licensing fees.

Technology companies, meanwhile, are watching the Bilski case for another reason: If the Supreme Court upholds the machine-or-transformation test, one of their fundamental assets — software — might no longer qualify.

The number of software patents has been climbing sharply in recent years — a reflection of the technology industry’s explosive growth and the increased reliance on software in all industries. A series of court rulings upholding software patents in the 1990s, including a key case in 1998 that opened the floodgates to business-method patents as well, also helped drive up software patent numbers.

Not everyone agrees software patents are a good thing, though.

Rob Tiller, assistant general counsel for software company Red Hat Inc., maintains that software patents actually discourage innovation because software developers are at constant risk of infringing on existing patents. Red Hat embraces the open-source movement, which makes software code freely available for anyone to modify, improve and use and is fundamentally at odds with software patents.

As the justices sort through these issues, they will have to determine how to draw the line between theoretical ideas not connected to the real world and concrete applications that put those ideas into practice.

The Supreme Court has already established that abstract ideas, natural phenomena and laws of nature cannot be patented. But there is still plenty of disagreement over what qualifies.

The same appeals court that ruled in the Bilski case had reached one conclusion when it upheld business method and software patents in the 1990s, saying that any invention that produces a "useful, concrete and tangible result" can qualify. The machine-or-transformation test arrives at a very different understanding.

Michael Jakes, a patent lawyer representing Bilski and Warsaw before the Supreme Court, argues that the new test is too restrictive and would exclude too many innovations — including software — in today’s service-based, information-age economy.

"The test may have made sense for industrial processes such as curing rubber or tanning leather," Jakes said. "But with today’s technology, we have processes that don’t fit these categories. But they are still practical and useful and innovative and important."

At this point, there is no firm consensus on what the test for patentability should be. IBM Corp. says an invention should be eligible if it makes a "technological contribution." Microsoft says an invention should be eligible if it has physical properties or produces a result in the physical world.

Under both tests, the companies say, software would make the cut and the Bilski risk-hedging application would not.

Indeed, Horacio Gutierrez, deputy general counsel for Microsoft, said the Supreme Court would actually help the technology industry by blocking a patent in this case — sending a strong signal that the government must hold patent applications to high standards.

Whatever test the Supreme Court ultimately settles on, IBM attorney Marian Underweiser hopes it will be flexible and broad.

"The danger is that if the test is too narrow and too specific," she said, "it won’t stand the test of time because technology moves so quickly."

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DFN: What interesting to me, is Evergreen in the last couple of years, spent $M on building a plant in Massachusetts, demand is down, prices are down, yet their building another plant in China? Doesn’t make a lot of sense; perhaps their trying to set themselves up for lower cost of production and higher profit margin, for when the solar market comes back?

Also, the State of Massachusetts, offered to pay $23M (GRANT) to subsidize a new plant, in MA, China offered $33M (LOAN), sure the cost of labor is cheaper in China, I guess this was enough to swing the NPV on the business case proving this in to be positive? I’d be curious about how more positive it was, it be curious if there was in fact a business case.

There’s a lot of talk about leadership, and its decision like this one that speak to the quality of a company’s leadership. To me, it puts me on the fence in regards to Evergreen, and if I were looking at ‘investments’ in this industry, I’d also be evaluating other companies.

Evergreen Solar to Move Solar Panel Production from Massachusetts to China
Ryan McBride 11/5/09
http://www.xconomy.com/boston/2009/11/05/evergreen-solar-to-move-solar-panel-production-from-massachusetts-to-china/

[Updated and corrected---8:30 pm ET on 11/05/09]Marlboro, MA-based Evergreen Solar (NASDAQ:ESLR) said it will move its solar panel production from Massachusetts to China—dealing a blow to the clean technology economy in the commonwealth.

Evergreen plans to begin migrating the manufacturing of solar panels out of its Devens, MA, plant to a facility under construction in Wuhan, China, in mid-2010, the company announced in an earnings statement on Wednesday. A lull in demand for solar cells globally and other factors have caused the price of solar panels like the ones that Evergreen makes to plunge by more than 30 percent since mid-2008, when its Devens production facility opened, the firm said. However, the company said it does plan to continue producing its silicon wafers and cells in Devens. It will also produce the silicon wafers in China beginning next year.

An Evergreen spokesman was not immediately available for comment this afternoon, and it was unclear how relocating panel production would impact its work force in Massachusetts.

Manufacturing in China is intended to reduce overall production costs, and Evergreen said it is receiving a $33 million loan from Chinese government to help cover the expenses of moving into a new plant that the company will lease from a contract manufacturing firm called Jiawei Solar. Evergreen’s move may sting some Massachusetts politicians and taxpayers; the state committed $23 million in grants to the firm, behind considerable support from Gov. Deval Patrick and his administration, to support its manufacturing in Devens. And Ian Bowles, the state’s secretary of Energy and Environmental Affairs, said in a statement about two years ago when construction of the Devens plant began that “we are breaking ground not only on a factory, but on the commonwealth’s clean energy future.”

Evergreen said it will manufacture its “String Ribbon” wafers at the facility it is building and will own in China, and that the wafers will then be sent to the the plant that its partner Jiawei Solar is building to convert the wafers into solar cells, which are used to make solar panels. The worldwide solar panel market has taken a beating over the past year or so due to reduced government spending or subsidies for the products in Spain and Germany, both of which are big solar panel users, as well as lower-than-projected demand in other countries such as the U.S., according to a recent report by Lux Research, which has an office in Boston. [Editor's note: the above paragraph was corrected to say that Evergreen, not its Chinese manufacturing partner, will build and own the facility where its silicon wafers will be produced in China. There are also added details from the company about the overall production process.]

Ryan McBride is Xconomy’s correspondent. You can reach him at rmcbride, or follow him on Twitter at http://twitter.com/Ryan_McBride.

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DFN: Pretty Witty and informative article regarding IT changed management. On the basis of just this one article, I’ve become a registered user.

CONFESSIONS OF AN ITIL GEEK
Lee Marshall on the universe of IT Service Management
ITSM Projects: A Tragedy in Five Acts
November 2, 2009 by Lee Marshall.
http://s236467555.onlinehome.us/

Eighty percent of IT Service Management programs and projects have failed to meet their objectives and are deemed a failure by the sponsor. Despite the high-profile success of ITSM and ITIL projects in organizations like Proctor & Gamble and BMO Financial, most ITSM projects will fail. This is tragic since ITIL has so much to offer in helping organizations align IT with their business objectives. This tragedy of failed ITSM programs generally takes place over five phases, or like Shakespeare’s greatest tragedy, Hamlet, five acts. In the following, I present the phases of a typical failed ITSM implementation along with suggestions on how you could avoid this kind of tragedy:

ACT I – The Way to IT Shangri-La

Macbeth:
I have no spur
To prick the sides of my intent, but only
Vaulting ambition, which o’erleaps itself,
And falls on th’other. . . .
Macbeth Act 1, scene 7. 25–28

Our hero, the CIO, joins an IT organization and seeing that there is a lack of standardized processes and mistrust between IT and the business, issues the directive that ITIL will be introduced into the organization. The ITSM program had been successful at the CIO’s previous organization where she had been a IT director, so why couldn’t it be successful here? The directive is for all IT staff to receive ITIL Foundations training and ITSM consultants will be hired to implement ITIL processes.

Recommendations: The typical ITIL training program involves training everyone in IT in Foundations, which is 100% content, then giving more advanced training to a small subset of IT staff. Instead, focus on creating understanding of the process and the intent of the role the IT staff will play in the process. Don’t focus on content. Create awareness and let people come to their own conclusions about the need for change. Use simulations to make people aware of the processes and get shared experiences about how ITIL can be used in the organization. Then do ITIL Foundations training, but focus on the right roles and people.

ACT II -Invasion of the ITSM Consultants

King Henry:

Once more unto the breach, dear friends, once more;

Henry The Fifth Act 3, scene 1, 1–6

ITIL training is provided in-house to all IT staff. Like most involuntary training involving change, twenty percent of staff will embrace it and get excited about the opportunities ITIL provides, ten percent will be openly hostile to change, and the majority seventy percent will take a wait and see attitude. Certificates and pins are handed out, and cute nerf toys are left behind for people to throw at each other. Next, ITSM consultants descend on the organization to hold process design workshops, create Visio diagrams and RACI charts and produce ITIL process binders. An expensive ITSM software tool is chosen and installed with the help of another ITSM consultant, who can’t interpret into the tool the processes designed by the other ITSM consultants, so they configure the tool the way they want to! The ITSM consultants then leave behind their process designs and documentation, and the organization is left to begin following these processes and using the tool. No one considered the management of change required with such a big cultural and operational change, so only about 20 percent of people begin following the processes and 20 percent are openly hostile. The rest are indifferent and just wait for this latest management fad to go away so they go back to working like they always have.

Recommendations: Have a training plan that involves more than certifying all IT staff in ITIL Foundations. Focus your training on key staff who get what IT service managment is about and have them get excited about it and spread the message to other IT staff. Don’t leave your ITSM program to just the consultants. Ensure that you are familiar with John Kotter’s 7-step model for management of change and don’t skip steps! Clearly document your ITIL processes before implementing an IT Service Management software toolset.

ACT III – Incident, Problem, Change, … Stop

Florizel:
“When you do dance, I wish you
A wave o’ th’ sea, that you might ever do
Nothing but that.”
The Winter’s Tale (IV, iv, 159-161)

The organization starts with implementing the Incident Management process, adds in some service request components, moves on to working on the Problem and a root cause analysis process and then proceed to modifying their existing Change Management process to align with ITIL. Then…stop. At this point, the wind begins to die out of the sails of the ITSM program. Champions become disillusioned as they fail to make a business case to move forward with implementing the other ITIL processes. People stop following the processes, if they ever did, since the ITSM consultants never considered how staff would be held accountable for following the processes. The cultural change associated with ITIL was not considered, so the shift to becoming an IT service provider never happens. And without this cultural change it becomes nearly impossible to implement the ITIL processes beyond Change Management, like Service Catalogue Management, Service Level Management, and Service Asset & Configuration Management, etc…

Recommendations: To take your ITSM initiative past Incident, Problem and Change it is imperative that you focus on the foundation of ITSM… services. IT must demonstrate the value it offers to the organization and the best way to start this is to clearly define what IT does for the business. Do this by building an actionable and relevant IT Service Catalogue that clearly articulates all the services that IT provides. ITIL provides basic guidance in this area but engaging someone who has successfully implemented a Service Catalogue in an organization similiar to yours is my recommendation.

ACT IV – Disillusionment

Marcellus:
Something is rotten in the state of Denmark.

Hamlet Act 1, scene 4, 87–91

The IT service management programs begins to die a slow death. The CIO has other priorities now, primarily outsourcing all IT development to India; the early ITSM champions have left the company; the ITSM software tool is being used for 10 percent of its capability and duplicate tools are being used and purchased across the organization. Managed Service Providers (MSPs), also known as IT outsourcers, are approaching the CIO and business unit customers about Software as a Service (SaaS) options for key business processes and Cloud Computing concepts for replacing the organizations costly IT infrastructure. In essence, these IT outsourcers are doing what should have been the goal of the ITSM program in the first place: aligning IT with the business and becoming a value-added service provider.

Recommendations: If your ITSM program has gotten to this point there may be little chance to save it. The key is to define to the CIO and senior management what IT does and the value it provides to the organization. Only be defining what you do can you compete with Managed Service Providers trying to take your business. As with all the ITIL processes, don’t try to boil the ocean. Don’t aim for perfection with one process before moving to the next. All of the processes are important so do what you can with each of them. If your audit or internal controls group is using COBIT, ensure that you leverage it in your ITSM program to implement processes to meet audit requirements.

ACT V – Death

Juliet:
“O happy dagger!
This is thy sheath; there rust, and let me die.”
Romeo and Juliet (V, iii, 169-170)

The final act of this tragedy is the death of the ITSM program. The CIO moves on to another organization and the few staff left that believed in the program move on to other projects. Management and staff who never bought into the program declare it another failed management fad. Ironically, more and more IT systems and functions are outsourced to managed service providers who understand what service management is about. And all that work and effort (and cost) of the ITSM consultants? The ITIL process binders and documentation sit on shelves and network drives until they are finally discarded as part of a clean-up project.

Recommendations: Don’t leave your IT Service Management program to consultants! Here are 5 tips for having a successful ITSM program.
1. The CIO and other IT leaders should take an active role by being executive sponsors for the ITSM program and ITIL process implementations.
2. Run your ITIL process implementations as projects, however that is defined at your organization. If you try to do these things on the side of your desk you won’t get the exposure and buy-in required. There are lots of elements to a process implementation so it is essential that it is run as a formal project.
3. Communicate all the time to all levels throughout the project. And communicate in different ways: email, web, presentations, handouts, etc. Experts claim that a person needs to see something 7 times in 7 different ways before the message sticks.
4. Get some quick wins. Don’t wait for the process project to be complete before implementing something. For example, if you are implementing Change Management, can you start a Change Advisory Board and start having meetings. Do you need the entire process to be complete before implementing this step? Probably not, so look for these quick wins in each ITIL process project.
5. Prepare for organizational resistance and fight-back. Management of change must be considered and Kotter’s 7-step model for implementing change is an excellent guide in this area.

Please don’t let the tragedy of a failed ITSM program happen to you and your organization. Contact B-Wyze or myself to see how we can help improve IT, reduce costs and align IT with the business objectives of your organization.

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