On the back of rising volatility in the global financial marketplace and fears of a U.S. recession spilling over into the European economies, stock indices have recently shown considerable weakness. When economic storms loom, smart executives typically start looking for a way to cut costs in advance of softening demand for their companies' products and services.  But what if you could know with some degree of certainty where your company is profitable and where it's not, and figure out a way to do more of the profitable work?  What if you fired unprofitable customers instead of firing the employees who have helped you build the company to its present stature? 

Many companies that successfully slash costs to survive a recession find top-line growth elusive when the recession ends.  Their best people are gone, their long term projects were cancelled and a short term focus is all they have left, resulting in the lack of a platform designed for growth.

Today's article is written by my colleague, Bill Balcezak, and Deborah Kerr, partner at affintus. Learn more about them in their bios at the end of the article.


Successful hiring is one of the key factors to operational success for large and small businesses alike. Executives should approach the hiring process as a means to both improve their existing workforce and to secure a candidate who will add long-term value to the organization. If approached merely as a step toward replacing a lost asset, the hiring process will squander considerable resources and forfeit significant opportunity value from a potential personnel improvement. The mission is obvious, yet, according tobusiness owners, finding the right employees can be an elusive aspiration in a drawn-out process.

The results of the hiring search can be crucial for the future of small businesses and a poor decision can easily cost any organization well into the six figures. Every new hiring opportunity has the potential to advance a business's interests or set them back significantly, and should be approached using the same level of data, knowledge, and preparation required for any critical business decision.

Typically, the implementation of a time and attendance system falls to a company’s human resources department. However, it is absolutely critical that top executives become involved, too, lest they miss the chance to facilitate greater profitability throughout the entire company. 

The time data that is collected, if collected appropriately, can also be used to automate project management, project accounting, project tracking and project estimation improvement, as well as for internal, external and reverse billing automation.  

There is a shift happening in our world today from capital businesses to people businesses. This is a shift of valuing time as much as money.  About 50 years ago, when most people labored in a factory, workers were not considered volunteers, they were not empowered, and managing the money of the company (i.e. the capital) was much more important than maximizing the time and knowledge of the worker. Such businesses are called capital businesses because power and wealth flowed from the capital.

The potential benefits of a project management office (PMO) are numerous and well-documented. However, many of the benefits never materialize. Take a look at PMOs over the years and you will see that many have restructured, dissolved, or constantly had to justify their existence during both economic downturns as well as high-growth periods. This is evidence enough that PMOs are not yielding demonstrable positive financial results. This churn often causes years of frustration for both the PMOs and the projects and departments they serve. Changing the way in which the PMO is chartered, works, and is perceived within an organization can ensure that it offers plentiful advantages for the entire organization. 

Two Problem Scenarios… And Strategies to Solve Them 

One: The PMO is spawned by an executive with a big problem 

Let’s consider this example: a client forms a PMO to salvage a huge contract with a customer. A very large project lags, causing late deliveries and missed expectations all around. Department staff is not completely honest with the customer, hoping that they will somehow be able to

In today’s highly technological business environment, many managers are tempted to put their competent IT professionals to work on any and every software solution the company needs.  While this might appear to be a good idea, such managers rarely take all of the necessary factors into consideration when making such a decision.  Often the cost of building a software solution is even higher than the cost of purchasing one.  

There are many reasons why managers today fall into the trap of building software solutions in-house. 

• Management often views its employees as free.  They think to themselves, "Well, I have these people on my staff and I'm paying them anyway so I'll just make them build it."  Not only that, but budgets for people and budgets for software or Software-as-a-Service (SaaS) solutions are separated and nonmalleable in many companies.  Budgets for people are always much higher so the idea of employee-built solutions being the better option is reinforced from a budgetary perspective.

Service-Oriented Architecture (SOA) is a style of information systems architecture that enables the creation of applications that are built by combining loosely-coupled and interoperable services. These services inter-operate based on a contract that is independent of the underlying platform and programming language - Wikipedia

I’ve been writing software for a long time. 

When I was 14, I got an HP programmable calculator that I taught to tell time by flashing hours, minutes and seconds repeatedly.  It used a loop of null operations to take up the time between each second.  Slight changes in room temperature would cause it to speed up or slow down the rate at which it performed these loops, ultimately making it a poor timepiece. 

But I was hooked – I have always loved programming since those days. 

That was three decades ago and since then, I've been writing some kind of software almost every day or managing those who do. For the last decade, I

What constitutes 90% of the value in recent asset sales on Wall Street by large companies?  The answer is data centers and headquarters.  When Lehman Brothers went bankrupt and sold its assets to Barclays for $1.75 billion, its data centers and headquarters constituted 86% of the value. This echoes the JPMorgan-Bear Stearns fire sale, in which Bear Stearns' two data centers and headquarters also represented most of the price.  Why is this so? 

A palatial headquarters generates no revenue for any business, and its upkeep depresses profits, sometimes significantly.  Yet another reason to sell your headquarters and data centers is to switch to Software-as-a-Service (SaaS) solutions.  Not only is this an excellent financial decision, but SaaS solutions are much greener than hosting your data on a local server. 

• Less Fossil Fuels

SaaS solutions enable telecommuting. This means that you no longer have employees wasting fuel by driving to work and getting stuck in traffic.

All business owners hear these days is how important social media is.  Yet understanding how tools like Twitter and Facebook can be used for your particular business model is often difficult. In March of 2010, my company, Journyx, launched a Twitter campaign. For every day in March, we announced coupon codes on Twitter that could be redeemed for prizes such as free licenses to our software, an iPod, a Kindle, tickets to a local music festival, USB drives, and more. 

Though this was a first-time experiment, we tripled the followers of @JournyxInc. The news was announced on more than 200 websites and the campaign landing page we set up got nearly 2,000 hits. Overall, the campaign was a big success.  These followers who joined during March have stuck around, and now they keep up with news about our company. 

How can you use social media tools to increase awareness about your business? It starts with knowing who your audience is, what tools they use, and what types of content/promotions they will respond to best.

 “The worldwide communications infrastructure has already started moving gradually and inexorably in the direction of ubiquitous broadband access and transport, an adoption that will completely revamp the meaning of what constitutes a telecommunications service.”

– The 2007 Telecom Industry Review, The Insight Research Corporation

The telecommunications industry is changing rapidly—as is the Internet—and they’re creating a mutual feedback loop.  This feedback loop is virtuous if you’re a consumer of such services, but it’s terrifying if you’re a supplier in these industries. 

Telecom is changing the Internet, and vice versa.  Let’s begin by discussing the Internet’s effect on telecom. 

Skype: Freeware Comes to the Telephone 

The freeware model for software delivery is a proven method for quickly creating a large user base for your product.  In the software space, WinZip and Journyx Timesheet are software products that quickly garnered huge market share due to their zero dollar entry prices.

No CEO can afford to ignore the smartphone technology trend that is changing everything about how we do business.  According to recent Morgan Stanley research, mobile internet is ramping up much faster than desktop internet did and is projected to outpace it in the next five years.[i]  It is coming on faster than any previous technology has, so you can either choose to develop a strategy and use this opportunity to your advantage, or you can fall by the wayside as your competitors take the lead.  

A Changing Landscape 

New Business Models – Smartphones are changing the way companies do business in a number of industries.  Carriers, for example, are looking for ways to keep up with the new bandwidth requirements.  In addition, smartphones have led to a regression back to client-server models.  While the web enables users to choose whatever browser they want, companies that develop software apps have to offer one for each specific phone.

Most managers know that trying to keep track of employees, with their various projects and skill levels, is a daunting task. Perhaps it is not so bad when you only have two employees, but when you work in an organization with 500, it is simply impossible to keep track of these resources without a little help. Here are some of the ways in which managers can manage their personnel more effectively in order to maximize success. 

1 – Understand Employee Skills and Availability 

Different projects require different skill sets.  For example, a project team might require engineers, sales representatives, plant managers or R&D professionals. Finding the right person to assign to a project or task can be extremely challenging without the right resource management processes in place. 

Even when managers understand resource availability, it changes. They might run around and get all of the vacation schedules recorded in a big spreadsheet, only to find that a week later it has all changed. Rather, what managers need is real-time access to team member schedules, tasks and available time. This makes assigning people to tasks much easier. The system should also be web-based, since the team is probably not all in one workspace 24 hours a day. Spreadsheets do not work very well because they do not allow for global access from various participants (and they also cannot be audited).

According to a recent article in a leading technology magazine, the demand for project and portfolio management (PPM) solutions is rising in response to the weakened economy.  Many businesses are choosing to implement PPM solutions in order to “identify which IT projects are mission critical and to help them execute those projects as efficiently as possible.”[1]  These customers have also found that PPM solutions offered as software-as-a-service (SaaS) are both more affordable and easier to deploy than traditional ones. 

One of the problems many businesses face when choosing a PPM solution is wading through all of the functionality of complex solutions.  It can be difficult to understand what functionality a business needs, as well as how to strike the right balance without paying for things that are not needed.  When it comes to project portfolio management, most companies have two basic needs: to understand costs and profitability on a per-person, per-project basis, and to know who is going to work on which projects for the next few months.

Project management technology has been around for years now, so the problem of project execution must be basically solved, right?  Wrong.  The Standish Group has found that 68% of technology projects failed in 2009[1].  Does this mean that project management solutions are just a waste of time? 

The truth is that project management technology is only as good as the processes that support it.  The only way to improve project execution rates is to look at the root causes of project failure and implement the necessary changes that will allow the technology to work.  Here are a few of the top ways to accomplish this in your organization. 

Problem #1 – Ignorance of True Per-Project Cost 

We all know that people hate to track their time for a variety of reasons.  Most find it to be a tedious exercise and believe that it takes time away from more important work.

It often seems that a lean, agile development environment will always be at odds with the structure and constraints of the PMO.  Rick Freedman described the situation well in a recent blog post: 

Many firms have committed so completely to PMBOK process flows and CMM best practices that many of the core concepts of agile development, such as “barely sufficient” documentation and change-friendliness, seem like heresy.  In fact, I’ve had people in my Agile Project Management classes tell me that their perception of agile is that the key message is “everything you know about project management is wrong.”[i]

Yet it does not have to be this way. The agile PMO can bridge the gap between these two very important groups and help organizations to execute projects more successfully.  While it does require a bit of change management, it is not as impossible as it seems and the benefits far outweigh the effort.

We now live in a technological world where tedious tasks can be performed with agility and ease.  Computers and software can do most of our work for us, whether it’s filing our taxes or ordering groceries.  The benefits we gain—namely more time and less margin of error—make this kind of technology appealing to businesses as well.  There are several ways in which an automated system that tracks time spent on projects and generates invoice reports will make your work life easier and more profitable.

Maximize Revenues

Your employees' billable time is the source of your revenue.  By capturing time, expenses and other products or services accurately, you will be able to maximize this revenue.  The right timesheet system will give you the ability to create customized interfaces to facilitate employee acceptance & compliance, eliminate double entry errors through online approval routing & integration, and even assign multiple billing rates to a single employee.

Microsoft has always been brilliant about garnering mindshare from smart developers. But now they're losing them. 

Developers are opinionated.  They're not always as unbiased and scientific as they think they are, so they're susceptible to philosophical wars: Mac vs. PC, Emacs vs. VI, Perl vs. Java... the list is endless. Once you get developers on your side - and Bill Gates has done a good job of this - they'll defend your position to the death. 

But now many of those developers, especially the youngest and the smartest, are going off and participating in open source work. It's easy to get passionate about open source because the stuff just plain works.  For example, our products at Journyx are built on Postgresql (a free database), Python (a free language), Apache and Xitami (free web servers) and are built and run on Linux & FreeBSD (free operating systems). But they also work with proprietary databases and operating systems, like Oracle and Windows. Our support costs are the lowest when our customers are on Linux.

I recently was asked to answer a few anecdotal management questions and as I was thinking through my answers, it occured to me that this would be useful information for my blog here at Software CEO. I've made mistakes along the way, no doubt, and I'm still learning all the time but here are a few things that I'd like to think I've done right and maybe will help one of you.

1) As a CEO, have you written out your policies and procedures to provide precedents for doing things or to make it easier for employees to run the business in your absence? 

Given that I’m more of an idea person and a technologist rather than a process maven, I have chosen to surround myself with people who get processes documented and implemented as those processes have evolved.  We now have processes for sales, billing, support, configuration and many other things involved with selling and making companies successful with our software processes. This helps to keep the business running smoothly no matter who is away from the office.

Like many of you reading this, I run a software company. (We make time tracking and resource management software solutions, in case you were wondering.) As you know, keeping all departments in your company humming along at a steady pace with no glitches is no easy task. A software company's IT department is easily one of the most critical areas. Their job includes putting out a lot of fires, often at all hours of the day and night. Following is a list that my IT Manager and I compiled in regards to the most critical things that every IT department needs to do, regardless of a good, bad or indifferent economy:

1) The absolute #1 on a list that cannot be removed is telecommunications. As a software company, a reliable, responsive company that provides a 24x7 dial tone is paramount to us. Calling prospects and providing support to customers happens 99% over the phone.

There are no longer many physical obstacles to performing global projects. Instantaneous global collaboration, inexpensive resource transportation, and near-global access to knowledge have expanded organizations’ horizons and consumer markets. At the same time, however, these now-hurdled obstacles present new challenges to the global project manager: though distance is now surmountable, what happens when project team members speak different languages, for example? We may have instantaneous communication, but this doesn’t necessarily translate into instant comprehension. 

So where does this current level of interconnectedness leave the modern global project manager? The internet and globalization are too young to have expunged regional differences, yet they make collaboration between these regions too profitable to be ignored. The following obstacles are real threats to conducting good business, but can all be hurdled using a combination of new technology – the tools which have brought us this far along – and old tactics – the tried and true elements which constitute business as we know it. Though new generations may not experience these same complications as we do today, they currently pose a threat to conducting smooth business.

Let's take a look at the pros and cons of cloud computing.

The advantages of the cloud include:

   1.  Low initial upfront investment -- If you are using Amazon EC2 to rollout some Linux boxes to fire up a new app, it costs almost nothing to get started.  No plugging in wires, crawling around on the floor.  It’s up, and you're done.  You don't have to buy any machines, ever.  That’s just awesome. It’s OPEX instead of CAPEX.

   2.  It’s probably pretty secure and pretty well backed up.

   3.  It’s green.

   4.  It is massively scalable.  If you need your app to grow and use 1,000 machines, but only for a while, this is very achievable.  Few apps have this requirement really.

   5.  You can bypass IT and purchasing and just get it done.

Disadvantages of the cloud:

  1.  In the case of Google App Engine, you have to rewrite your app since SQL is not supported.