Reliable Group – IT and ERP Consulting

Sit back. Relax. Release Creative Energies.

I was watching a TED video by Dan Pink on Motivation.   In many ways, it talks about how we can unleash human creative energies by making sure the mind is not forced to work on projects which require creative solutions while under pressure.

In many ways, the job of executives and management are all creative in nature.  Even roles which are a bit more task focused have a higher error rate if pressure on the employee increases.   Whether employees or even machines… there is a law of diminishing returns.  Once pressure increases and little R&R (Rest and Relaxation) allows the batteries to recharge, mental health to improve, and creative inspiration to come.

While writing this, I am overlooking the beach and listening to the waves ebb and flow against the sand.   The vastness of it all provides a clarity which requires us to step back. Who would have thought that spending time at the beach would provide for better IT solutions for my clients… but in fact, it does and will.

I recently saw a Bollywood movie called 3 Idiots.   In it, the lead character asks the Principal of a high-pressure engineering college how he expects people to work with so much pressure (beyond their capabilities) but he wouldn’t expect a machine to work under pressure beyond its capabilities.  Interesting point!

During this trip, I have been on the phone and working a few hours a day, however even that has been tension-free.   There is an aliveness that I remember when I am connected with nature.   This aliveness makes decisions and productivity come from a place which is richer and deeper than the pressures of the daily office routine.

Spreadsheet Bermuda Triangle

Horror! Fear! Mystery! The Unknown!

All great words to describe the formidable force that has been sucking the controls out of business’ hands: the Spreadsheet Bermuda Triangle.

While many savvy business owners have successfully maneuvered out from its path, a good many have been taken down by its unique properties to disband an organization. The primary properties of the Spreadsheet Bermuda Triangle are that it blinds businesses by convincing them that it is a safe way to keep all things data under control. But the opposite is true; spreadsheets throw a business’ accounting, operations and management into complete and utter chaos.

The more spreadsheets that are created by more individuals the greater the loss for a company.

A sad and desolate place where businesses reach when they have outgrown their basic systems and controls, but not yet implemented a proper business management software solution. Instead of spending time and money in a new solution and using IT properly, spreadsheets begin breeding in the office.

Inventory tracking? Open a spreadsheet. Cost Allocations? Open a spreadsheet.

Spreadsheet triangle

Time Tracking?  Open a spreadsheet.

In the Spreadsheet Bermuda Triangle, spreadsheets breed even when you are not in the office.  They take over the controls that you have so carefully monitored in your organization. They suck your time and make you work twice as hard for half as many results.  They force you to make improper decisions and often result in the demise of your organization.

I recently convinced my friend to free himself from the depths of the Triangle. I showed him a way out. Together, I promised him,  we can sail beyond its reaches.

Freedom lies within an organized and monitored business management solution.  We will structure our business to achieve goals which are Focused, Aligned with the team, and Managed clearly.

We shall be free of the traps of the Spreadsheet Triangle by implementing the proper controls and not just the illusion of one.

Mo’ Money, Mo Problems? The issue of excess cash flow.

It seems that the popular hit song  may have it right. While most businesses are struggling with limited cash resources, there are also many that fall under the strain of carrying too much cash.

Too much cash? You must be crazy!?!

No, actually not.

Many companies we work with have fallen due to too much cash. Remember, the cash has come from only a few places, if excess cash comes from:

• Cash investments from owner, you may have idle money that is not being “put to work”
• Loans from friends, family, or banks, you may have excess borrowing, which can put pressure on the company for unnecessary interest payments
• Operational profits, you may not be providing proper returns to your investors

As in all business decisions, you have to assess the balance. Money, like water, only increases if you let it flow. The more you use and share for the proper purposes, the more business grows.

Simple message: Don’t stockpile money for the wrong reasons — it could be the downfall of your business!

Cash Flow. The long and short of it.

“Lack of money is the root of all evil” – George Bernard Shaw

While I’m sure that George Bernard Shaw was not referring to businesses in mind, in many ways, his statement rings true.

When money is tight, businesses begin to make peculiar and downright foolish decisions as it relates to keeping their business afloat. When people start-up businesses, they typically do so on a ’shoe-string’ budget and plan to work hard to get past the point of putting actual cash in the bank.

Unfortunately, the majority of businesses fail because they don’t have enough cash to get to monetize their ‘great idea’.

Two things need to be paid attention to. Increase inflow, decrease outflow.

So how can we increase the inflow of cash?

The goal of all business is to BUILD OPERATING CASH. This is a target oft forgotten! And that’s when business owners mix-up cash from debt, cash from investments, and cash from equity.

What good is a business that’s cash rich, but only because of loans?

End of Recession?

I just received an email a few days ago from a friend.

“I am observing an increase of revenue and seeking new employees in my companies…. Looks like it’s party time, the recession is over….Let’s see how long it takes for the rest of the world to realize it.”

While I wouldn’t go as far as she did, I would tend to agree with the sentiment. In working with many of our clients, we track leading indicators of progressive movement. And this much I can say with confidence: sales pipelines are getting deeper, revenues are increasing, companies are starting to hire again, and most of all cash reserves are not shrinking month upon month.

Cash is not a “Leading Indicator” it is a “Trailing Indicator”. Therefore, we can’t look at the volume of cash reserves to predict whether or not the economy is progressing.

But seeing that they are not getting lower year upon year…at least it’s a start!

Oh No! I have to stop growing to stay in business! Help!

I was recently approached by a friend who has an Audio Video and Security Installation business.   They have 62 technicians installing equipment at residential sites and have been getting new clients at the rate of approximately 500-600 per month.   They are building incredible business, even in this economy and growing a a rapid clip.   Their income statement looks incredible… profits every month and increasing.   Their balance sheet looks great, they have contracts from their clients which are representing fantastic asset value.

They are, unfortunately, considering selling out or declaring bankruptcy.

What?   That doesn’t make sense!  How can this happen?

Well, the answer, is unfortunately a simple reality that many business people forget.   They don’t have enough cash to meet their monthly expenses.  They have used it to build their business, and now don’t have enough cash to make payroll.   They have so much business that each installer is required to do approximately 10 installations PER DAY.  Since this is virtually impossible, they end up hiring more installers.  In order to hire more installers, they need to lay out more cash.  They have drawn on all of their bank loans to fund their growth and are now in a predicament.   They have too much work.  They had cash reserve which was expected to last 3 months, however because they grew at unexpected rates, they no longer have funding enough to grow.

I remember a class I took in Wharton where we had been discussing the reasons for a particular company’s demise.  It wasn’t strategic alignment, business development, infrastructure or any other complex thought.  It was simple.  They ran out of CASH.   In order to maintain growth, business owners and CEOs must keep an eye on the cash available at every stage of growth.
Control your growth, manage your cash… else you can find yourself in the same predicament!

Security: Are we really protected?

I can’t help but notice that every hotel, mall, school, or public place has been buzzing with perception of security. Investments in technology and manpower give the comfort to the mass public that you are protected.  However, somehow, I don’t really feel protected or safe.  Other than Airports and Federal Mints, security in these public places seem to be serving a purpose of perception rather than reality.

I recently attended a seminar where they showed all this advanced biometric gate control and private guards in the front of the building.   Amazing technology in use, seemingly strong human presence.  However, in the same building, around the back, there is no guard to be found and 2 doors are wide open.  Do you think an intruder will be kind enough to use all this technology that we have invested in – or you do think he will use the back entrance?

Security needs to be looked at holistically, not just partially.  Physical security, access control, CCTV, Alarm Systems, perimeter security, etc are all part of the whole puzzle.  Depending on your situation, you have to understand and think like an intruder, not an executive.

Educating businesses and having the right consultants will give you more protection than just investing in throwing away money to make you feel protected – it will actually protect your valuable assests.

Crime, Worship, and Security… What’s the connection?

Being in India, I thought it would be a good idea to explore how security solutions are being used in India to protect valuable items.   I was fortunate enough to find a striking example of security and sprituality in one place.

Despite the global recession, there are numerous industries that typically do well in this environment.  Due to the rise in crime, which occurs during downturns in the economy, security and safety become more important when markets are weak.   Additionally, when people are struggling the most, the spiritual realm does better as well.  Places of worship often have greater donations and greater interest during recessionary times… perhaps due to greater dispair.  They have no where else to go.

Some enterprising thieves, perhaps aware of these links decided to target temples for their next burglary.  There are two examples in the attached article.  One temple, spent time and money on security, thereby saving over 10 Million Rupees in the process.  The other installed a very weak CCTV system, and had blurry pictures of thieves which were useless after the theft was complete.

Burglar alarm CCTV saves the day for temples – Mangalore – Cities – The Times of India

Long story short… Don’t skimp on security when crime is increasing… especially when protecting houses of faith!

Can you be an expert?

I just finished reading Outliers by Malcolm Caldwell, and there was definitely a lot of interesting analysis that was presented.   While the book itself has a somewhat pseudo-science feel to it, some of the information presented can’t be denied.

In Outliers, Caldwell presents numerous examples of people who “propel” to success (apparently) due to their innate talent and abilities.  However, this is only part of the truth.  Becoming an expert in any field, according to Caldwell, requires a certain level of abilities, a certain level of luck and over 10,000 hours of pure practice and grinding in the field.  From the Beatles to Bill Gates, having access to a forum which provides this practice was critical in their success.

This was immediately personalized in my mind, and I thought, “Why do companies take a speciality field like IT Consulting and Software Implementations and try to perform them in-house?”   A good IT consulting engagement will typically pay for itself within a year.  Although internal IT implementations may appear less expensive, in reality their have a failure rate of about 65%, eventually requiring an external consultant to come in anyway.  In addition, the delays increase the cost exponentially because the benefits that should have improved the company productivity get delayed.

How many people would never think of servicing their own cars, however attempt to service their own company IT infrastructure?  Are you willing to put in the 10,000 hours to become an expert?

Can 20 and 30-somethings rule a country’s growth?

There is something to be said for timing.  After all, the majority of ultra-successful people in the world had a high-level of skill in their field but something called luck and timing to help them along their path.   As it relates to India, and the growth of the country, there is a vast labor force in their 20’s and young 30’s who are amped and ready to go.

Unfortunately, unlike the USA and other developed countries, there is a vast shortage of successful people in their 50’s and 60’s to groom these new faces on their path.   You may ask, ‘Why? … Why in a country of over 1 Billion people, is there a shortage of labor?”   The answer, is in fact, rather simple.   Until 1991, India was a closed market which had fundamental barriers for foreign organizations to do business in the country.   After 1991, the awakening had begun, and the young generation that was just reaching their ‘impressionable’ teens and twenties, began seeing the true benefit that this open market provided.

Fast forward this to 2009… a child reaching 13 in 1992, would be about 30 years old now…  a child reaching 17 in 1992 would be 34 years old now.   Typically, psychologists recognize that mindframes of abudance or scarcity are defined by families – particularly during the adolescent years of 12-17.    By that definition, the oldest person to fall in this range would only be 34 years old today, and the youngest… about 29.

But here is the issue…. While a 34 year old may share the mindset of a 34 year old in the USA, will they have access to rich and abundant resources that the experienced people before them would have established?   Will they have guides who have navigated the same path to help them overcome obstacles?

The answer speaks for itself.   In India, there are an abudance of youngsters in their 20s and 30s who have the desire, energy and ability to grow… but they don’t have the direction which has historically been provided by a senior person who has come up through the same ranks.

Now, I don’t mean to imply that there are no able 30 somethings… nor do I mean to imply that there are no experienced people in the 50-60’s who can lead the way.  There are many experienced people who were able to adjust their mindset to the new economy.  However, in a country with such a vast population, the requirement for experienced guides is growing so quickly due to the uprising of the new generation, trained in the New Economy.

That leaves the responsibility to those with the ability to lead and guide the Indian generation to achieve the potential that it has built in.  The success of a country is dependent upon it.