Enterprise e-Commerce on a Shoe String Budget?

e-commerce on a shoe string

Image courtesy of Flickr

While inexpensively built and operated mom and pop e-commerce websites are as common as snow in New England in January, is it possible to build and operate an enterprise grade e-commerce site on a shoe string budget? E-commerce at an enterprise level is not simply slapping a shopping cart to your website and calling it e-commerce enabled. The demands of an enterprise solution may require:

  • Integration with legacy systems
  • Integration with supply-chain systems
  • Support for multiple currencies and tax codes
  • Multiple store-fronts
  • Profile and history driven offer management
  • Integration with a content management system
  • Business user control over promotions and pricing
  • …and more

Challenges of integration with existing systems alone are daunting enough never mind the fancy e-commerce functionality that is often considered vital for competitive differentiation. No wonder why starting an e-commerce venture or an upgrade is considered a seven figure expense. The cost of an enterprise grade e-commerce product alone can easily account for twenty to forty percent of the budget. The other option is to go with a hosted or SaaS based approach and avoid capital expense for software and infrastructure – not a bad approach for testing the waters but in the long run, charges and fees can really add up.

A well executed e-commerce site can provide great returns on the investment by generating new revenue streams, enhancing existing ones, or reducing operational expenses – and that can’t be too bad for the budget or your career. However, in tough economic times the challenge becomes harder as getting approval for large complex projects becomes difficult and even the approved budgets can get slashed. If your budget gets cut, is there a way to still implement enterprise grade e-commerce? Can an open source e-commerce solution be the answer to the “do more with less” mantra? Is open source e-commerce ready to play with the big boys in the enterprise domain? Let’s explore these questions and the capabilities of the open source e-commerce solutions.

Let’s start with a common misconception that an open source e-commerce product requires significant customizations and the cost of customizations more than offsets any savings from not having to pay license fees. Implicit in this assumption is the notion that a commercial product requires little or no customizations. However, the real-world experience shows us that this is not the case. Even the best commercial products cannot be used out-of-the-box unless you decide to adopt their look and feel and their model of e-commerce. The cost of customizations can add up just as rapidly in a commercial product as they can in an open source one. Therefore a prudent approach would be to adhere to the industry standards and best practices and use out-of-the-box functionality in areas which are not competitive differentiators. Heavy customizations should be limited to the aspects of the website that are true differentiators and result in a unique user experience. This guiding principle applies regardless of the decision to use an open source or a commercial product.

There are a lot of inexpensive and open source e-commerce products out there; however, most of them are nothing more than a simple shopping cart. They are only suitable for the most basic needs of a simple web site. However, Apache OFBiz and Magento are two promising contenders that break from the pack and compete in the enterprise space. In this article we will primarily focus on OFBiz.

Apache OFBiz is actually an integrated suite of products that does not only include e-commerce capabilities but also provides support for accounting, order management, warehouse management, content management and more. An enterprise e-commerce implementation cannot exist as a point solution. It has to integrate and work well with other back office processes and applications. OFBiz’s integrated suite can be used to automate and integrate most back office functions. Even if you decide not to use the built-in functionality it can still be integrated with other existing systems albeit with more effort and cost. It provides enough e-commerce functionality out of the box to match most enterprise needs and the rest can be customized if needed. Here is a summary of our assessment of OFBiz:

Technical Capabilities

# Criteria Rating Comments
1. E-commerce capabilities B+ Provides Robust e-commerce capabilities OFBiz e-commerce capabilities include: catalog management, promotion & pricing management, order management, customer management, warehouse management, fulfillment, accounting, content management, and more.
2. Sign-on and Security B Granular and robust security framework The OFBiz security framework provides fine grain control of the security including multiple security roles and privileges. Roles can be used to control access to screens, business methods, web requests (URLs), and/or entire applications.
3. Technical flexibility & ease of use B Very flexible but complex  OFBiz is an application development platform that can be used to build applications and as such provides a tremendous amount of flexibility.  The use of the entire framework (which includes the database, an Object Relational Mapping (ORM) layer, business object layer, scripting support, and UI tools) is optional.
4. Integration with other apps and locations A Multiple integration methods  OFBiz business services can be exposed as services and accessed by multiple methods including Remote Method Invocation (RMI) and XML Web Services.  Integration directly with the OFBiz Relational Database is also possible.
5. Scalability A Highly Scalable  Java systems are highly scalable provided a production architecture that is designed to support heavy load.  A load balancing device and redundancy at the web, application and database servers can redundancy and scalability.
6. Relational database integration A Support for all major database platforms  The most popular OFBiz database platforms are PostgreSQL and MySQL (both of which are open source).  OFBiz has also been tested with Oracle, DB2, Sybase, and MS SQL Server.  The default installation uses an Apache Derby database which is not recommended for production use. Our research indicates some problems with MS SQL Server database – this should be investigated further prior to selecting that database platform.
7. Skill Set to support NA OFBiz framework and application are based in the following technology components:

  • XML
  • Web Development: HTML, CSS, AJAX/JavaScript, Apache
  • Java Development: Java, JSP, Freemarker, BeanShell, Tomcat application server (possibly)
  • Database Development and Administration: MS SQL Server (possibly), SQL, JDBC

Long term support of the application would require knowledge and familiarity in each of these technology sets.  While these technologies are mainstream and skills should be readily available in the future, skills and experience with the OFBiz framework that is built upon these technologies may not be.

Business Position

# Criteria Rating Comments
1. Financial stability B OFBiz is a “top level” project in the Apache Software Foundation.  The Apache Software Foundation provides support for the Apache community of open-source software projects. The Apache projects are characterized by a collaborative, consensus based development process, an open and pragmatic software license, and a desire to create high quality software that leads the way in its field.
2. Maturity of product suite B Open For Business (OFBiz) was initially launched in 2001.  In early 2006, the project went through the Apache Foundation’s “Incubation” process to review projects for quality and open source commitment.  OFBiz was promoted to a top level Apache project in December 2006.The community for OFBiz is very active.  The major web posting board receives between 20-40 postings per day relating to OFBiz.  The original contributors are very active in monitoring these sites and sharing knowledge.
3. Reference Accounts B- Total number of installations is unknown due to the nature of open source software. The OFBiz websites lists more than 70 companies that use their software. However, there are very few marquee names.

Implementing an enterprise e-commerce solution can be expensive and complex process that requires analysis and investment in people, processes, and technology. While it would be insincere to say that an enterprise e-commerce solution can be implemented on a budget in the ballpark of a mom and pop e-commerce store, the budget can be significantly reduced by:

  • Carefully crafting business requirements
  • Adapting the business model to match industry’s best practices
  • Reducing and carefully planning data migration and application integration
  • Keeping the customizations to a minimum
  • And using an open source e-commerce platform

OFBiz provides a viable open source e-commerce stack that can be used to implement enterprise grade e-commerce. When combined with good implementation practices and solid execution the combination can result in slashing costs by twenty to forty percent — which sometimes can make the difference between getting funded or getting shelved.

Insurance litigation in the economic downturn

I heard a report on the news this morning that in a recent survey, lawyers have indicated that they expect a dramatic decrease in business in 2009 and do not anticipate earning income at the same levels they earned in 2008.  Really?

That may be true for mergers & acquisitions, and other similar purchase related transactions, but I do not believe the current economic downturn will have a similar affect on the insurance industry.  In fact, I believe it will have the opposite affect.

I think the upsurge in litigation stemming from the collapse of the credit markets and the mortgage industry could surpass levels ever seen before.  Litigation during these times could include some of the highest settlement amounts, parties sued, and parties suing.  Insurers are bound to get caught up, due not only to defending their interests, but also mainly due to their policy responsibility of defending insureds for litigation brought against them.

Some insurance carriers are gearing up for that increase in defense costs.  The Hartford is already battening down the hatches in preparation for a litigation hurricane.  As the insurer for The Peanut Company of America, they have gone to Federal court for clarification on the liability coverage in their policy, in preparation for the litigation defense costs and settlement payments for the over 1800 product recalls and related illnesses.

People are losing their jobs and can’t make their payments on their Lexus because they over extended in the boom of ’07.  So those vehicles end up on eBay, on fire, or in a chop shop.  Insurance SIU departments see a swell in claim counts.  The number of injuries in car accidents goes up.  These are times when an insurer’s Corporate Performance Management (CPM) and the ability to analyze their own data against their goals, along with incorporating automated processes can really pay off and keep expenses down.  The identification of fraud also becomes key to insurer’s weathering the storm.  Lawyers send people to the same doctors and vice versa.  I remember a case of fraud where a doctor was reported to be treating 1600 people in one day.  So, who gets involved in all these areas – lawyers.  Both on the claimant and on the carrier side.

Traditionally economic downturns are the biggest catalyst for increases in insurance claims and insurance fraud – people need money.  The decrease in policies written, coupled with the increase in policies cancelled for non-payment of premium, is not as dramatic a cost change as the increase in claims.  People still recognize the need for insurance and recognize the importance of maintaining that policy.  However, insureds, and claimants, feel they’ve been paying the premiums on their policies and now they need to get some money back.

I can’t see insurance lawyers experience that much, if any, drop in revenue during this recession.

The Benefits to Insurance Carriers of Automated Workflow Processing

mailcartDo you still distribute paper files and mail the old fashioned way?  I see this all the time.  Even Underwriting departments have people that distribute paper policy files to Underwriters for review of applications, renewals, MVR and CLUE reports.

Why do so many insurance organizations still use a manual distribution method for workflow - especially in the Claims arena which has transactions that are so heavily paper based? There are so many problems created by paper files and mail being stacked on adjusters’ desks for handling without regard to priority.  An insurance organization takes on too much risk:

  • Increased Error Rates
  • Increased Operation Costs
  • Reduced Service Response Time
  • Extending the Lifecycle
  • Raising Adjuster “Burn Out” Rate and Increasing Employee Turnover and Training 

When I was a claims adjuster, every day was the same – about 10:30, after the morning mail was opened (which I had to go to the post office and retrieve because I was a “field adjuster”), a stack about 3 inches tall, wrapped in a rubber band, would be dropped on my desk like a ton of bricks.  At least the claim file numbers were written on them which the administrative staff would spend about 90 minutes researching.  Then I would have to take that stack of mail, and start retrieving all the paper files from cabinets associated with that mail – PIP applications, damage appraisals, attorney correspondence, medical bills, etc.  How was I supposed to go out in the field when I had all those paper files back in the office?  You couldn’t take them with you because they weren’t allowed to leave the office IN CASE THEY GOT LOST.

Granted, this was a long time ago, and I had to consider myself lucky that at least I had a mainframe system into which I could enter my reserves, payments, notes and confirm coverage.  But these days, not storing files electronically and making them accessible remotely is almost inexcusable.  All that wasted time and productivity.  I probably could’ve handled twice the case load and closed files twice as fast if I could have been out in the field all the time.

Like so many of their policy brethren, many modern claim systems include automated workflow and straight-through processing features that insurance organizations with legacy systems can not, or do not, utilize.  But these legacy systems don’t necessarily have to be replaced in order to implement these types of functions.  Many independent automated workflow systems can work right along side existing legacy systems and push work forward.  I know carriers that implement a simple document management system with high speed scanners that scan and distribute 10,000 – yes, ten thousand – pieces of mail every day.

There are those claim managers that are considering making a change to their claim administration system, and may want to increase the priority of the automated workflow function in their search criteria.  By introducing an automated workflow, many insurance organizations have improved productivity by as much as 100%, recognizing savings to the hundreds of thousands of dollars, and supported a 20% increase in business with existing staffing levels.  The additional benefits to an Insurance organization of a workflow utility are that it can:

  • Implement continuity in processing,
  • Decrease processing costs, and
  • Increase efficiencies to improve Service-level Agreements (SLAs) with customers, agents, and company departments. 

Insurance organizations can also benefit by increasing the collaboration of resources using a document repository. A single repository would enable organizations to reduce resource costs associated with searching for non-existent data or recreating data that is unable to be found, such as loss control guidelines, rating specifications, or even just the office fire procedures.  Call center and other service-related expenses can also be reduced by providing customers with access to their documents via the Web for policy documentation and/or claims forms.  In addition, field workers would be more efficient by being able to review and transfer documents remotely, reducing claim processing times and expenses, and allowing for claim payments to be issued more promptly to customers; spending more face time with insureds, claimants, and agents.  Face time is always good for business.

One final note, Enterprise Content Management (ECM) and Workflow can also be utilized as a knowledge broker between the many systems and departments within an Insurance company, and can become an important source for Business Intelligence (BI). It can provide consistent searchable metadata for proper document retrieval that can be used to support Dashboards and other BI reporting tools for executive management, resulting in improved productivity even at those levels. 

But that’s all right.  You keep paying rent on that office space for file cabinets and maintaining resources to pass paper around.  I’m sure you’re not losing market share or unnecessarily increasing your expense ratios.

Collaboration Style Revisited

When looking at the results of our last poll on collaboration styles, several things jumped out at us.

1. Nearly a third of the respondents are either still relying on email collaboration or under-utilizing basic portal functionality (document checkout/checkin for version control).

2. Among users of collaboration portals, there was an even split between Sharepoint and other tools.

This led us to wonder how broad corporate adoption of collaboration tools might be. And it leads us, of course, to another poll.

Comments always welcome, and in case you missed the first post in this series, it’s still open and you can vote here.

Cutting costs should not mean cutting revenue.

0925_mz_skinflint

Image courtesy of BusinessWeek 9/25/08: "AmerisourceBergen's Scrimp-and-Save Dave"

The financial panic of late has caused a lot of attention on cutting costs – from frivolities like pens at customer service counters to headcount – organizations are slowing spending. Bad times force management to review every expense, and in these times obsess with them. Financial peace however has two sides – expense and revenue.

A side effect of cost cutting can be stunted revenue, over both the short and long terms. It is easier to evaluate costs than to uncover revenue opportunities, such as determining  truly profitable offerings and adapting your strategies to maximize sales. Also as difficult to quantify are the true loses in unprofitable transactions, and competitive strategies that can negatively impact your competition.

The answers to many of these questions can be  unearthed from data scattered around an organization, groking customers and instantly shared knowledge between disciplines. For example, by combining:

  • customer survey data;
  • external observations;
  • clues left on web visits;
  • and other correspondence within the corporation;

…an organization can uncover unmet needs to satisfy before the competition, and at reduced investment cost.

When external factors, like a gloomy job outlook, cause customers to change behavior, it is time to use all information at your disposal. Those prospects changing preferences for your offerings can provide golden intelligence about the competition or unmet needs.

Pumping information like this is the heart of business intelligence. Marketing and Sales can uncover the opportunity; however, it is up to the enterprise to determine how to execute a timely offering. Financials, human capital planning, and operations, work in concert to develop the strategy which requires forecasting data, operational statistics and capacity planning data to line up.

A good strategist views all angles, not just reducing cost.

It’s time to clean out the Junk Drawer!

In the December 23rd issue of CIO magazine, there is a great article on “The Case for Enterprise Architects” by Kim S. Nash. Clearly, this type of article catches my eye because I am an Enterprise Architect but it is important to note that in tough economic times, the role of the Enterprise Architect becomes more valuable.  Instead of simply slashing staff to reduce costs, an Enterprise Architect can helpjunk-drawer-before the CIO save money by “cleaning out the junk drawer.” The average corporation has tens and sometimes hundreds of business applications, databases, one-time-use programs and other junk cluttering up their environment and, more importantly, wasting valuable maintenance dollars and personnel resources.

The Enterprise Architect can look at this mess and begin to organize it with an eye to reducing complexity and gaining better alignment with business needs. The process is called an application rationalization or, you’ll love this, an App-Rat. It isn’t a complicated process to develop an inventory of all of the good stuff and the junk, but the real skill comes in the analysis process. With the inventory in hand, the EA then maps which applications that deserve continued investment, which need less investment (stop paying maintenance, etc.), which applications need to be retired and where applications are simply missing. While it sounds like a simple process, it can become difficult in organizations that have grown by merger and acquisition to track down the information and get it organized for the decision-making process. It is clearly worth the effort when the latest statistics show that over 70% of an IT budget is spent on maintenance of existing applications. The big benefit is simply freeing up some of those maintenance dollars to retain key personnel and spend it on new, more aligned applications.

It is sometimes humorous when cleaning out the junk drawer of business applications and databases. Invariably, there are one or more applications that have become what I like to call “black boxes.” Data goes into the black box and the right answer comes out. However, no one in the IT department knows how the application was built and certainly would only maintain it under extreme duress. Programmers know how difficult it can be to follow breadcrumbs left by a long departed developer. The truth is that these applications represent very real risks to organizations and a dangerous hidden cost if they break. The skill set necessary to properly maintain these applications may not exist in enough depth in the current IT staff. The application rationalization process can identify these applications, the related skill gap and lay out a road map to resolve this risk, and more importantly, help remove this high risk and hidden cost.

It’s clearly time to clean out the junk drawer by bringing in the enterprise architect to organize, simplify and help with your budget pressures. One of the big benefits is that it demonstrates to your organization that IT can be focused on making sound investments and caring about managing costs. It will provide your IT staff with a sense of accomplishment to improve the alignment of IT with the goals of the business. Finally, it will reduce complexity in an area (IT) of the organization that struggles to cope with constant complexity.

Reshaping your PMO to Beat the Recession

There’s been some buzz lately on how PMOs can help your company spend wisely during a recession. In wading through the recent buzz, it’s important to know that not all PMOs are created equal, and the skills of the PMO leadership can make or break your ability to use a PMO as a weapon in your recession-beating strategy. Because the economic climate has changed drastically, you may be in danger of overspending if you don’t re-evaluate and re-engineer your PMO to meet the needs of the day.

Kristen Caretta, at Search CIO-Midmarket discusses how project management offices are uniquely positioned to cut projects that have spiraled out of control and identify those critical to meeting changing business needs and increasing business efficiency.

An article at CIO.com includes key metrics for gauging PMO success. It’s important to reconsider your metrics during the recession, however, because the shift in business climate may require you to track against different targets.

Look critically at your PMO and the way it operates to see if your organization is guilty of any of these behaviors. All of them can actually cause a drag on your bottom line.

  • Undue effort spent on policing project teams fpolice-monkeyor adherence to a standard methodology. A highly functioning PMO evaluates requests for exceptions to methodology standards and helps the teams run with a lean and mean approach that speeds up progress while imposing an identifiable and acceptable level of risk to the business.
  • Hyperfocus on metrics. Don’t let the endless trackinbusiness-chimpg of metrics become an end unto itself. The only thing that needs to be reported and addressed are the exceptions-those projects that are riding off the rails. It’s a waste of corporate resources to publish lengthy status updates on projects that are humming along without any problems.
  • The half-day weekly PMO meeting withmeeting-monkeys a cast of thousands. Be very clear on the purpose of your regular PMO meetings. Using them to resolve cross-cutting issues and refine project strategy or reprioritize the project portfolio and realign resources is a good use of time. Dragging every project manager through status updates for each project only makes sense if the projects are somehow inter-related.
  • The IT PMO-in-a-silo. The biggest bang for ymonkeysour PMO dollar is in its ability to foster alignment between business needs (which may in fact change over the lifespan of a project) and implementation projects. You can only do this if your PMO is an enterprise (as opposed to an IT) entity. The director of your PMO needs to have a solid record of experience in advising and negotiating at the C-level, in addition to rock-solid project and program management skills.

To navigate the recession, don’t assume that your current PMO is already providing exactly what you need to win in a difficult economy. If you don’t have a formal continuous improvement approach in place, a semi-annual review and realignment of PMO approach and operations may be in order.

Generating Revenue through Social Networks: Part I

submitted by Ken Allard

Many organizations are struggling to understand why they should care about online social networks. They narrowly define them as blogs and message boards and dismiss both their relevance and their potential to generate new revenue. I believe that by failing to directly develop initiatives related to community many companies are missing opportunities to take advantage of the inherent network benefits that online services can offer.

Here are five qualifying questions that companies should ask themselves to see if they have an opportunity to generate revenue by fostering the growth of an online social network:

  1. Do you act as a broker of goods or services?

  2. Do you provide content or advice to a significant percentage of a specific industry or consumer segment?

  3. Are you facing new competitors who generate revenue by aggregating audience around your content or by providing meta-content?

  4. Do you have data or knowledge within your organization that is obscure to your clients?

  5. Do you serve an audience that is highly fragmented?

Any company that answers yes to any of these questions may have an opportunity grow their revenue. In this blog series, I will explore each of these questions and provide case study examples of organizations that have the potential to launch profitable social networking initiatives or those that already have them in place.

Let’s start with the first two questions:

  1. Do you act as a broker of goods or services?

  2. Do you provide content or advice to a significant percentage of a specific industry or consumer segment?

Companies that can answer yes to either or both of these questions have perhaps the richest opportunity to profit from social networking. Fortunately, a wide variety of organizations fit into this category. Let’s look at four different examples:

Wine Spectator – Wine spectator has an offline paid subscriber magazine that includes access to a Website. The magazine’s content includes stories about wine trends, wine auctions, experiences, travel, food, and other lifestyle content. Perhaps the most valuable content that the magazine provides is its expert ratings and tasting notes about wine. Wine Spectator’s wine experts are so respected and revered that their ratings immediately affect the price and the availability of wine.

While the offline magazine is interesting and a useful wine guide, the Web site has transformed the value of the publication. First it is a database of all the tasting notes and ratings for every wine that the magazine has evaluated. Hence, anyone looking for a review of a specific wine before making a purchase, has immediate access to an expert rating that provides valuable information and pricing guidance. If you haven’t yet figured this out, I am a huge wine enthusiast). The Web site takes this benefit a huge step forward, however, by enhancing the recommendations of their experts with the opinions of the entire Wine Spectator community. The Web site also allows each member to build an online inventory of their own wine collection with their own tasting notes and ratings which they can share with all other members.

Wine Spectator Personal Wine Inventory

Member Wine Tasting Notes

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Thus, the publication has greatly expanded the content available to all members and has significantly increased the utility of the Web site. Members share their own entertaining stories about their wine experiences with each bottle, what food they served with it, and their own perspectives about the quality of the wine. This social feature increases the revenue of the site by increasing page impressions (i.e. advertising revenue), engagement, and subscription stickiness. While I do not have access to any proprietary information, I am certain that the renewal rate for members who have entered their entire wine collection online is significantly higher than that of those who are passive readers.

Consumer Reports – Consumer Reports is an enormously respected magazine and Web site, published by the non-profit organization Consumers Union. This organization has been helping consumers make smarter purchases for decades and provides a valuable public protection and public advocacy service. Consumer Reports ratings and rankings of products are distinguished from any other source in that they are independent, objective, and scientific. The organization tests each product with sound, consistent methodologies. (The facilities are amazing. If you are ever in Yonkers, contact the organization to see if you can get a tour of the testing facilities. It is a fascinating experience).

The organization is serious about its mission and the scientific nature of its ratings. Thus, it has chosen to limit and often exclude the product opinions of its readers. Subscribers to the Web site may go to separate forums to discuss product quality, but unlike Wine Spectator or other sites like Amazon.com, member opinions and reviews are not integrated into specific product ratings.

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I believe that the organization is missing an opportunity to increase engagement, page views, and subscription renewals, by limiting the ability of consumers to learn from each other and to participate in the process of evaluating products. On the Web, people want to participate. They want sites to offer utility, convenience, and an integrated experience. Sometimes brands and policies need to evolve to remain relevant.

Reed Construction – Reed Construction is a business to business service that offers content to the entire construction industry, including contractors, architects, and product companies. Contractors and other suppliers seeking work or new sales can gain access to a database of new projects, building plans, and building specifications. This is a high value, premium content service, with paid subscriptions being the primary source of revenue. Reed, however, is failing to address a large part of the potential subscriber market.

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Reed is a kind of non-traditional broker of goods and services. While not directly enabling a transaction between two parties, their information is directly facilitating a transaction. Currently, Reed only provides content to one half of the purchasing dynamic, the suppliers. With the power of a proprietary social network, Reed could also provide information and advice to the businesses and developers who are seeking products and services. By developing some simple Web applications, data capture standards, and analytical frameworks, Reed could rate, rank, and categorize all suppliers of goods and services, relying largely on outcomes data gathered from the developers. Like Amazon and E-bay do with their networks of consumers and independent sellers, Reed has the opportunity to use the social network of professional developers who may be geographically dispersed but who share a common set of experiences with products and service providers to gather outcomes and ratings data that can be valuable in making future purchasing decisions. By failing to monetize their true network, Reed is leaving at least half of the potential market unserved.

Hamptons Real Estate Online – Hamptons Real Estate Online is the leading source of listings information for anyone looking to buy or rent a house on the east end of Long Island. It is not all that different from any other real estate site except that it is not specific to any specific broker and it offers and extremely easy to use interface and set of search and browse utilities. It is also a little different in that it serves a very specific regional community and its database of rentals and properties for sale is quite comprehensive. In effect, it is the one place to go to for this information. The site makes money by collecting listing fees. It is essentially a new form of a newspaper classifieds.

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Hamptons Real Estate Online is missing a revenue opportunity by failing to fully recognize that it is serving a distinct community. The collection of towns and villages that comprise the Hamptons is essentially a large, linked resort community. People buy and sell houses repeatedly. They often rent a different property every year. Real Estate is a hobby of sorts and the mass of people that returns to the Hamptons each year needs services that are specific to their property rentals or purchases. Yet, the Web site (unlike others that cater to a people seeking information about rentals, e.g. http://www.vacationrentals.com) does not capture any feedback from previous renters about the quality of the property. It also does not present any advertising or classified information about the services that renters or new home buyers often need such as cleaning, landscaping, pool service, or contractors. Essentially, the site is failing to monetize its community. The site could also greatly add utility to its site by presenting additional information about the homes that are listed (e.g. previous sale price and ownership history all of which is publicly available but fragmented) and allowing users to register and maintain information.

Three Basic Social Networking Strategies

There are three basic approaches that these companies have pursued or should pursue to generate new revenue.

  1. Add value to existing content by gaining audience feedback or additional user-generated content. (e.g. Wine Spectator)
  2. Capture data about how your community interacts with its suppliers or service providers and about the transaction itself to inform or advise future product development, marketing, or purchasing decisions. (Hamptons Real Estate Online, Reed Construction )
  3. Add content to your offering to extend your services beyond your core service. (Consumer Reports)

In the next post in this series I will address opportunities related to question number three:

3.  Are you facing new competitors who generate revenue by aggregating audience around your content or by providing meta-content?

What’s your project collaboration style?

A lot of today’s news has covered inaugural fashion style, but let’s get back to business and talk about collaboration style. We’ve seen a lot of different approaches to project team collaboration, and are wondering how our readers’ project teams work together on shared project files. Please take a moment to answer this poll, and feel free to comment on your answer in the combox.

Now is the Time for Comfort IT

comfort-foodWhenever crisis strikes and people enter uncertain and frightening times they close up like a clam.  They do not take on new risks like new cars or houses, instead they find comfort in life’s little pleasures.  Macaroni-and-cheese, tomato soup, and meatloaf seem to sooth the troubled mind and are the perfect accompaniment to the theater of financial meltdown.  IT has it’s equivalent of comfort foods, short (less than one budget cycle)  projects with easily measurable gains.  Projects which enhance core business functionality and projects which increase visibility are usually easy wins.

Projects like “Let’s Outsource All IT”, “Let’s Go to the Cloud”, or “Let’s Move to Open Source, Oracle, Microsoft, etc. to Save Money” are not Comfort IT and elicit the image of someone running down the hallway with their hair on fire screaming (does not look comfortable to me, let’s skip this one).  These projects will have their time in the sun when the Great Wheel turns again and risk is the entree of the day.  It will be fun to see how fast the major vendors morph their tune to a new reality; they are already shifting from guppy sales representives to bonafide sharks via the layoff lever (I am ever thankful for Email, Voicemail, and Spam Filter Purgatories).

If your organization is light on legacy projects and issues, now is the time to start some (ha ha ha!).  All joking aside, this period is a breather in the steady march of technological leverage of the corporation.  Companies can leapfrog past the painful pioneering process inherent in most technical innovation, at a bargin price.  Just about every hardware, software, and services vendor will have capacity to sell.  It is a buyer’s market , which gives the most comfort of all. 

This is the perfect time to review projects.  Determine cost-to-complete, or can it be completed.  Will it enhance the business process and ultimately be welcomed by its users, or is it a statue to political personal vanity (or an ediface to technology).  Sacrificing projects on the altar of the crisis is considered a statesman-like action and a career-saver for both the guilty and innocent.  For the fearful, consultant priests are available to both identify and cleanse  corporate IT sins for a small fee in these times (put another project on the fire!).  Nothing like a second opinion to sooth the soul, a true IT comfort food.