I read today of Bill Gates's sad last day at the helm of Microsoft. I don't blame he and Ballmer for their tears. I am sure that they share a lot of history and life's losses are always tough.

But for me, I know neither of these gentlemen, the best story of the week was the email that was posted on the internet in which Gates takes his team to task over their software's usability. The email has been described as a rant and eating your own dogfood, and there is a bit of that in it. But for me it was just satisfying to see the CEO of Microsoft do what I always fantasized the CEO of Microsoft doing: Reading the riot act about the software to their own.

Now, I know Larry Ellison of Oracle and Zach Nelson of NetSuite have both adopted the 'eat your own dogfood' approach; meaning, Oracle and NetSuite both run their businesses on their own software, respectively. But this email takes the whole process one step further. Maybe there are emails out there from Larry and Zach to the troops, but we have not seen them, and probably never will. But I sure hope that once in a while they communicate the issues that average users face with the software.  

It has taken me a while to find the time to sit down and write this and that's a shame because the lag gives the impression that our intro to OpenAir was less than it was. Though my procrastination may not impress, the OpenAir demo certainly did.

First, just let me say that the breadth and depth of functionality in OpenAir was amazing. They have the professional services automation (PSA) piece down cold. Of course like any application there are many things that practitioners would like to see added, but the functions that I saw were well conceived and executed, representing the complete PSA loop from project conception to resourcing, billing and revenue recognition.

I also thought the UI was very well done. It was only what was needed and no more. Simple to understand and navigate, the system also breaks down to a set of configurable roles so that each user has a subset of functionality. This is as it should be.

So overall we had an excellent impression of the OpenAir Software as a Service (SaaS) offering. One thing that really impressed was the ability to manage human resources in a project context. This is one of the functions that traditional software suites, like Oracle and NetSuite, have not added until much later in product development.

OpenAir's excellent demo has led me to think about the role of best of breed software, software that serves a specific business model or function, and how it changes in the SaaS economy.

In the past, on-premise best of breed software provided a lot of work for the IT department. They would wrestle a best of breed AP system to work with a best of breed G/L. Likewise a best of breed HR/Payroll system to G/L. On premise best of breed software was more geared to business functions than business models. Also, it was much more limited in its scope. It did one thing really well. In fact when the first software suites started to enter the market they actually offered themselves as a set of best of breed modules. Solomon, for example, took up an entire bookcase shelf with separate books and diskettes for G/L, AP, AR, Purchasing, Payroll, etc..

Eventually large companies grew tired of the best of breed approach and they started to implement software suites. These provided an integrated system, and less work for the IT department. But there were always outliers that did not really fit, and the functionality was wide but not always as deep as needed.

The newer SaaS best of breed offerings are more complete in how they tackle the requirements of a specific business model - OpenAir for professional services automation - or business function - Concur's SaaS offering for corporate travel and expense management.

In OpenAir's case, I think that it answers the need that many have raised for better deep vertical applications in markets that have been under served by software vendors and their broad offerings. The Deal Architect, for one, often raises the point that there are still several markets, like Health Care, where the large software vendors have no interest. In fact I have seen it reported that SAP is no longer interested in trying to serve these markets - the costs do not justify the revenues.

Also consider for a moment the challenges that NetSuite faces in integrating the OpenAir system with its own: Both offer billing and revenue recognition, so how this integration will work is still a big question mark. NetSuite will continue to sell OpenAir as a standalone system with a Web Services integration to NetSuite. Eventually the goal is to also offer a completely integrated system.

But in the meantime I have to say that a best of breed offering like OpenAir has an awful lot going for it. Its functionality is much deeper than what NetSuite would ever have offered on its own, and with a tie to the back end of NetSuite for Accounting, and to the front end for CRM, it looks like a true winner.

I can see other vertical market SaaS offerings integrating with NetSuite for its CRM, ERP and Web Presence, and, just as in the OpenAir case, adding value to both systems. And as both systems as SaaS, the user company does not have to worry about installing and maintaining multiple systems on multiple platforms. Hooked together with web services, it's really not that hard to run two SaaS solutions: One with deep vertical market functionality and the other with end to end business process integration.

How NetSuite handles the licensing is also going to be a challenge. If they integrate the OpenAir product completely it's bound to add a fair amount to the price, but then do you charge all users a higher rate or just the users of the PSA functionality? Or do you come up with a different pricing model?

Well, pricing issues are down the road a piece, but in the meantime we are already fielding calls from prospects interested in PSA with NetSuite.

We are attending a Partner Conference call and Product Intro meeting on Wednesday, tomorrow, concerning NetSuite's purchase of OpenAir, the software as a service offering for Professional Services Automation Management.

Should be interesting, and afterwards we will share some insights into how the combination and future integration of these two systems will work, and what it might mean for you - should you run a professional services organization.

Just a quick reading of the OpenAir site leads me to believe that this will be a great addition to NetSuite. We have heard many of the requirements from our clients that the OpenAir software meets. Looking forward to this.

Of course the merger of these two companies says something pretty significant about the future of Software as a Service, or SaaS. First, a SaaS leader like NetSuite is on pretty solid footing, both financially and technologically, when it can manage an acquisition like this. Second, we think it speaks volumes to how SaaS offerings can accomodate market verticals in ways that on-premise software cannot. When NetSuite integrates OpenAir it will be able to offer a complete solution for the professional services vertical, but only for customers who want it. With on premise software, whether you pay for it or not, you install it all, and sometimes you even have to patch a module, though you do not use it.

It amazes me sometimes how much easier it is to use SaaS.

Take a few minutes to check out Dan Farber's interview of Tasty Baking's CIO Brendan O'Malley. Tasty bakes and distributes millions of cakes, cookies and pies every day on the East Coast. They are moving from their 90 year old plant to a new facility in the near future, and O'Malley has to manage the IT challenge. Wow, what a challenge.

In this 2 minute outtake, O'Malley discusses the multiple, disparate systems which first must be discovered, and then assessed for value, before the move to the new facility. Small and Medium Enterprises (SMEs) should take note: This is what happens to the typical company as it grows and grows up. If you have the time, listen to the whole interview. Later, O'Malley discusses putting the company's IT requirements into one basket, meaning integrated systems, and how this reduces cost and risk.

As soon as I read the blurb about this interview I knew it would be a great way to make the point, again, about how fast systems can multiply at a business, and how difficult they are to manage. If you are running a small growing enterprise make sure that you purchase systems that help you to achieve competitive advantage while not ultimately draining away resources. Systems, and their advocates, often advance the benefits, while, since another department bears them, costs are forgotten. Systems must benefit the entire organization as much as possible: This is the only way to honestly gauge costs and benefits. The result will always be fewer systems of greater value.

By the way, he IBM commercial at the beginning is also hilarious and worthwhile to think about. Execution really is everything, regardless of the system or the idea.

We do a lot of work with companies who implemented NetSuite by themselves or were implemented by a third party that does not make NetSuite their business. As a result, many of these companies are oblivious to how to really make NetSuite work for them and meet its promise. This is a shame.

We worked with one of these companies recently and it made us realize how little some clients take advantage of NetSuite. This particular company has a number of technicians in the field and they have clients asking for assistance all day. Currently they have a dispatch person call the technician and direct them to the client's issue.

The owner was lamenting the cost of buying each of the technicians a fancy I-phone or similar device in order for them to receive and work client problems. We pointed out a simple way for all of the technicians to stay connected to the office and they were delighted.

Basically, you simply have to setup case rules so that the system knows how to route a case when it comes in. Each technician can take care of specific types of issues, or a geographic area, or something similar. Rules and the territories they define can be drawn in more than we can recount here.

Then, create a support@xyzcompany.com email address and drive all of the emails to this inbox to the NetSuite email address that the system generates for you. Essentially, you are sending of the emails into a NetSuite inbox, using support@xyzcompany.com as an alias. This is not difficult to do.

Finally, use a marketing campaign to contact and explain to all of your customers how to contact support by email. As the emails come in they will be routed based on the company's information and issue, for example. The system automatically emails the technician to whom the case was routed and the technician receives the email via what ever device they have, like a blackberry, or some other similar device.

The email to the technician can include all of the client's important information, from address to email and phone numbers. So they don't have to have access to the NetSuite system per se in order to continue to have important communications with it. Now, if you want more functional access you can always go for the I-phone or even a mobile notebook with a satellite internet connection. But with a simpler device you can still stay connected and keep the client's needs front and center.

I have a very similar discussion with every client on the subject of data conversion. It goes like this:

Me: Data conversion is very difficult and time consuming
Client: I don't understand - doesn't NetSuite have a way of doing this
Me: Of course it does, in fact there are several ways to do it. Method is not the issue...
Client: So what the problem? We'll give you the files and you load them up.
Me: The data is the issue..
Client: NetSuite can't do conversion, I don't understand?
Me: Yes, NetSuite enables conversion. The data is what makes it difficult...

And on and on. So I ask myself, how do I explain this to a business person? Or, another way of putting it, why is so difficult to explain a fairly straightforward technical point to a business person?

The answer, I believe, goes straight to the heart of implementation success. If you can understand this answer then you have a great chance of understanding NetSuite processes and a great chance of using the software to your advantage. Your investment will pay you back ten-fold over time. However, if this answer does not ring a bell for you, then you are going to really struggle, not only with NetSuite, but with any system, suite or no.

The answer, I now understand, is a single field. Here, let's enter an email address into NetSuite (because showing is at least 3 magnitudes better than telling).

How about tom @gmail.com? Think that will work? How about tom@gmail.comm? How about tom#gmail.com? How about ... the other hundred ways that email addresses have been entered into the legacy system. Do you think that any of these will work? The answer is no. NetSuite understands that email address is a very important data field and they have created a lot of error control in order to make sure that values entered are correct. The email must have the correct syntax: tom@gmail.com works, as does tomm@gmail.com. But none of the other examples cited above are allowed. Spaces, the wrong @ sign, the wrong extension, all of these throw an error; and if you take a 100 line legacy data file I would be willing to bet that 33 of the lines have some incorrect syntax like this in the data. If not in the email, then in the address, or in the telephone, or the web address, or in the name, etc..

So why is this such an important point to understand? Why is your understanding key to NetSuite implementation success? Because conversion and its challenges unmasks the real character of the computer. At the physical level, a computer disk is a huge number of discrete electrical charges. At the logical level, a charge is a 1, the lack of a charge is a 0. The one is a Yes, the 0 is a No. Every single thing on the screen is there because it answered a series of Yes/No questions. The color of every pixel is the answer to a series of 1s and 0s, a series of Yes/No questions. Every field, task, process is an ever lengthening series of Yes/No questions, cleverly strung together by the developers.

Let's be honest, we are all in business, and in business there are a lot of Yes/No questions, and there are a lot of Maybes and Sortofs and Kindofs, too. This is why some business people struggle with implementation and why some skate through it: There are no Maybes in the computer. There is a lot of built in flexibility built into the product, so you may choose among several different ways to, for example, process an order. But in the end, there will ultimately be a Yes/No question. Love it or hate it NOT: It is simply the way computers operate.

Implementing NetSuite requires a lot of decisions, and you will have to be ready to say Yes/No over and over again. You will have to remove your business person hat and put your engineer's hat on, at least for a while. One story I remember from my Wayne State days is the story about a building under construction. A structural engineer and a construction engineer meet in one room; two business people meet in another room. All four of them look at the same plans. They all note an anomaly. The plans call for a 110 foot building, while the blueprint calls for a 112 foot building. The two engineers get out the calculators and start banging away, determined to find the error. The two business people agree that 111 feet is not that big a difference either way; they shake and march off to lunch, taking the next quarter's revenue projections. Which building would you rather work in? Right.

NetSuite, by the way, has a lot of flexibility and with the right solution you will be able to conduct business the way you want, that way you have found competitively advantageous. But it's really important to understand your process and to think about it as a series of yes/no questions. You will have a more successful implementation if you understand the system and work with it instead of against it.

In this article, the authors do a good job of detailing some of the necessary prereq's for software implementation, and if you read the subtext closely, they are telling you that you are going to have a lot of Yes/No decisions to make, so get all the help and support you can muster.

No good will ever come from trying not to lose. That's the key takeaway in the Microsoft / Yahoo story.

Everyone knows by now that Microsoft has walked away from their bid for Yahoo. The story has been covered everywhere. The real story is that Microsoft needs to re-evaluate its franchise and start to build with purpose again. For whatever reason Microsoft has moved to a defensive position, always looking to protect their current franchise. Like any entity taking a defensive position, it's easier to defend when its more narrowly defined.

This explains why Microsoft is so intent on defending the desktop. Certainly, they have  a strong position in desktop apps, but don't they also have a strong position in the network and the server? Why did they decide to defend the desktop so urgently when their franchise is really client - network - server. Taking a less narrow view of their market would have led them to pursue a broader range of options when the Internet became a reality.

Similarly, they have recently invested in Facebook, a social networking site. By itself this is ok, but seen in a larger lens it looks again like a defensive move. Meanwhile Micorsoft owns 4 different enterprise applications, and noone in the enterprise market has yet integrated social networking functions - which are the same as collaboration tools in their underlying defintion - into an enterprise software suite.

A company the size and heft of Microsoft has to be able to manage threats to its business. We all understand this. But they must also take some challenging directions to new innovations, new markets, new ideas.

The interesting thing with Microsoft is that they have so much positive cash flow, you must wonder if this is a positive thing or not. When you have so much, does it remove a sense of urgency and create a sense of entitlement? They certainly did not fight for Yahoo like they just had to have it. Oracle ended of buying Peoplesoft for $26.50 after an initial bid of $16.

Is SaaS becoming too popular? For one company, on the verge of a new product offering, it appears that the answer is Yes.

It was announced the other day that SAP's Business By Design product will be delayed for several more months. The reason given is technical in nature, as this article notes.

However, it seems odd to me that a company the size of SAP, with its enormous cash reserves and obvious technical acumen and talent cannot deliver a new software product after several years of effort. It also seems strange that they are reducing their investment in the product. If you are having technical problems, wouldn't you want to continue making the technical development investment?

So what is really happening? First, for those of you who may not have heard of BusinessByDesign (BBD), this is SAP's first attempt at a pure SaaS offering. A full ERP Suite delivered over the Internet as a service. Much like NetSuite in its intent, though with less of an e-commerce offering.

Also, it's worth noting that BBD really validates the SaaS marketplace and makes it clear that while NetSuite is an up and comer in the ERP/CRM market, it has started to cause some indigestion in the executive dining room of its larger competitors.

OK, our take on the BBD delay, or BBDD, starts with the observation that for a company like SAP with a lot of products already in the market, a SaaS offering is not a top line revenue addition. A SaaS offering will probably mean almost as many lost customers of the other products as new customers of BBD. A SaaS product is major disruptor.

For example, SAP sells Business One, a product that they purchased many years ago to sell into the Small and Medium Entreprise market, through the partner channel. Business One is often sold in the ASP model were the client purchases an on-premise license but then has the infrastructure hosted and managed at a data center. I can imagine that many of these customers would be interested in BBD, but I bet the channel partners would be a little sore about losing the hosting bucks to the mothership, not to mention the additional software and hardware that Business One users are forced to buy from the channel - CRM for example.

On the other hand, there are a lot of customers of SAP's main product R3 already running ERP on their own premises. I have to think that these customers are also interested in BBD. Running an on premise system sounds like a great idea when you consider just the cost of software and hardware. It's the soft costs of human talent that make on-premise software so expensive. The Total Cost of Ownership, or TCO, of on-premise software has not been lost on the managers of SMEs who, after all, can take a quick glance at the P&L every month to see $ in the IT Salaries line.

When you consider the current SAP customer base, whether R3 or Business One, you can quickly see that there must be some real concern at SAP over losing customers from one product to another. Interestingly, in the US, SAP now runs campaigns on TV and in print - The Wall Street Journal - dedicated to the proposition that smaller business can be successful with the high end R3 software. This looks like concern may have drifted into outright conflict. At any rate, it must be noted that when a customer switches, as many will, from SAP product X to BBD, it will be a zero sum game: One winner and one loser. Channel partners are not going to like this at all.

You can really take two views of where this leaves SAP. On the one hand SAP is in a bind. They have a new SaaS product but can't release it because too many customers would switch, creating too much conflict in the channel. At the same time, BBD also forces an on-premise software vendor to talk openly about the total cost of ownership of business management software when you buy the software, the hardware, the people, etc. and maintain it all yourself. There is a huge channel edifice in place that rakes in cash from these on-premise requirements, and BBD threatens to blow it up.

On the other hand, you could say that SAP was pretty smart about this. They have a product on the brink of release, which I am sure has probably put the brakes on other potential competitors coming out with an offering, but by not releasing it they manage to keep their channel mollified.

Either way, the main takeaways from the BBD experience are that SaaS, in a full suite, not just Best of Breed, or "focused applications" as they are now called, is ready for prime time and NetSuite, still the only player in the game, will benefit. And, second, we are on the verge of understanding the Total Cost of Ownership in a way that NetSuite users and partners have understood lo these many years, but which the larger market of on-premise software has always denied. When the biggest on-premise business application vendor validates the TCO of SaaS to the market, watch out. It's a stampede.

In some recent conversations with Andy Seidl of MyST Technology Partners, (Disclaimer: Their technology runs this blog), I came to the thought that the whole practice of creating a corporate website is passe. Unless you require a shopping cart, in which case your must have an item catalog that you would like to exhibit, there is really no particular need for a typical, static, plain html corporate site.

Think about it like this: The average corporation spends $1000 to $2000 per page for a corporate site of roughly 50 pages. That's $50,000, if you catch a good deal! What are you getting for this? Essentially, the ability to forget about your online presence. Once the site is built, everyone gets back to work, no longer worrying about not being able to point to a credible online presence. In other words, the corporate site is like a flag planted on the moon: Yes we have been there, but there is no other signs of life. Many corporate sites don't even have the ability to capture an interested party's particulars. So, come and look, but don't let us know who you are. Seems strange - like what would you think if a stranger just showed up in your office, stared at you for a few minutes and then left? (OK, we have all had strange work mates - that's not what I mean).

But we do need an online presence, you're thinking. Sure, of course, without question. Look at this blog that you are currently reading: This is online presence to the nth degree. The ability to post dynamic content, provide a comments channel for readers, capture their information if they would like to talk in person, feed them new content automatically through RSS, and so much more. This is not a static site, this is a corporate advertorial. This gives you the ability to speak directly to people who seek what you have to say. They are interested, believe it or not, to hear about what you do, how you do it and why you do it.

You can also provide them with other interesting content here. For example, if you are a law firm with a patent law practice, what better place to talk about your expertise and also aggregate interesting articles about patent law from other sources than your website. On a typical site it would mean creating an article and sending it to a web developer. Three weeks later, and many $ later, it would appear in your website. Now consider a blogsite like this one: Write your own topical post for the blog, decide when to publish it, aggregate other interesting articles about the same subject, create links within the post to other sources, and when it becomes public it will automatically feed into the online world of your readership. You are now a leader in you field. How's that work for you?

The more I think about this idea of blog as primary internet presence, or primary website, the more interesting it becomes. Now I must say that SightLines did not follow this path. When we began blogging, almost 3 years ago now, it was anything but a mainstream practice. In fact, blogging still has a bit of a bad reputation because of the lunatic political fringe that tends to take more advantage of the medium than others. But this is really starting to change over the last 6 months or so. More and more mainstream writers have entered the medium. The corporate world will follow, and sooner would be better than later. I am not sure what we will do with our primary website, but we'll probably keep it and continue to work this blog and the primary site together.

After all, it certainly does not hurt your internet presence to have both a primary and a blogsite. The two do wonders for your organic search results, to be sure. So if you already have a corporate site and do not want to kill it, then I would say that's not a problem. Keep both. But if you are just getting started and do not yet have your $50,000 corporate site then I would tell you to hold on their big guy. You might want to take a look at what's next in internet technology. There will soon come a day when not having a blogsite will be akin to not having a website at all.

8. Design 'Design' Projects

All brand owners start with a few products, and then the market begins to ask for more. First it's women's sandals and then men's sandals and kid's summer shoes. It's only a matter of time. This is great and exciting, when the force of inertia sets in and your brand starts to roll as if on its own. But it also costs time and money to design new products, or even new brands, with all of the attendant packaging materials, artwork, etc.

When this begins in your market, take the time to start putting your design projects into the enterprise system where at the very least they can be properly tracked; or, in the best case scenario, they can be quantified and measured. How much does it really cost to bring a new model to market, from original idea to a prototype ready for production run?

If you find yourself using a lot of spreadsheets to organize, track and measure brand initiatives then it's time to act and start using your enterprise suite for project management and measurement.

Apart from using the project to manage the work, it should also be a repository of the costs associated with product development. After all, if you have to sell 10,000 pairs of a sandal to break even, you have your work cut out for you. Don't wait until it's too late to find out where the costs end and the profits begin. An integrated enterprise suite enables the aggregation of important financial information at the project level, and you should be measuring your efficiency here also.

9. Share Data

Be prepared to share data:That would be an important message in Brand Ownership 101, if such a course existed. It may be inbound, like EDI transmissions from a large retail store; or it could be outbound, like a file of sales orders to fulfill sent to a 3PL partner. There are more possibilities in this area than we can name or enumerate in this paper, but suffice to say that you must be prepared as a brand owner to manager serious data transfer from and to all points in the brand eco-system.

Couple of key points: You will need an EDI partner to work with you and through your enterprise system. You may also need another access point to your enterprise suite, for non-EDI transactions, and for this we would strongly recommend web services, if at all possible.

The subject of data sharing also brings to mind the need for partners/brokers/dealers, vendors and customers to have access to your enterprise suite. Not the entire suite of course, but those records to which they are privy. This might sound like a 'nice to have' but for a brand eco-system where communications and collaboration are the life blood, an enterprise suite optimized for partners, vendors and customers is really a requirement. Receiving a sales order via the fax machine is ok when you have a few orders a day. But when you have hundreds of orders and each one requires negotiation and collaboration with the eco-system, and executive approval in many cases, the fax machine breaks down.

Maybe you think your brands aren't to this point in the sales cycle yet, but it won't be long. If you walk into the office one day and see a stack of sales orders on the fax machine you are in trouble and it's going to take some time and energy to get out of it. First you will need to train partners and customers in using your technology to place order or request quotes. Then you will have to work through all of the logistic issues with their setup. You would be better off coming to the realization early on that enabling your brand eco-system to access your enterprise suite right from the beginning is a better idea than hiring high priced accounting talent to re-key sales orders.

10.  The Brand Eco-system, or Eco-system as Brand?

It is normal for brand owners to think about their brand as distinct from the 3rd party companies and business processes that bring it to market and put it finally in the hands of the end user. But be careful not to work at odds with your mission to create a known brand of value in your market. Each link in the chain from design project to manufacturing, logistics, warehousing and distribution adds value to the chain, and it is this chain that creates and supports the brand. Keeping those links tight and strong is really key to long term brand viablity.

In this short white paper we focus on the system and business needs for brand owners. Our conclusion, remarked throughout, is that successful brand ownership requires managing and collaborating with a brand eco-system of customer, suppliers, manufacturers, partners, and third party logistic providers to provide brand value to the end user. The level of management and collaboration required for brand management bespeaks the need for an integrated enterprise suite wherein you have complete visibility into your brand's many moving parts. This is not only a good idea, but a necessary one. We have also argued that the Internet with its sweep and ubiquity is natural ally of the brand owner, and they should use it at every step.

Best wishes and we'll be looking for your brands, soon.

5. Keep a Sharp Eye on Inventory

It's not nearly as easy as it sounds to put a product into the hands of a paying customer, especially when your model requires several third parties along the way. The only way to do it successfully is to manage inventory from the point where it is but a glimmer in your eye until the credit card swipe.

This is not easy or even possible if you are using several different pieces of software to run the business. And if you're thinking that different systems can simply be integrated, or integrated simply, please stop and disabuse yourself of these ideas. Consult any experienced information technology professional with whom you are acquainted and they will tell that no two systems are easily or well integrated, unless they start out this way.

With manufactures and distribution warehouses spread out over great geographical areas, it is vitally important that you understand lead times and safety stock levels, and that you continue to assess these over time as your business grows. Just as important is the seasonal inventory question. Sporting goods will start to jump a couple of months before the high school season begins. If your container arrives after the first game you are going to be sitting on a lot of inventory for a long time.

Managing these inventory levels is much easier when all of your purchasing and sales data is in the same system, enabling the system to do a lot of the work for you. Also, if you are selling to other businesses, then your sales pipeline also gives some very important information about the stock levels that you should be carrying.

The key point here is that in order to manage your brand eco-system with authority, you need to take a enterprise wide view of your systems and processes. Don't let various stakeholders cordon off pieces of your enterprise for their own narrow purposes. Frankly, sales people prefer to use a CRM that is not part of the enterprise suite, because they like autonomy, and are not fond of too much performance measurement. But a stand alone CRM means that your customers are now on their own island and this eventually creates huge supply problems.

Remember: Managing your enterprise means managing your brand-ecosystem. The best, most meticulous managers are not going to manage isolated islands of information well. A well functioning enterprise demands an enterprise suite. The enterprise suite also demands attentive management to create value. Don't stack the odds against yourself.

6. Automate Pricing

Customer pricing and vendor pricing are often the Achilles heel of brand owner organizations. Focused on the sale, as they should be, brand owners often develop a lack of pricing discipline in the market. For example, landing those first customers is important and doing whatever it takes may be necessary. But even as you negotiate prices product by product and customer by customer, try to maintain some rationale in the process.

One way to do this is to keep an historical record on the system of the various opportunities that you are working and the quotes you create. And instead of just adjusting the per unit price, attempt to work a volume price break in conjunction with price tiers. Do whatever it takes to land the business. But try to work the deal into an understandable model. One of the great pain points that we see on every implementation with a brand owner already in business is that they have negotiated prices with every customer and done so without any rhyme or reason.

Again, do what you need to land the business, but try to configure a price model as you move through each deal. Eventually your pricing will start to take shape and you will see patterns develop, based on product line, division, channel, etc.. When you at last have a system that can manage a complex price model you will be able to implement it and start to forecast not only sales but profitability.

7. Exploit the Search Engines

As we mentioned earlier, everyone now understands the need for a corporate web site, much like we all need business cards. The difference is that while all of us understand the use and meaning of a business card, most brand owners have not really asked themselves what the use of the website is and what it means in the larger context of business. Every day, the Internet becomes more important to the world of commerce. If you want your brands to occupy the mindshare they deserve, then a strategy to exploit the search engines is a must.

We hand someone a business card, or staple it to a brochure. Simple enough. But how do we hand someone our website? We should know the answer to this question because, after all, a website costs more than a business card and, day by day, has more gravity in the business world than all the printed marketing material we can muster.

There are two acronyms that every brand owner should know: SEM and SEO. SEM is search engine marketing, and SEO is search engine optimization. SEM is a strategy, with wide ranging tactics, to market your brand via the Internet search engines, like Google, Yahoo and Ask.com. SEO is the goal of optimizing all that you do on the Internet for the search engines.

Without becoming entangled in a lot of jargon, let's offer a few important ideas about what you should be doing online and how you should be doing it. First, your corporate web site, regardless of its main purpose, information or e-commerce, must be built within a context, and that context is the words and phrases that are key to your brand.

You have heard of the elevator pitch? The 30 second explanation of what your company does and why is a well known exercise for new business owners to sharpen their focus. The 'keywords' list is the same thing. A keyword is what someone types into Google as a search term. If you are selling sandals, then you should have a list of all of the keywords that describe your product from 'sandal' to 'beach shoes' and everything in between. What's the point? When you build your site you need to write about your business, brands and products using these keywords; you need to optimize your site for the search engines that will eventually 'crawl' through your site and then unite you with people searching for what you offer.

SEM is a topic greater than this white paper, but the other thing that you must think about is marketing on the Internet. A lot of business people think about marketing or advertising as 'paying for space' in one way or another; but there are other, and we would argue, better ways to create your brand marketing using the Internet. As mentioned earlier, your company has a fascinating story to tell and when you tell it your search engine rankings will take off. Hello customers!

Yesterday we started the publication of our Lessons Learned whitepaper in installments, and we continue today with parts 2, 3 and 4.

Again, the purpose of this whitepaper is to introduce some important considerations about enterprise software to brand owners. Let us know what you think.

2. Know Thy Business: Divisions, Product Lines, Warehouses

One of the most important decisions that you will make in brand solution configuration is how you will measure the business. This is one area where starting at the end and moving backwards is very helpful.

How you will eventually slice and dice the data is very important. What does this mean? Well, ask your self these questions and you will start to get a feel for what's at stake:

> How will you sort team members' responsibilities?
> Who is in charge of what products and sales channels?
> How will you measure their results in their areas?
> How will you budget the business?
> How will you look at profitability? By Product? By channel? By product Line? By Product Line within Channel?
> How will you compensate channel/product managers and members?
> How many warehouses will you manage, and where will they be located?

These are just some of the questions that you need to consider. Each Brand Owner is going to have a completely different set of answers, depending on their markets, their product line, their channels, and, interestingly, their volumes. Our experience has taught us that expected sales volumes and expected $ volume per sale are very important determinants for how the business structures the software for optimal business analysis.

Companies looking to enter Brand Ownership must take the time to consider these questions before beginning configuration. Your business plan should help to guide you. Those Brands Owners who are already operating should think about whether their current structure meets all of their needs.

Over the course of time, your decisions on how to measure the business may change. This is to be expected. You must build flexibility into the system at the same time that you build structure. These are not opposing goals: Prioritizing your requirements and understanding the system's native functionality helps you to use the system wisely and keep some options open for future development.

3. Know thy Debits and Credits

The enterprise suite is, after all, an accounting engine as well as a tool for CRM, Inventory Management, Partner Management, etc. Creating a useful Chart of Accounts (COA) is very important not only for the accountants, but as well for anyone else who needs to measure various aspects of the business. It's important to think about the story that financial reports will tell you about your business.

Brand Owners may purchase raw materials, move them to the manufacturer and pay for the manufacturing process; or, the manufacturer may purchase the raw materials, handle logistics, and the brand owner purchases finished goods. These are very different scenarios and each will require a different chart of accounts.

Using the accounting system to its fullest extent will enable your business to transact not only the normal business of buying and selling, but also the unusual transactions of the Brand Owner's eco-system.

For example, many brand owners who deal with large retailers must pay these customers for co-operative marketing. This can be any number of things, from planogram space to catalog advertising fees. Managing the customer payment process and tracking it over time is important to customer profitability metrics. You should try to understand and test these transactions prior to project sign-off. They may require configuration that had not thought of when processing standard transactions.

On the other side of the ledger, some brand owners receive funds from vendors, also for a wide variety of reasons. Setting these transactions up correctly requires time and effort to understand the requirements exactly and test thoroughly.

Having a well crafted chart of accounts is the first step. Using it correctly requires that you understand how the system operates to take full advantage of the COA. Setting up Inventory and Cost of Goods Sold accounts may not be very helpful if you do not understand how to use the Purchase Order.

4. Know Thy Channels

Many brand owners begin with one channel front and center. They focus on an e-commerce market, or perhaps one or a few large retail stores, or catalog sales. At the end of the day, however, we have seen all brand owners move to a multi-channel sales model. Though your initial focus may be one channel or another, it's wise to consider other channels when you start to implement. You may eventually have to measure the business from a retail/wholesale perspective, and without some mechanism in place this will not be easy.

After you have considered the several sales channels you will attack, consider how you are going to attack them. This is a perplexing process for many brand owners and the main reason why most them focus on just one or two channels: They plan for what they know and are comfortable with. But in the end, your brand will end up in many channels and you should begin to understand the processes of each as soon as possible. Direct sales, partner/dealer sales, direct to consumer sales through your own catalog, e-commerce sales are just a few of the ways that brand owner products are sold.

All of these require different processes and different moving parts. Selling via partners will require the ability to calculate partner commissions, for example. And of course sales channels also determine how you decide to distribute product. Third party logistics companies work really well in some channels and not so well in others.

In all cases, a sale is the transaction created by marketing. As you consider various channels, ask yourself how you are going to announce your brand in the market via these channels. In many cases, the brand owners that we meet are very focused on the sale and for the marketing, well, not so much. Everyone now understands the importance of web site to the company, but this is the least you can do with internet marketing. What the world wants to hear is your story and it's a very interesting story. Go to #7 for more details.

Lessons Learned

1. Integrate the Brand Eco-system

2. Know Thy Business: Divisions, Product Lines and Warehouses

3. Know Thy Debits and Credits

4. Know Thy Channels

5. Keep a Sharp Eye on Inventory

6. Automate Pricing

7. Exploit the Search Engines

8. Share Data

9. Design "Design" Projects

10. Eco-system as Brand

Synopsis

SightLines Consulting implemented the Solution for Brand Owners in the Sporting Goods, Sports Apparel, Office Product and Candy/Confection markets over the past three years. Our experience with the business processes and requirements of brand owners sharpened our interest in the brand owner market and forged a complete brand owner solution; not a one size fits all model, but a flexible, tailored configuration, enabling Brand Owners in many industries to manage their brands and their businesses in the hyper competitive world marketplace.

Underlying the Solution for Brand Owners is our awareness of the importance of managing the relationships that support the brand: We call this the Brand Eco-system. Your products may be sold in a variety of channels, and your software needs to support all of them.

Then there are the vendors who manufacture, ship and distribute your products to the sales channels. Keeping the cost side of the business aligned with your brand market also requires a flexible and well crafted software solution.

This whitepaper details how our Solution for Brand Owners enables Brand Eco-system management and competitive advantage in the marketplace.

1. Integrate the Brand Ecosystem

Brand owners require a complex eco-system of vendors, manufacturers, designers, 3rd party logistic and distribution providers, and partners before their branded product lands in the hands of an end user customer. Managing this eco-system is the key to brand ownership, and management of the eco-system requires an integrated, enterprise database.

Multiple systems for various roles in the eco-system ultimately ends in failure and more re-work than value added effort. An integrated eco-system requires an integrated database. The only way to understand long range supply needs is to have sales forecast and inventory in a single system. Sounds simplistic, but it is the rare company, let alone brand owner, that can claim to have laid this foundation stone.

There are many ways to communicate today. Telecomm is pervasive. Our experience is that brand owners tend to rely upon the telephone and an email application to manage most of their communications. But do these tools enable collaboration? Sure, to a degree, but their focus is on a single back and forth exchange; or, in the case of email, a single thread.

An integrated system can manage these communication threads, bringing them all together into a single database where customer, brand and vendor records exist together. Collaboration requires a focus on multiple exchanges from multiple entities within the eco-system, with a reviewable history. 

Recently, one of the world's largest companies, and a leader in their industry, filed a lawsuit against the German software giant SAP. The plaintiff, Waste Management, Inc.,  contends that they were duped into investing $100 Million in an SAP software solution for the Waste Management and Recycling industry that was untested and defective. This is a rare bird indeed.

It's not that unusual for smaller companies to make a public complaint about a software failure. Smaller companies are normally run by the owners, and if they want to vent in public, they are going to damn well vent in public. When working with the Small Medium Enterprise, one must take special care - a good lesson to remember.

However, large companies, where the owners are represented by a board that management must answer to, rarely ever talk about failures of any kind, software or otherwise. More politically savvy, executives at large companies realize that in the end any failure will reflect back to them. In many, or actually most, cases when large, software implementations go bust, both sides eat some humble pie and move forward with nary a public utterance.

So to see such a public complaint filed by a company the size of Waste Management is both rare and surprising. What inspired it is quite interesting. Waste Management contends that they were given a series of demonstrations of the software product over the course of eight months that were actually rigged. The software that they saw was just a 'mock-up' thrown together for the purpose of the demonstration, with no 'real' foundation in reality. If true, this is one of the most incredible allegations that I have ever heard in the software industry, for two reasons. First that a software company would do something that stupid, and second that a prospect would not have the wherewithal to see that there was no engine under the hood - those engine noises are just a tape playing.

Software and software implementations can fail for an infinite number of reasons. But there are some simple strategies that you can take to make the most of your investment and keep the implementation on track. For small and medium enterprises that are considering a substantial investment in software, please consider the following appeals to the better, and wiser, angels of your nature:

1. Use a consultant. Self-serving, yes of course. But if I sold canoes and you wanted to cross a deep, fast river, I would do my level best to sell you a canoe. I like to eat, and sleep in a warm bed, as much as the next guy, I won't deny it. But more importantly, I do not want to see you drown. Selling you swimming trunks would be selfish and a disaster. Outfitting you properly for the challenge ahead is value we all profit from.
2. Prototype early and often. You can use a free live account of SaaS software, like NetSuite, in most cases. But a free, live account does not by itself suffice. See #1. Hire a consultant to at least help you to understand in 'system think' what your processes are and then help you to prototype them on the system. We do this for many clients: Business Process Analysis and System Prototype are the first two, and the most important steps, in the implementation process. Once you see how the solution goes together, you won't have any problem finishing the implementation yourself, provided you have the time to spend doing system configuration and training. But for gosh sakes, don't just jump in the river and start swimming furiously. You'll be surprised at how easily you sap (no pun intended) your strength.
3. Be realistic. It's software folks, and there are going to be holes and defects. There is not a business software anywhere at any time that fully meets all of the challenges that are thrown at it. Human beings can find more ways of doing business in a day than software engineers will ever understand in a lifetime.

But letting the perfect be the enemy of the good is a failed approach, also. One of the important things that all business managers should have before going into a system implementation is a list of objectives, all with a value for importance to the business. After you assess the software, ask yourself if it has met your objectives. The thing that we often see is that a company goes into the implementation with no list of objectives, and by the time they call us they are frustrated because they have discovered some nagging issue with the software. Quite often this issue has been blown way out of proportion as they have no business objectives for the implementation and therefore are not seeing the issue in the context of the entire software implementation. They are focused on one or two minor points to the detriment of all else.

After almost 20 years of doing software implementation, the one thing  I can say with all honesty is that it is not getting any easier. It is a rigorous job. It requires a ton of patience and understanding. Finger pointing is a waste of effort. We make a strong attempt at collegiality with our clients because we know in the end that we will have to lean on each other to make it work, and it's hard to form a team with people you are not getting along with. But there has to be honesty first and foremost. If either side feels like the other is hiding something, then there is going to be trouble. No one profits in these cases. Except the lawyers. What a waste.

If you would like to read more about the SAP and Waste Management Case, you'll find a good overview, here.