How Personalized Marketing Can Increase Your E-Commerce Sales

Point, click, buy? If only it were that easy.

In his book Successful Advertising, penned in 1885, Thomas Smith famously said that a prospect has to see an ad 20 times before they are finally convinced to make a purchase.

This typical customer journey – from ignorance of a product or service to a sale – is sometimes condensed into the “Rule of Seven,” stating that, on average, people need to see something seven times before making a purchase.

What does this have to do with personalization? Well, considering the mercurial nature of Internet surfing, you can’t always count on your web visitor to stay on your website long enough to see your message seven times. In fact, you might be lucky if they see it just once!

This is where “remarketing” comes in. By creating advertising that “follows” a visitor once they leave your site, you create that all-important frequency that drives them from an initial impression (one they may not even have remembered!) to a purchase.

But this is only one form of personalization.

Personalization is also important while prospects are on your website, and particularly if they return to it. The first visit, if tracked, provides a wealth of information that can be leveraged for subsequent visits. Where did they go? Does their journey align with any other previous customers?

In other words, if your current visitor has shown an interest in A + B, and 90% of prior customers who liked A + B also liked C, shouldn’t we show the new customer C, as well?

Personalization can be even more powerful once a customer is logged in, and we know (presumably) even more about them. If their purchase history shows they bought Widget A, we wouldn’t want to show them Widget A again. Rather, we might show an accessory for Widget A. Or, if we know they bought Widget A two years ago, we might recommend they upgrade to Widget A 2.0.

Surprisingly, relatively few companies are making use of the incredible power of personalization to boost eCommerce. According to Econsultancy & Adobe, 63% of companies surveyed do not have the ability to target personalized web content in real time. Even more shockingly, roughly 1/3 of those surveyed didn’t believe it was important!

Another aspect of personalized marketing is, of course, email. According to Forrester 30% of eCommerce repeat purchases come from email marketing. This can be everything from “empty cart reminders” to emails tailored to the behavior of almost any (registered) user on the web.

The upshot of all this? Not just eCommerce success, but a rise in customer satisfaction, as well.

According to a research by Invesp, 53% of online shoppers find customization to be valuable, and 45% of shoppers prefer to shop on sites offering personalized recommendations.

If that isn’t enough, personalized ads have a conversion rate 10 times higher than “one-size-fits-all” ads. Which means customers are finding what they’re looking for.

Talk about an undeniable recipe for success. When vendors and customers are happier, it’s a “win-win” that creates a good experience for both parties, and can even boost brand loyalty in the process.

Michael Buczkowski is a digital marketing leader and executive who has been helping global brand marketers navigate the new digital world by successfully operating at the intersection of marketing, data and technology. See his full bio.

Mike Buczkowski | Partner
Strategy, Sales & Marketing

mike.buczkowski@techcxo.com
+1 (312) 420-4398

Mapping Your Customer’s Journey: A MarTech Adventure

How do your customers find you? And once they find you, what do they want?

Knowing the answers to these questions gives you extremely powerful insights into understanding how to convert visitors to your website into paying customers. Just as importantly, it also helps identify what your visitors don’t want.

What frustrations are your prospects experiencing while looking for what they need? As we know, the moment a customer becomes frustrated, they start looking for another business that understands their needs better.

“The moment a customer become frustrated, they look for another business”

Fortunately, no matter how varied each individual prospect’s journey may be, most prospects follow a familiar pattern. Their journey is defined by “touch points.”

Common touch points along a journey may be as simple as this:

The first touchpoint, “Google search” (68% of all searches are with Google) is addressed by implementing an SEO strategy that ensures people looking for your product or service actually find the relevant pages on your website.

The second, “Landing page,” is addressed by User Experience (UX). Do they find what they’re looking for immediately, or do they have a sea of information to swim through? If they see too much information, or information that’s not relevant to what they’re searching for, they may back out immediately. (This is called “bouncing” away from your site, without clicking any further.)

“Do they find what they’re looking for immediately?”

The third, “Browse site,” delves deeper into UX. Once they find what they’re looking for, do they know what to do next? Is the messaging compelling, as to WHY they should choose you?

Is the cart visible? Does it work properly? Are there discount codes visible, to add incentive? Some companies, like VistaPrint, have elevated the practice of discount codes to a fine art, offering discount codes seasonally, for first-time shoppers, repeat shoppers: almost every reason imaginable.

The fourth, “Email signup” – assuming this is part of your desired user journey – begets obvious questions: Do they know WHY they should sign up for emails? Do they know how? Is it easy to opt in (and opt out)? All of these smaller moments will not only affect the likelihood of a sale, but will also affect the user’s impression of you and your brand.

The fifth, “Receive email,” asks whether the email they’re receiving is truly relevant to their needs. In the case of an educational institution, were they browsing nursing courses, and now receiving information on piano lessons? Are the emails graphically pleasing? In a sea of competitors, do they compel a purchase?

Finally, “Make purchase.” At this stage, the first cycle of marketing is complete. But an effective marketing strategy demands the customer be marketed to again, with content relevant to their first purchase. In fact, thanks to that first purchase, we have a much more informed idea of what truly matters to this customer.

Mapping the journey encompasses analytics and personalization. By mapping user flow, from landing pages to subsequent pages, we form an idea of whether our goals are aligning with actual user experience. (Are they going to pages that have low value simply because of the way our navigation is organized? Conversely, are the most important pages hardest to find?)

In terms of personalization, the “2.0” approach is to guide each user individually based on what we know about them from their actions once on the site. This is accomplished by assigning a cookie to each visitor, which forms a history of where they go on the site, and then populates the next pages of the site based on that history.

This creates a truly “customized” experience for prospects.

Only by listening carefully to our customers — by seeking to understand their entire journey — can we serve customers effectively, by helping deliver what they truly need.

How to Get the Best Offshore Results

In his 2005 Book, The World Is Flat, Thomas Friedman sums it up pretty well. “There is just a job, and in more cases than ever before it will go to the best, smartest, most productive, or cheapest worker—wherever he or she resides.”

My first experience with offshore teams was well before that. Albeit not the best experience, it got better as we figured out how to work together. As distant economies bring the best and brightest online, the world is flatter. To succeed you need to make it a smaller world, too.

[This article was adapted from Kevin Carlson‘s original blog post.]

To best manage these challenges, follow three basic principles to deliver top results.

1. Lead With a “Single Team” View

Nothing kills productivity faster than “us and them”. Unfortunately, a lot of companies experience this. . And it exists in companies with only local resources! With offshore teams, that chasm occurs even easier.

When everyone is working together toward a common goal, you have a team. A team functions best when there is unity and everyone is accountable to the same standards.

In my work, I see this most often between business stakeholders and technology teams. It’s a lot worse when there is another “us and them” on the technology team. Fragmented teams always struggle. Teams with many fragments rarely produce what they set out to build. In the rare case such a team delivers something of value, its perceived value varies to a high degree.

To build a cohesive team across many time zones, always treat every team member as if they are in the same room. One’s physical location should not influence importance, impact, or influence.

A technique that I use to keep this in perspective? Imagine that team members on the phone are working from home that day. Sounds simple, yes, but it works.

As a leader, you set the tone. You set the example. Others will follow and those that don’t, regardless of location, may not be best for the team. Sometimes, you’ll have to make tough choices. When you do, make them early and move on.

2. Define a Single Process for team interaction

Technical projects can be difficult enough when coordinating tasks and information. Business stakeholders, product owners, user experience, developers, QA, DevOps. Everyone needs to know where things stand and what’s coming next.

Whatever method you use to manage the process, make sure it’s easy to use. The more areas in which it’s easy to go around the process, the worse things will get.

I’m a big fan of using tools to create a workflow that — at a glance — shows an accurate picture of things. But be careful, as many out-of-the-box workflows are useless. They are simplistic and a general free-for-all with no permissions or data requirements. In other words, they fool you into believing you have something useful when you don’t.

Don’t Be Shy About Workflow Stages

Take the time to define the process with as many stages as it takes. Permission transitions to specific project roles. Require data when moving items from one stage to the other. And above all, let everyone see where everything is!

On larger teams, create specialized role-based dashboards, too. For example, create a view for the QA team to see what’s in development, what’s ready for QA, what’s in QA, and so on. The combination of these dashboards allows for team-wide accountability and role specific focus.

If you find a workflow isn’t effective in a particular area, change it. Every situation is different and requires monitoring to be effective. I promise, you won’t get it right the first time. I never have.

Keep it Transparent

Avoid the temptation to deny access to dashboards. It sends a message that some information is only for some. It erodes trust, visibility, and feeds the “us and them” mentality.

Of course, there are areas where information is very sensitive and requires care. Security and compliance related issues are examples that may dictate limited access.

3. It’s All About Communication

Communication is the glue that holds a team together. Doubt it? Spend time in a company where leadership sequesters themselves. These organizations become weaker and more brittle by the day.

To make sure the glue is strong, communication must be consistent and frequent. And most important, don’t forget that great communication begins with great listening skills.

You’ll have team members that don’t understand an approach or a goal. They may flat out disagree. Any they may be right. Listen and you will be a more effective communicator because you understand the team.

Don’t Slack on Frequency

Leaders will sometimes slack off on communication frequency. It’s an easy mistake to make. Always remember that a lull in communication provides fertile ground for doubt.

If you’re in a leadership role, turn this around to understand it. Image a dedicated team member that stops contributing ideas. They’re less vocal during stand-ups. It would be natural to think something might be wrong.

That’s exactly how the team feels when leaders stop communicating.

Maximize time overlap

When working with teams across many time zones, it’s important to provide overlap. Even with a 12 hour divide, adjust working schedules to make sure there is ample discussion time.

Teams that don’t get a chance to talk are rarely the most efficient. People will act on assumption instead of understanding. In my experience, this increases churn and rework.

Use video conferencing

There’s nothing like being face-to-face, even if it’s on a screen from thousands of miles away. Body language is necessary to pick up on nuances. Phone calls hide body language. Email hides voice inflection. The less cues one team member is able to give another, the less able they are communicate well.

There are a lot of free services that enable this. If you have a larger team, paid services can provide the best experience. And, if you think you can’t afford it, wait until you see what miscommunication costs.

I recently worked with a company that had screens and cameras in team rooms. Quite often, a remote team member would connect and be “on screen” most of the day. It was like they were actually there.

A Flat, Small World

Things have changed since I entered the technology world. Global competition has made us sharper and global collaboration makes us all better. It is indeed, a flat world.

Using proven practices around team identity, process, and communication increase effectiveness. They serve to make our world smaller, which serves us all better in the end.

Before the (Banker) Bake-Off, Cultivate a Great Chef or Two

They were immortalized in literature by Tom Wolfe as “Masters of the Universe” in Bonfire of the Vanities.

Michael Lewis described them as “…a breed apart, a member of a master race of dealmakers” with “vast, almost unimaginable talent and ambition” in his book, Liars Poker.

At one time, 44% of Harvard’s MBAs went into finance and more than 1 in 10 became investment bankers.

But, following the financial collapse in 2007, and the dissolution of famous firms like Salomon Brothers and Bear Stearns, a lot of talent left moved to hedge funds and private equity. Venture capitalists replaced investment bankers as the media’s celebrated dealmakers.

The Economist even wrote stores like “Banks? No, thanks!” detailing how graduates from leading business schools were more drawn to consulting and tech firms than investment banking.

While they may not be seen as the other-worldly beings that they were in times past, I continually promote investment bankers as a wonderful resource for entrepreneurs, executives, board members and investors. Moreover, having worked a variety of bulge bracket and boutique firms, I find investment bankers to be among the most generous in sharing their knowledge and insights to develop long-term relationships with prospective clients.

I find investment bankers to be among the most generous in sharing their knowledge and insights…

If you want to know what’s really going on in your industry, talk to an investment banker. And, while most business people think about investment bankers demonstrating value in the context of transaction execution, you should cultivate these really smart people before the bake-off… that is, a capital event like an IPO or a sale.

Here are six reasons why.

1. Information about industry trends. Investment banking firms tend to organize their marketing efforts around an industry focus, they have likely competed for engagements or potentially represented similar firms in your sector. The preparation for these projects is intense and requires significant research and background information. Meetings with bankers can provide an opportunity to learn about important industry trends and recent events and these discussions provide you with a low-pressure opportunity to learn more about their qualifications.

2. Insight about your competitors. Investment banking firms frequently attend industry events and may meet with management teams of businesses that compete with your business (whether they win the mandate or not) and often have insight into the business of your competitors.

3. Advice on your business strategy. Investment bankers see lots of businesses and exits. This experience provides them with a knowledge base to render sage advice on strategy, positioning, pricing, and distribution, etc. Coupled with their knowledge on the values of the businesses upon exit, investment bankers can be an excellent source for advice on strategy.

4. Introduction to executives. Investment bankers active in your industry sector are networked with executives or aware of executive changes. As your business grows and evolves, you may be looking to add an executive to your team. Investment bankers can be an excellent source for introductions to potential hires.

5. Referrals to sources of capital. Venture capital and private equity firms frequently engage investment bankers to work with their portfolio companies. As a result, they have a significant number of contacts with these capital sources. As a growing business, you may find that you require additional capital that does not warrant an engagement of an investment banker. Bankers are happy to provide referral to potential sources of capital as it endears them to you as a prospective client and equity sources for providing a potential opportunity.

6. Feedback on your pitch. Since Investment bankers have the opportunity to review plenty of company pitches, they can provide great feedback on the company presentations. Sharing your pitch while developing a relationship with an investment banker is an excellent opportunity to learn about their qualifications in potentially representing your business in the future.

Take note of tombstones for recent transactions in your sector as to which firms are active and target developing relationships with these firms. In addition, BankerAdvisor is a resource for discovering and learning about investment banking and M&A advisory firms that may help you identify firms with a track record focused on your industry sector.

Mike Casey

Mike Casey is TechCXO’s co-founder and a partner in the Finance/Operations practice. See his full bio.

Are you leveraging fractional C-level leadership? Maybe you should

Does Fractional Leadership work?

Fractional leadership is the practice of leveraging external experienced C-level executives to fill leadership gaps in your business in a part time capacity. The fractional executive works on a contract basis and usually with more than one company at a time. The concept is gaining popularity as an effective way to grow and scale your business without the commitment and risk associated with bringing on a full time C-level person. The nagging question for many CEOs, however, is how can this seemingly counterintuitive approach really work? “I need leaders who are 100% committed to my business and wake up everyday thinking about how to make us succeed – right?” This article will outline how this fast-growing approach can and does work – and not just as a “plan B” to fill a short-term need until I find a full-time leader, but as a strategic approach to scaling your business, preserving your equity, and driving superior performance.

So, let’s take a look at what makes the model work.

Ruthless Focus

Think about how much of your time is actually spent on things that only you can do? Similarly, think about how that applies to your leadership team – how much of their time is actually spent on tasks or strategic activities that only they are capable of doing? In my experience as a full-time C-level leader, I can’t count how many times I would think back at the end of the day and wonder what I actually accomplished that really moved the company goals forward. All the meetings I would get pulled into, all the customer issues that I “had” to deal with, all the little interruptions for for “urgent but not important” things – when you add it all up, there really isn’t much time left for the real “C-level” stuff you need to be focused on. Paradoxically, this is the key to how the fractional model works. As a fractional leader, there is simply no time for little stuff. If you are working with a company for just a couple of hours per day, you are forced to ruthlessly prioritize only the very most important items on your list. If your day-to-day task list doesn’t align precisely with the most important strategic initiatives for the company, you will fail – there is simply no time for anything else. Similarly, in order to accomplish 8 hours of tasks in a fraction of that time, you are forced to relentlessly delegate and leverage the typically under-utilized talents of the team under your direction (which isn’t that what we are supposed to be doing as leaders anyway?).

So…. when you actually compare progress on the “big rocks”, on the things that really matter, between the fractional and full-time leader, the fractional model doesn’t seem so improbable. Not coincidentally, these principles of focus and delegation are the same principles behind the concept of the “4-hour work week” and how great leaders can still be very successful in far less time than what is traditionally expected.

Expertise

Hand in hand with that deep experience, and more specifically, the experience working with a large number of similar stage companies, comes the ability to get up to speed very quickly. The time to become effective for a fractional leader is dramatically shorter which means that less of your money is going towards ramp up and that results can be achieved much faster.

Objectivity and Ego

The fractional leader comes into an engagement with one goal in mind – success. The consulting world is unforgiving and any engagement that is anything less than success will have a negative impact on future business. The fractional leader is not looking for titles, promotions, or stature within your company. They are objective and unencumbered by the typical dynamics that surround traditional leadership teams. The result is an ability to do what needs to be done and to say what needs to be said. All too often, the problems holding back a team are rooted in personalities and behaviors of the people involved – there is great benefit in having a leader in the mix who can identify and address the real problem – even if that problem is you.

So, When Does a Fractional Leader Make Sense

As effective as a fractional leader can be, it is not always the right solution and to be honest, is not typically the right long-term solution. The scenarios where this approach is especially effective include:

Too early for full-time – your company is starting to get traction and you need the expertise of a C-level leader but you don’t have the money or the need for a full-time person.
Coaching / Mentoring – your current full-time leader is not delivering. They need the help of an experienced leader to come alongside and help get them to where they need to be.
Unexpected departure – someone just left (or was terminated) and you need someone on the ground tomorrow to keep the team together and moving forward.
Assessment – You are not sure what you need. The gut feel is that the leader in place is not working but you need someone with the relevant experience and skills to come in and give you an objective assessment.
Critical inflection point – whether the company is experiencing significant growth or looking to raise money (or any number of other critical transition points), you know that it is going to take some different skills to help get you to that “next level”.

The value proposition of a fractional leader in scenarios such as these is unparalleled. The take-away here is that you don’t have to solve these challenges on your own and there is another option besides finding and hiring the perfect full-time leader. Know that there is a network of very experienced fractional “operating partners” who can come alongside for a period of time to help expertly solve the challenges in any aspect of your business. Help you get things going in the right direction and get the right team and processes in place to sustain that. And then help you find the right full-time leader to carry it forward.

Greg Smith is TechCXO’s Managing Partner for the Product & Technology Practice. See his full bio here. Or, learn more about interim CTOs and CiSO-as-a-Service.

CEO vs CTO: Fixing a Broken Marriage

CEO vs CTO – Fixing a Broken Marriage

Many times IT dysfunction in a company comes down to the inability of the CEO and the CTO (or CIO) to effectively communicate. When you talk to the CEO, the problem is that, “The CTO just doesn’t get it. Every time we ask for something the answer is ‘no’ or that we need more resources to do that. There just doesn’t seem to be a sense of urgency, or even an understanding around what are obviously the most important goals of the business! I think we need to go in a different direction.”

And from the CTO’s perspective, the typical assessment is that, “The CEO just doesn’t get it. She has no idea how much is on our plate and what actually goes into building the platform – and if she would just stop changing direction every week, we might actually get something done!”

The reality is that there is truth in both perspectives and until both parties accept that, you will never get the productivity that you want and need from your technology team. So… for the CEO, once you admit that the CTO might not be clueless, here are some practical things you can do to repair this relationship and, in turn, maximize the output of your delivery organization.

Accept the Difference – The CTO most likely doesn’t think the way that you do, hang in the same circles you do, dress like you, talk like you, etc, etc, etc….. It is not surprising that you might have some challenges communicating effectively! If you can accept that and not try to force a round peg into a square hole, that alone will go a long way towards improving the relationship. But to take it one step further, spend some time together outside the direct context of business. Get to know the person. Have lunch together, go out for a beer after work, maybe you both like to play golf, do something! It might not help but then again, it might make all the difference.
Get Alignment – make sure that business goals and objectives for the coming month/quarter/year are well understood by the entire technology team and that the plans for that team are in alignment with them. Even better, include the CTO in coming up with the strategy and goals for the business – you will secure much better buy-in and you will likely get some great insights to help shape that plan.
Trust – Unless you want to learn all things technical, you must be able to trust your tech leader. If you think that team is not working hard enough or not getting enough done or you think estimates are too high and you try to micro-manage your way to justifying that belief, it will backfire – guaranteed. If you don’t trust the CTO, get someone in who can validate or assuage your concerns. If the concerns are valid, replace the CTO ASAP and move on.
Stay the Course – Yes, you must be “nimble” and the company may need to pivot from time to time and you must also be responsive to your customers, however, none of this is an excuse for being all over the place. Developing software (and other complex IT systems) is a lot like building a house – there is way more that goes into it than just the parts you see and when you change direction (let’s move this room over there), that will likely result in expensive “foundational” changes. Continual changes like this result in greatly diminished productivity, morale problems, a shaky platform that will not scale, and, ironically, to you thinking that the CTO cannot deliver.

At TechCXO, our fractional CTOs/CIOs have significant experience helping to bridge this gap and make the CEO/CTO relationship functional. From advising the CEO to mentoring the CTO to even taking an active leadership role over the Technology team when things are beyond repair, we can help you get to where you need to be from a product development and technology standpoint.

Greg Smith is TechCXO’s Managing Partner – Product & Technology. See his full bio and contact information here.

Acquisition Integration: Systems and Technology

Part Three: Systems and Technology

Companies seek to accelerate revenue growth or enter new markets through mergers and acquisitions. They spend a lot of energy and resources identifying the right targets based on synergy and combined financial models.

But oftentimes, the real value of the acquisition is not realized. M&A typically fails during integration. All that effort and capital spent on acquiring the target is wasted.

There are multiple factors from a technology perspective that can cause problems for acquisitions. In this segment, we will look deeper into those challenges and talk about how best to approach this important aspect of acquisition integration.

What are the things to be integrated?

To kick off the conversation, it is helpful to identify the various systems and tools that need to be integrated as part of an acquisition. It is easy to minimize this aspect of integration because the people who put these deals together (and who are likely reading this article) don’t live in this world. However, there is a lot to consider here and if not managed and executed properly, the anticipated timeline and synergies of the acquisition can be missed.

The items below represent the core systems and tools relevant to any acquisition scenario:

ERP / Accounting / Expense reporting
CRM
Phone Systems
Internet & Networking
Email / Spam Filtering
Single Sign-on (SSO)
Network Drives / File Sharing
Backup Systems
Chat / IM Tools
Web & Video Conferencing
Mobility (cell phones and hot spots)
Internal Servers / Hosting
Website
DevOps Tools (remote desktop support and system monitoring)
HR Systems (time tracking, performance management, PTO)
Marketing Automation Systems
Project Management Tools
Helpdesk Tools

If the companies involved deliver a technology product, the integration effort must also take into account those products, the teams that develop them, and all the tools and processes that are part of that development effort. And while the items listed above represent a formidable integration challenge, bringing together multiple products and product development teams is an even greater integration challenge.

Integrating Core Systems

There is no set “right” way to do this, however, I do think that there are some guiding principles that can help you focus first on the things most critical to the overall success of the acquisition.

Shared Identity – once the deal is done, focus first on the tasks that will allow the combined organization to appear as one – both internally and externally. Internally, make it easy for the new teams to communicate with each other and access shared resources. This ties back to chat/IM tools, SSO, access to shared drives, and a unified phone system – things that makes it easy for everyone to communicate and feel like they are on the same team. Externally, the new entity should appear integrated absolutely as soon as possible. Shared email and phone systems are a couple of quick wins in this category, but the website is the big thing here. Depending on the nature of the businesses being merged, this could represent a large redevelopment effort, however, a staged approach is a good way to tackle this. Start off with a quick project to either brand the acquired site or to redirect the acquired site to the main site. You can then follow along with the full project to redevelop the main site to reflect the new, combined entity.
Organizational Efficiency – this category of tasks represents most of the work but also is where a tremendous amount of the anticipated synergies will be realized. It includes systems such as ERP, CRM, HR systems, etc.., each of which is a significant project unto itself. To determined the best approach, it is important to start with an in-depth and independent assessment of the current systems in place in each entity to determine requirements, capabilities, and effort to convert. And don’t always assume that the acquiring company’s systems should be the ones that win out. Either way there is a significant conversion effort at hand, so maybe there is an opportunity to replace an internal system that you have been struggling with – either with the corresponding system already in place with the acquired company or maybe even one that is new to both.
Technical Efficiency – many tech teams will jump to the items in their world as the place to start after the acquisition. While there is certainly inefficiency in different hosting facilities, different helpdesk tools, and different remote desktop support tools, that inefficiency is mostly limited to the IT team and does not impact the rest of the organization. This is why this category of tasks should be last. To do this work last may require carrying additional IT personnel longer than planned, but it is worth it in order to get the combined business operating efficiently as the new entity as quickly as possible.

Integrating Products and Product Development Teams

If the acquisition is bringing together companies with either competing or complementary technology products, there were synergies anticipated in bringing the deal together. To realize those synergies will require many difficult decisions and development efforts to make the products in question work together.

However, unlike the “core” tools and systems outlined above, there is tremendous passion and pride of authorship around internally developed systems. And to make matters worse, since you have to figure out organizational issues as well (including potential elimination of positions), it is very difficult for employees to separate themselves from the emotion to provide objective input. This is why is it critically important to get outside help to do an independent assessment of these systems and the teams supporting them to help determine the plan forward.

There are multiple important questions to be answered such as:

Which product(s) should be sunset?
Who will lead the combined team?
What does the new IT/Product Development organization look like?
What toolset (Agile PM, defect tracking, build & release, etc…) will the combined team use?
Which customers will be migrated to other systems?
What is the right technology stack moving forward for the combined entity?
Should the systems be integrated at all?
Etc, etc etc…

Furthermore, it is important that these decisions not be driven just from a technical perspective. Technology people focus on technology solutions which may not be the right thing for the business. As an example of this, I was recently working with a company that acquired another company that provided the missing piece of an overall solution they needed to compete effectively in the market.

Shortly after the acquisition, the technology team determined that the effort to integrate the two platforms wasn’t that much less than the effort to build the acquired functionality into their existing platform. And since having a single system with a shared UI, DB, technology stack, and development team was “better” for the company, that was the path that was chosen. Needless to say, the redevelopment of the acquired platform was far more complicated than anticipated and the team also underestimated the effort required to support both systems during the effort. So, after 18 months, not only do they not have the new functionality they made the acquisition for, their existing product and customers have suffered because their focus has been on this redevelopment effort. None of the anticipated benefits of the acquisition have been realized. If, however, the approach had been to loosely integrate the two applications (SSO, Billing, UI refresh, etc…), those benefits could have been realized within a few short months while still keeping existing customers happy. While perhaps not the best “technical” decision, it would have certainly been the best decision for the business.

Fortunately, the acquisition integration risk can be greatly reduced by bringing on the right leadership. TechCXO has partners with extensive experience in the area of systems and technology integration that are ready to help you make your merger successful.

What is the right cloud spend?

I was recently asked by a client – What is the right spend on cloud for my organization? The client was asking about both cloud software (SaaS – Software as a Service) and cloud infrastructure (IaaS – Infrastructure as a Service). In their technology profile, they had the opportunity to use several cloud applications that ideally fit their organization but they also had some proprietary systems that were a key competitive advantage. In this particular instance, they had a significant investment in servers and infrastructure in two on-premise locations.

Beside cost, we discussed several other considerations. From these considerations, we developed a method to evaluate their “public” cloud vs. their private cloud / on-premise spend.

Cost: Cost is a critical component of the cloud decision-making process and any comparison needs to be apple to apple. We included people, infrastructure, disaster recovery systems, information security spend and several other components to evaluate cost.

Functionality: For the software component, there were a number of cloud software systems that fit their needs well and they selected several platforms and migrated their processing to them. However, they kept some of their custom written systems since they felt those provided a competitive edge.

Integration: For integration, they selected a cloud-based system to integrate data between their cloud software platforms and to/from with their on-premise, proprietary systems. This was very cost effective, as they built most of their integrations in a single tool.

Flexibility: One of the reasons they choose to keep some of their proprietary software was their need for flexibility in their core business. While some cloud software vendors have good flexibility and market add-ons that can add functionality, there are often key business areas that require highly customized software and systems.

Availability: Cloud infrastructure and applications are designed to be highly available. On-premise can take much more internal effort to be highly available and to ensure there is a disaster recovery capability.

Scalability: A huge advantage for cloud software and infrastructure is scalability as many customers depend on it and the providers have made it easier to scale (up and down). On premise / private cloud needs to be designed properly for scalability and can be less adaptable for scaling.

Deployment: Cloud software and infrastructure is easily deployed (sometimes too easily and there can be pockets of subscriptions that are not being used). On premise systems can suffer from slow deployment.

Security: Many think that public cloud security is a big challenge, but many of the cloud companies have invested heavily in protecting their client’s data. Good due diligence about information security is still a key factor in the cloud decision. On premise software can be expensive to properly secure and monitor.

The client ended up with a “hybrid” model, which is where many companies operate – some cloud capabilities and some on-premise/private cloud.

Conclusion: The “right cloud spend” should be evaluated from an overall cost and a strategic perspective, taking into account a number of key decision criteria.

Dan Brown
Partner, Fractional CIO / CTO; Interim CIO / CTO
dan.brown@techcxo.com
(770) 365-1901

Dan Brown is a senior technology executive with a wide range of technology, operational and senior leadership capabilities. As a strong leader, he has a proven track record of aligning technology organizations with corporate strategy, building / rejuvenating technology teams and leading organizations through growth and rapid change.

TechCXO Names Nicole Siokis as Chief Operating Officer

TechCXO is pleased to announce that it has named veteran executive Nicole Siokis as Partner, Chief Operating Officer. Ms. Siokis will help guide the firm’s continued nationwide growth and international expansion.

Nicole joined TechCXO in February 2018 and has been focused on organizational structure, internal business process review, and firm profitability. In her new role, she will focus on firm growth by practice area and geography, firm profitability and new strategic initiatives.

Nicole, a US Army combat veteran, previously served as President & Owner of the Atlanta branch for a national strategic workforce solutions firm. She was also an Associate Partner for a well-known executive search firm where she was responsible for strategic partnerships with senior business and HR leaders. In addition, she worked for a major telecommunications company based in Atlanta where she served as Director for Small Business Marketing, as well as Director for Domestic and International Carrier Relations. She is a graduate of Clemson University. (read Nicole Siokis’ full bio).

“Nicole is a very skilled operational executive. She’s highly organized, understands how to motivate and mobilize talented people, while maintaining focus on growth and profitability,” said TechCXO Managing Partner and Co-Founder Kent Elmer. “She’s the perfect combination of skills for what TechCXO needs going forward.”

“We’re entering a new era of expansion and broader services, and Nicole is one of the people we’re relying on to help guide us. It is a pleasure to have her overseeing many of our critical operations,” added TechCXO Co-Founder Mike Casey.

You can read the full press release here

The Art of Being Scrappy

People often equate the word “scrappy” with a startup or a lean organization. Larger organizations, on the other hand, are labeled as bureaucratic, slow and process-oriented. There’s rarely an association with scrappy. But a scrappy mindset has its advantages, and for larger companies, that means achieving the agility of a startup.

Startups are viewed as scrappy because they often don’t have the luxury of name recognition, power and money that larger institutions enjoy. Stripped of an ability to rely on capital and traditional infrastructure, startup employees are creative, resourceful, and can quickly learn new skills and adapt. In the absence of opulence, they often move forward with pure grit, passion and determination. It allows them to solve problems in ways that others can’t.

The scrappiness factor can make or break a company. In my role as an advisor, interim and/or on-demand chief people officer, I always interview for this.

So how can a larger organization benefit from this mindset? It’s actually easier than you might expect.

1. The freedom to make mistakes is worth more than formal training.

Irish author James Joyce famously wrote, “His errors are volitional and are the portals of discovery.” The most significant accelerated learning path a person can take is by making mistakes. Most companies often invest thousands of dollars in training, mentorship and other tools to help employees grow in their roles, yet they create an environment where mistakes are not celebrated.

The freedom to make mistakes, course correct, and continue is one of the primary benefits of working in a startup. Faced with limited financial resources, startup employees are forced to wear many hats, regardless of whether or not they have experience or comfort with a role. This sink-or-swim mentality is scrappy. It creates grit, confidence and resourcefulness, but also encourages an environment where mistakes are not only inevitable but expected and sometimes even celebrated for the learning they bring.

An organization I served as CPO has a values statement that was written by our employees. It states, “We are a group of highly talented people who love the challenge of our work and strive to solve problems others consider impossible. We approach this work fearlessly, knowing that if we fail, we’ll learn and do better next time.” For larger organizations, this means taking a fresh look at the definition of “training and development.”

2. Trading latent assets is invaluable.

New economies are built upon resource constraints. The sharing economy, whose poster children are companies like Airbnb and Lyft, speaks to a solution that stems from a need to do something, like take a vacation or get somewhere fast. The solutions, innovative and new, tap into latent assets with the help of technology.

The bonds that come from networking with people and trading expertise is invaluable. You learn to rely on each other and use every skill that each of you has to work as a team. I have seen instances where one offers legal advice in exchange for helping to recruit for a growing business. Most will happily share their expertise in the form of brain power and connections in exchange for even a glass of wine or some lunch.

Larger organizations could benefit from going back to this more resourceful, community-minded method of doing business, whether it’s across departments or across borders.

3. To be scrappy means to skip the formality.

Ideally, an organization’s philosophy emphasizes personal responsibility over policy, freedoms, and learning through risk taking.

In order to be able to do that, opt for regular feedback loops rather than a formal review process. Feedback loops provide weekly, immediate feedback to help employees take risks and course correct in a fast and efficient way. Business moves too quickly to wait for annual reviews; with instant feedback, the opportunity to learn is still fresh. Too much policy and process impede scrappiness.

Additionally, if companies over-prescribe a formula for success ahead of time, employees will not trust in their ability to experiment and achieve. They won’t reach their highest potential for themselves or for the business. Large organizations should consider completely throwing out their time-intensive performance review process and opt for a scrappy, fast-paced feedback method where speed and authenticity reigns.

You don’t have to be a startup to be scrappy. Interviewing for scrappiness and creating an environment that values it could make any company – large or small – more creative, nimble and ultimately profitable.

Maria Goldsholl TechCXO Human Capital Practice (click her photo to see Maria’s full bio)

All we need is a million dollars, and we will be unstoppable

All we need is a million dollars, and we will be unstoppable! (A cautionary tale)

Keith Heffron is a TechCXO Partner and an innovative financial leader, business owner and transformative CFO who scales emerging companies. See his full bio

At TechCXO, we’re fond of saying that part of the CFO’s job is not to save money but to spend it. Spend it, that is, to fund the scaling and acceleration of a company in ways that increase enterprise value.

As business owners, we all fall in love with the idea of our business growing into a huge success. Thinking big is a good thing.

You also have every right to ask your CFO to model an aggressive growth plan and to help secure the capital to help that plan take flight. That’s what we’re here for.

However, the same amount of energy and forethought you put into the concept of “How fast could we grow if we had an additional $1M investment?” should be applied to asking “How fast can we grow without sacrificing quality, our reputation, or our values?” And, “What, if any, additional investment is required to achieve this level of growth?”

The best approach is to build a Marketing, Sales, and Operational plan to support the financial plan growth you are targeting. Then, consolidate these individual department plans into an integrated financial model. The resulting cash flow projection will tell you how much of an investment you might need and the timing of that need. It will also allow you to modify your plans based on constraints. The result should be an integrated financial and operational plan that the entire organization understands and is confident of achieving.

Remember when you got your first 10 customers? Everyone was all over them! Everyone knew what was going on, hand-offs were well communicated, and you had your arms around all of it. Things didn’t go perfectly but you were able to react quickly and course-correct well. But then 10 became 20 and you experienced your first growing pains. Everyone was in everything, ownership and hand-offs weren’t clear, and the cost of breakage wasn’t something you had planned for.

Time to assign positions, ownership, metrics, and invest in hiring and systems. While these are all good and necessary things, each requires its own plan and considerations. I further suggest to you that this process of re-evaluating as you grow should be a non-stop process that you should dedicate time to every month with your team.

If you are making plans to solve your many current problems, you are already behind. Are you considering the impact of growth on all areas and are you prepared to pull the necessary levers when that growth comes? Does every person in your organization know how their job will be impacted if customer volume doubles? Let’s work through an illustration to clarify.

Bob is in customer service. He has amazing rapport on the phones and customers love him! He can handle any problem and knows how to make customers feel appreciated. Sure, he has to work a bit of overtime on heavy days but he always keeps customers happy. He’s the kind of employee you can build a company around.

Now imagine that customer volume doubles. Bob can’t keep up and each call is taking longer. He is spending too much time apologizing for delays, he is tired and his quality is slipping. Complaints are getting back to you from others in the organization and you need to get Bob some help. You can quickly hire someone and count on Bob to get them up to speed but it will be another month before the new person is proficient. You hope you can survive until then and not lose any more customers…

Fast forward three months. The new guy is OK but he and Bob aren’t getting along well. Bob is a perfectionist that doesn’t want to let go of control and the new guy is frustrated. You think he may quit. You are still getting customer complaints. Wasn’t this hire going to solve the problem? And why is this happening in other departments as well? Will this cycle never end?

What if……three months before this became a problem, you sat down with Bob and a couple of other key employees for just an hour and asked the question, “What would break down if we doubled in volume?”

Questions you might ask include:

1. What should the customer service organization look like with the increased volume?
2. Do we need a Supervisor for this group?
3. Is Bob capable of being the Supervisor and does he even want that role?
4. How can we identify candidates now?
5. At what point will we need to make the hires?
6. What key skills does the hire need to have?
7. What does the training and on-boarding process need to be?
8. How do we make sure this is not felt by our customers?
9. Can our paper tracking system handle the volume or should we look into a CRM?

This kind of planning for growth is critical to the near-term success of the company and the process is also key to building a long-term successful, evolving enterprise. Further, it suggests a different order to your growth decisions.

There are few things as exciting as growing your business, but you must take some time and understand the cost of that growth. I’m not just talking about dollars, although all roads ultimately lead back to that. There are massive impacts to your people, your ability to execute the additional volume, and an opportunity cost to everything you choose. To start down this road without a clear plan risks all that you have built so far.

Using that $1 million investment to fuel manageable growth is far better than throwing money at problems caused by inadequate planning. Now you have a plan for success.

Business Continuity Plans

Here’s a rhetorical question… When is the best time to prepare for a hurricane or tropical storm? (BEFORE it strikes). If you weren’t dealing with the busy hurricane season directly, you probably had at least a passing thought about your business continuity plans. The good news is — like holiday shopping — there’s time: hurricane season doesn’t officially end until November 30. So, for those marginally impacted or fortunate enough to escape unscathed, now is good time to reflect on your preparedness.

To avoid any confusion on the subject, the definition of Business Continuity Plans (BCPs) are those preparations focused on maintaining continuous operations even in the event of a emergency. They typically involve communication plans, alternative work sites, system failover/redundancy, and any number of “contingencies”. Compromises like operating in a reduced capacity can be an option based on the agreed risk acceptance of the company. Disaster Recovery Plans (DRPs) are invoked at the point that BCPs fail and the business is interrupted beyond what is acceptable in the BCP.

While the process my vary based on the size and risk profile of your business, you can develop a sound BCP by including these four main phases:

– Project Scope and Planning (Who will be involved in the organization’s planning and execution?)
– Business Impact Assessment (What are the priorities of the business? What are the risks and impacts?)
– Continuity Planning (What strategies, provisions, processes and assets will be invoked?)
– Approval and Implementation (Approval, training, testing, implementation and maintenance of the plan)

These documents are fairly straightforward to create. If you’d like templates for any or all of these documents, email me directly at: olin.wise@techcxo.com and I’ll be happy to send them along.

Olin Wise TechCXO Product & Technology Partner

Olin Wise is a Product & Technology partner in TechCXO’s Atlanta office. See his full bio here.

Disruptive by Design

Why is Dr. Clayton Christensen’s Disruptive Innovation Theory Important for Your Business?

Disruption Innovation Theory is about growth and creation of shareholder value. It generates viral growth, often 20 times typical growth index averages. It causes a dramatic change in the market’s competitive playing field. Disruptive innovation challenges incumbents with inferior products, competes against non-consumption, and thereby creates a new dimension of value to the consumer. Disruptive innovation is not just about technology, but more importantly about the successful execution of the Business Model.

Disruption Innovation opportunities are predictable and have distinct signals or “disruption fingerprints”:

Often an Inferior product/service to the incumbent alternatives
Addresses an unserved or under-served market,
Competes against consumer non-consumption
Often targets small niche markets
Customers are often unattractive to current market incumbents
Designed for moderate to low growth markets
Often disintermediates with traditional distribution channels
Enjoys a sustainable cost of production advantage
Product focuses on consumer advantages such as: ease of use, flexibility, simplicity and convenience

Disruption can be for low-end or high-end products. Low-end disruption targets micro market segments where consumers have opted out (non-consumers) with existing market products. Disruption is possible because in many mature markets, incumbent products exceed the true performance needs of customers. New market disruption focuses on the notion of inferiority based on the customers “job to be done”. New market disruption is superior to incumbent alternatives because it is based on a different set of customer values. It enables customers where previously impracticable before.

Key takeaways for your business:

One of the best ways to find disruption is to focus on non-consumption.
Disruption is predictable and should be integral part of your product planning and strategy development.
You can engineer disruption; “market disruption by design” is your best strategy.
Incumbents routinely dismiss disruptive upstarts as not good enough, until they are
Signs of future coming market disruption are present and obvious for years.
Alternative value chains are crucial for disruption
The customers who will not buy your product, understand why they do not!

Disruptive innovation creates abundance out of scarcity and is one of the most powerful engines of growth for your business. If you would like to review how to make your business model disruptive, contact TechCXO.

Ken Goins is a Finance & Operations partner in TechCXO’s Atlanta office. Ken uses his c-suite leadership skills to develop and execute strategies to maximize revenue growth and operational efficiencies through innovation and process improvements in domestic and international business settings. See his full bio here.

Open APIs light a FHIR under interoperability

With a certification deadline looming, EHR vendors and healthcare providers should look to 3rd-party applications that meet the promise of secure and effective data-sharing

By the end of April, only two major electronic health records vendors had achieved full certification under the 2015 Edition Meaningful Use Stage 3 criteria and the Advancing Care Information (ACI) program established by the Medicare Access and CHIP Reauthorization Act, according to the Office of the National Coordinator. For the hundreds of other EHR vendors listed in the ONC database, the Jan. 1, 2018, deadline for certification is likely to be a significant challenge, a situation that ought to serve as a wakeup call for hospitals and physicians hoping to avoid Stage 3/ACI payment penalties.

Underpinning most of the goals and metrics of Stage 3 is the long-sought and elusive dream of interoperability. You cannot meet population health objectives such as providing patients with electronic access to their health information, protecting patient-level data and coordinating care through patient engagement if you do not have robust and secure means of communicating among disparate information systems from multiple vendors. New value-based care initiatives, accountable care organizations and bundled payment arrangements demand access to patient records across the continuum of care, enabling functions such as a single, uniform view of all patient records; centralized scheduling; care management protocols; and quality measurement.

Given the nature of the challenge ahead this year, the time is now to follow the direction of the ONC and the Centers for Medicare and Medicaid Services. In looking to set a foundation for an interoperable health IT infrastructure, the agencies mandated that EHRs be capable of open application programming interfaces (open APIs) and underscored the advantages of the hottest trend in health IT circles today, Fast Health Interoperability Resource (FHIR – pronounced “fire”) in establishing that foundation. This vision of the open API would allow a patient to use a single app to retrieve medical records from any hospital, lab, insurance company or physician office simply by obtaining the secure URL for that service’s open API and providing required authentication, truly placing the patient in control of their own health information.

As Obama-era CMS Acting Administrator Andy Slavitt put it during the rulemaking phase for MU Stage 3 in 2015: “The burden needs to be on the technology, not the user. EHR vendors and hospitals that use them will now be required to open their APIs — so data can move in and out of an application safely and securely — and technology can become plug and play.”

Then came the 21st Century Cures Act, passed by Congress in December 2016, which states that any certified vendor must not “take any action that may inhibit the appropriate exchange, access and use of electronic health information” and must develop APIs or other technologies to enable the application to be “accessed, exchanged and used without special effort.” Vendors that are found to be blocking information are subject to penalties of as much as $1 million per violation.

What it all means

APIs are sets of requirements that govern how applications communicate and interact with one another. An open API is an interface that provides developers with programmatic access to a proprietary software application. The FHIR standard, created by Health Level Seven International (HL7), describes data formats and elements (known as “resources”) and an API for exchanging electronic health records. Open APIs interconnect any healthcare system, doctor, patient or medical device by normalizing all incoming requests and data as appropriate FHIR resources.

FHIR is appealing because it is based on a truly modern web services approach that makes it easier for systems to exchange very specific, well-defined pieces of information such as a medication list, a problem list or lab results, rather than entire documents.

The Drummond Group, a certification body for Meaningful Use authorized by the ONC, has more than 200 EHRs registered to go through its testing process this year. “While the FHIR standard itself is not mandated, the ONC has made it clear this is the direction they are going, and, indeed, we have yet to see an application that isn’t FHIR,” said Sonia Galvan, director of EHR testing for Drummond.

An open API using FHIR standards can be described as a new and exclusive “front door” to an EHR, eventually replacing hundreds of point-to-point connections with hospitals, doctors, billers, registries, labs and data clearinghouses that are currently used to connect, but at a high cost in dollars and labor time – a physician might spend 15 minutes logging in from outside a firewall for a single patient record. Health information exchange using HL7 links requires a separate point-to-point connection for each location or system utilizing a dedicated Virtual Private Network (VPN) connection. Some hospitals have 100 or more of these connections. And HL7 connections cannot be used to share information with patients. Even those entities that moved to a web services strategy with their EHR vendor for connectivity would experience additional benefits with an open API approach, especially by implementing a standard protocol like FHIR.

The open API in the real world

Following the release of the Meaningful Use Stage 3 Final Rule in October 2015, a health IT firm, Carefluence, realized many vendors might not be ready for the financial and resource challenges of implementing an open API, so it began to produce a low-risk, plug-and-play solution, which can be licensed as a modular solution for ONC certification. Even with the company’s extensive healthcare IT background, the solution took more than a year to build, in part because the standards being put out by the federal government were growing along with software development, but also because an open API, designed to the standards set by the ONC, can be a challenge even to the well-initiated. A vendor, even one with the most able team, would need at least six months to develop its own open API. Given that there are now fewer than eight months until the Stage 3 certification deadline, that is especially problematic. (In June 2016 Drummond made Carefluence’s modular Open API software platform the first to be certified by the ONC for health IT.)

“An EMR vendor doing its own API is probably the least common criterion we have seen,” Galvan said. “That is either the criterion they are leaving last to develop or they will be using a third-party application.”

Given the modular nature of certification in Stage 3 – meaning a vendor can certify for one or many modules of an interoperable EMR – many vendors may not fully understand that there are options to meet the requirements of an open API through software that can be deployed alongside their existing systems to make them Meaningful Use-compliant, avoiding the costly internal development of a custom open solution. Hospitals and medical groups not willing to risk waiting for their IT vendors to act can also use this solution to avoid the disruptions and costs of EHR software upgrades, not to mention significant loss of revenue from penalties.

The ONC has never been more direct about enforcing that EHRs vendors and all healthcare providers act now to ensure electronic access to patient records, and that the strategy of delaying and waiting for a perfect standard to emerge will no longer be tolerated. FHIR has emerged as the clear de facto standard for open APIs, and there are deployments in the market that are working effectively. Will the standards evolve? Certainly. And yet that is no excuse to sit on the sidelines when patients are demanding greater access to their electronic records, and thousands of apps, disease and drug registries, managed care entities, and individual clinicians will depend on this electronic access to optimize patient care and promote healthy behaviors.

In the short term, modular open APIs will give EHR vendors a much faster and easier route to 2015 Edition certification for Meaningful Use. In the long term, they will facilitate interoperability and reduce costs for accessing, analyzing and using data to improve care, becoming one of the pillars on which we can build a better healthcare system.

Adam Boris is a veteran healthcare technology executive and a partner with TechCXO, a strategic advisory and professional services firm. See his full bio here.

TechCXO Client MemberSuite Raises $11M Series B

TechCXO client MemberSuite raised $11 million of Series B venture funding from lead investor Revolution Ventures on September 26, 2016. Fidelis Partners, Angel Investment Management, Accomplice Partners and Alerion Ventures also participated.

The company plans to use the funding to add over 50 team members, with a focus on hiring in sales, marketing and engineering in the Atlanta region. With the round, the company has now raised a total of $19.6 million in funding to date.

MemberSuite is a provider of association management software (AMS) for associations and nonprofit organizations. The company develops software that helps trade associations manage fundraising, event planning, accounting, dues-collection and other functions. It delivers its web-based, back-office software on a subscription basis. TechCXO partner Todd Guthrie is engaged with MemberSuite. Read the full release here.

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