October 22nd, 2009

CEO Interview: Meridian Systems' John Bodrozic on the construction front

Posted by Brian Sommer @ 10:15 am

Categories: CEO Interview, Current Affairs, PPM - Project Portfolio Management, SaaS and Beyond, Software Vendors, software. applications

Tags: Asset, Construction, Meridian, AECOM, Asset Management, Transportation, Software As A Service (SaaS), Operational Planning, Business Operations, Emerging Technologies

I recently had a chance to speak with John Bodrozic, President and co-founder of Meridian Systems. Meridian sells a number of solutions in the project portfolio management and infrastructure lifecycle management space (e.g., Prolog, Proliance, Prolog Converge) . Their products help property owners, property managers, construction firms, architects, engineers, etc.

I asked John specifically about the economy and how it has impacted the construction space. John indicated that some sectors are in dire straits, especially new housing construction. However, there are definite bright spots out there. John talked about all of the ARRA (American Recovery and Reinvestment Act of 2009) spending in the United States and the significant amount of public works construction it has spawned. Meridian has made sales of its solutions to organizations like City of Seattle Dept. of Transportation, Miami Dade Water & Sewer Department and the General Services Administrations’ Public Building Services group.

John also indicated that not all parts of the world are being impacted the same way. The World Bank is apparently helping out with infrastructure projects in selected locales.

Meridian is seeing lots of government interest in infrastructure initiatives particularly in areas like transportation, energy and water.

Given that Meridian had a strong private sector customer base (approximately 5000 customers/100,000 users), I asked John if these new governmental customers are any different than private sector customers. The biggest difference that John identified was that governmental customers preferred more on-premise solutions while private sector customers were more interested in their SaaS (software as a service) offerings. However, both groups are interested in looking at assets (e.g., buildings, dams, roads, power plants, etc.) as long-lived assets that need meticulous records maintained on them over the life of the asset and not just during the initial construction phase. John then told me of their shorthand name for this: plan – build – operate.

Meridian has recently added functionality to track project expenditures by fund. This functionality is especially needed for those entities administering or seeking reimbursement from targeted government stimulus funds. John also discussed how firms seeking these stimulus monies must also meet OMB compliance and reporting requirements if they hope to win this work and get compensated for it.

Finally, I asked John about whether they are seeing the overseas market being a big contributor to the company’s growth. He indicated that the Middle East is going strong for them. He singled out one success story: their customer/partner AECOM. AECOM is involved in numerous initiatives in the Middle East and Meridian’s solutions are being used in many of these efforts. AECOM is a program management company that is often hired by a building or property owner to design and engineer the structure, hire contractors to do the work and manage the lifecycle of the asset thereafter.

September 25th, 2009

Shouldn’t services firms have their own ERP?

Posted by Brian Sommer @ 9:41 am

Categories: CEO Interview, Future of Application Software, HR, PPM - Project Portfolio Management, PSA - Professional Services Automation, Professional Services, Selling Professional Services, The Applications Market, software. applications

Tags: Staffing, ERP, Services Firm, Service Firm, Enterprise Resource Planning (ERP), Sales Strategy, Enterprise Software, Software, Sales, Brian Sommer

I caught up this week with Morris Panner, CEO of OpenAir (now part of NetSuite). One aspect of our wide-ranging conversation concerned the continuing evolution of businesses, the economy, etc. towards a greater services orientation. Drawing on that, we discussed how services firms need their own version of ERP.

Here are just some of the ways I believe a Services ERP would differ from a traditional ERP:

1) Services firms need visibility in their ‘resources’ so that the best/optimal staffing decisions can be made. If the best resource (as measured by value delivered) is available in one country but the work is sold in another and eventually delivered in a third, can these resources be optimally scheduled? ERP/MRP solutions optimize capital resources (e.g., stamping machines, extruders, CNC machines, etc.), customer orders, inventory and other assets. But, in services firms, the optimization software is still in its infancy or non-existent. Sadly, this staffing is often controlled (not optimized) by individuals whose allegiance is to a local sales or operations person and not to the service firm or its shareholders.

2) The CRM component of ERP is also structured to serve Industrial Age firms. Service firms need information about people, availability, real-time pricing data about people, etc. and this is different from products. For example, if your service firm knows it will soon offload a very large number of SAP implementers from a big project, would you want to offer some discounted pricing to prospects to soak up all of that upcoming bench time? And, would you want to be selective in offering these discounts for only some personnel while actually boosting the rates of others who have distinguished themselves as real experts in this subject matter? ERP solutions don’t do that.

3) Sales commission calculations are/should be different in services firms. Some sales people would prefer to sell only domestic work as they are paid a percent of total revenues. Selling a mixed mode project (i.e., where some work is performed offshore and some on shore) results in a lower total fee estimate and lower sales commissions for the sales person. Shouldn’t the sales commissions be driven on which projects drive the greatest margin for the employer or greatest value to the client (and not greatest income to the sales person)? Do ERP systems address this? Do ERP systems show a local sales person the staff availability of personnel in another country? Do ERP systems recommend the best value people for a project regardless of location?

4) ERP systems (still) don’t integrate non-accounting data into their software well. Service firms need to capture, reuse, modify and expand prior work plans, intellectual property, ideas, etc. into their projects, deliverables, work plans, etc. They need a flood of information about people so they know who to staff and where. That sort of information changes daily and is rarely found in the standard HR system. This is why resource managers exist in service firms and knowledge management components are essential in service firms’ IT solutions. ERP providers have tried to bolt on project tracking and some PPM capabilities to their ERP offerings but it doesn’t work well. ERP was designed first for accounting transaction data and then updated for Industrial Age firms. Overlaying ERP on service firms is an unnatural act and not optimal for these firms.

PSA (professional services automation) firms did some great things to get services firms more productive and efficient. We all owe them a big thank you just for making time entry a one-time event and eliminating all the reconciliation work (between the project tracking module, payroll and budget/estimating systems). PSA vendors also made billing, collaboration and other project work easier, too.

The initial focus of PSA has been to stitch together a number of service functional needs into a smaller collection of better integrated solutions. Service firms now have better, larger, more robust and more efficient systems. They still have islands of service automation software and data that include: PSA, spreadsheets, accounting software, HR/Payroll software and BI/Analytics. It’s time for that to come together as a more unified solution set.

These larger solutions will likely form the nucleus of a SRP (services resource planning) offering but won’t initially deliver the full capability of SRP until someone adds the unique business functionality that only service firms have and need. Functionality like support for global service delivery models, billing and currency reconciliation for global projects with globally sourced team members, resource staffing optimization models, etc. That may be a few years off but it’s what will eventually come. The question is which vendors will deliver it?

I’m pleased NetSuite kept Morris after they acquired OpenAir. It speaks volumes to their support for the service industry. The question now is will NetSuite create a full, robust SRP for the services space?

July 22nd, 2009

Teams in the (Troubled) Cloud

Posted by Brian Sommer @ 7:20 am

Categories: Auditing - Tax - Accounting, CEO Interview, CRM, Future of Application Software, HR, PPM - Project Portfolio Management, PSA - Professional Services Automation, Professional Services, SaaS and Beyond, Service Providers, Web/Tech, Wisdom of Crowds?, group dynamic, internet

Tags: Team, Team Member, Worker, Maynard, Loyalty, Team Management, Management, Brian Sommer

Not all team members are created equal

I’ve had some really interesting briefings/meetings lately. If you want to understand where software executives, industry leaders, etc. are going/thinking, then read on.

Let’s begin with a conversation I had with Maynard Webb. He’s the CEO of LiveOps and former CIO of E-Bay. Maynard’s running a huge virtual call center and outsourcing operation these days but these businesses lack the miles of cubicle walls and background noises we hear in so many other call center operations. His workers are home-based contract workers. The better the level of service a worker provides causes that worker to be rewarded with ever greater call volumes. Therefore, the better reps get more pay while bad reps get shunted off.

Maynard and I got into a great discussion about how difficult it is to do project work in any situation and how much harder it is when the team members are physically disconnected from one other. Sure, teams can access online white boards, chat rooms, etc. but these technologies cannot replace one requirement of great teams: people that know and want a team to succeed.

Technology cannot do a number of things. It can’t make people share information. Hoarders and those who use knowledge for power can really screw up a project team. Technology cannot change the personality makeup of a lone-wolf worker. If they don’t want to play with the team, they won’t. At least when a person is in the next cube, you can check up on them or ask them a question. That gets really difficult when they’re 1000 miles away. Technology can help the person who’s communicative, social and team oriented become a great team worker even when no one is physically co-located with other team members.

Yes, process work flow technologies can help a (project) manager identify who is a bottleneck or who isn’t co-operating. But, these solutions pre-suppose that firms want this kind of worker in the first place. They don’t.

Earlier in my career, I had the pleasure of working with hundreds of individuals who:

- put the client’s interest ahead of their own self-interest
- did what it took to honor commitments
- were career-focused
- wanted to continue to learn and grow professionally
- helped teammates especially when one was floundering or adversely impacting the critical path

Since then, I’ve seen a lot of other kind of workers. They are:

- self-interested. If it doesn’t impact their compensation directly and immediately, they cannot be bothered
- of the opinion that if they personally didn’t commit to something then they feel no reason to move their schedule or life around to honor someone else’s timeline or commitments

- more concerned about their immediate needs & commitments (e.g., attending a concert) than meeting a client’s commitment or deadline
- disinclined to help a colleague as there is nothing but downside in it for them
- expecting you to pay them whether they deliver value or not
- certain that they possess more skill and knowledge than you (and others) believe them to possess
- mercenary. If you don’t pay them plenty now, they’ll walk. Loyalty is dead to these people. So, is commitment.

In many professional services firms, lone wolves are either loved or hated. In some law firms, lone wolves are expected to hunt and deliver their own work. In systems integrators, executives may be expected to be great team members and team leaders. Moreover, they may be expected to include many others in a prospective deal. Team selling and lone wolves do not go well together.

Teams in a cloud world have challenges that warrant a lot discussion. The first issue you should surface is: “When staffing a cloud-based team, are the personalities (i.e., lone wolf vs. team orientation) of the team members appropriate for this environment?” I’m not sure some cloud technology purveyors have thought this through but it should be a big discussion item for their HR department. The fact that Maynard is thinking about this issue is a comfort.

Now, the lone wolf, mercenary, self-interested individual is not indicative of any generation of worker. They exist in all generations. Lone wolves are great in many sales, trading or broker jobs. They may not excel in virtual projects.

Another issue to consider is how decisions get made in a distributed team environment. In a research piece I read last week from an Ivy League graduate student, this person identified some interesting team behaviors in audit and consulting teams. One observation was that junior team members deferred to the more senior team members. They deferred even when the senior team members may lack specific technical knowledge that the more junior people possess.

Why did this occur? Well, it seems that the more senior team members were decidedly more experienced in other, non-technical matters. The senior teammates knew:
- how to deal with persnickety clients
- how to navigate complex client office politics
- how to develop winning value propositions/proposals
- how to manage client expectations
- etc.

The highest functioning teams were those where the most senior team members knew when to back away and let more junior members step up. But how does this work in virtual teams? How do the most junior members know what others may or may not know? Likewise, how do the most senior people know when to let others take over? Many of the clues/cues in face to face project team interactions are absent or diminished in the virtual or cloud based project. This is another area that warrants additional research.

Small projects might be more manageable in the cloud but more study is needed on the ability of really large projects to work well in the cloud. To date, I know of many projects where large groups of team members in one location are co-operating with other teammates in other locations. These many to many or many to few combinations are working but can large numbers person to person connections in a very large project really work well? I’m optimistic it can be done but there are likely to be hundreds of best practices, personality issues, etc. that need to be documented and promulgated in new project management technologies.

These are only three of the numerous cloud-based team issues that Maynard and I discussed. Our conversation was spirited and energizing. He clearly knows of the challenges and the issues to be explored. And, it’s great to speak with someone who’s thinking about the business (and not their golden parachute).