I have asked the channel to ping their existing customers about a discount on training. Say what!

My colleague Diana Waterman asked me this week for my list of least favorite jargon used in business. I quickly came up with five, they are:

  1. Existing customer – as opposed to a, what, non-existing customer, the term should be current customer or just customer.
  2. Discount – when we really mean preferred price or promotional price.
  3. Channel – sorry I just don’t like the term when referring to people.
  4. Training – when we mean education. Horses and dogs are trained, people are educated.
  5. Ping – when used to mean “get in touch with.” I am not an IP address, I would prefer not to be pinged, thanks.

I asked Diana and she graciously allowed my to post her top five as well. They are:

  1. Dialogue – when referring to a conversation. (OK, I am guilty on this one. In all fairness I do try to explain the term.)
  2. Spearhead – when used as a verb meaning to take the lead on on a particular project.
  3. Incentivize – meaning to create an incentive for. PS – incent is not a word either.
  4. Interface – as in have a conversation. Again, this is one of those computer terms that is degrading to use when talking about people.
  5. Socialize  – when speaking about an idea and meaning to talk about it with others.

Please share your list with us. You do not have to have five, but I ask that you limit yourself to five.

Ga-doing! Ga-doing! Ga-doing!

Hear the sledges with the bells –
Silver bells!
What a world of merriment their melody foretells!
How they tinkle, tinkle, tinkle,
In the icy air of night!
While the stars that oversprinkle
All the heavens, seem to twinkle
With a crystalline delight;
Keeping time, time, time,
In a sort of Runic rhyme,
To the tintinnabulation that so musically wells
From the bells, bells, bells, bells,
Bells, bells, bells –
From the jingling and the tinkling of the bells.

– Edgar Allen Poe

There it was on page 64 of the January 23, 2010 issue of The Economist! Another death knell for the billable hour has sounded.

In a recent paper, ‘The Death of Big Law,’ Larry Ribstein, a law professor at the University of Illinois, argued that after decades without changing, law firms are likely to have an outburst of experimentation with different business models: even the venerable and lucrative “billable hour” method of charging clients is in doubt.

It reads like an obituary doesn’t it. I anxiously await the wake!

Pricing question number 9

or Why my lovely wife does not want me to go shopping with her.

At a recent trip to the mall, the whole family wondered into an Ann Taylor Loft. Actually, Christine wandered in, I just obediently followed. While she was looking around, I noticed three signs above adjacent racks.

The first offered two tee-shirts for $30 or $19.50 each.

IMG_0151 

The second, right next to it offered two tee-shirts for $30, but no mention of individual price and the third rack had individual tee-shirts for $15 each.

IMG_0152

Any thoughts as to why? I have an idea, but will hold off posting it for a few days.

You should have seen her face when I was taking these pictures. The salespeople at the store were a little perplexed as well.

For Sage Partners Only (Sort of)

Sage has made a site available for Sage Partners or anyone else who would like to speak at Insights to submit their session ideas. Please note that these would not be paid speakers, but if you have a topic that you would like to share with other partners, please feel free to submit your ideas.

You will need to provide a title and an abstract (description) of the session. These must be submitted by January 29, 2010.

The site is available at http://www.softconference.com/subs/SAGE/2010/CFPE/default.asp?log=1

If you have any questions, please email me or just leave a comment below.

Instead, I’ll let you be the judge

Yesterday, I was forwarded a post from Dwayne Wright who could not be more wrong about project management and value pricing. Please read his post before continuing.

I posted wrote a comment, he rejected it saying, “Well, just rejected the first comment for a blog that wasn’t clearly SPAM. It came from a value billing advocate and was equally harsh, combative and lacking of substance.”

“Harsh, combative,” HELL yes. “Lacking in substance,” I’ll let you be the judge.

My comment:

I am probably the original source of the comment about billing by the hour as being unethical. (It is clearly suboptimal and I believe immoral as well, but that is a whole other story.)

First, let me be clear, I do not accuse anyone personally of being unethical; it is the practice that is unethical because it promotes some very bad habits.

  1. It puts the consultant and the customer is an adversarial role. It is in the consultant’s financial interest to maximize hours; in the customer’ interest to minimize hours.
  2. You state, “It also says this (hourly billing) is often used when a precise statement of work cannot be quickly prescribed. Does that sound familiar to you and your consulting business?” Yes, it sure does and that is just plain wrong. Prescription before diagnosis is malpractice in any profession.
  3. While the PMBOK (and PMI, in general) have some good things to say about project management, they are overly obsessed with costs. After all most of this stuff comes from government (think defense contractors and NASA). In business, customers do not care about your costs, nor should they. They care about the results. They pay for results not efforts. This again is a misalignment.
  4. You are arguing that the risks should be borne by both the customer and the consultant. That is just wrong. You are the one with the knowledge not the customer. It is your job to spread diversify your risks across all your customers not put it back on each of them. Your customers hire you because of risk. If what you did was easy, you would not be hired in the first place. To put it back on them is ludicrous.

Lastly, it is not “value billing” is it “value pricing” or better yet “pricing on purpose.” A price is set ahead of time a bill comes after the fact. You bill now, we at the VeraSage Institute, encourage you to set a price beforehand.

Ed Kless

Senior Fellow, VeraSage Institute

www.verasage.com

By the way, Dwayne Wright, you are free to post any comments here they will not be rejected. You can thank me later for giving you a larger audience then you ever thought possible.

Sage Partner Consulting Workshops

Yesterday, in Atlanta, I delivered the first of many Consulting Workshops for partners of Sage North America. Here is what one participant, Fred Wright had to say about the experience:

 

If you are a Sage partner and interested in attending one of these upcoming events, you can register by going to www.sagepartnerportal.com. Select the Build Knowledge tab, and then Academies and Boot Camps. You can also go to www.sageu.com.

Current dates include:

  • January 26 in Tampa, FL
  • February 9 in Austin, TX
  • February 16 in Phoenix, AZ
  • March 9 in Irvine, CA
  • March 23 in Herndon, VA
  • April 6 in New York City
  • April 20 in Boston, MA

Report on ITA General Session – WOW – That’s a great idea

This is the sixth and last in a series of postings about my thoughts from sessions that I attended at the Information Technology Alliance’s Fall Collaborative (<-I love that word) held in Palm Springs.

Delivered by five partners, four of them Sage partners. Wows included:

  • David Cieslak of Arxis – Solid state drives can breathe new life into old laptops. I can state from personal experience this is very true!
  • Jeff Roth of SWK made their part-time HR director a chargeable resource. Customers love it.
  • Steve Krueger of Business Technology Systems created and executed a referral plan to accounting firms and did lunch and learn and technology updates.
  • Lissa Johnssen of Net@work sold her business. No more headaches and she loves working for another company.
  • Chris Faist – Started selling cloud services to customers.
  • Clark Haley moved BCS/Prosoft’s Web site to WordPress. For details visit his post on this transition.

New Pet Idea

While listening to a recent podcast from the Cato institute on the value of globalization, I was introduced to something called the Stan Shih Smile Curve of Value.

The idea is that the lowest value item in the production chain is the manufacturing of the product. This is why, for example, that the while every iPod and iPhone are considered to be manufacturing imports we should not care. The real value of the product is in the development and end-use. It is estimated that of the $400 price of an iPhone a mere $5 goes to manufacturing in China, about $45 goes to Japan for parts, the other $350 to the US or, in this case, Apple. This is why every iPod and iPhone say, “Designed by Apple in California. Assembled in China.”

Anyway, this got me to thinking about what this curve would look like for software implementation firms. Here is what I came up with:

image

What this shows is that the value to the customer is actually delivered at the extremes of the relationship.

What are your thoughts? I am just beginning to play with this model, so it is very open to criticism.