Business Computer Systems Guide – Part 1

Introduction

9/6/2010 Update – Much of this guide was written in 2005 from material as old as 2000. Although we’ve come light years since 2005, this material still applies to current businesses and business systems.


Today’s sophisticated business computer systems are a complicated lot. Coupled with the plethora of consumer market oriented hardware that one finds in the Sunday paper’s Business Section, confusion appears to be the order of the day. My purpose in writing this guide focuses on sweeping aside most of the confusion. Most small business people remember assembling home stereo or home theatre equipment, as well as programming ones satellite to VCR-DVD to television set. The basics of office computing are not much more complicated that that. 

I believe that if a marginally technical business person understands a few ground rules, the opportunity exists to capitalize on business systems designed for Fortune 500 companies at a price point acceptable for small to medium sized businesses. The first place to start requires exploding the marketing myths used by computer service companies, so called “VARs” value added resellers. VARs partner with software and hardware companies to sell products, “solutions”, to you, the business customer. 

The two most profitable “solutions” to sell are the entire Microsoft paradigm and the Cisco communications product line. Both of these companies have excellent products and have amassed a fortune assisting VARs to sell solutions to business people. Virtually all of the computers in existence today run a Microsoft Windows operating system with Microsoft Office components installed. Those same computers talk to each other using Cisco hardware and software.

If you max out your investment in Microsoft and Cisco systems, two things are certain. Your VAR will have sold you the best and most expensive systems available and you will have very little money left over to productively take advantage of your systems, or much else for that matter. A business needs to achieve balance between costs and deployed systems functionality. Balance achievement is where my systems model and the ground rules associated with my model come into play. It is not in the best profit interest for a VAR to assist a business with achieving this balance.

VARs are an odd lot. Most are well established business people that have hooked their future on a specific software solution or systems solution in a vertical market. Others purchase the latest “how to be a computer business” course and enter the business with well honed marketing tools.

My two most favorite Information Technology Service Provider marketing ploys are the “have an IT person, you are wasting your money” claim and the “own more than 20 computers, save a small fortune” claim. They read like this:

If You Have 20-100 Computers And a Full Time IT Manager…You Are Wasting Your Money” “..any person who qualifies for this position does not really want this position.” “..Not to mention the time they spend on their Fantasy Sports teams, emailing friends, searching for a new job, and downloading PORN. I hate to say but we have caught too many of them doing it.”

Gee Mr. VAR, if you were any good at IT, you would not have let porn into the network to begin with. Scare tactics work on very few astute business people. If you have IT people, pat yourself on the back! 

You are not wasting your money on a “full time IT person”. As a matter of fact, your IT person is most likely on the front lines, helping your employees resolve day to day productivity problems; because, your IT person comes armed with business process knowledge, learned from job related experience he or she came into IT with. Or, your IT person might be passing application specific business knowledge to other employees that came from years in school or on the job training in house, from a competitor or from another unrelated company.

Your IT worker is not a porn surfing waste of time. You hired her or him, just like you hired all of your other great employees. Managed into the right role, they become a valuable intellectual property asset and very able to manage your computing assets. 

If you own more than 20 XP computers in your business, you are in an excellent position to save a great deal of money,” and you can really save a fortune! What you are about to read is all over the Internet and responsible for substantial growth in IT and extreme profit for VARs. 

Check out this information from the Gartner Group* reported in CMP’s Network Computing magazine Page 34, 9/2/2004 issue.

“The cost of an unmanaged Windows XP desktop is $5,309 over three years, whereas a managed XP desktop runs only $3,335, according to Gartner.” A MANAGED XP computer results in a savings of $1974 per computer over three years. If you have 20 XP computers in your business, you can recover $39,480 over three years in expense savings! That amounts to $1096 PER MONTH in expense savings! 

A proactive approach to systems can mitigate and control the cost of your XP computers as well as your entire IT investment. If you have searched the Internet for “Managed Services”, “IT Services”, “help for my network” of “repair my computer” for any length of time, you have no doubt come across similar claims. 

Saving $1096 per month in reoccurring expense for a typical small business is a very realistic goal. But, one must understand that reaching the goal requires a comprehensive approach to business systems, an approach I hope you clearly understand after you learn from my “Business Computer Systems Guide”.

The comprehensive approach is the tool that makes VARs wealthy. A savvy business person might decide to give the $1096 per month and more to a VAR that can return value to the business or might decide to put $1096 per month back into the business, directly to the bottom line. The decision hinges on achieving balance between costs and deployed systems functionality. 

Coming full circle, achieving balance is where my systems model and the ground rules associated with my model come into play. Again, it is not in the best profit interest for a VAR to assist a business with achieving this balance.

Thanks for reading. In the next post, I will discuss balance, managed services and my systems model.

Business Computer Systems Guide – Part 2

Balance, Managed Services, and My Systems Model

I mentioned in my last post,  Business Computer Systems Guide – Part 1, that VARs are an odd lot. Some VARs purchase the latest “how to be a computer business” course and enter the business with cookie-cutter marketing programs. However, most VARs are well established business people that sell specific software solutions or systems solutions in a carefully crafted vertical market. 

The computer systems business attracts poorly capitalized, contractor dependent individuals that acquire business skills from computer systems business consultants of online “how-to” fame. Consultants like Robin Robins and Joshua Feinberg are legendary in the business. Their material, although compelling, can be a loaded canon in the hands of inexperienced business people. 

These systems VARs are dependent upon selling service contracts and emergency repair services. They are not interested it business systems structure or best practices. The marketing consultants push reoccurring revenue over everything else. They also push immediate profits from canned solutions like Microsoft Small Business Server. Mention balance between systems deliverables and business need and they will not know what you are talking about. 

Hidden among the flashy, out front systems VARs, are the vertically focused solutions providers that provide excellent service to their chosen market. These hard working business people provide software for such niche markets as resale and pawn shops, concrete pumping services, medical doctor’s practices and automobile dealerships. They are generally customer focused and quick to respond to market changes. They steadily provide a flow of customer support and product upgrades. It is not uncommon for their customer service people to fly to customers all over the world. 

Niche market VARs push solutions over technology, problem solving over the latest big computer name in the business section. All the while, their solutions evolve, developed to the latest technology. Their benchmark becomes speed, agility, effectiveness and the size of their installed customer base. 

Procede Software of San Diego, California provides a great example of a focused niche market VAR. They serve the automobile and heavy truck dealership market primarily in North America. The Procede Software Excede application, if deployed correctly, can serve every aspect of a dealership’s business without adding any other software product into the mix. This single benefit can add substantial cost savings to a dealership’s financial statement. 

A typical systems provider VAR does not have an in house developed solution that they derive profit from. A typical systems provider VAR depends on their “channel” reseller relationships to survive. Margins are made on the hardware and software that they promote and sell. The “channel” refers to the sales path that occurs from the big software or hardware company, to the systems VAR, then to the end user. The end user (your company) pays for software licensing and hardware, as well as reoccurring software and hardware support. 

The systems VAR’s intense focus on the reoccurring revenue model places it in direct conflict with business thinking. Businesses strive to eliminate reoccurring costs. Consequently, in recent years, a brilliant marketing tool has surfaced. It is called “Managed Services”. 

The “Managed Services” hype promises trouble free computing and round the clock support. However, the words “Managed Services” are simply not enough for your business. 

Your business may have been around for a while or you might have just started up. Your computers and printers may have been networked for some time. You might even have 40 or 50 desktops and a couple of servers, or you might have just purchased new equipment and used this guide to formulate a systems plan, then deployed your systems plan yourself. Regardless where you are in your business, you face similar systems challenges. 

By now, you are certainly receiving mountains of “Managed Services” literature and scads of email urging you to sign up for the latest service plan. Whatever your computer, printer, server, network, systems situation, it is time to take the next step.

Forget about “Managed Services” and think CUSTOMER SERVICE

“Managed Services” is a contrived term that moves the focus AWAY from what computer people are “doing for their customers” to how computer people are supposed to be “doing computer service business”. In other words, away from customer service to internal business processes. “Managed Services” is all about reoccurring revenue for computer service companies, insurance against tough times. 

Without a profound focus on CUSTOMER SERVICE, there are no bones to MANAGED SERVICES. If the “network is having problems” again or the “Website won’t come up” or “my pc is slow” again, you are having customer service problems with your computer systems VAR. 

You own your business and you control your destiny. You are pro-active about your sales, operations and employees. If the proposed managed services fill your need, are delivered robustly and exceed your expectations, then you have services that are CUSTOMER SERVICE intense and as pro-active about systems as you have become about your business. 

My systems model combines the best of pro active systems monitoring and management, with “channel” relationships and focused niche market VAR solutions to set the stage for a robust cost effective business computing environment balanced with business need. My model requires a business to address several points: 

Embrace a solutions provider, a niche market VAR dedicated to your niche market.

Focus on doing all of your business within the feature set offered by your chosen solutions provider.

Provide a top tier robust hardware environment for your employees and your solutions provider.

Support relationships between your knowledge workers and your solutions provider.

Leverage channel opportunities and big computer company opportunities.

Do you want your business to flourish? If so, balance the specific features offered by your solutions provider and the sophistication of your systems environment with the specific business needs of your organization; and, do it with a road map!

Thanks for reading. In the next post, I will discuss planning and design.

Business Computer Systems Guide – Part 3

Planning and Design

I mentioned in my last post,  Business Computer Systems Guide – Part 2, that the formula for a florishing business requires a road map with the goal of balancing specific features offered by your solutions providers with the sophistication of your systems environment, all the while considering the specific business needs of your organization.

If you are like most people, you would rather be free and spontaneous about doing an activity as opposed to methodically planning the activity, then executing your plan to do the activity. Business systems are an area where you must restrain you spontaneity. 

To begin your plan, you must ask yourself several basic questions. As you are working on these questions, begin documenting your questions and answers. Grab paper and pencil or a laptop with graphics and word processing software and let’s get started. This work will become the foundation for your “Planning Document“. Your “Planning Document” can be a single piece of paper or become a book, serving as the instructions to put your plan into action. 

The process works like this. List the functional areas of your business then, within each functional area, list each specific role and the tasks each role needs to complete to be effective. Do not think in terms of departments or employees. Managing multiple roles is commonplace in today’s business environment. List the processes that are required by the task for successful completion. Your list, a business process evaluation, may look something like this:

Functional Area Role Daily Transactions Task Process Notes
 Service
department
 Warranty
Parts Returns
 55 Obtain
return number from vendor
Obtain
some numbers from vendor websites, some from telephone calls to
vendors
      Enter return number on warranty service order Pull
up WSO in business software, insert number then update WSO
      Enter
return number on shipping label
Create
UPS label using UPS website, insert number on label then print label
with return number
 Service
Department
 Warranty
Tracking
 1 Print
warranty accounts receivable report
Go
to reporting module of business software and print report #AR525
      Print
freight tracking report
Go
to reporting module of business software and print report #FRT15
      Reconcile
parts received to warranty line items
Use
a ruler and yellow highlighter to highlight parts not received on
report #AR525
      Give
reconciled report to service manager
Scan
and email highlighted report #AR525 to service manager

Unfortunately, this will be a necessary, tedious and difficult undertaking. However, the information gathered in this “business process evaluation” will save you an incredible amount of money. 

From the example above, I can tell you that both roles require a desktop computer with a directly attached printer and scanner, a configuration dictated by the number of daily transactions of the Warranty Parts Return role. The computer will need network access to the line of business software and email, both hosted in a remote data center and high speed internet access to UPS for creating labels. The two roles are done by one person using 35 to 40 man hours per week, again based on the daily transaction count.  

The information that this brief evaluation does not tell me about is equally important. Each role does not require music or burning of cds for completion. Also, no other websites except UPS are required for completing these two roles. I think you get the picture. 

You will need to progress from 1) your “business process evaluation” section, to 2) your overall systems design, to 3) specific business driven initiatives within your design, to 4) a formal tactical deployment plan for each of your initiatives.  

Your overall systems design must answer several questions from information in the “business process evaluation” that you complete.

1 – Do I build and keep my network robust and secured from intended or unintended damage? YES.. Your systems investment is large, no matter what size business you have. Include in your design simple things that may go un-noticed later. Plan to lock up your equipment. Secure your equipment by mounting it on the wall or cabling a desktop and monitor to a desk. Have a BONDED cleaning service. Keep desktop computers out of sight at night, even if it means your office might not quite be arraigned the way you like. Scrutinize the perceived need to carry a laptop with you. Think of all the lock and key issues then define how you will deal with them in your planning document.  

2 – Do I “seal off” and protect my network from both other peoples’ networks and the internet? YES.. Solid business drivers determine the appropriate use for your computer systems. Think about how you intend your employees and yourself to use your systems. Will you need access to EBay for selling your excess inventory? Will you need to login to your supplier’s Website to place and pay for orders? Do you plan to have email for everyone that you employee? Do you use QuickBooks or some other accounting system? Add all of your access needs to your planning document.  

3 – Do I deal with my present computer network system that does not seem to work correctly and wastes my employees’ and my time? YES.. You can work around your present systems and possibly mitigate the problems you have. If necessary, you might need to do a sequential cutover to your new system by simply un-plugging and re-plugging cables and restarting desktop computers. Document the cutover in your PLAN. If you are concerned about overall costs, you might consider re-service contracting present equipment or selling it on EBay.  

4 – Do I avoid being stuck with repair bills on computers and equipment and costs for “consultants” or the “local computer geek” over the long term? YES. Make a commitment to TIER ONE equipment, and then secure it well. Think warranty, more warranty and extended service contracts. Never keep a business technology device beyond its warranty period. Very good tools exist to migrate data and settings from old computers to new computers. Your business deserves the best desktops and laptops, and the prices are relatively low. With warranty, one call has your pc repaired.  

At this point in your “Planning Document” you will need to create specific business driven initiatives that become part of your “design” and a formal tactical deployment plan for each of your initiatives. From the “business process evaluation” example above, I might have several initiatives. For example: 

The service department will have four desktop computers. These computers will be networked into a combination firewall / router / switch allowing access to UPS, Email and the ABC Business Software. 

Initiative 1 – Deploy four desktop computers to the four service department administrative employees. 

Tactical plan 

Order four Dell desktop computers Dell Small Business website link
Unpack and install four desktop computers to four service department desks
Turn on each computer; name with serial number, complete default setup
File each computer’s documentation in unique folder in file room
Install ABC Business Software to each computer
Install UPS and Email links to each computer

Initiative 2 – Install 10 network cable runs from the telephone closet to the service department, two drops for each of the four desk areas and two drops for the printer area on the north wall. 

Tactical plan 

Call Cable Company to look at service department and schedule work
Locate area in telephone closet to terminate cable runs and place equipment
Move desks away from walls
Clean up service department administration area
Meet Cable Company then sign off on cable company installation
File cable run certifications in file room

Initiative 3 – Install combination firewall / router / switch into telephone closet 

Tactical plan 

One
Two
Three
Etc

Etc,  until your initiatives and deployment plans are completed

Identify and commit the resources dedicated to the initiative, set a time and sequence for each initiative. Then you are on your way. Your “Planning Document” should now be off to a great start.

Continue to brainstorm questions and answers and note them in your planning document as you progress this Guide to Business Computer Systems and other internet sources you may come across. In a short time, you will have a document that will form the basis of positive changes to your business computing structure.  

Your design can be as simple as following the user guide that you will learn about in the next section or as complex as you cannot possible imagine.

The important thing is to be straight about when you know you are over your head and need additional learning or outside assistance. When you have completed the majority of your planning document, you will have a sense of whether or not you can complete the task yourself or how much of it you can complete without help. 

Thanks for reading. Next time, I will discuss networks and the Internet.