A recession isn’t the time to lay out big bucks on information technology that will take many years to pay back on your bottom line. You do need to keep investing in IT that’s essential to running and growing your business. Yet your focus should be on those tech tools that will deliver quick results in two fundamental priorities: increasing revenue and reducing expenditures.
But which tools are those? PROFIT has investigated more than 20 technologies, and from them identified your best bets for troubled times. All are them are tools you can implement easily, or exploit more fully if you’re already using them. And all will, for a modest outlay—or even no cost at all—soon start contributing to your business results.
With software as a service (SaaS), you no longer purchase the software. Instead, you pay a subscription fee to an SaaS provider that hosts the application and your data, which you access via the Web.
This model has been around for a decade. But only recently has it moved into the business mainstream as applications have proliferated and millions of firms have bought into the notion of “Why buy when you can rent?” Gartner Inc., a Stamford, Conn.-based IT research firm, predicts that global revenue for software on demand will soar by 131% between 2008 and 2012, to US$14.8 billion.
Although cost savings are not the principal reason to use SaaS, they’re certainly part of the appeal. You don’t have to put any money down, and you avoid the expenses entailed with software as a product (SaaP), such as buying and maintaining servers, as well as installing and configuring the application. The subscription rate includes software updates, an economical way to stay current. And some publishers, such as IBM, will scale the fee up or down with your usage.
But the main attraction of SaaS isn’t saving money; it’s the business-building power of the applications themselves. “It really puts what large-scale enterprises have already had into the hands of small and mid-sized companies,” says Brian Klemenhagen, senior principal at TripleTree LLC, a Minneapolis-based investment bank that advises clients on which SaaS companies to invest in. SMEs can now use on-demand software tailored for their needs for key functions such as enterprise resource planning, human-resources management, accounting, business analytics and e-commerce management. And the number of industry-specific applications is multiplying fast.
With resources so tight these days, SaaS offers an affordable way to manage complex operations and expand sales without having to make costly investments in in-house IT resources. Rob Whitfield has used NetSuite, one of the most popular SaaS applications, since launching his Toronto-based furniture chain Casalife three years ago. (NetSuite costs US$499 per month, plus US$99 per user per month.) Whitfield uses the integrated business platform to gain a real-time view of his entire operation. This includes managing a formidable number of details to track his inventory at every stage, from the factories in China, where the furniture is made, through all the steps from shipping to sales to payment in his supplier network. Whitfield says using NetSuite has saved him up to $150,000 in hardware, programming and maintenance costs that he would have incurred using SaaP—helping to keep his prices down and thereby generating more sales.
“I don’t even have an IT guy on staff, and I don’t have any servers,” says Whitfield. “But, because of NetSuite, every three weeks a container is shipped from our warehouse in Shanghai with exactly the orders that we need.”
THE LONG TAIL OF SALES
Web-conferencing providers tout their service above all as a way to slash travel costs. Why get on a plane to meet someone in person when you can connect virtually over the Web?
But this tool’s benefits go well beyond cost-cutting. You can use it to deliver customer service remotely to clients outside your home base. For instance, you can use it to reach into the computers of web-conference attendees—with their consent. “We have an accountant in the Midwest who meets via WebEx with clients in Florida and accesses their QuickBooks, makes changes and updates their books,” says Joe Schwartz, San Jose, Calif.-based director of marketing at WebEx Operations. “Then he does the same for clients in San Francisco and elsewhere, all without leaving his office.”
Another facet of Web conferencing you might be missing out on is using this tool to run sales webinars. You can mount an impressive pitch to prospects seated at their computers by skilfully combining a PowerPoint presentation, files displayed on your own desktop, phone chat and even live video.
Sales-management specialist Dominic Rubino started testing webinars in 2007, and they soon became central to his firm’s sales effort. The Vancouver-based CEO of FocalPoint Business Coaching says his firm pays its provider, Global Crossing, $600 to $800 per month for 10 to 12 hours worth of webinars, which FocalPoint uses to lay out its business model to potential franchisees. Pitching en masse allows Rubino’s team to reach more prospects more quickly, and without travel costs, than with an in-person sales call.
FocalPoint runs a weekly webinar of up to 1.5 hours—what Rubino calls “weedout calls”—to pitch to a long list of potential franchisees. It then follows up every two or three weeks with an in-depth 3.5-hour webinar to the shortlisted prospects.
“We have zero attrition in the sessions,” says Rubino. He attributes this to the freedom it gives participants to multitask with the webinar running in the background, then jump in when they have questions. As well, the live video permits a high level of interaction. “I keep a whiteboard behind me,” says Rubino, “so I can just turn around and draw something, and the webcam picks it up.”
A customer relationship management application is such a multi-faceted tool that, even if your firm is already using one, you might not be getting as much mileage out of it as you could. You can use CRM for far more than tracking key information about a customer from initial contact to closing a sale. It can also help you identify which prospects should be your sales team’s top priorities and take full advantage of follow-up selling opportunities through after-sale calls. And, by using it in conjunction with marketing-analysis software, you can more effectively convert marketing-generated leads into sales.
CRM programs such as Salesforce.com and Microsoft Dynamics CRM put the entire sales cycle in your hand, including leads, account contacts and history, current discussions, after-sale service, purchase orders, and credit, inventory and shipping status. This gives your sales team a wealth of data, such as which questions prospects have asked about your services and products, when the conversation started, how much they’ve bought and how often. Your reps can use this information to customize their selling to each client and improve their close rate.
One crucial feature is that you can use a CRM app to steer your reps to the most promising leads. You devise a series of criteria for which leads are your best bets (e.g., giving priority to existing customers over respondents to a direct-mail blitz), then give your reps a series of prompts for each step in the sales process with these prime leads. You can also set up prompts to ensure that your after-sale service team consistently follows up and uses the data on each client to suggest further purchases and solicit referrals.
Eric Schapira is using Salesforce.com in combination with free marketing-analysis software to track which of his marketing campaigns deliver leads yielding the greatest sales lift. Schapira, owner of Klondike Contracting, a Vancouver-based residential and commercial contractor with 15 to 20 full-time staff, has linked Salesforce.com’s front end to Google Analytics. He’s using the latter to test the impact that specific wording in his e-mail, Internet and print advertising has on the volume of leads, then adopting the wording that scores the highest. These leads flow automatically into Salesforce.com, where Klondike tracks them from lead to sale, as well as tracking project budget, design, pre-construction, construction and after-sale service.
Salesforce.com is helping Klondike boost customer satisfaction—critical in a sector in which you live or die by repeat business—by providing an easy way for clients to alert the firm to after-sale problems it needs to fix. “A customer can now log on to our website, enter a deficiency, get a case number and track it until it’s resolved, and so can we,” says Schapira.
Klondike spends $120 per month for each of its four Salesforce.com users, and Schapira expects that to jump to 10 to 12 users in the next few years. His other expense has been $4,000 for a database specialist to massage the company’s data to make it compatible with the CRM tool. In return, says Schapira, Salesforce.com’s impact on the efficiency of his sales process has been “mind-boggling. We figure that in three to five years, we will grow our business by about 50% to 75% as a result of these efficiencies.”
MOBILITY FOR PRODUCTIVITY
More work than ever is being done outside the traditional workplace: IDC, a Framingham, Mass.-based market-intelligence firm, forecasts that 75% of U.S. workers will be mobile in two years, up from 68% in 2006. And these days, at a time when you can’t afford anything less than peak performance from your people, you need to give them the mobile tools that will allow them to deliver this level of performance.
One part of that is to spread smartphones—whose fast-growing sophistication makes them ever more powerful productivity boosters—across more of your workforce. A 2007 Ipsos Reid study of BlackBerry users found the average device converted 250 hours per year of downtime into productive time, and team efficiency jumped by 38%. The average user handled more than 2,500 time-sensitive e-mails and 1,200 phone calls per year while out of the office, adding $5,000 to the value of their output.
Peak performance also requires arming your staff’s mobile devices with efficiency-enhancing business applications. That largely means mobile versions of software originally developed for desktops. Because there are so many competing mobile operating systems, until recently there hadn’t been anything on the mobile business software side comparable to the explosion Apple triggered in consumer-oriented mobile apps with its iPhone and App Store.
But that’s starting to change as more software developers tailor business applications for mobile users—primarily SaaS, but also SaaP. So far, there isn’t a killer app but a series of productivity enhancers. One is PeeKaWho, which, for US$6.95, shows at a glance the sender, subject and a text snippet from an incoming e-mail so you can decide—without spending precious time opening your e-mail client— whether to read the message right away. Another is the premium edition of Documents to Go, which for US$70 lets you create Microsoft Office documents on your mobile device and view Word, Excel, PowerPoint and PDF files without having to convert them. And the imminent launch of BlackBerry App World should spur a faster pace of new business apps.
Another new tech tool is boosting the productivity of laptop users on the move. It looks like a jump drive and has the odd name “USB dongle.” But these gizmos, also known as Internet sticks, give employees anywhere with cellphone coverage instant access (provided they’re set up on a Virtual Private Network) to data and applications from your firm’s computer network or SaaS providers.
USB dongles, which wireless carriers Telus, Rogers and Bell have introduced in the past year, free mobile workers from wasting time seeking a Wi-Fi hotspot. And, unlike earlier mobile Internet-access tools for laptops, they port data at broadband speed. This lets you quickly download or upload files with large attachments—think: a massive PowerPoint deck. You can use a laptop’s power and larger screen to easily review, edit, annotate and collaborate, for a fee starting at $25 per month.
Peter Day, president of Endo Networks Inc., a Mississauga, Ont.-based experiential marketing agency, calls the new devices “amazing. It’s one thing to have your BlackBerry with you, but a whole other thing to have your laptop right there. It’s like having your office with you.”
THE TELEWORKER’S TOOLKIT
The number of employees who work from home continues to boom. The most recent Canadian figures, from Statistics Canada, show 1.4 million people teleworked in 2005, up by 55% in just five years.
The slump has arrived so recently that there aren’t any figures yet on whether the trend to telework is accelerating. But its double-barrelled benefits are especially relevant in hard times. It saves on the cost of office space and other overheads, and it offers a way to get more productivity out of a flat or shrinking workforce. People who work from home tend to get more work done because they’re better able to focus, and because they tend to convert some of the time they used to spend commuting into work time.
“Teleworking one to three days a week increases productivity by at least 10% to 20%,” says Bob Fortier, president of the Canadian Telework Association. He points to a case study at American Express, whose teleworkers produced 43% more business than their office-based counterparts. And IBM Canada, with about 20% of its workforce teleworking, found its home-based staff up to 50% more productive.
But you won’t get productivity gains like this unless you equip your teleworkers with toolkits that will make up for them no longer routinely collaborating in person with colleagues. These kits should include an online meeting tool such as WebEx or GoToMeeting (the latter charges US$39 per month for up to 10 users), also a handy tool for training.
Another essential for your new home-based staff is one of the many collaborative tools on the market. Some are free, such as Google Apps. This was the attraction for Port Coquitlam, B.C.-based VendTek Systems, a software maker for the global prepaid and financial services market. Its 40 far-flung staff in Beijing, Abu Dhabi, Toronto and Vancouver use the Google suite to seamlessly e-mail, schedule, share voice messages and documents, and sync their BlackBerrys, iPhonesand other smartphones.
“We’ve saved up to $70,000,” says Grant Shellborn, co-founder of VendTek, which literally runs on these collaborative tools. “We started with the e-mail and then added applications. What I like is that when someone updates a spreadsheet, everyone gets notified of the change.” He says using a single, simple set of shared software reduces the miscommunications that get in the way of delivering good customer service.
The third tool to include in your kits isproject-management software. The leading player here is Basecamp, which has three million users. Prices start at US$24 per month for 15 projects with unlimited users. Another option is Microsoft Business Productivity Online Suite, which starts at US$15 per month per user and offers instant messaging, collaborative e-mail features, shared calendars, document auto-updates and “presence.” This last item lets team members know the best way to reach you right now—by your e-mail, mobile or home phone.