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On Pervasive Encryption and GDPR

By on July 21, 2017

 

How much of your personal data is encrypted? Is your hard drive encrypted? Do you know? Only if you caught WannaCry, am I right?

How about your corporate data? Is that encrypted? Do you know? How would you go about finding out?

Should you care?

We spend so much time on the Internet these days that we seem to assume wire encryption is all that we need. We’ll just encrypt the connections and everything will be find. Hey look dad – HTTPS – we’re all good!

But enterprises in mature industries have this annoying thing called “regulation”, which means you have to worry about “audits” and “controls”. Sometimes regulations even affect startups – no really, it’s true.

25th May 2018 a doozy comes into effect – GDPR, which will cover any organisation handling personal data of EU citizens, regardless of where the company is located. Organisations are going to have a legal responsibility to do some annoying and expensive things, like inform customers there has been a breach of customer information within 72 hours. They will need to maintain “state of the art” controls. They will need to be able to provide an electronic record of the data they hold on citizen. GDPR also enshrines right to be forgotten – with data erasure if someone wants you to delete a record about them. It’s going to be Silicon Valley’s favourite.

But enterprises are generally more used to this kind of stuff. GDPR is going be the biggest market for IT controls since Sarbanes Oxley came in. It’s hard to say whether it will be any more effective, but that’s not the point. The EU is making a market.

So why bother? The most serious violations could apparently result in fines of up to €20 million or 4 per cent of turnover (whichever is greater). Note- WHICHEVER IS GREATER!

Obviously one way to avoid damaging breaches is to encrypt everything. With that in mind today IBM announced “Pervasive Encryption” as part of it’s Z14 mainframe launch. Mainframes uh, right? I think I can hear your eyes rolling. But mainframes are still the most solid platform for data management, and they happen to be a place where most Fortune 500 companies keep a significant amount of transaction data – that is, customer information. IBM is telling mainframe customers they can take significant strides to being more secure with an upgrade. It has significantly upgraded its cryptographic processors, and worked out pricing models to make overheads not punitive.

For some companies they might look at GDPR, and think “I know let’s use GDPR as an excuse to replatform all our data somewhere else instead”. Except that would obviously be insane.

So IBM has a pretty solid sales pitch for its new boxes, when it comes to circling the wagons. Will organisations decide to move data back onto the mainframe, to manage it more effectively under GDPR though? Less likely but not an impossible scenario.

Centralisation is definitely one approach that can make data management easier. IBM coined another neat phrase to talk about the regs – “data is the perimeter”.

As I pointed out the other day, Google expects GDPR to accelerate corporate adoption of the cloud – centralisation again. All the cloud providers see GDPR as an opportunity. Oracle is going to be in there. Compliance is always a great sales tool for technology. Microsoft is making play too.

What else did IBM talk about at the Z14 launch? It also announced some machine learning stuff (without the usual Watson hooplah). It said it could run open workloads faster than x86 (less relevant in the age of the cloud). I was expecting a blockchain onslaught, but actually there wasn’t so much of that. So a clear message.

 

 

disclaimer: Google, IBM, Oracle and Microsoft are all clients.

(Read this and other great posts  @ RedMonk)

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We need to talk about data science skills. Real talk about AI, deep and machine learning

By on July 20, 2017

Saw this story after it was tweeted by Puni Rajah  – Bosch to invest 300m euros in AI, employ 100 experts from India, USA, Germany. As ever India has done great job building its native skills base. But the fact Bosch needs to look outside Germany is telling. We’re seeing a lot of pressure owing to skills shortages, and companies, countries and cities everywhere are going to need to up their game to avoid brain drain. Silicon Valley is still the main place data scientists, in particular machine learning and AI specialists, are ending up.

Pierre Etienne Bardin of Société Générale expressed the need to be more active in hiring and training succinctly in a recent post on data transformation as the new digital transformation.

“You can’t wait for experts to come to you. They won’t come unless you’re Google or Facebook.”

Yesterday James Kisner, an equity analyst at global investment banking firm Jefferies, said that “IBM Appears Outgunned in the Talent War.” Part of his argument rests on IBM having fewer open positions for ML than competitors on Monster.com. Not the most scientific methodology. To Bardin’s point Silicon Valley firms have a halo, and the fact they’re held to very different standards by equities analysts means they can spend a lot more on compensation. Frankly if you had the chance to work with Dr Fei Fei Li at Google you’d be crazy to turn it down. Unless of course, you didn’t want to move to the USA, or even to the West Coast. Carnegie Mellon in Pittsburgh is another centre of excellence.

That said, let’s get real. The enterprise is hardly ready for big data, let alone AI/ML. The data transformation is in its very early days. This isn’t the end, or even the beginning of the end, but it may just be the end of the beginning. Google and Facebook are making money with machine learning, not for machine learning. So far the model is kind of similar to open source in that respect – Web companies are making money with open source.

It seems unfair (though of course them’s the breaks) to mark IBM down for consulting engagements with its customers to help them understand and realise the value of data science, training models and so on, given its competitors aren’t selling services to do that. Maybe Kisner knows something I don’t about someone selling AI/ML, in terms of revenues.

Before going back to the skills shortage a couple of conversations with IBM and Google recently are worth noting, with respect to the AI/ML market.

A few weeks back I met with Rob Thomas, General Manager, IBM Analytics. He said something kind of powerful. He said he wasn’t so interested in talking about AI/ML/Cognitive with Watson clients, but rather “decision systems”, because that was where the value was. Using IT to drive better decision-making. AI as augmented intelligence.

It would be easy to scoff that this was IBM’s problem, but we had almost exactly the same conversation with Google a couple of days ago, at the launch of their London data centre.

An analyst from another firm asked what they felt Google’s key competitive differentiator was – something they could explain to “Joe Bloggs on the street”? He said he thought the Google advantage was machine learning. But neither Tariq Shaukat, who heads up the Google Cloud Platform customer team, or Ben Treynor Sloss, VP of Engineering, agreed. They said they were cautious about trying to explain that as an advantage. Google was good at using ML, but it might not be the best idea to lead with it as a message, because frankly it’s hard to explain.

In the long term, yes. We’re at a significant inflection point. As Sloss put it:

“Cloud is going to change how things are built. AI is going to change what things are built.”

But for now this stuff is hard to explain and the customer isn’t ready.

After all, If we can’t hire people to use the tools, what’s the point of leading with a technology story? The UK has done pretty well lately in being seen as an AI/ML leader. The country’s universities, notably Cambridge, have been doing a sterling job of seeding the market, leading to acquisitions. Google acquired DeepMind, which in turn acquired Dark Blue Labs and Vision Factory. It’s not clear whether the Brexit shitshow will leads people elsewhere, but computer science at least for now is in pretty good shape in the UK.

Tel Aviv is another market rich in AI talent. Apple acquired RealFace there.

If AI/ML is going to a be source of competitive advantage, then the skills to deliver it are going to be at a significant premium. We need better online learning, more university courses, better funding, and a clear understanding that skills will be the difference. The irony of machine learning is that we need better human learning and teaching to take advantage of it.

Finally I’d like to introduce Ivan Beckley. He’s smart, driven, studying medicine, and wants to study data science at UCL for a year. He’s also black, looking for sponsors for the course, and I am looking to help him. If you’d like to improve the skills pipeline in groups that are under-represented in tech, Ivan would love to hear from you. He’s prepared to collaborate on his research agenda, and work as an intern with you in Summer 2018 if you’d like to sponsor his course. Let me know. You won’t find anyone brighter or more hard-working to collaborate with. This is his post about joining us at Thingmonk as a diversity scholar.

We all need to invest in data science skills. Let’s start with Ivan.

(Read this and other great posts  @ RedMonk)

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Detecting and Eliminating the Rolling Hairballs in your Sales Pipeline

By on July 20, 2017

Quick:  what’s the biggest deal in this quarter’s sales pipeline?  Was that the biggest deal in last quarter’s pipeline?  How about the quarter before?  Do you have deals in your pipeline older than your children?

If you’re answering yes to these questions, then you’re probably dealing with “rolling hairballs” in your pipeline.  Rolling hairballs are bad:

  • They exaggerate the size of the pipeline.
  • They distort coverage and conversion ratios.
  • They mess up expected-value forecasts, like a forecast-category or stage-weighted sales forecast.

Maybe they’re real deals; maybe they’re figments of a rep’s imagination.  But, if you’re not careful, they pollute your pipeline and your metrics.

Let’s define a rolling hairball

A rolling hairball is a typically large opportunity that sits in your current-quarter pipeline every quarter, with a close date that slips every quarter.  At 2 quarters it’s a suspected rolling hairball; at 3 or more quarter’s it’s a confirmed one.

Rolling Hairball Detection

The first thing you need to do is find rolling hairballs.  They’re tricky because salesreps always swear they’re real deals that are supposed to finally close this quarter.  What makes rolling hairballs obvious is their ever-sliding close dates.  What makes them dangerous is their size (including an accumulation of them that aggregate to a material fraction of the pipeline).

If you want to find rolling hairballs, look for opportunities in the current-quarter pipeline that were also in last-quarter’s pipeline.  That will find numerous bona fide slipped deals, but it will also light-up potential rolling hairballs.  To determine if an opportunity is  a rolling hairball, for sure, you can do one of two things:

  • See if it also appeared in the current-quarter pipeline in any quarters prior to the previous one.
  • Look at its stage or forecast category.  If either of those suggest it won’t be closing this quarter, it’s another big hairball indicator.

The more sophisticated way to find them is to examine “stuck opportunity” reports that light-up deals that are moving through pipeline stages too slowly compared to your norms.

But typically, the hairball is a big opportunity hiding in plain sight.  You know it was in last quarter’s pipeline and the quarter before that.  You’ve just been deluded into believing it’s not a hairball.

Fixing Rolling Hairballs

There are two ways to fix rolling hairballs:

  • Fix the close date.  Reps are subtly incented to put deals in the current quarter (e.g., to show they’re working on something, to show they might bring in some big sales this quarter). The manager needs to get on the phone with the customer and, after having verified it’s a real opportunity, get the real timeframe in which it might close.  Assigning a realistic close date to the opportunity makes your pipeline more real and reminds the rep that they need to be working on other shorter-term opportunities as well.  (There is no mid-term if you fail enough in the short term.)  The deal will still remain in the all-quarters pipeline, but it won’t always be in the current-quarter pipeline, ever-sliding, and distorting metrics and ratios.

 

  • Fix the size. While a realistic close date is the best solution, what makes rolling hairballs dangerous is their size.  So, if the salesrep really believes it’s a current-quarter opportunity, you can either reduce its size or split it into two opportunities (particularly if that’s a possible outcome), a small one in the current quarter along with an upsell in the future.  Note that this approach can be dangerous, with lots of little hairball-lets flying below radar, so you should only try if it you’re sure your salesops team can produce the reports to find them and if you believe it reflects real customer buying patterns.

Don’t let rolling hairballs pollute your pipeline metrics and ratios.  Admit they exist, find them, and fix them.  Your sales and sales forecasting will be more consistent as a result.

(Cross-posted @ Kellblog)

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Truth and Lies About Cold Calls, Cold Emails, and Advertising

By on July 19, 2017

Doing a lot of cold calling, cold emailing, and advertising?

The trouble with blogging is you’re always in the middle of the discussion.  There’s not time to lay out the story right from the beginning to get everyone on the same page.

Take the subject of cold calls, cold, emails, advertising, and outbound marketing in general.  Personally, I don’t think businesses should waste a dime on any of it.  It’s a revolutionary thought, I know, because so many businesses make those avenues their primary means of marketing.

But Outbound is so terribly flawed and inefficient.

Actually, it isn’t all that revolutionary, as many are realizing the truth of it.  Way back in 2008, marketing expert Seth Godin was saying:

Content Marketing is the only marketing left.

As we will see, Content Marketing is just another term for Inbound Marketing.

Recently, I was answering a Quora question about cold emails.  The question was all about what the best tactics were for using them.  A bunch of authorities weighed in with advice about creating subject lines to get people to open then, making your you give value in the message, yada, yada, ho, hum…

STOP!

I couldn’t take it.  My answer was all about telling the audience to quit wasting their time on cold emails at all.  Forget optimizing them, why do it?

Let’s use cold emails as our petri dish for talking about outbound marketing.  in this post, because convincing you not to waste your time and money on it (except in very special circumstances where you have no choice) is something I believe in deeply.

Here’s why:

No matter how hard you work on your subject line, your cold email is an unwelcome party crasher in your recipient’s mailbox. The vast majority of them will never read the email.

But even if you can craft a subject line that gets a great open rate, what next?

FastCompany writes that after getting a fantastic open rate on their cold email experiment, only 1.7% bothered to click and take further action.

That’s right—only 12 out of the 1000 they sent emails to bothered to take action.

Only 12 out of 1000 did anything with the cold emails…

It gets worse though. Many recipients will consider your cold email to be spam. After all, they didn’t opt into it or ask for it. And it’s oh so easy for them to mark it as spam.

Also, many ISP’s watch what happens to email to determine if they are spam. If a particular sender has low enough open rates, they may blacklist them as spammers, particularly if many recipients are calling the messages out as spam.

You can destroy your online emailing reputation in a hurry with cold emails if you’re not careful.  Suddenly, all your emails, not just the cold ones, can start ending up in the spam folder.

Not only is the upside limited with cold emails, but there’s a big downside too.

So why do firms still send so many cold emails?

Lots of reasons:

  • Because they can and it’s cheap
  • Because there’s a certain badge of Old School Honor in Cold Calling that carries over
  • Because they’re desperate for leads

But here’s the thing—you’ve got a zero sum game here. You’ve got one budget. You need to make every lead generation dollar count. So why waste any of it on a tactic that has such a low likelihood of success?

Why waste any money on a tactic with such a low likelihood of success?

By now you’re thinking, we’ve always done this, we have to get our leads somewhere, so what’s the alternative?

For me, this is just a very specific part of the whole inbound vs outbound marketing question.

Outbound is all about advertising, cold calling, cold emailing, and generally knocking on doors uninvited. Inbound is all about dangling bait in the form of content that potential prospects search for.

They are “inbound” to your company rather than you being “outbound” to their door. They come willingly rather than having to be beaten into submission by the unbearable din of endless ads and marketing campaigns.

Here’s the important thing most experts agree on:

Inbound marketing is cheaper and has a higher ROI than outbound marketing.

There are a lot of numbers floating around out there, but one source I tracked down says that Inbound leads are 62% cheaper than Outbound.

Getting back to that zero sum budget, why spend dollars on one method of lead generation when you can get 62% more sales using another method?

Here’s another way to think about it?

Which method do real marketing experts choose to market their own businesses?

It’s one thing to spend a whole bunch of the client’s money doing what they want to make them happy. But it’s another thing entirely when it’s your own money.

I have done some deep analysis on the marketing tactics of a group of marketers I call the Top 15 Master Marketers of the Digital World. These are some of the top people that tell us how marketing is done.

Here’s where they’re getting their leads:

Almost no advertising!

Notice what a tiny percentage is coming from outbound advertising. Email is quite a bit better, but the vast majority of that email isn’t cold emailing. It’s warm emails to folks who have willingly joined their email lists.

Most of the traffic is coming from Search. That’s right, they’re doing classic Inbound marketing. They write great content that helps people find the answers to questions they’re searching for.

If you’d like to learn more about the tactics of these master marketers, check out my article here:

Marketing Master Profiles [Guide to the World’s Best Marketers]

Let me give you a personal anecdote about how effective Inbound Marketing can be. I’ve used it across multiple startups and it has always worked well. But it is the cornerstone marketing strategy of my current business, which is called CNCCookbook.

This is a B2B business selling to CNC Manufacturers. My customer list reads like a who’s who of leading manufacturers:

My web site gets over 4 million visits a year from this audience, making it one of the top destination sites for my audience.

Keep in mind, I compete with very large companies for that attention. Some of them are even public companies. I even compete with an online television show aimed at this audience. It’s a reality TV show called Titans of CNC.

Guess what?

My site gets more traffic than Titans does.

In fact, I wrote an article not too long ago about how my site gets more traffic than one Venture Capitalist’s best startups.

My point is not to brag, but to educate. I am generating all that traffic all by myself. That’s right—CNCCookbook produces a very large income for me and I’m a solopreneur. I write our software, do our customer service, and I do all the marketing.

It’s just me, and I’m beating public and private companies with large marketing staffs and millions of dollars in marketing budget.

All because I don’t waste any time on outbound. Every minute I have available is invested in creating great content that my audience loves.

Instead of planning your next cold email campaign or cold calling blitz, you might want to consider ramping up your own Inbound Marketing efforts.

If this article resonated and you’d like more just like it, sign up for our Entrepreneur’s Newsletter.  You’ll receive a free mini-course Work Smarter and Get Things Done. It teaches you how to maximize your productivity so you can get everything you need to do for your business done.  It even includes our free productivity software to get you organized, focused, and productive.

(Cross-posted @ Bob Warfield)

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The incredible shrinking time to legacy. On Time to Suck as a metric for dev and ops

By on July 19, 2017

 

“All this fuss over nothing. All this searching for something, all this reinventing the wheel, all this searching for something, that’s not real”

The Wheel, SOHN 2017

I’ve had a riff for a while about Developer Time To Suck, the half life of a product or project before developers decide it is time to find something else bright and shiny to play with. It used to be that a new technology had a few years before it was seen as boring. In tech, like in politics, you were the future once. But the window is shrinking all the time.

It used to be that a developer choice was cool for about five to seven years. Today not so much.

MongoDB is a case in point. It went from the new hotness, adopted by a bunch of 23 year old “architects” surfing the Node.js is Bad Ass Rock Star Tech wave, to the same people saying it totally sucked two years later. For mongoDB that was OK, because it’s convenience meant that enterprises had also adopted it in significant numbers – so it has a market to sell into.

Web companies are doing much of the development of core infrastructure today, and they have a far higher tolerance for disposability than vendors or enterprise customers. The combination of open source, cloud deployment, and social coding means that developers are building, and exposed to, more cool new technology than ever before.

Hadoop was the bee’s knees for about 5 years. Then, just like that, streaming was the  new thing, and everyone pivoted to Spark and Kafka stacks.

All this newness has a cost though – in terms of production deployment, but also sheer cognitive overhead. In 2014 my colleague asked: A Swing of the Pendulum: Are Fragmentation’s Days Numbered? In 2017 we can fairly safely answer – no. In every category we track we’re seeing cool new things emerge that developer want to use in production.  Pony and Rust are going to break out any time soon.

But Ops of course has always had to take up the slack, or should be take up the stack. Running the thing in production is not the same as running things on your laptop. Except of course, when it is. Clearly the direction of travel with container technology is to collapse distinctions between development and production environments. From a testing perspective we want local and deployment to be as far as possible the same.

As Ben Fletcher, Principal Engineer said in his excellent talk at Jeffconf recently:

‘We don’t like pre-production. We like localhost”

The organisation the FT runs is very much a web first operation, rather than a more traditional transactional enterprise shop. Not everyone is going to do multiple production deploys per day but that is direction of travel. It’s not just enterprises that sustain technical debt of course. We’ve had some fascinating conversations recently with startups that are unable to keep up with Amazon Web Services (AWS) pace of innovation. While they’d like to adopt AWS Lambda for example for some functions, they’re already bedded in a stack built on earlier AWS stacks.

This tweet got me thinking

Turns out of course it’s not just Developer Time To Suck that is shrinking. Operations is heading the same way. Folks at Pivotal are saying that operating systems don’t matter, as we’ve moved further up the stack. Cloud Native is a proxy for saying much the same thing. But then, something is being written right now that will supplant Kubernetes. If we’re not running our own environments in house, operations disposability become increasingly realistic. Cattle not pets, for everything.

But convenience and disposability always incur a cost.

 

Pivotal and MongoDB are both clients.

(Read this and other great posts  @ RedMonk)

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What You Want to Hit: 50 and 20 at 10 (million in ARR)

By on July 19, 2017

The first SaaStr post that got widespread distribution was this one — “Want to Understand SaaS?  If Nothing Else — Understand That It Compounds.”

The excerpt here:

“What does this mean, that SaaS compounds?

  • It means it’s really, really hard to get revenues going.  You close a customer for $120 in annualized revenue, you only get to recognize $10 of that a month.  A lot of work for ten bucks.  Think of trying to get a train out of a station with a very small engine.  Tons of work, tiny revenues to start.
  • It means you’ll really have to struggle to get to cash flow positive.  Unless you get a lot of annual prepayments, cash will lag.  This will be painful.
  • It means once you get to about $2m in ARR, your business is real and solid.   It isn’t going to evaporate, unless churn in massive … which it most likely isn’t once you get to this inflection point.  Now is the time to invest, in team and product at least.
  • It means once you get to about $10m in ARR, some level of real success is almost inevitable.  Next year, you will have a $14m, or an $18m, or maybe even a $20m+ business.  I don’t know which.  But I know it’s one of them.
  • It means once you get to about $25-$30m in ARR, you are unstoppable. The flip side of the struggle to get any revenues going.   That train ain’t gonna be stopped by no one.  Until you disrupt travel and no one even needs a train anymore.”

I thought at this time this was true for everyone in SaaS, but it turns out it’s really true more a large but material subset of SaaS companies.

Because you have to hit 50+20 by $10m in ARR for SaaS to really compound.

What is 50+20?  If you are doing it right, if your customers are super happy and your NPS is high and you are shipping product at a healthy pace, then:

  • 50% (or more) of your revenue by $10m in ARR, or earlier, should be from zero cost marketing; and
  • 20% (or more) of your revenue should be expansion revenue.

Let’s break this down slightly, and discuss the implications.

Once you have a mini-brand (maybe around $2m in ARR) and then a real brand (as you approach $10m in ARR), something magical should happen.  Second order revenue, and just in general, word-of-mouth should kick in.  The bottom line is the best software and SaaS companies start to get 50%+ of their new leads from “zero cost” lead sources.   In fact, many get 80%+ of their new leads all from brand, word-of-mouth, and referrals.

This doesn’t mean these leads are literally zero cost.  You still have to nurture these leads, do webinars, give them collateral, do a customer event, and sell them.  The sales cost is still real and the marketing cost isn’t literally zero.  But it’s very low, when the lead source is “organic.”

And second, what should happen except in the most SMB-y models, is that your start to have material “net negative churn” by or well before $10m in ARR.  That your customers buy more from you over time.  Net of actual churn, that ideally is 120% cohort growth year over year, or more.  Net net, you want to see at least 20% of your annualized growth come from your base by Year 3.  This is super capital efficient, even if you pay your success team and your sales reps here.

This is pretty common for best-of-breed SaaS companies — 50+20 at 10.  And if you can pull it off, you basically can go cash flow positive whenever you want, within reason.  You can spend a fair amount on marketing programs, because the “free” leads will bring down your blended marketing costs.  And you can pay your sales team well, because the true blended CAC is low, and the true CLTV is high.

But it you don’t hit 50/20 at $10m in ARR, best case, you’ll have a capital inefficient mess of a business.  You’ll be super “Magic Number” sensitive.  You’ll scrutinize every marketing program and every sales spend.  Your sales team will feel like a cost center, not a profit center.  You’ll have to run every faster to keep up with your targeted growth.

And importantly — you may never go cash flow positive.

So what’s actionable here?

  • Broken record, but, focus like crazy on CSAT and NPS, at $1m ARR or even earlier.  Measure it, raise it, make it happen.  At $5m ARR, it will almost be too late.
  • Don’t pat yourself on your back because of your ‘pretty good’ Magic Number.  Hooray, you pay back your sales and marketing costs in 13 months.  But if you don’t have 50+10, you’ll hemorhage cash at $10m ARR.  A healthy Magic Number really assume a lot of zero cost leads and strong, positive revenue retention.
  • Be wary of comps.  You’ll have a hard time getting a real picture of how those Hot SaaS Startups are doing.  The higher the zero cost lead ratio, and the higher the revenue retention, the more they can actually be sloppy in the rest of their metrics.
  • Don’t let a high burn rate creep up on you.  Most of us don’t have this luxury, but if you are going to burn a lot, at least do it with intent.  If you are venture-backed and can’t hit 50-20 at 10, your burn rate may well grow linerly with ARR.  That can be a trap it’s hard to get out of.  Pick a max burn rate and stick to it.
  • More CSMs.  Hire more customer success professionals on the way from $1m to $10m ARR.  This can only help.
  • Know your lead sources.  This may sound obvious, but we often come up short here.   Many of the startups I meet with don’t really know where many of their leads come from.  Track first, second and third touch.  Ask them.  Don’t allow any material amount of “Don’t Knows” as your lead source.  No, the lead source is not “Intercom”.  You need to know.  Or you won’t really know how you are doing in terms of zero cost marketing.
  • Take action.  If it isn’t looking after $2m ARR or so that these metrics are improving, that you’ll get to 50/20 at 10 … then take action now.  While you have time.

If you can hit/exceed 50/20 at $10m ARR, all will be good.  It will.

If you don’t, it will be hard.

You can do it.

Make it so.

 

The post What You Want to Hit: 50 and 20 at 10 (million in ARR) appeared first on SaaStr.

(Cross-posted @ SaaStr)

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Time to Drop LastPass? The Most Irresponsible, Idiotic Post Ever!

By on July 18, 2017

<rant>

I have not blogged for a while, but I feel my blood is boiling at such an irresponsible call by MakeUseOf, a site I used to respect:

It’s Time to Drop LastPass: How to Migrate to a Better Password Manager

As a long-time LastPass user, my first reaction was panic: yet another breach?  But no such thing.  This article simply goes on providing step-by-step instructions  on how to switch from LastPass to  1Password, Dashlane, or KeePass, should you so wish.  But why?  Who knows.  I can’t find any reference to a new LastPass breach, bug, or any issue not already known/remedied a long time ago.

But why?  Who knows.  I can’t find any reference to a new LastPass breach, bug, or any issue not already known/remedied a long time ago.   What I do know is that the safety, integrity of the central password manager is critical for all of us, and moving to another provider is …well, kind of a Big Deal.

Which is why such crap calls are utterly irresponsible.  I lost all respect for MakeUseOf.

</rant>  (and I am feeling better now)

🙂

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Insurance case management: SoluSoft and OpenText

By on July 18, 2017

It’s the last session of the last morning at OpenText Enterprise World 2017 — so might be my last post from here if I skip out on the one session that I have bookmarked for late this afternoon — and I’m sitting in on Mike Kremer of OpenText and Kiran Thakrar of SoluSoft showing SoluSoft’s Active Client Management for Insurance, built on OpenText’s Process Suite and case management. SoluSoft originally built this capability on earlier OpenText products (Global 360) but have moved to the new low-code platform. Their app can be used out of the box, or can be configured to suit a particular environment.

The goal of Active Client Management for Insurance is to provide a 360 view of the client, including data from a variety of sources (typically systems of record for policy administration or claims), content from any repository, open tasks and pending actions, checklists and ad hoc notes. It includes the entire customer lifecycle, from onboarding and underwriting, through policy administration and claims; basically, it’s user work management and CRM in one.

The solution is built on the core of Process Suite, using the full entity modeling AppWorks-style low-code development. It also includes process intelligence for analytics, Capture Center for document capture, and Streamserve for customer communication management. Above all of these OpenText building blocks, SoluSoft has built a client management solution accelerator that (I believe) they can use for a variety of vertical applications; below the OpenText layer is a service bus integration to line of business systems. For insurance, they’ve created a number of business processes and request types corresponding to different parts of the business, such as processing a new application, amending a policy, or initiating a claim; each of these can be configured for the specific customer’s terminology, or disabled if they don’t require specific functions. It’s not completely clear, however, how much of the functionality of other insurance systems might be replaced by this rather than augmented: clearly, the core policy administration system stays as the system of record, but an underwriting or claims system workflow might be replaced by this functionality. Having done this a few times with clients that use systems such as Guidewire, I have to say that this is a non-trivial architectural exercise to decide what parts of the flow happen where, and how to properly interact with other systems.

At the heart is a generic capture-driven workflow: scan, capture, index, data entry, process, approve, review, fulfill. The names of these can be aliased for different vertical applications — their example is that “processing” becomes “underwriting” — and steps can be skipped for a specific request type. Actions that can be performed at any of these work steps are configured using checklists. Ad hoc processes can be attached to steps in this master flow, either a single-step task or a more complex flow, and be executed before, after or in parallel to the pre-defined work step. Ad hoc processes can be created at runtime, and secondary request processes created for certain case types. The ability to make any of these configuration changes is restricted by role security. Relationships between clients, policies, brokers, claims, etc. are managed using folders for customers, policies and advisers, driven by entity modeling in Process Suite (AppWorks Low Code); this ability to establish relationships between all of these types of entities is critical for providing the complete view of the customer. They also have integrated iHub analytics for showing case statistics and workload analysis, as well as more complex analysis of risk or profitability for specific customer groups or policy types.

 

Although SoluSoft built some of this in custom code. a lot of the application is built directly in the OpenText low code development environment provided by Process Suite. This means that it’s fast to configure or even do some basic customizations, with the caveats that I mentioned earlier about deciding on where some parts of the workflow might happen when you have existing LOB systems that already do that. It also provides them with native mobile support through AppWorks, rather than having to build a separate mobile application.

We saw the version focused on insurance, but they also have flavors for pensions, financial services, government, healthcare and education. However, it appears that there is an existing legacy of the Global 360-based application, and it’s not clear how long it will take for this new AppWorks version to make its way into the market.

(Cross-posted @ Column 2)

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Where’s the ROI in your CRM? It’s in the process.

By on July 18, 2017

I’m down to the last chapter of The Commonwealth of Self Interest: Customer Engagement, Business Benefit and then have some editing to do. But I want to make sure that you keep getting some good reading in while I finish this. A couple of months ago at CRM Magazine’s CRM Evolution Conference, I ran across a guy named Brian Gardner who was speaking on sales process at the event. I loved what he was saying about it and I thought, “hmmm, it would be smart to get this guy in front of the people who read my stuff so they can either learn something about how to think about contemporary sales process OR if they are among my super rock star type readers, get a refresher course from a guy who just knows. Brian not only can write but he’s got some cred: He’s the founder and lead evangelist of SalesProcess360, which helps companies get ROI from CRM. He is also the author of ROI from CRM: It’s About Sales Process, Not Just Technology, available from MDM.com and Amazon. Brian’s got more than 25 years in sales management and CRM.
One thing, though: What he calls CRM is what I call Sales Process Automation (SFA). My CRM has three pillars — sales, marketing, customer service. Since most of you know that about me, know that what he is referring to in my vernacular is SFA.

Take it away, my good man!

CRM is Not a Four-Letter Word

Why after the past 18 years of working with companies on CRM does it still feel like CRM is considered a four-letter word? It is often viewed as a curse throughout a company…

  • Outside sales (“Big Brother is going to micro-manage me.”)
  • Inside sales (“I don’t have time to log information into this other system.”)
  • Management (“I know I need this but I am tired of fighting the team to get them to use it.”)
  • Marketing (“If only I could be tied to the sales team with the system…”)
  • IT (“It’s just another system to manage.”)

When I give talks on CRM and sales process, I usually start off with two simple questions.

The first: “Who is using a CRM system?” On average 70 to 80 percent of the hands go up. I then say: “Now leave your hand up if you feel like you or your company is getting ROI from CRM.” Every time just 10 to 15 percent of the hands stay raised.

So the big question is: Why do so few companies feel like they are getting so little ROI from CRM?

In my humble opinion, there are three primary reasons that ROI from CRM number is so low.

1. IT is driving the bus.

As mentioned earlier, I have been around CRM for more than 18 years. My story: I was managing a sales team back in the 90’s and wanted to use technology to help manage the sales process within our company. I looked for solutions; every company that came into my office didn’t have a clue about my company’s processes and only wanted to sell me technology. I said no thank you and wound up developing a CRM system with a partner. I was the sales side of the CRM equation and he was the technical side. It was a match made in heaven. I took all of my sales needs that were being done manually via Excel, Access and contact management, and we built a sales-focused CRM (SFA at that time) system.

I am a believer that CRM should start with process, not technology. One of the main reasons only 10 percent of the hands stay up when I ask who feels they are getting ROI from CRM is because process isn’t a priority. Because of this, I feel the CRM bus should not be driven by the technical team. Sure, they need to be on the bus. But they shouldn’t be driving it. Sales — and in particular sales management — should be at the wheel. This is where a lot of companies fall short.

Step back and evaluate your company’s situation. If sales management is not driving the bus, this may be a reason the company is not getting the full ROI from CRM.

2. The focus is on the technology, and not the underlying sales process.

I believe CRM can be a company’s competitive edge if implemented properly. What is your competitive edge? Did you answer your people, products/services, experience, support or dedication? Your competition probably did, as well.

So what truly gives your company a competitive edge? I believe it is how you execute on the processes. I use the analogy of three-legged stool, which needs all three legs to stand. Your company needs three things to compete effectively:

  1. People
  2. Process
  3. Technology

CRM is obviously one of the components that make up the technology leg, but the missing link that I see is the process leg. Many companies have not reviewed their sales processes, identifying the gaps and inefficiencies and leveraging CRM to fill these gaps.

Let’s break it down a little further. What I find (and what I was doing when I started in sales management) is that most companies have processes for the back end of their business — quotes and orders — but not the front end. The front end — leads and opportunities — is where CRM plays and if done properly can bring ROI and a competitive edge. A picture is worth a thousand words:

sales-process.png

If we linearize the sales cycle and graded our company on the processes, visibility and efficiencies at each step, how would we do?

 

sales-process-2.png

Typically the scores are strongest on the right (orders), weakening as they move to the left (leads). I say this with personal experience; this is how our company looked before we started to leverage CRM.

The goal we had when I started CRM in our company was to earn a high score at each stage of the sales cycle. I believe that if your company can improve the processes, visibility and efficiencies at the front end of the sales cycle and use CRM to manage this, you can get ROI from CRM. This is how CRM can provide a competitive edge. The best part? You can control this.

The economy does not determine how well you do this. Going forward, when I ask “What is your company’s competitive edge?” your answer will be:

  • Our People
  • Our Processes
  • Our Technology

3. It’s not positioned as a team solution.

I like challenging my audience. If you are on CRM — per my polling 70 to 80 percent are — do you believe you are using CRM for team selling? I am a big fan of team selling. I believe that CRM is the hub for team selling; this can be another area for a competitive edge.

I frequently ask my audiences what team selling means to them. I’m sure your answers would be the same as what I typically get:

  • Working together
  • Working as one
  • Being on the same page
  • Sharing information

These aren’t wrong, but let’s take them a step further.

My definition for team selling is:

Sharing and leveraging information for a competitive edge.

I believe leveraging is the key. This is where CRM comes in. CRM was built for sharing and leveraging information as a team. When I say team, I mean all touchpoints within your company and both external and internal customers.

Let’s dive into this. External customers are easy; they are the companies that purchase your products or services. Let’s talk about internal customers.

I frequently ask which departments are on CRM. The most obvious answer is the outside sales team. Great, but what about all the other departments? How are you sharing and leveraging the touchpoints that everyone on your team is having with both external and internal customers?

List all the departments that communicate. Here are some examples:

  • Outside Sales to Inside Sales (both ways)
  • Inside Sales to Accounting (both ways)
  • Marketing to Outside Sales (both ways)
  • Inside Sales to Marketing
  • Operations to Everyone
  • Management to Everyone

CRM can be the hub for this sharing and leveraging information.

 

sales-process-3.gif

Think about the value of this.

You have inside sales logging all their key touchpoints with external customers. The outside salesperson walks into the customer’s office and has this information at their fingertips in CRM. “Mr. Customer I see you talked to our inside salesperson yesterday about XYZ. I brought a solution that might help.”

Marketing is sending out a rifle-focused content email. You have integrated marketing and sales in CRM with closed-loop marketing. The customer’s response to the marketing piece is captured in CRM. Before walking into the customer’s office, an outside salesperson looks up his marketing score and how he has engaged. He downloaded a whitepaper on one of your products. That salesperson now know exactly what to talk to the customer about.

The Service Department logs their interaction with a customer via field service report or service phone call into CRM. They document a summary of the issue and action items to resolve. The outside salesperson looks up the touchpoints with the customer and sees the service log. As a result, he walks in armed with the right information; he’s not blindsided not knowing this service call happened.

All three of these are great examples of sharing and leveraging information to gain a competitive edge?

My Experience

CRM doesn’t need to be viewed as a four-letter word. If approached properly, these three areas of focus will allow you to keep your hand raised when I ask: “Who here feels they are getting ROI from CRM?”

I leave you with this quick story. My company focused on these three areas back in the late 90’s:

  1. Sales Management Driving the CRM Bus
  2. Putting Processes on the Front End of the Sales Cycle
  3. Sharing and Leveraging Information Across the Team

By focusing on these three areas supported by CRM, we tripled our business in a little over six years with all organic growth. I will go to my grave believing we did that because we focused on mastering and excelling at these three areas. We did not try to do too much with CRM in the beginning. We lived by the saying “Start Slow and Grow.”

Thanks for taking the time to read this article. I hope it got you thinking and motivated you to look deeper into how you are using CRM. If you have not embarked on the CRM journey yet, these areas will help you navigate and remove the speed bumps for success and truly get ROI from CRM.

(Cross-posted @ ZDNet | Social CRM: The Conversation)

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Digital Transformation and the Leadership Quandary

By on July 18, 2017

The data now shows that a near majority of organizations today are undergoing digital transformation in some shape or form. By digital transformation I don’t mean IT automation of the business of course, but wholesale rethinking of some or all of the business in digital terms. It’s the greatest game in the business world right now, and necessary for long term survival, but such digital reinvention also one of the hardest journeys to make.

However, just like startups have a high failure rate (8 out of 10 don’t make it typically) in trying to do something new that’s relatively unproven, digital transformation is a endeavor fraught with high hurdles for success in any organization.

Enterprises, however, do have vast assets they can assemble on deck to ensure a successful outcome — everything from existing customer bases and supply chain to current market share and the ability to fund loss leadership to success. This drives the failure rate down much lower than typical greenfield technology startups. But as commentators such as Christian Frei estimate that two-thirds of companies still won’t make the journey successfully, and others have put the failure rate much higher.

Modern Digital Leadership Unleashed by Network Effects: Digital Transformation

Better and New Types of Leadership = Effective Digital Transformation

As Christian also notes, leadership is ultimately the root cause, for both success and failure in re-imagining organizations digitally:

After all these discussions, workshops, and coaching sessions, one point came out very clearly as the biggest threat companies have in this transformation.

It is not technology.

It is not their people.

It is not their business model and products.

The biggest threat and reason why most companies will fail to adjust and most likely either end up bankrupt, acquired, or marginalized…
… is their leadership mindset, which is embedded in their company culture.

The diagnoses of the reasons for implicating leadership is many and varied but essentially boils down to the reality that leadership has the most resources and control in hand, but is often lacking in digital vision and/or competency to wield these. The reality is that most leaders of large organizations today have limited experience in successfully leading either large digital efforts or enterprise-wide change efforts, and much more rarely both at the same time. While it’s likely we’ll see far more seasoned executives in this space in the next 5-10 years, that will be much too late for most organizations.

what then can leaders do now to ensure they’re doing their very best tap into and truly marshaling the deep experience, fresh thinking, and effective action they need from across their organization and indeed, from across the industry? To help address leadership in digital native terms, I’ve been promoting the concept of network leadership for some years now (and I’m not alone), realizing that all leaders must much more effectively tap into the full measure of knowledge and innovation in new channels they need to deliver on what has become the most important and challenging transitions in the history of business.

Leading (and Acting) With and Through Your Networks

Leaders have always had to work through others — their workers, business partners, and their industries — to accomplish what enterprises do. But we now have new ways and methods of doing so that are far higher scale, have more leverage, and are earned, rather than owned. Leading through the network is the only way to tap into broad enough talent, diverse ideas, and local action to accomplish the large scale changes that must be achieved today. I’ve written much about the new CIO mindset emerging and the need to better design our organizations for loss of control needed to keep up with the pace of tech change, and that these must be baked most deeply into the leadership thinking (both on high and at the root) of our organizations.

Underscoring this, I recently receive a note from a friend (who was also previously one of the top CIOs in the world in my opinion) that made me reflect that while we can (and must) let much of the network do the work for us — if we only know enough to harness it — that leadership remains critical in ensuring the ultimate outcome:

The leadership part (for what I had) was always my “secret” weapon.” Key parts of that leadership is:
– Human (recruit, develop, manage, balance)
– Technical (new and old tech, ops etc.)
– Business (core business (new and incumbent), finance and accounting)

From this we can see that people are the key to driving actual change. Technology and business, combined, are the vehicles, but not the agents of change. Leaders must cultivate, build, and tap into the best networks of people, tap into their knowledge, and empower them to create change at scale. (See the growing and vital change agents industry conversation for more thinking on this.)

Thus the essential leadership quandary with digital transformation is that leaders — formal and grassroots — simply don’t know what they don’t know yet. And many — and likely most — are simply not taking sufficient steps to learn more and faster or unleash those that know a given answer and can act.

My good friend and CIO advisor Tim Crawford put this another way today. Leaders in digital — both on the technology and business side (though the distinction is starting to get blurry these days) — must establish their network effect. For those not yet familiar with this key digital concept, it means establishing sustainable value through connection. For the CIO and other types of leaders, this means building relationship capital in all its forms (personal, organizational, industry, and digital), and then using it effectively.

Addressing the Leadership Quandary with Network Effects

As I noted in a reply to Tim, this means:

  • Engaging both upwards and downwards. Establishing deep and wide social capital in the process.
  • Being the conduit for change. By ensuring you empower and enable others through their relationship with you.
  • Sharing knowledge. By setting it free to spread and work for you forever.
  • Enabling and empowering others. Proactively, especially with change agents (which are the ones, by definition, that will effect needed change anyway).

In short, digital transformation requires a new type of leader with a digital mindset that is broadly encompassing, fueled by growing network effects, and strategically turning over non-essential control to their network of change agents to drive the many hundreds, if not thousands of local microtransformations that will collectively result in a holistic and aligned overall digital transformation. It’s a more organic, pervasive, and sustainable way and, I believe, the only real way most digital transformation will ultimately happen.

Why? Because a rich network always beats a poorly connected system in almost any situation.

Additional Reading:

How IT and the Role of the CIO is Changing in the Era of Networked Organizations

Using Online Community for Digital Transformation

How Should Organizations Actually Go About Digital Transformation?

(Cross-posted @ On Digital Strategy | Dion Hinchcliffe)

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