Mark Richtermeyer's Blog

How a small biz can get a big CIO (with a small budget)

2009-12-29T09:15:00.000-08:00

In the new economy, it is critical for businesses of every size to prepare for growth and to maximize efficiencies. This always sounds easier than it is. A good way to approach this challenge is to think in terms of outsourcing – not just IT, but outsourcing the entire CIO function.

Our company recently completed an engagement that illustrates how this concept works – actually, how it works extremely well.

We got started by performing a quick audit of the client's overall technology infrastructure -- touching everything from desktop support to enterprise systems, including line of business applications. We basically served as a senior level CIO in order to assess their use of technology, the state of their systems, look at their business processes and then provide a roadmap for the upgrades, efforts and costs the client will need to plan for the next 3-5 years.

In this engagement we are providing the services of what an experienced technology team would bring to a large company. The senior business perspective, business analysts, enterprise architects – the whole enchilada.

This type of engagement provides more value than anyone could have imagined. The client got senior talent and intelligence without hiring a big-ticket, full-time CIO (which they couldn’t afford anyway). Once the roadmap is in place our team provided part-time help as necessary to ensure that the recommended initiatives were accomplished properly.

At the conclusion of this project, the company saved around $15,000 in maintenance costs by simply creating a more uniform technology infrastructure, but more importantly they:
· massively reduced the risk of a business critical system outage
· improved their revenues by creating a better experience for their customers in the form of a client portal (which allowed their customers more access to key performance information, allowing our customer to look so good that their customer hired them for a multi-million dollar new project)
· saved thousands of man-hours on managing paper based processes
· Improved their Internet up-time from 2-3 outages per month to no outages at all

Businesses that use technology are more profitable, more efficient, and grow faster. And businesses that embrace new ways of thinking – such as outsourcing the CIO function – are the ones that will emerge bigger and better in the new economy.

About me: Mark Richtermeyer is the CEO of The Spitfire Group. Providing strategic business and technical services to companies that want to use technology to grow and become more profitable. Feel free to contact me at 303.485.1878, or mark@spitfiregroup.com

Government Run Healthcare

2009-06-25T09:32:00.001-07:00

As a small business, we pay very close attention to the costs of insurance and healthcare costs that we provide for our employees. In the past few days I've heard the President mention that his government sponsored programs will keep private insurance companies honest. I ask who will keep the government honest? At least on an open market I am free to fire my insurance company and select another-I dont suppose I get thqt option with the government.

The other thing I heard him say was that a government program will not effect private programs, that they would not have an unfair advantage in the marketplace. And I think this is truly an intellectually dishonest statement. How can the rule maker not have an unfair advantage? Legislators place so many rules on the private companies that clearly will not apply to them-these legislators certainly have no idea the financial impact in the marketplace of the foolish requirements they create.

Based on recent legislation here in Colorado, our company is facing what we understand to be the highest rate increase our agent has ever seen in a year-almost a 70% increase in cost that will be shared by the company and employees. Unbelievable!

Mark

Workflow Benefits

2009-06-25T09:24:00.000-07:00

I've recently witnessed numerous cases of businesses that are lacking processes for their core business deliverables. We've been told that processes run the business and people run the processes, but I personally believe that people play a larger role in the business than just running processes.

Nevertheless it is difficult to provide consistent quality and scale the business if good processes are not in place. The companion to a good porcess is a process tool. I was asked yesterday "how do you keep people from backsliding on new processes that you set up?", and the answer is simply to institute tools to track progress and make the new porcess a part of the job. Once a tool is in place and funtioning porperly it is awfully ahrd to move back to the old way of doing things. Sometimes we refer about this as adoption, and work very hard to get buy-in from the various users of the process to ensure that the tool is adopted fully. I argue that once this has happened it is much harder to backslide to an old way of doing things, and if the tool is configured well, it can identify a lack of adoption, or exceptions to the process-which in turn become management tasks.

Mark

Quality during a recession

2008-11-18T09:34:00.000-08:00

Does anyone remember the triangle model that reflected the qualities of Speed, Quality and Price? The deal was you could pick any two, but all three were not possible. In other words you could have something (a product or a service) quick and cheap, but like fast food, its probably not going to be too high a quality, you could have fast and good, but it wont be cheap, or you could have good and cheap, but not get it very fast. I believe that this model still holds true, but the question is does anyone choose high quality during a recession? Does fast still matter during a recession. I worry that most people choose the low cost option no matter what the consequences.

We see Wal-Mart is doing good business during these hard times, but that most of the higher end retailers are reporting life-threatening results.

I for one, believe that higher quality is typically a better option. Quality has many components to it, including the characteristic of being appropriately sized and engineered (with regards to software development and technology architecture anyways). Over my career, I have found countless examples of how experienced teams of people who deliver high quality solutions save companies money in the long run. They also decrease pain associated with a project (on time delivery, done right the first time, etc.).

I find that paying for quality rarely leaves someone regretting their decision. I don't think this is true for the other options in the triangle. When wise people evaluate the real cost of the low cost option, they rarely find it was as cheap as they expected or that much cheaper than the higher quality option.

Marks Meeting Message

2008-11-18T09:17:00.000-08:00

About once every year or so I feel compelled to remind people about how dangerous meetings have become to American business. Like so many Dilbertian characters, some people have literally made a career out of attending meetings. So once again, here are my suggstions for managing effective meetings:

1. Meetings should have a start time and a stop time. I once had a client tell me they wanted a system on the wall that identified the cost of each employee in the room multiplied by the time spent during the meeting to be reflected in a cost clock on the wall. Cool idea.

2. People should be on time for the meetings, that is simply out of respect for other peoples time. But the meeting start does not shift just because choose to not be on time (exceptions probably granted to certain royalty, and egomaniac CEO's).

3. Meetings begin and end on time.

4. A meeting should have an agenda, and that agenda should be communicated prior to the meeting in order for the attendees to be well prepared for the meeting.

5. The meeting should have a facilitator and a note taker. The facilitator may or may not be the person who called the meeting, but they should ensure that all participants are engaged and providing input. The facilitator also needs to be something of a time manager.

6. The meeting should have written action items, and the responsible party needs to be identified (no fair tapping people not present :) )

Some companies have adopted meeting free days. An interesting idea, with a good message, but probably not very practical for managing schedules and getting things done. More than ever I appreciate good communication and collaboration in companies today, but there needs to be a balance struck with efficiency and a need to get things done!

Mark

Exchanging fixed costs for variable costs in IT

2008-10-21T13:40:00.001-07:00

With the recent threats of a recession, it seems to me that more companies will be interested in changing out much of their flat fixed costs for variable costs in the IT department. This makes a lot of sense and prepares companies to be more flexiable in a less stable business environment.

Spitfire (www.spitfiregroup.com) has pioneered some very innovative ways to help companies manage their IT projects in a maore variable manner. Some of the benefits of these methods include:

1. The ability to throttle back on IT costs for short periods of time, or quickly when the revenues are not tracking with the costs of the company

2. The ability to throttle up for short periods of times when a critical or strategic need arises.

3. Where a firms technology needs may help them jump ahead of a competitor, or an entreprenuerial opportunity is identified where certain technology requirements are necessary

4. More reliable or timely delivery of business value needs to be achieved for a less risky cost.

We've heard some critics argue that they wanted a full time staff for everything and that consulting costs, or variable resource costs, are too expensive but in most cases this proves to be a misconception. Common myths are:

1. "I need full time people who undersatand the history of the systems". In this case, those people are often just as likely to leave as stay and they tend to have settled into patterns that may not provide for the most effective use of resources. In every case I've been involved in, those with the "history" were more interested in promoting that myth in order to save their own skin rather than promote a better way of dealing with technical challenges.

2. "Outsiders don't understand my business". This certainly may be true, but you might be surprised to find out how consistent technology issues are between businesses. Even businesses in different industries.

3. "Consultants are expensive". They can be but expenisve is relative. If you are paying them to get a project done, that project has a beginning and an end. The cost is variable based on that project. If you are paying a whole department of people (a fixed cost), you are also paying for all of the overhead of managing that department. All of the HR issues, politics, payroll issues, etc. In other words you are paying for many things other than the technical business functionality that you need to serve your customers better.

To make my point even clearer, I recently had lunch with a CEO friend of mine that told me he would never again have an IT department, that he would use consultants for everything. His reasoning was if I have a project that I'm trying to accomplish and its not getting done by the itnernal department-my discussion with that department is much different that the discussion I have with an external consulting firm. His thought was that internally he has to manage people, externall y he only has to manage value-he would rather manage the value. I think most business managers would prefer to focus on the business issues.

Since

Spitfire's refined focus

2008-09-19T09:53:00.001-07:00

When I first started the company, the idea was to bring a high level of consulting professionalism and extraordinary value to mid-market companies. This continues to be the focus, but in order to properly sell our services it was critical that we identify key practice areas. These practice areas are Custom Software Development (using an agile approach, and proven intellectual capital to jump start critical software development), Technology Strategy (helping companies select the right applications, and then customizing and configuring them to work for the business as well as integrating these applications into other systems), and lastly we decided to officially focus on Enterprise Content Management (from document management all the way through Web content management and workflow systems).

This focus allows us to tie our marketing materials to our skills and also to continue to create impactful intellectual capital to deliver to our clients bottom line. We should see more information on our web site regarding this shift in message- www.spitfiregroup.com.

Clearview ECM

2008-09-19T09:53:00.000-07:00

Recently we inked a partnership with Clearview ECM, an Enterprise Content Management package that we are quite impressed with. This package runs on top of Microsoft's Sharepoint, and has what we consider the best integration with Sharepoint to date. The software allows users to quickly search on key words and bring up documents related to that keyword-for example, an employee name, or number,a customer etc. Its quite impressive in how it takes document management to a new level that is truly affordable for the mid-sized organization. More info on the partnership at www.spitfiregroup.com, and www.clearviewecm.com.

Why use consultants?

2008-09-09T09:45:00.001-07:00

I have many thoughts about why consulting provides better business value for companies than hiring full time employees. One of the reasons is that in the application development world, there seems to be two distinctly different personality types: Developers and Maintainers. Developers are creative, they, like artists, builders or architects, are excellent at creating new solutions where none previously existed.

Maintainers are trouble shooters. They are excellent at unwinding why something doesnt work, and making corrections to make it work. We often call them the forensic scientists of application development. Their role is less about building and more about fixing. Typically this role is less valued and the pay rates for those willing to do maintenance is significantly less than it is for developers.

Developers enjoy building new products, but once the product is built they are often ready to move on to more interesting pastures, and are not enthused about maintaining their creation. Thus, often times the intellectual capital associated with their role in the creation departs the company, and most often not at the time favored by the company. Maintainers are soon hired to replace them and so goes the story.

I believe engaging a top notch team of developers who know they are going to go away after the product is created provides for a less expensive full time technical team that is more appropriately matched to the long term goals of the company. The consulting team has expertise at transferring knowledge regarding the application for suitable maintenance, and often the consulting firm can be engaged to provide ongoing support during the transition time (and a nice backup if things go awry), or can even work in a joint environment with maintainers to provide strong knowledge of the interworkings of an application.

I need to work on a model that shows how much money can be saved by working in this fashion.