Communication can be divided into three categories according to the audience as;

1- Intra-communication: When someone communicate or exchange idea with himself/herself it is called intra-communication, e.g. talking with one’ self.

2- Inter-communication: Communicating with an individual or a number of individuals is called inter-communication for example, a person talking to a group of coworkers.

3- Mass-communication: Exchanging information with a large number of people is called mass-communication, for instance. The president addressing the nation

As Communication is very important aspect in the organizations and its importance can be seen by observing:

Internal Communication:

When different individuals or groups in the same organization exchange ideas and information, is called internal communication. Or communication inside the company is called internal communication. So, it’s the flow of information between different department and different levels in the organization. Internal communication can be downward and upward too. For instance, when a manager gives an order to his subordinates to fulfill it is called downward communication while the feedback from a worker is upward communication. In organization, internal communication has many means like telephone, E-mails, Face to face meetings and memorandum.

Communication inside the organization (INTERNAL)

Ways of Communications:

• Memo
• Reports
• Conferences
• Face to face
• Teleconferences
• E-mail

 Downward communication:

For better motivation, clear job direction, orientation, benefits, wages, and job conditions.

When employees receive appropriate downward communication from management, they be letter of motivation and more efficient. They need not only clear job direction, safely rules but also facts about organizational strategy, products, viewpoints, on important controversial issues. They are concerned about employee benefits- health care, insurance, promotion, pension, training, work environment and retirement. In all the many pressures from employees force employers to be accountable for their decision through effective downward communication. Employers who communicate effectively have employees that are more productive.

Upward communication:

Frank comments, complains, problems and suggestions,

Many executives sincerely seek frank comments from employees, ion addition to the usual periodic reports. Successful managers listen closely to opinions, complaints, problems, and suggestions of especially when these are clearly and effectively stated.

• Horizontal communication:

Between peers and colleagues for better performance and team work and connected activities.

Effective horizontal communication betweens peers is also essential in organization in order to solve problems, performs jobs duties, prepare for meetings, and cooperate on important projects. for example, if you think about the time spent listening to and making requests, writing notes, and memos, and discussing and writing about projects, you soon realize that communication is the medium through which an organization accomplishes its role.

(Among various ways of communication within companies are memos, reports, meetings, face-to-face discussions, teleconference, video conferences, and electronic mails.)

Communication is the process of transmitting and receiving of verbal and nonverbal messages.

Or Communication can be defined as the sending and /or receiving of massages (verbal and nonverbal massages).

Effective Communication in Business, Effective Communication in Business, Verbal communication, Nonverbal Communication

• Ø Communication is a SKILL and an Advantage!!!
• Ø Communication skill was considered essential in ancientGreece andRome

Medieval Period: middle centuries

Renaissance: دوره تجدد ادب و فرهنگ یا رنسانس

• Ø At the Fourth Century Chinese Theorists advised for smooth flow of Information

The process of effective communication can be defined as “sending a massage (verbal or nonverbal) and receiving a feedback or response (negative or positive response)”.

Effective communication is a cycle and it cannot be completed without response or feedback from the receiver of the massage. If a massage is sent and we do not receive a feedback or answer (either positive or negative) it cannot be called effective communication

Verbal communication:

Verbal communication is the use of words to convey a massage, so it can be both speaking and writing.

Nonverbal Communication:

Nonverbal communication is sending a message without the use of words. Therefore, to be clearer, nonverbal communication is a message through gestures, postures, space and facial expression, sometimes-nonverbal communication is more important than the use of words and sentences.

At the National Manufacturing Week (NMW) event, held February 23-26, 2004 in Chicago, Illinois (US) SAP AG (NYSE: SAP), the leading provider of enterprise applications, announced the availability of new industry-specific solutions for small and midsize manufacturing companies, with the aim of extending its leadership as a provider of solutions for an even broader range of companies, from small enterprises via mid-market companies to the world’s industry leaders.

As for the lower-end of the market, SAP has designed SAP Business One to meet the core management needs of dynamically growing small and midsize businesses, and is moving to better address the specific needs of small and mid-sized manufacturers through a planned strategic solution relationship withSoftBrands (www.softbrands.com), an established privately-held global leader in manufacturing management systems for small and medium businesses(SMB), whereby the two vendors have initiated efforts to integrate SoftBrands’ leading manufacturing software product Fourth Shift with SAP Business One. Fourth Shift is a renowned mid-market, web-based manufacturing management solution that has broad functionality and that facilitates many critical business functions including manufacturing, operations, financials, and customer and supplier relationship management (SRM).

See Part One of this note for details on the approach to the higher-end of the SMB market.

On the SoftBrands’ side, the Fourth Shift product line will still be available as a separate system and will continue to be developed as the vendor remains focused on the hospitality and manufacturing industries. With more than 5,000 customers in over 60 countries now actively using its manufacturing products (i.e., Fourth Shift, evolution, and DemandStream) and hospitality products (i.e.,PORTfolio, Medallion, and RIOGrand), SoftBrands has established a worldwide infrastructure for distribution, development, and support of enterprise software. The company, headquartered in Minneapolis, Minnesota (US) has over 500 employees with branch offices in Europe, Asia, Australia, the Middle East, and Africa.

At the end of 2003, SoftBrands announced the highly anticipated release of Fourth Shift 7.30, which should confirm the company’s continued commitment to its customers and products, since over seventy of the enhancements in Release 7.30 have been delivered at the request of customers. At Release 7.30, Fourth Shift significantly broadens accounting capabilities as well as other key areas of business operations. Customers are also afforded improvements in the web-based application of the Fourth Shift product, My Fourth Shift Workplace, while tighter security and easier retrieval of data are also hallmarks of this release.

In a continuing move to provide products and services on the latest Microsoft technology, which has been hinted after the release of Fourth Shift 7.20 in 2002 (see Fourth Shift’s evolution Within SoftBrands’ DemandStream), release 7.30, introduces FSTI(Fourth Shift Transaction Interface), which provides a common transaction interface to Fourth Shift business logic in the .NET environment resulting in an interface that is easier to use, more reliable, and easier to administer.

At the about the same time, the vendor announced that DemandStream, one of the leading best-of-breed lean enterprise automation solutions, has been integrated with the Microsoft Business Solutions‘ (MBS) enterprise resource planning solutionAxapta. Axapta is gaining market acceptance in the US and by integrating with DemandStream, it will provide its customers a toolset for their journey to “lean” manufacturing, since economic conditions and global competition have led manufacturers to look for an alternative to “push” manufacturing. Still, although lean manufacturing is gaining wide interest and acceptance as the next big event for the manufacturer, traditional ERP systems typically revolve around push manufacturing and leave little capability to manage the lean manufacturer (see Pull versusPush: a Discussion of Lean, JIT, Flow, and Traditional MRP).

This is Part Two of a five-part note.

Part One began the event summary.

Parts Three and Four will discuss the market impact.

Part Five will cover challenges and make user recommendations.

DemandStream

Thus, SoftBrands claims DemandStream’s integration to Microsoft Axapta and other various ERP systems now provide the manufacturer with a true lean ERP system. According to the vendor, DemandStream is the “lean conversion kit” that allows customers of Axapta and other ERP systems, to preserve their existing ERP investment while providing a lean (pull) based capability. That is done by deploying kanban management by cell in a “real time” environment. DemandStream provides factory floor management of dynamic kanbans, lean material flow management, and supply chain material/demand signals with visibility to both vendors and customers.

To that end, DemandStream provides back office integration tools for importing data using Import Wizards into the Shop Floor Module from a back-office system, and for inputting data using extensible markup language (XML) messages generated by the Shop Floor module back into a business system. Applets are included that generate manufacturing orders and purchase orders, item changes, bill of material (BOM) changes, and non-replenishable kanban.

The product delivers the following four important capabilities to manufacturers:

1. Dynamic Kanban: Enables kaban sizing and re-sizing to be synchronized with the demand pattern of the business. This allows lean manufacturers to achieve improved material flow and reduce overall production leadtimes.
2. Lean Scheduling and Demand Smoothing: Balances customer demand smoothly to the shop floor for timely and efficient execution. DemandStream delivers visualization to traditional Heijunka smoothing techniques and drives the execution data all the way to the cells for execution without the challenges of manual techniques.
3. Supply Chain Planning and Execution: Supply Chain Execution is an interactive Web-based application that enables the shop floor to interact with suppliers through the Supplier Kanban Board. Features include interactive shipping and an enhanced XML messaging system, while reports include Projected Usage and Vendor Performance Statistics.
4. ERP System Transaction Automation: Manual lean implementations are still relying on ERP systems to process transactions. This burden often times off-sets significant portions of the gains realized by adoption of lean practices. DemandStream’s Back Office Integration capabilities will automate or eliminate most of the ERP system transaction processing effort.

Consequently, the product should allow manufacturers to leverage their investment in ERP systems and at the same time embrace lean manufacturing methods, and thereby improve productivity, competitiveness, and profitability, all being a must in current difficult economic times. Available off the shelf, DemandStream is able to interact with most ERP systems including Fourth Shift and evolution and thereby bridge the chasm between companies that are heavy planners, and those that must respond to constantly changing demand on the fly. SoftBrands claims that the integration with Axapta took less than 3 weeks, owing to DemandStream’s architecture and the advantage of the latest technology using Microsoft’s .NET platform. DemandStream is expected to release a number of other ERP integration platforms in early 2004.

The Promise of EAI

Plug and Play business application system integration is the goal of investment in EAI technology. Buyers have a number of applications from various suppliers and a number of external trading partners with whom they want to exchange business transactions. EAI suppliers promote products that connect to a diverse set of applications (Adapters) transform data format, structure and content (Transformation Capabilities), move data among applications predictably and with assured content integrity (Transport), and create new transaction interconnections with assured process integrity (Workflow).

With a full complement of Adapters, the appropriate set of Transformation Capabilities, versatile communications Transport and flexible Workflow capabilities, heterogeneous applications, platforms and network configurations cease to be impediments. EAI tools promise seamless and flexible interconnection with low overhead.

Apparent Capabilities versus Vital Capabilities

TEC has examined a number of recent EAI acquisitions to refine its Selection Model and Knowledge-based Procurement Process. Of particular interest is the difference that we noticed when we compared selection criteria to success criteria. It is clear that a number of selections did not sufficiently address long-term cost of ownership and operation capabilities. Several of those capabilities are described in the following table.

The column titled Apparent Capability lists a number of EAI features and functions that customers included in their Request for Proposal (RFP). The Discovered Requirement provides examples of additional capabilities that at least one customer discovered should have been included as a requirement in its RFP. The third column, entitled Implications, captures important considerations for buyers based on actual discovery during implementation and use.

Preparing for an EAI Initiative

Comprehensive preparation maximizes chances for success by establishing clear goals and identifying risks.

1. Create a clear picture of how the product will be applied to business process automation tasks.
2. Create a clear picture of how the product will be operated, administered and managed.
3. Create a clear picture of how the product will be deployed including:

• Server platforms and operating systems
• Objects (Application Systems, Relational Data Bases, Special File Structures) that will be interconnected.
• Trading partners that will be interconnected including their interconnection requirements.
• Monitoring systems (Hewlett Packard’s Openview, Computer Associates’ TNG) that will be employed.
• Performance measurement and management processes and reporting.
• Event monitoring, response and escalation

1. Establish capacity, performance and availability requirements for the system that will be built using the technology.
2. Define an implementation timeline linked to business system deployments.
3. Create a selection team with clear roles and responsibilities.
4. Build the Business Case
   Identify the potential time and cost savings of the future model. Include anticipated maintenance and product application extensions.
5. Design a Future System
   Create a concise picture of how the information technology staff and business leaders will employ the technology and how it will perform after it has been assimilated into mainstream operation.
6. Create a Call to Action
   Build a coalition of lead users and executives around the business value that can be derived from the technology.

10. Identify and Select Suppliers
Using the Business Case and Future System Design to establish selection criteria and a model for the ideal product, map contending solutions to the model and select a product configuration and supplier(s). Include Application Service Providers as well as product vendors and systems integrators to maximize the leverage of resources and to minimize project risk.

11. Scope the Project and Risk
The gap between the idealized system and the one that will result from the selection process will impact investment return. The gap between existing technology capabilities and those required to deliver the solution contribute to project risk. EAI deployments derive most of their risk from change imposed on design and implementation techniques i.e., the skills and practices that are employed by the technical staff. When all of these are factored into the scope / risk equation, a final check of return on investment can be made and a decision to move forward and on what can be made.

A market is comprised of two major sides—one side has the demands and the other side has the capabilities to satisfy these demands. In order to verify the relevance between BPM and FOSS from the user side, I used Technology Evaluation Centers’ (TEC) data on demand trends to explore the stats of end-user demand for FOSS BPM solutions as well as users’  requirements for deploying BPM solutions (be it FOSS or proprietary) in a FOSS environment. For the supply side, my findings are not as quantitative but still suggest that some vendors are addressing BPM users’ requirements in FOSS.

The Demand Side
Every year, thousands of users come to TEC’s BPM Evaluation Center looking for suitable BPM solutions. By answering a questionnaire regarding their business characteristics and requirements, users walk away with a working list of BPM solutions that are likely to fit their specific BPM initiatives. Although defining a working list is the first step of TEC’s entire software selection services, the aggregated answers captured in this process show a good picture of the overall requirements from the user side on different issues, in this case, FOSS. In order to have a long-term view of the demand, I looked into the aggregated data for specific years (2007, 2008, and 2009), and below are the results.

FOSS BPM
TEC data shows that almost a quarter of software seekers think the FOSS model is considerable when looking for a BPM solution—higher than all major application types that are more business process-specific (figure 1).

One of our questions allows users to identify their customization, software license, source code, and other miscellaneous requirements. Amongst the valid 2950 responses to this question, 23.0 percent said they wanted software licensed under an official free or open source license. Compared with the same percentages in some other enterprise software categories, this 23.0 percent is higher than all the others except for that for enterprise content management (ECM). I’m not sure whether the 23.0 percent of BPM initiatives would all end up with FOSS BPM solutions as wanted, but at least the percentage shows that the FOSS awareness in the BPM area is relatively strong.
Figure 1. Percentages of people indicating a desire for a FOSS solution in different enterprise software categories (2007-2009)

BPM Running in a FOSS Environment
Besides looking for FOSS solutions, BPM seekers also showed high interests in running BPM systems on top of a FOSS database and server platforms.

Figure 2. BPM seekers’ preference on database management system (DBMS) (2007-2009)

Figure 2 shows that FOSS databases—MySQL and PostgreSQL—are ranked third and fifth, respectively. We structured the DBMS question with multiple choice answers—an average BPM initiative selected 2.1 options—even though the percentage shown in figure 2 suggests that there is a considerable large group of users who are considering FOSS database while planning their BPM implementation.

Figure 3 BPM seekers’ preference on server platform (2007-2009)

Figure 3 shows that FOSS operating system (OS) Linux is ranked second. In this case, an average BPM initiative selected 1.9 options when asked to identify server platform preference.

The DBMS and OS preferences in Figure 2 and 3 are captured from all BPM initiatives regardless if BPM seekers were looking for FOSS or proprietary BPM solutions. By separating the BPM initiatives that preferred FOSS BPM solution from the rest, I was able to find that the two groups (named as the FOSS BPM group and the non-FOSS BPM group) showed significantly different preferences on FOSS DBMS and server platform (Figure 4).

Figure 4.Preferences on FOSS DBMS and server platform, FOSS BPM group vs. non-FOSS BPM group (2007-2009)

Clearly, Figure 4 shows the correlation between FOSS BPM and FOSS IT infrastructure preferences. However, it also shows that even if an organization doesn’t plan on having a FOSS BPM solution, it may want to run proprietary BPM solutions on top of FOSS software, though less likely than a FOSS BPM seeker.

The Supply Side
Where there is a demand, there is a supply. Again, this is true in the BPM area regarding the FOSS issue. Let’s take a look at how some BPM vendors’ support FOSS database and OS.
Amongst the 27 BPM vendors that are currently listed in the TEC BPM Vendor Showcase, 15 vendors support Linux. Amongst these 15 vendors, 10 of them support MySQL, and amongst these 10, seven of them also support PostgreSQL (figure 5).

Figure 5. Percentages of BPM vendors that support FOSS’s database and OS

Although these 27 vendors don’t make an exhaustive list, the percentages in Figure 5. give a sense of priority when supporting Linux, MySQL, and PostgreSQL from high to low, coinciding with the demands from the user side as we have previously seen.

Now the question is, as there is a considerably-sized group of users willing to adopt FOSS BPM solutions, how many options do they have? Although none of the 27 vendors currently available for evaluation in TEC’s BPM Vendor Showcase deliver their solutions through the FOSS model, there are FOSS BPM solutions such as ProcessMaker, Intalio|Works, uEngine, Runa WFE, and BonitaSoft. If you want to find more options, SourceForge.net is a convenient place that hosts over 80 FOSS BPM downloads under the Business Process Management category. However, one should be aware of that many of the downloads listed here are just subsets of today’s general convention of a BPM suite in terms of functionality.

Software selection is a process of measuring what you want and what the alternatives are able to provide. When a BPM seeker is interested in FOSS solutions, cost might be a major reason, but IT strategy, existing IT infrastructure, experiences of the IT force, etc., might also play a role in the decision-making process. Below are a few points you should consider when regarding a FOSS BPM solution as an alternative prior to a more detailed evaluation.

• Think of what functionality you want, for now and in the near future. Without a doubt, FOSS software gives you more financial convenience to roll out your BPM initiative. Typically, with a phased approach, you may start from business process modeling, and then expand to business process execution and monitoring, and later on find that process analytics and process mining should be added. With that being said, you need a solution that not only provides you with a convenient start but also helps you explore during your BPM journey.

• Know the boundaries of “free”. Some BPM vendors may deliver their solutions in both FOSS and proprietary models. In this case, you should be clear about the differences between the two offerings and make sure you will be able to stay with the free version relatively long or be able to move to the proprietary version if your requirements go beyond what the free version is capable of.

• Be prepared to spend some money. Although the license is free of charge, you will still need to invest in the implementation. In case you don’t have enough in-house BPM experts and IT force in planning, implementation, and training (which is quite likely for many organizations), you need a budget before you hit the road.

In conclusion, I’d like to emphasize that, you are not alone if you are tying FOSS with your BPM implementation plan. The demand is out there, and the supply is growing to meet the demand. For those who want to run proprietary BPM software in a FOSS database and OS environment, you will find support from many BPM vendors; for those who want to go one step further to FOSS BPM, different options are also available. The extent FOSS should play in your BPM implementation is a decision to be prudently made starting from the understanding of the demand-supply relationship on the market.

There are two major types of messages that you can get: warning messages and error messages. Let’s take a closer look at what they represent and what you should do when you see them.

Warning Messages

Wouldn’t it be nice to get a warning message if you were about to step on a banana peel? Something like: “Are you sure you want to step on a banana peel? Click Yes if you want to break your neck, No to avoid it, and Cancel to ignore this message.”

Well, business systems warn you that you are about to do something important and ask you to confirm your actions. This only happens when those actions can have a serious impact on the system, like voiding invoices, exporting hundreds of orders, or doing an inventory count.

So start by carefully reading the question or the warning. Your answer will very much depend on that. Speaking of answers, you must understand your options very well. It might seem obvious, but it’s not always just “Yes” and “No.”

Sometimes no is another type of yes. Let me explain. If you change the price of a product on an invoice, you might get this message: “Would you like to change the price for similar products on this invoice?” And the options you have are: Yes to change prices for all products, No to change the price for the selected product only, and Cancel to do nothing. “Yes” and “No” will both generate a change in the price, but “Cancel” will not.

Error Messages

The advice I gave you for warning messages is still important for error messages: please read the message very carefully! When it comes to error messages, though, this will not help you very much. What does “Boolean parameter for function S471PD in sp_inventory not found” mean?

If you don’t know already, don’t even bother to find out. Let your technical support staff handle it. The problem is that if you press the OK button or close the screen and the message disappears, trying to explain what it was to a support representative will be quite a challenge.

I know you’re busy and cannot wait for the support team to connect remotely and see what’s on your screen. So take a screen shot. No, you do not need sophisticated tools for that; you can just use the Print Screen key on your keyboard and then open any image editor and paste the results (CTRL + v).

For those of you who are capable of fixing such problems on your own, some database providers share their error codes with you, including the possible cause and the action that you can take. Oracle has thousands of error messages, and you can find them all here. For Microsoft SQL Server, go here, type the error number, and see if it helps.

“Miracle” solutions like closing the system and opening it again, as well as rebooting your computer, might work, but are not recommended. For ease of use, many systems do not have a save button, so when you close a window or a software application, it will save automatically. This is probably something you don’t want to do, and most of the time there is no “undo” button or functionality.

Errare Humanum Est, Sed Perseverare Diabolicum (To Err Is Human, but to Persist Is Diabolical)

The Romans did not have business software, but they understood that when you make the same error twice or more, maybe the user is the problem rather than the system. Warning messages can prevent bad or illogical things from happening, but error messages will let you know that it’s probably too late.

Whether or not it’s an error or just a warning message, ignoring it is like failing to listen to your spouse: sooner or later, it will turn against you. A computer cannot make you sleep on the couch (yet!), but it doesn’t understand that you’re (only) human and therefore not perfect, and will not forgive you when you make mistakes (and ignore its warnings).

How do you deal with warnings or error messages? Do you panic, ignore them, use them as an excuse to take a break? Do you think the system you’re using has too many of these messages or maybe not enough?

Identifying Vendor Differences

Identifying the way vendors are positioning themselves in the market may help users find the vendors that most closely meet their requirements. Although there is a great deal of feature and functionality crossover, vendors market their differences aggressively. This may create confusion for user organizations. Differentiators among vendors are generally seen in business benefits, market positioning, and organizational uses, which often translates into how solutions are adopted and used.

BPM Vendors

Leading BPM vendors include Applix, Cartesis, CorVu, Clarity Systems,Actuate, and Hyperion. Analysts forecast that the BPM market will reach roughly $1 billion (USD) by 2011. While BPM vendors provide similar features as their BI counterparts, they primarily focus on planning, budgeting, forecasting, consolidation activities, etc. that center on an organization’s financial performance. This can include sales and marketing efforts, human resources management, and vertical market solutions.

Traditional BI Vendors

Traditional BI vendors include Cognos, Business Objects, Information Builders, and MicroStrategy. In 2005, analyst consensus placed the overall BI market between $4 billion and $6 billion (USD) with high growth rates for subsequent years. BI vendors provide users with the ability to create and leverage data from within a data warehouse, and extract, transform, and load(ETL) functionality that pools data from across various applications to create a centralized data repository. Additionally, reporting, online analytical processing(OLAP), analysis, scorecard, and dashboard functionality provide the user with interface and front-end analysis tools. Lastly, many BI vendors develop solutions based on various vertical markets, or business functions, to meet the general needs of organizations out of the box, and increase their usage across the organization by providing specialized solutions.

Crossover Vendors

In addition to vendors with a strong presence in either BPM or BI markets, several vendors have expanded their product offerings and marketing strategies to compete in both spaces. Included in this list are Actuate and Hyperion, which have crossed over from BPM to include BI. Within the BI space, Cognos and Business Objects are examples of vendors positioning themselves in both markets. These crossovers give users more flexibility. For BI vendors, their expansion into the BPM market gives their customers the advantage of a BI platform, vendor viability, and features and functionality. Additionally, many customers that implement BPM solutions do so as expansions within their BI frameworks.

Operational BI Vendors

Operational business intelligence (OBI) has emerged to provide organizations the forward-looking analysis and real-time decision-making ability lacking in traditional BI. Operational BPM and BI use similar tools to measure and define an organization’s performance, and to compare those defined measurements to identified metrics. However, the focus of each market differs slightly. BPM focuses on the departmental management of metrics, or key performance indicators (KPIs), to manage the application of strategic planning. OBI leverages the use of BI to embed those tools within organizational processes. OBI includes the development of analytics and dashboards to monitor various metrics and provide collaboration tools to interface with various departments. OBI tends to appeal more to operations users and lines of business (LOB) managers, while performance management tools appeal to financial applications users.

Factors Inhibiting the Widespread Adoption of BPM

Aside from market size and current market penetration, the perception of BPM is that it has less presence than its BI counterpart. In reality, BPM and BI each play to a different audience in terms of usage within the organization. BPM’s main focus is financials, including budgeting, consolidations, planning, and so on. However, BPM vendors may offer some similar features and functionality as BI vendors. BI vendors focus on the breadth of their product offerings, which include data warehousing, OLAP, reporting, usage of dashboards, etc. This means that BPM vendors might have to fight to get their “foot in the door,” because BI plays to a wider market.

Installed Base

BPM vendors compete in a skewed market where they are immediately disadvantaged. Why? BI has a large installed base. BI vendors use aggressive marketing campaigns to target their current customer bases and to increase standardization within organizations. This presence often creates a roadblock for BPM vendors. A BI vendor’s installation base and crossover strategy makes the vendor a natural contender for growth within user organizations. BI vendors have greater success because it is easier to sell to a current, satisfied customer than to find new customers. Additionally, many BI vendors develop crossover strategies or market their BI functionality to meet an organization’s BPM needs.

Platform Standardization

Standardization on a single platform by the information technology (IT) department represents a significant obstacle to BPM vendors. One of IT’s goals is the creation of a stable and manageable environment. BI standardization involves the use of a common BI platform to meet the needs of an entire organization. It also allows BI vendors the advantage of expanding their installed bases to generate more revenue and to align themselves more closely with the IT department.

This means that once a BI environment stabilizes, the expansion of that environment may be seen as the easiest route to achieve both IT and business satisfaction. Vendors that try to enter these organizations may encounter resistance due to the additional time and resources necessary to install, maintain, and integrate the new tools within the current environment.

Similarly, organizations have been gravitating toward standardization on an overall IT platform—that is, Microsoft, IBM, SAP, andOracle (MISO). Therefore, organizations are more likely to look to these vendors first for BPM or BI solutions. Although most BPM vendors can integrate within these environments, the seamless transition and the use of a single platform create more ease for the IT department.

Also, the products offered from the MISO vendors are built specifically for these platforms to make, in theory, the job of the IT department easier. Whether other BPM suites are better suited to the organization’s needs becomes inconsequential, as the short-term benefits of an easy integration and general functionality may outweigh the payback of a full-scale project to evaluate other options.

Financial Resources

BPM vendors have another obstacle—the financial strength of BI vendors. With their substantial revenues and profits, many BI vendors have an advantage over BPM vendors in their ability to grow functionality or sales channels either organically through internal efforts, or inorganically through the acquisition of smaller vendors. The development of BPM functionality allows users to use their current platforms with minimum integration or training issues. This provides inherent value to current customers and allows them to take advantage of a vendor’s far reach.

BI vendors that become crossover vendors through organic growth can increase their installed bases and focus on platform standardization. Alternatively, many BI vendors choose to acquire smaller, best-of-breed BPM vendors to broaden their market shares. A recent example is Business Objects’ acquisition of ALG Software. Such acquisitions give larger vendors an automatic inroad into the BPM market. Additionally, by buying out BPM vendors, BI vendors increase their market penetration, customer bases, and overall presence. Once BI vendors do this on a large enough scale, they could dominate the market by default, making it difficult for best-of-breed BPM vendors to compete or to expand their market presence.

Learning Curve

BPM vendors are missing the boat by arguing ease of use against BI tools. User-friendliness occurs due to familiarity with the tool, and not because of its perceived intuitiveness. Training initiatives are required to get users “up to speed” (accustomed to) on whatever tools they will use. Their comfort using the installed applications creates an ease of use that cannot always be duplicated by a new system.

Basically, the unfortunate reality for BPM vendors is that BI is already in the organization. Even if the learning curve for a BPM tool is not as steep, it may not matter. The result is that BI’s use within organizations creates its ease of use over time. For BPM vendors, arguing that they have an advantage in this respect may be a losing battle. A better strategy would be to focus marketing messages on addressing perceptions of BI instead of focusing on a point BPM vendors are not likely to win.

How BPM Vendors Can Accelerate User Adoption

BPM vendors and their messages of aligning corporate strategy and business processes to drive profit have gained momentum within organizations. However, the subsequent actualization of BPM’s strengths has been adopted at a slower rate than its BI counterparts. BPM vendors need to identify and focus their market strategies on differentiating themselves further from BI and on using their key strengths to further penetrate the market.

Vertical Markets

BPM vendors could accelerate user adoption by expanding into key vertical markets. These markets include finance, banking, and government. BPM’s strengths are within budgeting, planning, activity-based costing, and so on. Focusing on these areas may provide BPM vendors with the ability to show user organizations the inherent value of their software in a way that does not compete directly with their BI counterparts. Also, by providing these features out of the box, and because they require less customization, the implementation times are lessened, thus adding to users’ perceived value.

In addition to a vertical focus, the features that BPM solutions provide to target these specific markets could give BPM vendors the edge in relation to more horizontal implementations. Once a vendor becomes known as a leader within a specific sector, its expansion across departments within organizations may be an easier transition. Additionally, based on a BPM vendor’s strengths, it can partner with BI vendors that already have a strong foothold within the industry, but whose functionality may not include BPM. This would deliver benefits to both vendors, and enable BPM to extend its presence within organizations.

Seeing IT as an Ally, Not a Detractor

To ensure successful BPM, the IT department and business unit need to work together. Many BPM vendors abandon the sales effort if IT is involved in the decision-making process. In reality, these vendors may be “kicking themselves.” In many cases the business unit may drive the process and choose the tool. However, the IT department provides the back end support and maintains the platform.

Due to its overall structure, such as being built using a data warehouse and ETL processes, IT’s involvement in BI is great. The expansion of many BI projects is based on IT’s buy-in to support the infrastructure. Because BPM appeals to financial departments, business units that manage metrics, and C-level managers, the involvement of IT might not seem as intuitive.

Vendors positioning themselves solely for business units may be missing the boat. IT’s involvement, and bridging the gap between IT and business units, can help guarantee a vendor’s positive perception by the organization. Alternatively, if buy-in from the IT department is not attained, the internal expertise to keep the system up and running may be lacking, and expansion throughout the organization will most likely not occur.

Tying Key Differentiators to Return on Investment

Within the BPM and BI markets, return on investment (ROI) seems elusive. These two markets have an overlap of various features and marketing messages, but the overall advantages and how to measure them are not straightforward. Common ROI measurements that reflect hardware and software costs do not provide the full picture, as BPM advantages tie in directly to the organization’s strategy. Examples include an increase in sales, lower customer turnover, successful financial consolidations, and so on.

BI can provide the same advantages, where its focus aligns with that of a BPM initiative. This means that although BI can be measured in time versus cost savings, the additional ROI measurements attached to BPM only work if the solution is aligned with organizational strategy. Vendors can use ROI calculators to develop an ROI methodology that highlights their alignment to an organization’s overall strategy to further differentiate themselves from their BI competitors.

Conclusion

The focus of BPM and BI vendors overlaps as BI vendors enter the BPM landscape and vie for domination within the market. Due to their current market presence, BI vendors have a perceived advantage over their BPM counterparts. BPM vendors can learn from BI’s past successes to expand their presence in the marketplace. Additionally, they can leverage their key differentiators to make more inroads into expanding their customer base and to build upon their inherent advantages

Most people are familiar with the term “Web 2.0,” which refers to a second generation of Web development and design that focuses on fostering social networking via the Web. Innovative companies are beginning to embrace Web 2.0 technology as a way to enhance communication, information sharing, and collaboration, thereby allowing them to work smarter rather than harder.

The use of Web 2.0 in business represents a new trend called “Business 2.0.” Aside from being the name of a defunct magazine, Business 2.0 is about using new Web-based social networking applications (many of which were originally created for personal use) in a way that fosters teamwork, customer touches, and internal and external collaboration in a low-cost seamless way.

Unfortunately, many businesses feel that Web 2.0 and social networking are for the younger generation and a waste of time when used by employees. However, once you understand the power of these applications and how to use them in your company, you’ll quickly find that they can be invaluable tools to boost your bottom line.

Following is an overview of the best Business 2.0 tools.

Personal Tools with Business Applicability

Facebook
Personal Use: Facebook enables you to connect and share with the people in your life. Users can join networks organized by city, workplace, school, and region to connect and interact with others. People can add friends, send them messages, and update their personal profiles to notify friends about themselves.

Business 2.0 Use: Large organizations can connect all of their employees, or members, with Facebook. Some are finding an added advantage of using an internal, secure version of Facebook. This has helped organizations to dramatically increase their internal networking and collaboration.

Ask Yourself: Could we use Facebook, or our own internal version to get people to collaborate at a higher level?

Twitter
Personal Use: Twitter is a micro-blogging service that allows friends, family, and co-workers to communicate and stay connected through the exchange of short, quick answers using no more than 140 characters per message. Senders can restrict delivery to those in their circle of friends or co-workers. Users can receive updates via the Twitter Web site or other social networking sights such as Facebook. Young people use Twitter for answering the question: What are you doing?

Business 2.0 Use: Business users could change this question to: What problem are you trying to solve? Several companies have used this as a fast way to solve problems. Hotels, airlines, and airports are using Twitter to pitch services, travel updates, and respond to travelers needs.

Ask Yourself: Could we use Twitter to solve problems faster with our organization or our customers?

Wikipedia
Personal Use: Wikipedia is a free online encyclopedia that anyone can use to find information on virtually any topic. Anyone can edit the content as well.

Business 2.0 Use: A large manufacturing company with engineers in locations around the world increased problem solving and collaboration by creating an internal, secure version of Wikipedia for sharing information on parts and service offerings as well as repair and maintenance instructions. Retailers and suppliers could create a version of Wikipedia to foster education and training as well as enhanced information sharing.

Ask Yourself: Could we create an internal version of Wikipedia to foster better information and knowledge sharing?

YouTube
Personal Use: YouTube is a video sharing Web site where users can upload, view, and share video clips. YouTube displays a wide variety of user-generated video content as well as movie clips, product demonstrations, and commercials. Unregistered users can watch the videos, while registered users can upload an unlimited number of videos.

Business 2.0 Use: Businesses are posting humorous commercial videos to generate interest in their products with great success. The more entertaining it is, the more people watch it. Business partners could create a YouTube like channel for the purpose of educating and training.

Ask Yourself: Could we enhance our marketing efforts as well as general communication by using YouTube?

Digg
Personal Use: Digg is a social news Web site made for people to discover and share content from anywhere on the Internet, by submitting and accessing links and stories. Voting stories thumbs up or thumbs down is the site’s cornerstone function, respectively called digging and burying.

Business 2.0 Use: Many organizations have found this to be a good way to track the most interesting advances in technology or the most useful business news. Large organizations can create their own internal version for sharing what employees consider to be the most useful information.

Ask Yourself: Could we use Digg, or our own internal version, to get people to share their most interesting and valuable Web-based information with each other?

Delicious
Personal Use: Delicious is a social bookmarking web service for storing, sharing, and discovering web bookmarks. It uses a non-hierarchical classification system in which users can tag each of their bookmarks with freely chosen index terms.

Business 2.0 Use: Business users can share their most useful Web sites with co-workers or business partners. If a customer purchases a product, sellers could share relevant bookmarks that keep the customer coming back for more information and hopefully more products.

Ask Yourself: Could we use Delicious to share important new Web sites faster within our organization or with our customers?

Visual Communications
Personal Use: Visual Communications, unlike traditional video conferencing, uses your desktop, laptop, and soon your smart phone to hold a quick, anytime, anywhere videoconference with one or more other people. Travelers who must be away from home are using their laptops in hotel rooms with broadband access and free software such as Skype and AOL Instant Messenger (AIM) to communicate with family and friends to enhance their personal connection.

Business 2.0 Use: Businesses are discovering the power of Visual Communications to enhance the connection with their sales force, business partners, and customers.

Ask Yourself: Could we use Visual Communications to enhance communications internally and externally?

Purely Business 2.0 Tools
Wiki
A Wiki is a collaborative Web page or collection of web pages designed to enable anyone to create a quick web page that allows visitors to search the Wiki’s content and edit the content in real time, as well as view updates since their last visit. Wikis are often used to create collaborative Web sites and to power community Web sites. On a moderated Wiki, Wiki owners review comments before additions to the main body of the topic. Additional features include calendar sharing, live AV conferencing, RSS feeds, and more.

Ask Yourself: Could we use Wikis to enhance internal and external collaboration?

LinkedIn
LinkedIn is a business-oriented professional networking website for exchanging information, ideas, and opportunities. There are over 35 million registered users spanning 170 industries actively networking with each other. For example, large insurance companies use LinkedIn to foster networking with their independent sales representatives. Human resources (HR) professionals from all over the world could use LinkedIn to share best practices.

Ask Yourself: Could we use LinkedIn to expand our organizational network for enhanced knowledge sharing?

Cloud Computing and Software-as-a-Service (Saas)
In cloud computing, some or all of the storage, software, IT processes, and data center facilities you use can exist on your provider’s server, which is maintained and cared for by your provider, giving you 24/7 access from any device anywhere. The cost of upgrading hardware and software, maintenance, and associated IT labor costs can be dramatically reduced or eliminated. Currently, the ideal organization would be any size company that’s facing big investments in computing and communications infrastructure. For example, Amazon.com can give you an entire e-commerce back end. SaaS such as SalesForce.com has acustomer relationship management (CRM) package, SciQuest has a spend management package, and Google, Microsoft and others have a suite of offerings.

Ask Yourself: Could we use cloud computing and SaaS to streamline our IT needs?

Gain a New Competitive Advantage
By reframing the use of social networking technology, companies can increase communication, collaboration, problem solving, and competitive advantage with little cost. Remember, many of these tools are free or nearly free, making them accessible to even the smallest of businesses. Therefore, the sooner you embrace Business 2.0 and put it to work for you, the faster you can penetrate new markets and win the lion’s share of business.

The global economic downturn has been swift, sharp and widespread across all industries. And while the timeframe for recovery is debated on a daily basis, one certainty remains true: companies today face the toughest economic conditions in several generations. The next steps they take over the coming months will determine their very survival. Winners and losers will inevitably emerge, but perhaps separated by only the thinnest of margins.
The Challenge for Small and Mid-Sized Companies

The global downturn has brought about a dramatic increase in business failures over the last six months, and nowhere has this been more apparent than in the case of small and mid-sized businesses (SMBs). Unlike bigger companies, where more cash on the balance sheet provides some degree of insulation, SMBs have seen a rapid decline in cash flow as a result of slowing customer demand and evaporating lines of credit.

There has been a sudden rush to cut spending as companies use every means at their disposal to restrict or eliminate activities that will not improve sales or the bottom-line in the near term. While this has been understandable, cost reduction on its own will not steer a business safely through the economic downturn. Businesses also need to examine how they can safeguard revenues and profitability, and particularly within their own customer base. Otherwise, they are just delaying the inevitable: more painful cost reductions and the very real possibility of sliding into an irrevocable decline.

What Can You Do?

Cutting costs while maintaining growth is a formidable challenge at the best of times, but during a downturn, it can seem almost impossible. To meet these goals, SMBs will need to look for practical solutions that will help them to drive productivity and increase effectiveness across their operations.

Increasingly, companies like yours are turning to business software and CRM applications in particular, to drive through the kind of operational improvements needed to survive and accelerate out of the downturn. By optimising revenue-generating activities at a lower cost to your company, CRM is uniquely positioned to assist you during the most challenging market conditions.

Why CRM?

First and foremost, CRM helps you to protect revenues from your current customers by ensuring that you are delivering exceptional service and safeguarding their loyalty notwithstanding increasing cost pressures. Additionally, by providing deeper insight into your customers, CRM enables you to unearth latent revenue opportunities within your customer base for complementary products and services. It allows you to leverage these opportunities and proactively grow your revenue share through highly focussed business development programmes which replace sporadic interaction with true customer lifecycle management. CRM, therefore, helps you deliver exceptional and personalised service consistently to your customers during these challenging times.

Selling more to existing customers may be the first priority during a downturn, but the important task of acquiring new customers cannot be overlooked. Without growth in customer numbers, any business runs the risk of exhausting its revenue base over the medium term. Selling to new prospects, however, is generally regarded as being five to ten times more costly than selling to an existing customer, so improving sales and marketing efficiency will be vital for growing your customer numbers during the downturn. CRM, and the latest generation of CRM products from companies like Sage in particular, have an important role to play in this regard. In times of recession, CRM solutions can allow you to extend the reach and effectiveness of your new business sales and marketing programs through on-going process improvements, productivity enhancements and significant cost savings.

In a downturn, therefore, CRM enables you to:

1. Grow your revenue share within your existing customer base
   1. Understand the true cross-sell and up-sell opportunity of every one of your customers in order to maximize the profitability of every relationship
   2. Dramatically reduce your cost-per-lead by delivering highly targeted marketing communications to specific customers or customer segments.
   3. Cut the amount of time and cost it takes to resolve service issues without compromising an exceptional service experience that keeps your customers loyal.
   4. Provide decentralized empowerment to your customer-facing staff in a way that will drive their productivity and effectiveness while still retaining central control over headline resource, performance and budget management.
2. Capture new businesses at a far lower cost-of-sale than was possible previously
   1. Lower your cost-of-sale by always ensuring that your sales team is focussed on the opportunities that are most likely to close.
   2. Dramatically reduce your cost-per-lead by delivering highly targeted and consistent marketing messages to specific prospects or market segments.
   3. Introduce marketing accountability, so you can ensure that you are getting the right level of return from every marketing dollar that you spend.
   4. Ensure consistent processes are followed, with clear key performance indicators (KPI) which create solid discipline and greater predictability for sales and service personnel.
   5. Strip administration out of your organization, so there?s less paperwork, errors and task repetition, and less cost as a result.
   6. Provide decentralized empowerment to your business development staff in a way that will drive their productivity and effectiveness while still retaining central control over headline resource, performance and budget management.

Why Now?

Your customers and potential customers are facing identical cost pressures, and they have changed their purchasing patterns accordingly. In many cases, they are spending less than before. But in all cases, they are looking for even greater value for money, and being far more discerning about potential purchases and potential suppliers. As a result, you will need to work a lot harder to earn their business during the downturn. This challenge, coupled with the fact that cost inefficiencies will become even more pronounced as the downturn progresses, means that businesses are likely to experience significant and growing trading pressures as each month passes.

As a result, one of the biggest potential mistakes a company can make at the moment is to continue with in a ?business as usual? mode notwithstanding exceptional trading circumstances. The ?cost of doing nothing?, therefore, is significant. The table below highlights the potential cost of inaction through a series of practical examples. It also examines some of the underlying issues which may be affecting a company like yours and discusses how CRM can help to address them.

The Cost of Doing Nothing – Examples

• A sales executive spends six weeks closing a $50,000 opportunity with a new customer rather than spending two weeks closing a similar opportunity with an existing customer [$100,000 opportunity cost]
• A sales executive with a base salary of $80,000 per year spends 10 hours per week on sales administration [$20,000 direct salary cost per year]
• A sales executive focuses exclusively on a large but poorly-qualified opportunity worth $500,000 rather than pursuing three, well-qualified deals worth $60,000 each [$180,000 opportunity cost]
• At a company with 400 customers on $10,000 per year service contracts, a 30% increase in call queuing time translates into a 15% increase in non-renewal of service contracts the following year [$600,000 in lost revenues]
• At a company, 25% of customer support requests; equating to two FTEs earning $25,000 each per year, could be handled on a self-service basis over the Web [$50,000 direct salary cost]
• At a company where an average deal is worth $35,000 and the sales team closes one-in-five leads, lower than anticipated demand generated by traditional marketing activities translates into a 30% net decrease in inbound sales enquiries from 80 per month to only 56 [$2.02m in lost revenues over the year]

Underlying Issues

• Difficulty identifying quick win, cross-sell and up-sell opportunities within your current customer base
• Lower yields from traditional marketing activities and fewer inbound leads
• Lower lead-to-opportunity conversion
• Fewer sales opportunities in the pipeline
• Too much time spent on poorly-qualified opportunities
• Lower sales conversion rates
• Inaccurate forecasting
• Too much time spent on administration
• Limited visibility on the real-time performance of sales, marketing and customer service functions
• Shortfalls in customer service delivery
• Difficulty identifying which areas of the business are in growth/decline and defining focus accordingly.

How CRM can Help

• Enables you to leverage further revenue opportunities within your current customer base
• Ensures your sales, marketing and customer services resources are being used to maximum effect
• Reduces your opportunity cost
• Reduces your cost-of-sale
• Reduces the cost of your marketing leads
• Ensures you meet customer service level agreements
• Minimizes administration costs
• Protects your net margin
• Protects and grows your revenues
• Enables you to pinpoint underlying issues and take corrective action accordingly
• Reduces the potential for customer attrition
• Ensures that your investments are all aligned to revenue development
• Prepares you for the economic recovery

In a downturn, therefore, CRM should not be viewed as discretionary initiative; it is now an operational and financial imperative for all SMBs. As a supplier and consultative partner for over 5.8 million SMB customers across the globe, Sage has an important perspective on how CRM software has helped companies like yours to address these issues.

How Sage CRM Solutions can help your organization

Lowering costs and driving productivity within your sales operations
Sage CRM Solutions empower organizations to sell more effectively and efficiently during a downturn. Sales executives have a single point of access for calendars, accounts, reports, pipeline management, contacts and call lists; all of which ensure that they are producing more revenue per sales hour. Easy-to-use analytical tools help your sales team to identify latent sales opportunities which exist within your customer database, and then create cross-sell and up-sell propositions accordingly. Automated workflow and pipeline management tools eliminate unnecessary paperwork and ensure that sales teams are optimizing their sales processes and adhering to company-specific sales stages. This means that opportunities will be progressed as quickly and as efficiently as possible. Dashboards and reports provide at-a-glance information to sales executives and managers on performance at any point in time. Integration with back-office applications provides sales staff with access to both financial and non-financial data, for a complete 360 degree view of their customers. Information and capabilities from on-demand services can be added with ease, allowing users to leverage even further productivity benefits and insight. Mobile and offline solutions provide sales teams with access to the information and services that they need to do their jobs effectively; regardless of their location, device or connection, and ensuring that they are as productive in the field as they are in the office.

For your sales operations, Sage CRM Solutions can:

• Maximize cross- and up-sell opportunities
• Improve team collaboration on opportunities
• Improve prospect targeting
• Increases revenue yield per opportunity and account
• Provide real-time visibility on sales KPIs
• Improve win rates
• Shorten sales cycles
• Reduce sales training costs
• Eliminate duplicated sales processes
• Decrease time spent on administrative tasks
• Reduce sales forecast variance
• Eliminate inconsistent sales practices

Lowering costs and driving productivity within your marketing operations
In the downturn, buyers are demanding even greater value-for-money and are exercising further discretion in the products and services that they purchase. Sage CRM Solutions allow you to develop a deep understanding of your customers? needs; enabling you to create a tailored proposition that can be communicated to them through their preferred marketing channels. Sage CRM Solutions provide effective controls for monitoring marketing budget and enable you to calculate direct revenue yields per campaign. In a downturn, only those companies whose marketing messaging and activity is targeted, compelling and timely will survive. Sage CRM Solutions will improve lead quality and ensure higher conversion rates by sales. The marketing team can leverage customer insights to develop retention programs, as well as crosssell and up-sell lifecycle management. Marketing analytics and reporting ensure absolute accountability at all stages in the cycle, which means that the return-on-program investment can be calculated with ease and marketing budget is optimized at all times.

For your marketing operations, Sage CRM Solutions can:

• Enable marketing programs to be planned more efficiently and effectively
• Improve campaign response rates
• Enable accurate measurement of marketing campaign ROI
• Ensure customers and prospects receive the right marketing message at the right time
• Reduce marketing administrative overhead and enables marketing budget to be tracked and managed
• Decrease the cost per customer acquired
• Reduce marketing campaign lead times
• Reduce cost per lead

Lowering costs and driving productivity within your customer service operations Sage CRM Solutions will enable your company to roll-out Web-based customer self-service quickly and cost effectively. From here, users can service their own information needs, track data and update the system without the requirement for customer service assistance and at the time and place of their choice. Additionally, you can maximise the synchronisation between your service agents and your customers, ensuring that cases are progressed in a timely manner and in accordance with service level agreements (SLA). Knowledge management capabilities make it easier to capture remedies related to specific issues which may recur over time; making sure that agents are not duplicating effort. Reports and dashboards provide detailed analysis on metrics such as call volume, case resolution times, communications, follow-up statistics and escalation so management can quantify the benefit of the agents to the business and to their customers.

For your customer service operations, Sage CRM Solutions can:

• Provide web self service
• Increase productivity of agents
• Ensure issues never ?get lost between the cracks?
• Enable agents to capture further sales leads from customer interactions
• Improve response times to customer service requests
• Increase customer retention
• Reduce customer support costs
• Reduce the average time to resolve an issue
• Decrease the number of customer cases that are re-opened
• Decrease the number of customer service escalations

Enhancing command and control over the entire organization for your senior executives
Sage CRM Solutions provides your senior management with enhanced central control over operations and budgets, helping them to manage these areas more effectively during challenging times. Reporting and dashboards provide instant insight into business performance across multiple criteria. Senior managers have the ability to validate forecast data with full drill-down to the underlying opportunities. Real-time visibility on revenue and budget variance ensures that decisions are based on accurate information, and corrective action can be taken earlier in the cycle when it has maximum impact. Integrated with your back-office applications, CRM provides a complete view of the business and streamlined end-to-end business management capabilities.

For your senior executives, Sage CRM Solutions can:

• Drive revenue growth
• Improve profitability
• Provide improved support for strategic decision-making
• Enable real-time corporate performance management
• Drive productivity across the entire organization
• Improve business/shareholder value
• Reduce margin erosion
• Reduce cost-of-sale
• Reduce customer attrition
• Reduce administration cost
• Eliminate process bottlenecks
• Reduce budget variance
• Reduce performance variance

Introduction

If positioning is one of the most misunderstood concepts in business-to-business (B2B) software marketing—which it is—part of the problem is that it can seem vague or difficult to develop and apply. Are we talking strategy or tactics?

Who can dispute the importance of positioning in a strategic sense—communicating the unique benefit of your software product? In Crossing the Chasm, Geoffrey Moore writes, “Positioning is the single largest influence on the buying decision.” Obviously, he’s talking about strategy, not tactics. Let’s look at both.

A position is a mental space that you can “own” with an idea that has a compelling meaning to the recipient. In that mental space, the product’s benefit and the customer’s most important needs meet, and hopefully form a meaningful relationship.

Moore describes a position as a buyer’s shorthand for the best solution for a particular problem. What Moore and others haven’t done is tell you how to go about establishing a position. Some experts say there’s no formal way to position, no step-by-step method to follow to stake out that mental space. I disagree. Shy away from marketing consultants or advertising agencies that won’t take you through a structured positioning exercise.

Look for a company that teaches a process, or methodology, that other clients have used successfully to differentiate; this company should also be able to demonstrate how the process reduces the cost of creating marketing materials. The objective is to develop a marketing message strategy that most effectively expresses your position. A strong message strategy will accelerate the marketing-sales process, because it will heighten awareness and convey the reasons that lift you into the top rank of the prospect’s consideration set. From there, you’re at least in shooting distance of making the sale.

Where To Start?

To paraphrase the ancient Greek dictum “Know thy product—and your customer.” Be ruthless. No wishful thinking, guesses or conventional wisdom. Eventually, you’ll see the intersections between the truth about your product and the truth about your prospective customers. The positioning process is complete when you have developed a message strategy that accurately and compellingly describes your unique ability to satisfy your customers’ problems and needs.

A solid message strategy, the foundation for all your marketing, consists of the positioning statement and three, carefully chosen, support points. All four address key target market problems by stating a benefit, such as, why the target buyer should care about your product, service or company. A message strategy can be extremely detailed and is like a recipe for all marketing communication. Follow the recipe, stirring the ingredients and taste testing as you go, and voil, you’ve got a dish that’s hard to resist.

The Positioning Statement

Your positioning statement becomes the central idea and theme underlying all your marketing activities. A positioning statement is a short, compelling declarative sentence that states just one benefit, and addresses your target market’s number one problem. It must be unique, believable, and important, or your target market will ignore you and your product.. Here are examples of good positioning statements:

• “Microsoft Windows 3.0 transforms the way you use a PC.”
• “PeopleSoft Financial Management Solutions make every employee financially accountable.”
• “Microsoft Business Solutions - Navision Financial Management frees you to focus on your business.”

A good positioning statement easily adapts to various media—from magazine ads and trade shows to sales meetings and customer calls. It should be simply stated and works in every aspect of your marketing effort. So in summary, a positioning statement is

• Short—aim for fewer than twelve words (not counting product name)
• Simple, non-jargon language
• Adaptable to various media
• A compelling statement about the one, big benefit
• A conceptual statement not necessarily copy
• Supported by three additional benefit claims, and
• Satisfies four evaluation criteria (unique, believable, important, and useable)

Support Points

Once you’ve developed a positioning statement, you need to bolster it with three supporting claims. These benefit statements must satisfy the same criteria as the positioning statement itself and reinforce the importance, uniqueness, and believability of the positioning statement. They provide the reason to believe the central positioning statement. Most importantly, support points must support, not compete with the positioning statement.

Use support points to unfold your story in more detail. They help explain your positioning statement, and answer questions like “how do you do deliver the promised benefit?”

Demonstrate Your Support

Supporting points also provide a structure for product demonstrations. While the positioning statement articulates a high-level benefit, the claims made in the supporting statements should be readily demonstrable. That is, in just a few steps, you should be able to show how the product delivers concrete benefits.

Once you have developed benefit-oriented supporting statements, you can drill down into as much detail as needed to provide a platform for product or company communications. A standard outline format makes it easy for writers and other communicators to see the message strategy’s benefit hierarchy, and to take full advantage of your work. Here is where the tactical elements emerge that enables you, for example, to create ads targeting a special segment, or to stage a truly relevant trade show event.

The positioning statement, along with the supporting points and related detail, complete your message strategy. Now you need to execute it. Over and over and over.

A message strategy makes it easier to deliver the same message across all marketing media including web sites, brochures, advertisements, and presentations to investors, industry analysts, and prospects. Repetition is one of the most important factors in claiming a position and giving it staying power. Remember, you’ll get tired of your message strategy long before your target audience does. Give it a chance to work.