During 2012 I have come across a multiplicity of issues faced by businesses.
There is a common thread, either the company directors do not have the expertise and or they have been taken advantage of.
You have to ask yourself, as a director of a company, you have very specific skills, based on your experience and knowledge built up over the years, but if your core skill set is not technology, it is unlikely that you will have the skills to manage your technology.
The questions you need to ask yourself are:
- Do I have the ability and time to manage this project?
- Do I have the knowledge to manage this project?
- Have I carried out the appropriate Due Diligence?
- Do I have someone on my side of the table to cover my back?
Below are some projects I am helping to turn around or have turned around.
This client, actually it was hard to choose which one as there are several, has spent £35,000 of £45,000 on an ERP system to streamline their sales process. Unfortunately the system is so fragmented that it is almost unusable.
When the staff are lucky enough to find a part of the system that appears to follow a logical process, it breaks. My client is the test bed for this system and the developers are learning on the job!
I have taken over the management of this project. The supplier now has to tell the truth and cannot hide behind jargon. We are withholding payments and have a plan to ensure that the development stays ahead of the payment schedule!
My client now has the power to level the playing field, the supplier knows it and understands that I am working with a lot of other companies!
This company has fallen victim to some clever words from a salesman. They were sold an SEO package that would turn around their online sales. They are paying £29,000 per annum and are getting exactly the same number of website hits that they were a year ago. The suppliers system tells them that 21,000 people a month are showing interest in the company, however these are unvalidated numbers.
The ACTUAL WEBSITE STATISTICS show between 3 and 10 visitors a day, just as a year previous. Before you ask, sales revenue has not increased.
I have ended the contract, secured the assets and have a plan to move forwards. My client asked why he hadn’t found me before he spent the money. In this case the contract is so poor that I suspect that the monies are lost.
This company was paying in excess of £250,000 a year on website hosting. The hosting build have risen exponentially as the companies online sales have increased. Just as it would for a manual system. The directors thought this slightly strange, but had been reassured by the website vendor that the hosting had to grow as the sales grew, taking advantage of the companies lack of knowledge or experience.
It turns out that the website is on the same server using the same architecture as it did at the start. We have now come to an agreement where by the hosting is capped at £25,000 per annum, which is a reasonable figure.
This company paid £21,000 for an eCommerce website, the site was eventually delivered and looked OK, however it didn’t seem to be attracting visitors. The company then agreed to pay the webs developer an additional £1,000 a month to help promote the website to the search engines – SEO.
The feedback was very positive from the web developer, however the bottom line didn’t change – NO SALES.
The website was built on an obsolete technology, despite being a recent build. It had no provision for SEO optimisation. When confronted, it quickly became evident that the web developer was neither competent, nor willing to play nicely, after much tooing and froing, it became obvious that there was no movement.
The decision was made to transfer the website elsewhere, however this was not possible as non hosting company could provide an equally obsolete environment.
In the end the decision was made to redevelop the site from scratch. This job has been completed successfully for £3500.
This company has a number of staff that have been in station for a substantial amount of time. Their IT supplier has been with the company for as long as anyone can remember.
The IT support technician is charging the company that employs 15 staff and has 16 PCs and a server £45,000 a year, with a turnover of £1M, £25,000 profit.
The directors of the company were very concerned about the value for money, but had been reassured a number of times that the technician was excellent value for money and only charges for a fraction of the work carried out. The directors have thus shied away from challenging the technician as they just do not have the money if he starts charging for all his work.
Reportedly, the technician only charged for 50% of the work he does, so essentially a company with 15 staff is paying £90,000 a year for technical support, approximately 10% of its turnover and 400% of profit.
This arrangement has been replaced by a Managed Service contract whereby the company now pays £195 a month to have all its machines and infrastructure supported. This is in line with industry standards.
A web developer / software developer was engaged to develop a website and back office system to manage an online and bricks and mortar business. Initially the project went OK.
However once the initial website build and back office prototypes were completed, the core functionality started to flounder.
The company had paid £28,000 – full contract value. It was now obvious that the developer had never built such as system, he had aspirations well beyond his abilities.
It was also clear that the individual had spent the money and there was little chance of a refund.
The company then approached another developer to get the job finished.
However the developer who had got it wrong, contacted them and explained that he owned the IP (Intellectual Property) and as such they would be in breach of his IP if anyone else touched the system.
This problem could have been prevented using less than 10 words in a contract and by taking advice up front from someone who had a thorough knowledge of the technology.
Essentially a proper DUE DILIGENCE had been undertaken.
Call me, this is only the tip of the iceberg!