Tag: business process

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Blockchain 101 Self-Assessment

Blockchain is the new black. We’ve heard the term in conference calls, seen it on the cover of magazines and know it’s a hot topic on CNBC but the barrage of information makes it difficult to distinguish hype from reality. It’s clear that Blockchain will revolutionize the world but understanding how is mission critical. In this blog post we’ll cover the Blockchain essentials and the most frequently asked questions we’ve come across.

At The Art of Service we’ve developed a Blockchain self-assessment tool that professionals use to test the depth of their knowledge on the Blockchain concept and its potential. The Blockchain self-assessment covers numerous criteria related to a successful project – a quick primer version is available for you to download at the end of the article.

BLOCKCHAIN FREQUENTLY ASKED QUESTIONS:

What Is the Blockchain?

The problem with nearly all Blockchain explanations is that they supply too much detail upfront and use lingo that winds up leaving folks more confused than when they started. We are in the nascent stages of this technological revolution and it’s hard to predict how Blockchain will impact our institutions and our lives. Brand new Blockchain-related technologies are being built every day and the framework is evolving.

Here are some key definitions and ideas to help you understand the fundamental pillars behind this insurgent technology:

1. Blockchain is a technology that essentially disperses an account ledger. For those of you in the monetary management world, you know an account ledger as the trusted source of transactions or facts. The same is true with Blockchain but in lieu of existing in a great buckskin bound book or in a financial management program, Blockchains are run by a dispersed set of information handling resources working together to maintain that account ledger.
2. The Blockchain procedure of securely and permanently time-stamping and recording all transactions makes it very hard for a user to change the account book once a block in a Blockchain has been added.
3. Private Blockchains allow for distributing identical copies of an account book but only to a restricted amount of trusted contributors. This set of techniques, practices, procedures and rules is better suited for applications needing simplicity, speed, and greater clarity.
4. Users of the Distributed Account Ledger Technology (DLT) notably benefit from the efficiencies by generating a more robust ecosystem for real-time and secure data sharing.
5. Blockchain is only one of the various kinds of data constructions that provide secure and valid achievement of distributed agreement. The Bitcoin Blockchain, which uses Proof-of-Work mining, is the most common approach being used today. However, additional forms of DLT consensus exist such as Ethereum, Ripple, Hyperledger, MultiChain and Eris.

Blockchain: Who controls the risk?

Each party on a Blockchain has access to the entire database and its complete past. No single party controls the data or the information. Every party can substantiate the records of its transaction associates directly, without a mediator.

For public businesses, the conditions of Blockchain are very different. The identity of contributors must be known while permissioned Blockchains require no evidence of work. Over the next few years, Blockchain growing pains will hit the industry and support systems will begin to take shape. Today, Blockchain needs supporting infrastructure available for cloud or traditional database setups – there are no systems management tools, reporting tools or legacy configuration integrations in place.

Could Blockchain be the structural change the market needs?

Blockchain’s foundational technology is the biggest innovation computer science has seen in a long time. The thought of a dispersed database where trust is established through mass collaboration and clever code rather than a powerful institution is game-changing. Now it will be up to the larger business community to determine whether it will become the building block for the digitized economy or if it will be disregarded and perish. Now, building formidable and trustworthy Blockchain standards is the next step to turn this global opportunity into a reality.

Blockchain: What does the future hold?

There are many Blockchain and distributed account ledger setups emerging in the market including: BigchainDB, Billon, Chain, Corda, Credits, Elements, Monax, Fabric, Ethereum, HydraChain, Hyperledger, Multichain, Openchain, Quorum, Sawtooth, Stellar. The Block chain use cases span a number of industries including insurance, healthcare and finance but we are only scratching the surface of what’s possible.

Next, get started with the Blockchain Self-Assessment:

The Blockchain Self-Assessment Excel Dashboard provides a way to gauge performance against planned project activities and achieve optimal results. It does this by ensuring that Blockchain criteria are automatically prioritized and assigned; uncovering where progress can be made now; and what to plan for in the future.

To help professionals architect and implement best Blockchain practices for your organization, Gerard Blokdijk, author of The Art of Service’s Self Assessments provides a quick primer of the 49 Blockchain criteria for any business in any country.

Get the Blockchain Quick Exploratory Self-Assessment eBook here:

https://189d03-theartofservice-self-assessment-temporary-access-link.s3.amazonaws.com/Blockchain_Quick_Exploratory_Self-Assessment_Guide.pdf

About the Author

Gerard Blokdijk is the CEO of The Art of Service. He has been providing information technology insights, talks, tools and products to organizations in a wide range of industries for over 25 years. Gerard is a widely recognized and respected information specialist. Gerard founded The Art of Service consulting business in 2000. Gerard has authored numerous published books to date.

By Gerard Blokdijk

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Leveraging Data and Revenue Opportunities in Media Syndication

In the modern digital era where people are constantly bombarded by web and mobile content, any expectation of success for digital media creators requires advantageous placement of their content. In most cases, that means disseminating media across as many platforms as can conceivably host it. The benefits are innumerable, not the least of which is the expanded opportunities for scale and the considerable financial implications of an increase in revenue generation as a result of growing one’s audience. However, this process is not without its drawbacks. Our previous blog post delineates some key issues that creators are often forced to address once they decide to showcase their content through different online channels.

Analytics

Building a brand by means of video content requires a close eye on the full range of analytics concerning one’s media. The reach and impact of one’s online presence is paramount to a creator’s ability to make strategic, data driven decisions. Though it might seem tempting, it is not strategic, nor is it actually feasible, to publish content on any platform indiscriminately. Some video content perform exponentially better in certain online environments and in some cases, its existence on a certain platform could prove to be detrimental to a creator’s overall brand, which makes its continued presence on that platform counterintuitive.

The key to combatting this scenario is for the supplier to maintain unhindered visibility into the data surrounding and generated by their content. Analytics on this scale, across different channels is understandably a massive feat. As a response to this challenge, media creators are exploring blockchain technologies (as we detail in a previous post) and leveraging its transparency feature in order to retain control of data tracking and reporting capabilities despite adopting a multi-channel distribution strategy.

Contract Compliance and Rights Management

Once a creator adopts a multi-platform syndication strategy, the increase in exposure is accompanied by the intensification of complexity in regards to contract agreements. There does exist a much simpler distribution strategy in which a creator simply sends the content files to a third party host and is then awarded a license fee, revenue share, or a combination of the two for their contribution. However, the tradeoff for the presumed ease of this distribution process is that the creator effectively loses control of their content. This concession of control does make a simple, cut-and-dry third party distribution less enticing for content suppliers and may deem the management of multifaceted contractual agreements worth it if it means that they retain the rights to their media.

EY astutely posits that “opportunities, across all sectors of the global economy, have at least one thing in common: they require multiple corporations to partner.” In adhering to that model, media syndication requires the interwoven partnerships between the content supplier, syndication partners, and advertising networks. The amount of involved parties can be daunting even from the beginning, as each one must find enough mutual benefit to forge on with an agreement. The resulting mass of contracts is irrefutably overwhelming. Establishing the contract will be inherently difficult with the sheer amount of parties and agents involved, but AdMonster suggests focusing on the terms of your syndication relationships, your business priorities, and the requirements of your advertisers when determining the terms of a syndication agreement.

Beyond the initial hurdle of contract creation lies the cumbersome task of enforcing the established contract. The agreement will cover everything from ad agency contract compliance to the rules of digital distribution as agreed upon by the content supplier and the platform that will host it. For many video creators, this is beyond what they are capable or willing to do, hence the common employment of syndication services such as Castfire or Grab Networks. Streaming Media reports that content suppliers value these services’ capability to manage relationships, especially with advertisers, and keep “track of advertising agreements and cross-promotion rules for the various sites that carry a video.” With the release of these video inventory and contract management systems, video creators are being spurred into creating more content and syndicating it to more platforms.

On a broader level, EY continues to laud the disruptive capabilities of blockchain technology, particularly in the media industry. The technology is brimming with potential as EY notes the advent of a blockchain-based music ecosystem “in which artists can place their songs and control song data and terms of usage, with transaction royalties distributed in real time to the artists, producers, writers and engineers involved in a song’s production.” Once this system is modified for video media, the means with which contracts and the terms regarding the rights to a piece of content are enforced will be conducted with significant ease and transparency.

Dealing with countless data repositories in a multitude of formats of structured and unstructured data can make the efforts not worth the ROI for many content suppliers. But True Interaction’s Synaptik platform has the ability to automate and aggregate your disparate structured and unstructured data across internal and external sources that will usher in a transformational return. It is becoming imperative for creators to learn more about the benefits of blockchain technology and the many ways it can be integrated into your business processes in order to steer your organization to success.

Joe Sticca, Chief Operating Officer of True Interaction, contributed to this post.

By Justin Barbaro

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Digital Transformation Capability and the Modern Business Landscape

Yesterday morning, The Wall Street journal announced that Goldmann Sachs Group Inc. dropped out of R3CEV LLC blockchain group. R3 has been notable in its corralling of 70 different banks and financial firms to join their group since 2014, including Bank of America, J.P. Morgan and State Street. A spokesperson commented on the company’s departure:

Developing technology like this requires dedication and significant resources, and our diverse pool of members all have different capacities and capabilities which naturally change over time.

For the record, Goldmann Sachs will continue to invest in blockchain technology including the startups Circle and Digital Asset Holdings, but there is only speculation as to exactly why Goldmann Sachs’ membership with R3 expired. Certainly it may have been related to disagreement as to the equity distribution models between R3 and its members, but just a month earlier, when R3 announced their blockchain proof-of-concept prototype exercise, R3 CEO David Rutter commented:

Quality of data has become a crucial issue for financial institutions in today’s markets. Unfortunately, their middle and back offices rely on legacy systems and processes – often manual – to manage and repair unclear, inaccurate reference data.

The truth is, that there’s still quite a bit of latitude of digital capability across, within, and without businesses, big or small.

Getting the whole gang onboard

Perhaps Goldmann Sachs’ departure is due to exactly this: some aspect of their business units are behind the power curve in their digitization transformation and data management efforts.

Digital transformation can be a painstakingly complicated process, partially because, according to Computer Weekly, some parts of the transformation process aren’t even executed by the organization itself, yet still require all the vigilance their CIO and IT units can muster, being ultimately their responsibility:

Companies of all kinds are increasingly using technology partners, channel partners, contract manufacturers, warehousing and logistics partners, service partners and other outside services to handle all or part of a business process. Most enterprises come to view these partners as the extended enterprise, and look for ways to have tight integration and collaboration with them.

To achieve effective, successful transformation, digital business leaders must get their whole business ecosystem onboard with a clear, discernable, comprehensive strategic digital transformation plan that touches upon all of the extended enterprise. To act and assess digital transformation opportunity, McKinsey suggests 4 steps:

1. Estimate the value at stake. Companies need to get a clear handle on the digital-sales and cost-reduction opportunities available to them. Digital—and digitally influenced—sales potential should be assessed at the product level and checked against observed internal trends, as well as competitor performance. On the cost side, administrative and operational processes should be assessed for automation potential, and distribution should be rightsized to reflect digital-sales growth. The aggregate impact should be computed and turned into a granular set of digital targets to monitor progress and drive value capture.

2. Prioritize. Most organizations don’t have the ability, resources, or risk tolerance to execute on more than two or three big opportunities at any one time. Be selective. Figure out what areas are likely to deliver the greatest return on investment and the best customer outcomes and start there. While digital requires some experimentation, too many ad hoc demos and showcases lead to scattershot investments that fail to deliver sustained value. One retailer, for instance, ended up with 25 subscale digital offerings by not culling in the right places.

3. Take an end-to-end view. One financial-services firm built a world-class digital channel but failed to update the paper-based processes that supported it—processes that were prone to error. That false veneer of speed and efficiency eroded trust and turned off customers. The moral? Although it may seem counterintuitive, overinvestment in a slick front end that is not matched with the corresponding high-quality fulfillment that customers now expect may actually lead to increased customer frustration.

4. Align the business portfolio accordingly. In the long run, some lines of business will simply be destroyed by digital. Hanging on and tweaking them is futile. Companies need to act purposefully and divest where it makes sense, identifying what holdings are likely to be cannibalized or likely to underperform in the new environment and sloughing them off. Conversely, some areas will clearly need new capabilities and assets, which companies often do not have the luxury to build up organically over time. One retailer used targeted acquisitions to rapidly build out its e-commerce capabilities, allowing it to focus on defining strategy and aspirations rather than tinkering with the “plumbing.” Source.

Creating new monetizeable value

A recent report by Gartner revealed that often organizations are missing out on a bevy of monetizeable value due to overemphasizing traditional silos and markets (marketing, social media, mobile applications, etc.). A too-narrow focus means organizations are getting only a small share of the full value that digital transformation can provide. Saul Judah, research director at Gartner says,

All too often IT leaders focus value creation more narrowly, with the result that most digital initiatives are aimed at operational improvements, rather than value transformation. While this tactical approach to digital value can result in very real process and financial improvements, the greatest potential for digital value lies in more strategic initiatives, such as creating new markets, empowering employees, changing the basis of competition and crossing industry boundaries.

IT leaders need to work with the business side of the house to identify and exploit these high-value initiatives.

Algorithms and analytics offer accelerators of value and are themselves of exchangeable and monetizable value. An analytics process may use algorithms in its creation, which could also be monetizable through an algorithmic marketplace, making it available to enterprises of all types and sizes to use.

For example, True Interaction’s data agnostic machine learning analytics platform, SYNAPTIK, is rolling out a data marketplace where organizations can syndicate and distribute new data revenue opportunities and actions to their clients, as well as other platforms.

Digital transformation and the modern enterprise landscape

The Blockchain endgame?

Blockchain technology offers several benefits to an organization. The technology uses new methods of encryption which enables anonymous sharing of information in a data-rich environment. They are further characterised as Smart Contracts, computer protocols that facilitate, verify, or enforce the negotiation of contract cases or terms. And with blockchain, the dataset remains updated and intact at all times, without the need or use of a central governing authority.

Decentralised systems using blockchain technology can manage the data relationships and sequence of events where all parties share the same data source. Furthermore, with the impending intersection of the Internet of Things with blockchain technology, digitally tenacious organizations will soon be able to connect, conceivably, anything with anything, and get them to communicate intelligently and securely. Enterprises that embrace this phenomenon will be able to provide a better user experience and value-added services, as well as gain competitive advantage and differentiation.

Seeing the rumble between Goldmann Sachs and R3 shows us that we are still a ways off as far as describing the exact standards of blockchain in business. With certainty, some markets need to topple age-old paradigms of strategic thinking that are no longer relevant in a digital world. But the promise is quite exciting.

by Michael Davison

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Forget Your Development Team – is Your Business Agile?

Situation

In my last article, I interviewed business strategy consultant Michael Farmer of Farmer & Company regarding his new book, Madison Avenue Manslaughter, which details the plight of advertising agencies and their deteriorating situation today brought about by several paradigm shifts, including the shift from commissions to fees, brand globalization, the rise of holding companies, client obsession with shareholder value, and the digital and Internet revolutions. In the interview, I touched upon a quote by Albert Einstein:

We can’t solve problems by using the same kind of thinking we used when we created them.

While Einstein’s words most definitely apply to the trend in advertising agencies as detailed in Mr. Farmers book, let’s put away the magnifying glass, pull back for a moment, and explore business at large.

First of all, the average lifespan of an S&P 500 company has decreased from 61 years in 1958 to 27 years in 1980, to just 18 years now, and that number is diminishing as I write this. On average, an S&P 500 company is now being replaced about once every two weeks. And the churn rate of companies has been accelerating over time.

Comparing 1955 Fortune 500 companies to 2015 Fortune 500 (ranked by total revenues), there are only 61 companies that appear on both lists. Nearly 88% of the companies from 1955 have either gone bankrupt, merged with (or were acquired by) another firm, or they still exist but have fallen from the top 500. In other words, only 12.2% of the Fortune 500 companies in 1955 were still on the list 60 years later in 2015. Most of the 1955 companies on the list are unrecognizable today: Armstrong Rubber, Cone Mills, Hines Lumber, Pacific Vegetable Oil, and Riegel Textile. Today, successful companies need to explore new products, markets, and business models more frequently in order to continuously renew their advantage. According to BCG Perspectives,

“…companies face circumstances that change more rapidly and unpredictably than ever before because of technological advances and other factors. As a result, companies need to constantly renew their advantage, increasing the speed at which they shift resources among products and business units. Second, market share is no longer a direct predictor of sustained performance.”


Source

Defined by reduced time between innovation and adoption, increased market unpredictability, and reduced importance of market share, our modern business era has unveiled new drivers of competitive advantage – one of the most important being: the ability to adapt to changing circumstances or to shape them. This echoes Disney CEO Bob Iger’s famous quote: “The riskiest thing we can do is just maintain the status quo.” In a recent study of more than 900 business leaders, 93% responded that they “have completed, are planning, or are in the midst of a business transformation”. Really, what we are seeing is that “business transformation” isn’t something that is undergone once or even periodically – business transformation is becoming a continuous process.

Indeed today, businesses at large – not just their creative and development silos – benefit from operating in an Agile manner, most importantly in the area of responding to change over following a plan. Consider the words of Christa Carone, chief marketing officer for Xerox:

“Where we are right now as an enterprise, we would actually say there is no start and stop because the market is changing, evolving so rapidly. We always have to be aligning our business model with those realities in the marketplace.”

Solution

The situation in business today inevitably begs the question: “Where will your business be in 20 or even 10 years? Statistically, 9 of 10 people who are reading this are working for an organization that will NOT stand the test of time. But the good news that I’ve blogged about in the past is that progressive businesses that take the technology leap and invest in the future will reap tremendous gains over their less progressive peers. With that in mind, ALL SMBs should take the time to reassess the value of their business processes and technology solutions as soon as possible.

Need help determining the right solution? Consider these 9 criteria:

1. How easy and intuitive is the user interface?

– Affordance Visually, the UI has clues that indicate what it is going to do. Users don’t have to experiment or deduce the interaction. The affordances are based on real-world experiences or standard UI conventions.

– Expectation Functionally, the UI delivers the expected, predictable results, with no surprises. Users don’t have to experiment or deduce the effect. The expectations are based on labels, real-world experiences, or standard UI conventions.

-Efficiency The UI enables users to perform an action with a minimum amount of effort. If the intention is clear, the UI delivers the expected results the first time so that users don’t have to repeat the action (perhaps with variations) to get what they want.

-Responsiveness The UI gives clear, immediate feedback to indicate that the action is happening, and was either successful or unsuccessful.

-Forgiveness If users make a mistake, either the right thing happens anyway or they can fix or undo the action with ease.

-Explorability Users can navigate throughout the UI without fear of penalty or unintended consequences, or of getting lost.
No frustration emotionally, users are satisfied with the interaction

2. How quickly and easily can the solution be implemented?

Does the solution offer an accelerated implementation approach to minimize demands on your resources? Rapid implementation techniques can reduce costs by more than 50 percent – again, this takes us back to the subject of Agile methodology.

3. How easily can the solution integrate with your supply chain, product development, and business processes?

No system operates in a vacuum, and it delivers the most value when embedded in the business! Your solution should have multiple points of integration, so that all business processes are outfitted with historical data in order to discern insights and take action.

4. Can the solution easily scale as your business grows?

Change. The only thing that remains constant. Take into account not only number of users, but also specific roles and functions and the need to support end-to-end business processes, which are constantly changing.

5. Is the business solution available as SaaS or subscription?

You can’t always anticipate your future, so being fiscally conservative is important. On-demand business solutions are often available on a subscription basis, virtually eliminating the traditional upfront investments. Alternately, if cash is a major issue, your solution provider should offer you some flexibility in billing, payment, intellectual property, and ownership – allowing you to keep your cash working while you get the benefits of the newest business technology solutions.

6. Does the solution offer you company-wide visibility into your business processes?

Link up with a solution provider who understands business process management. The right solution can help you gain a HUGE competitive advantage through increased visibility into critical business functions, superior reporting, integrated processes, and even increased customer loyalty/retention, more in-depth customer insights, and an accelerated product time to market.

7. Are there ample resources to assist you with your implementation and ongoing support?

Look for business partners with both long-term business experience and support services, as well as expertise with cross-functional, strategic, technology and software solutions.

8. Is industry-specific expertise built into the product?

The best business solutions are not plain vanilla.Your solution provider should understand your industry as well as you, and address any industry-specific needs, support roles, and functions unique to your vertical markets.

9. Does it provide you with any real-time monitoring and analytics?

by Michael Davison

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Madison Avenue Manslaughter : An Interview With Author Michael Farmer

The rise-and-conquer story of the advertising industry after the end of World War II has become woven into the fabric of modern American folklore: ads and commercials from the Golden Age of advertising (1945-1975) are forever etched in Baby Boomers’ memories, while the industry’s Mad Men themselves have been celebrated and further mythologized in our entertainment. The ad agency exec archetype, with his swagger and his 3-martini lunch, is one of the most familiar characters in American culture, while those actual Mad Men of the Golden Age, who pounded their concepts of “Big Ideas”, “Creativity”, and “Unlimited Service” to their clients, established such a mark upon advertising agency culture that it pervades the industry to this day, and remains the template for today’s advertising.

The problem with this, according to Michael Farmer, Chairman of Farmer & Company LLC, a strategy consulting firm for advertising agencies and advertisers, is that the industry has been turned completely on its head since the Golden Age, and the paradigms that were then in place then cannot address the state of the industry today. Peril is close at hand:

Today’s Mad Men celebrate new clients and creative awards just like the Mad Men of yesteryear, with champagne, parties and laudatory speeches, but the resemblance and the fun stop there. Returning to their daily routines, ad agency people put on a brave face, struggle with increasing workloads and demanding clients, and feel like players on a losing team, unable to break out or at least pull even with their clients as respected, secure partners. The advertising business, which was once one of the most fulfilling and glamorous of industries has become a grim sweatshop for the people who do the work.

The system is broken, says Mr. Farmer, and the ad industry is in dire straits. His riveting new book Madison Avenue Manslaughter recounts the “dizzying heights” of the Mad Men days, and tracks a timeline of the key events and technologies – such as remuneration changes, globalization, new ownership, shareholder value, and digital and social media – which brought about the weakening health of today’s advertising agencies, and are now typified by ever-growing and unaccountable workloads, reduced client fees, and shortened or one-off client engagements.

With a richly depicted history and a candid, thorough examination of the current state of advertising agencies, Madison Avenue Manslaughter lays out a detailed 10-step transformation program for those progressive industry CEOs who want to “restore organizational health, financial well being and renewed strategic relevance for their ad agencies”.

I recently had a short conversation with Michael Farmer, where we discussed Madison Avenue Manslaughter and mused about the future of the advertising industry.

Michael, first let me commend you on your book. As an advertising industry outsider, the setup of your argument– the comprehensive history and explanation of the current state of affairs– was so richly detailed, it felt like a page-turner. I learned quite a lot; the theme of your book brought to my mind a quote by Albert Einstein that I think is quite applicable to what you are describing:

We can’t solve problems by using the same kind of thinking we used when we created them.

How does this resonate in your mind with regards to what you describe in your book?

It’s hard to argue with Einstein! Yet, the mystery of the ad agency business is that executives are wedded to the concepts that created success in the period 1960 through 1980 — even though the conditions that allowed this past success do not exist. For example, agencies still believe that “highly creative TV ads drive client brand sales.” Well, that was true when TV was a novelty, as it was in the ‘60’s and ‘70’s, and amusing ads were a new thing….but today? TV ads are no longer a novelty, and we’re familiar with all the cliches and attempts to amuse. We’ve each digested several hundred thousand ads since that day, and we’re sick of them! Pure creativity is not the formula for success. Furthermore, agencies are paid 1/3rd what they used to be paid, so they can’t afford “full service.” Let’s face it, the world has changed, but they’re stuck in the past.

Agency remuneration in the Golden Age was commissions-based. Can you briefly describe the shift to today’s model, and what effect this has on workload?

Agencies then received 15% of their clients’ spend on media — for TV, radio and print. That covered ad creation. How much work they did was irrelevant to how much they were paid. In the ‘90s, though, most of the industry was required to change to “fee-based” remuneration, which means they are paid for the number and cost of people who work on a client’s account, plus some additional money for overhead and profit. This should correlate with the amount of work they do, but in fact it does not! Clients and agencies agree on fees and agency headcounts / fees, but nowhere in the system do they clearly spell out how much work is to be done and how many people it actually requires to get it done. This is a holdover from the “full service” days when remuneration was based on commissions. The new system, then, allows clients to grow the workloads but hold the agency fees and resources (people) constant, and that’s what happens. Workloads grow, but fees and resources are driven downwards. More work, fewer people. A complete disaster, and it continues every day!

You make an observation in your book that even as SOW communication happens after-the-fact, creative workloads skyrocket, unmeasured and completely independent of agency resources or fees, the typical agency C-level indeed does NOT want to know about or address this issue. Can you elaborate on the managerial passivity that pervades the industry, and why that is the case?

The passivity is irresponsible, in my view. Agency CEOs are not doing enough to ensure that their agencies are paid for all the work they do. They are reluctant to throw their weight behind “SOW tracking systems” that would be updated regularly by their senior client heads, and they absolutely are uninterested in reviewing client head performance — finding out who is giving away work and who is not. I can’t understand this, but it appears that they don’t really want to manage their organizations. They want to win new business and be viewed as creative geniuses, but they have little appetite for the hard work of management.

Your consultancy has built a database of Scope of Work (SOW) briefs, and has established a metric for measuring workload across them: the ScopeMetric(R) Unit, or SMU. Can you briefly explain the metric, how your organization uses it, and why it’s important?

Early in my consulting career with agencies, I found that I needed three things to understand agency operations: 1) the amount of work they were doing for each client; 2) their fees by client; and 3) the resources they allocated to each client. This is simply logical: “what are you doing for each client; how much are they paying you; how many people does it take.” Across an agency office of 20 clients, there would surely be “good clients” and “bad clients,” where the alignment among workload, fees and resources was out of whack. I needed to identify those situations. In order to do so, I had to figure out how to measure workload. Today, there’s a huge difference among the relative sizes of a TV ad, a print ad, a Tweet, and an online ad banner. I decided to use creative manhours as my basic measurement, using them to measure the size of different deliverables, categorized by media type (i.e., TV), media detail (TV:30), origination versus adaptation, and according to creative complexity (low, average, high).

I now have a database of about 7,000 deliverables, each with a unique SMU value based on creative manhours. The use of an SMU allows me to calculate “price” (fees divided by SMU workloads), “productivity” (SMUs per creative person per year) and other metrics.

Advertising agencies do not have a system in place for measuring workloads. Do you know of any turnkey “workload management platforms”, SOW measurement and management tools, or other solutions on the market today? Are there any early adopters?

Advertisers, on their own, have used systems like Decideware to keep track of agency deliverables, but even Decideware does not have a way of measuring the amount of work in the SOWs, We may team up with them to combine Farmer metrics with their system. Agencies, though, are resisters.

So what can be done? What is the ‘next best step’ that agency C-level management can take, right now?

If I were an agency CEO today, my first step would be to announce a policy. It would sound something like this:

Every client that we serve will have its SOW documented in a uniform way, using an agency-wide SOW tracking system using Farmer’s SMU metrics. Every client head will ensure that his / her SOWs are kept up to date in the tracking system.. Every quarter, we will review client performance, client-by-client, examining the alignment of client workloads, fees and agency resources. Clients whose workloads, fees and resources are misaligned in some way — like ‘too much work and too little fee’ — will require corrective action by client heads. We will review client head performance in correcting misalignments. Needless to say, it is imperative for our agency to be paid correctly for all the work we carry out, and for the resources required to carry out the work.

Michael, your book is currently for sale, and provides readers with a detailed cross-section of the operations and financials of a model agency, as well as a 10-step transformation program for CEOs. Are there any other resources, online or otherwise that you would recommend to your audience?

I write a blog from time to time, and it is published on http://farmerandco.com. The blog is a place where I can comment on developments in the industry associated with the under management of SOWs and agency remuneration. I try to make this an interesting resource — let me know how well I’m doing!

Madison Avenue Manslaughter is the winner of the 2016 Axiom Awards Gold Medal for Marketing Books, and is available online and in selected bookstores nationwide.

By Michael Davison

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How can Your Business Optimize B2B Sales?

The Challenge

Business to Business (B2B) sales can be an incredibly nebulous, complicated, and uncertain arena to navigate and manage. The products may be varied and complex, the sales cycles are wide-ranging, and many decision-affecting influencers, contingencies, and persons/agencies may be involved.

Compete in B2B at the global level, and your challenges compound exponentially. Consider the situation of Lifetime Brands, a leading global provider of kitchenware products that include household brands such as Farberware®, KitchenAid®, Mikasa®, Pfaltzgraff®, Built®, and Fred and Friends®.

Cliff Siegel, EVP of Global Supply, at a Lifetime Brands warehouse in NJ.

Encompassing a vast, global network of factories, production schedules, warehouses, distribution points, demand planning systems, budgeting processes, and scheduling, you can imagine that Lifetime Brands’ B2B sales ecosystem is both complex and ever-changing. The sheer size and breadth of the product line makes the sales ecosystem especially vulnerable to issues and challenges that include prohibitive lead times, continually changing or unclear data, redundant manual tasks and interactions, difficult to manage budgeting processes, and difficulty in clearly aligning budget to strategic plan, among others.

Taking Action

Exactly how can a company sidestep or conquer these perils? Lifetime Brands reached out to True Interaction to help mitigate the inherent discord typified by complex sales operations. Cliff Siegel, the visionary EVP of Global Supply Chain at Lifetime Brands, had championed a set of core goals for his organization that should be familiar to all business leaders: Lifetime Brands wanted to grow revenues and increase profitability. They wanted to attract new customers, and keep existing customers happy. They wanted to make Sales operations as efficient and effective as possible. And they wanted to be able to identify and track opportunities and threats within their sales ecosystem.

Mr. Siegel knew that in order to attain these goals, Lifetime Brands would need to assume a proactive, progressive stance and shape their circumstances rather than react to them. They would need to true up the core engine of their business – the Platforms, Processes & People within their sales ecosphere – in order to transform a patchwork of disparate applications and methods into a harmonious, unified entity.

Liam Wright, CEO and Innovation Specialist of True Interaction, teamed up with Mr. Siegel to conduct an exhaustive bottom-up inventory of the existing system and all external data points and data sources, such as Demand Solutions and SAP. The disparate pieces were gathered, identified, organized, defined (and refined) using True Interaction’s proprietary innovation process including several rounds of whiteboard sessions and data identification meetings. Based upon this process, Matt Tidd, TI Chief Technical Director, had a complete map of the information landscape, and was able to architect a full-stack custom solution for Lifetime Brands, complete with the appropriate features and specifications; including Milestones, User Stories, and Tasks laid across a well-articulated development path.

A Solution

The product outcome is a fully articulated and unified Sales Portal platform, encompassing both an operational planning component and a financial planning component, that can provide sales estimates based on past history as well as the numerous continuous factors, events, and data points that influence day-to-day operations and financials. As a result, the entire value-added planning process accepts revisions quickly and easily. The Sales Portal system is able to link planning and planning procedures to the strategic plan, minimizes the time spent gathering data, maximizes the time for strategic decision making, automates collections and consolidation of budgets, enables collaboration, tracks sentiment, provides various level managers with fiscal control, and establishes a data warehouse for insightful financial planning and reporting, all within a beautiful user-experience. But most importantly, True Interaction built a custom product for Lifetime Brands that is not only cost-effective to implement, but also saves Lifetime Brands hundreds of thousands of man-hours in future enterprise operations.

“Sales portal allows us to simplify and focus the sales process, and ensure the lines of communications between sales and marketing teams are in perfect harmony. Additional benefit is gained from the resulting structured data that we can use to make informed decisions on what our customers are looking for and to better equip our sales team,” says Cliff Siegel. By investing in technology and implementing the proper digital solution, Lifetime Brands has amplified both financial and human value for its organization.

Now that Lifetime Brands has harnessed all of these disparate data sources into a unified system, they are also reaping serendipitous, unplanned-for benefits as well. For example, based upon the collaborative sales projections that the system now provides Lifetime Brands, the organization is now able to more accurately plan the related inventory requirements throughout the calendar year.

Reflection

Is the B2B sales process in your business well-organized? How well does your organization wield technology to achieve their better achieve their goals? According to SMB Group’s 2015 SMB Routes to Market Study, 29% of small-to-medium businesses (SMBs) view technology as helping them to significantly improve business outcomes. These “progressive” SMBs are 18% more likely to successfully forecast revenue increases than their peers. Progressive SMBs spend 29% more on technology, are 55% more likely to have fully integrated primary business applications (financials, CRM, HR, etc.) and are 86% more likely to use analytics than their counterparts.

 

By using technology to streamline workflows, slash time spent on repetitive data entry and inefficient processes, gain better insights into opportunities and threats, and create new business models, progressive SMBs are well positioned to tap into new customer requirements, improve customer engagement and experience, and enter new markets. As they move forward, they will continue to outpace their peers and reshape the SMB market. ~Laurie McCabe, Partner at SMB Group, Inc.

 

Are you able to make informed, actionable business decisions? Is your organization evolving with our digital ecosphere as it expands and develops? It’s time to invest in the future.

By Michael Davison

Categories
Insights

Do Your Company’s Processes Contribute to Creating Value?

As I wrote in my post last week, data shows that for SMBs, the race is still on to develop and realize a true digital business ecosphere. Ultimately, the core of any business is composed of a system of Platforms, Processes, and People. When this system is not flexible enough to accommodate new business demands – or there is a bottleneck in the flow of inputting, receiving, or processing and taking action on data – the frameworks in place force users and customers to modify their behaviors and act according to contrived rules that are based upon weaknesses and gaps in process, rather than in harmony with the environment at large.

The roadmap to creating and improving value in your organization starts with discovering and understanding these weaknesses and gaps. If you bring cracks and imperfections to light, never fear! Business process influencer Keith Swenson succinctly put it this way in his podcast, “It is ironic, that to make a robust reliable system, you do so not by hiding problems, but by exposing all the problems as they happen.”

So how do your business processes stack up?

Reviewing your processes

Let’s get started. Robert Glushko and Tim McGrath have assembled some high-level questions that can drive the initial conversation, such as:

– What is the name of the process?
– What are the goals or purposes of the process?
– What industries, functional areas, or organizations are involved in the process?
– Who are the stakeholders or participants in the process?
– Are there any problems with the current process?
– How could the process be improved?

“Increased awareness of your processess dimensionality, invariably leads to an intuitive understanding of its Strengths, Weaknessess, Opportunities & Threats.”

Go both ways

These of course, are just the inaugural questions of a true process audit. Your quintessential goal is to identify and determine what the business does, in a hierarchy of detail from the topmost level, all the way down to where individual documents (and specific information components in document exchanges) are visible. To truly understand these processes, we need to examine this from both the top-down and bottom-up points of view. This ensures understanding and confluence of strategic focus, as well as the requirements for granular tasks and contingencies.

With a little Google-fu, you can find a wealth of resources for your process review. I like this handy comprehensive list of questions to improve processes published by the University of Michigan.

Also, check out Janne Ohtonen’s 12 Important Questions When Starting BPM Projects.

Where should I start?

I’m going to assume that you are not Google, and your company does not have unlimited resources. Examine all areas and departments of your business so you can determine the most efficacious route to the biggest dividend in improvement. What small changes can you make that will have the most effect? What would your ideal solution look like? Is it aligned with your business goals? How much time and capital will your business need to invest? It’s not enough to just identify processes for improvement; you need a feasible and reasonable plan to achieve that improvement. I’ll expand on this and include tips and methodologies on this subject in future posts.

The time is now

My post on last Friday underscored the fact that technology is becoming increasingly essential to modern business, and that those SMBs that make the technology leap will reap tremendous gains over their less progressive peers. With that in mind, ALL SMBs should take the time to reassess the value of their business processes and technology solutions on a regular basis. As TI CEO O. Liam Wright says, “Increased awareness of your processes’ dimensionality invariably leads to an intuitive understanding of its Strengths, Weaknesses, Opportunities & Threats.”

By Michael Davison