We’ve worked on a couple of software evaluation projects this year – and have had to wrestle with all 4 clients on this one topic:  Don’t ask questions to software vendors if you don’t know what you are going to do with the answer.

For example, a couple of my clients were requesting 5 (five!) years of financial statements.  My questions to them:  What are you looking for – low debt, liquidity, earnings - what?  What constitutes a healthy financial statement?  I get a lot of blank stares, and at times, anger.  If you had to focus on one thing in the evaluation of a software company (not the product, the company)…my recommendation would be to look at the health and breadth of their prospect pipeline.  More on this another day.

This past December, in the span of 3 days I received 4 different phone calls from software sales professionals that went something like this: “David, I have prospect and they are ready to buy but they don’t want to spend a lot of money on the implementation – can you create a proposal on the cheap?”

Not music to any professional consultant’s ears. I did craft the proposals…and they were crappy as I knew in more heart that I was not serving this prospect well. I was just quoting services for a fee up to their threshold level. Nothing about outcomes. Nothing about success. Nothing about strategy. Nothing.

As a result of the December proposals, Lupine decided to open up our tactics and methodology to the market in order to allow our clients and prospects the opportunity to become The Wizard. We have created and are currently selling the “Do it Yourself Guide to Implementing Yardi Voyager”. It’s for those prospects who don’t want to spend/invest the money for outside consulting – i.e. unsuspecting Wizards. And it’s for those Wizard wannabes who have been itching to ‘look behind the curtain.’ For those who want to go it alone, but desire to be educated and to have us looking over their shoulder. Everything we know about software implementation has been included in this Guide.

I’ve been told by several in the industry that I am crazy for doing this – signing a death warrant for Lupine Partners. Who opens up their intellectual vault and shows their secrets to the world? Us, I guess…And this is one of the reasons why I went ahead with this effort. I look around and see what others are doing, and then do the opposite. To stand out, to differentiate, and to serve my employees and customers. This is no death warrant. In a changing economy, CHANGE!

Change. Just to be clear Lupine Partners is a consulting firm. We still consult with clients on a daily basis. We are also in the product solution business. We consult with our clients through our products on a daily basis as well.

We created our Guide with our team of 5 each having a separate responsibility and function while we carried our full consulting load. Amy served as the project manager using the exact methodology that I teach in the guide. In other words, we practiced what we preached. We had an issues list, held weekly status meetings, had a kickoff meeting, and a lessons learned process at the end of the ‘engagement’. Maggie was responsible for the packaging and shipping. Brian, Angela, and I created the content – each handling about a third. I also had (have!) the responsibility of marketing and selling the series.

Not many consulting firms or companies can match our speed to market. Our 27 DVD series was completed in about 2 months – from soup to nuts. Our agility is a by-product of working together for a very long time, working overtime as necessary, and having a trust in the relative strengths of the individual team members. In our company, the sum of the parts is greater than the whole.

While the Guide was built for new customers, an interesting phenomenon has occurred. Existing Yardi clients have been buying it…Reasons given to us include:

• · not wanting to be held hostage by key employees
• · having to add more properties to their portfolio and wanting to ‘do it themselves’
• · using the Guide as an internal training document

As a marketer, I have been trained to enter the conversation going on in my customer’s and prospect’s head. For prospective software buyers, one of the questions is always: Why does an implementation have to cost so much? It’s a good question – really good. The honest answer is that doing it poorly can be devastating and expensive in ways that most people don’t think of. A few being:

• · An increased amount of time on their old, inefficient system
• · Loss of organizational confidence
• · Loss of time spent on meetings and tactics that did not take them to their goals
• · Employee firings resulting in increased training costs and ramp-up time (on their regular job)
• · Organizational recriminations
• · Money spent on software license fees for a product they were not using
• · Money spent on outside consultants – with no implementation to show for their consulting investment
• · Competitors had pronounced operating advantages due to being on a more current software platform

When should you be the Wizard and when should you beware the Wizard? My answer is that you be and do both all the time – as much as you can. Independence is a good thing – except when it isn’t. For example, if the independence takes you away from your core earning potential or your core business…then you need to be marginally dependent. If you are in a dependent mode, don’t put all of your eggs in one basket and don’t trust one Wizard absolutely. Hate to say this…even if that wizard is me.

In 2007, a software sales professional friend of mine and I commiserated with each other over our shared conservatism toward money, that kept us sitting on the sidelines, out of highly leveraged real estate investments pyramided one atop the other. We both knew the same fellow, somebody half as smart as either of us and less industrious, who was making $100,000.00 to $150,000.00 each time he bought and flipped a pre-construction high rise condo contract, then using that profit to tie up three, then that to tie up nine. It is, of course, all gone now. The sunny clime buried in a blizzard of bad paper. Never taking any chips away from the table and parlaying every wager as if the idiotic appreciation and frenzied buying would never end came to a conclusion I’d predicted from day one. It took a little longer than I’d envisioned. But neither of us envies his easy profits now.

The obvious point is that most of what we see shining from afar is covered with grit and grime when you get up close, and is often really nasty if you get inside. It is easy to envy the illusion. Comparing your own situation to the fiction of others’ is certain path to real disaffection and discouragement, but to what end? It’s also easy to envy the temporary, the star of the moment for whom success greater than yours appears to be so easily obtained.

But the teams that look best early in the season are not necessarily those winning late and through the play-offs. In a small snapshot of a brief window in time, we can make just about anything seem smart – even lending to people without ability to pay, even pyramiding debt and calling it income.

It is usually best, as Tom Peters observed about the behavior of ‘the excellent’, to stick to YOUR knitting. To invest in what you know and understand, including yourself. To “focus tight” on your business, your products, and your customers – the economy you can make and mold and largely control through your own initiative and imagination. A new year is upon us, in some ways, just the rollover of an artificial, made-up page in a calendar; it must occur for the calendar business to exist. But in other ways, an inspiration, a motivation, to re-think priorities, renew energies; re-make the world around you to your preferences. While everything seems changed, nothing has changed: we still prosper one good customer relationship created and sustained after another after another, multiplied as best and as rapidly as resources permit.

I am back from a trip to England.

I spent a week with my son Bryan, daughter-in-law, Frances, and my devilish grandson, David. During that time I stayed at the on-base ‘hotel’ at RAF – Fairford. (Always comforting to have an assault rifle pointed at you through the car as you fumble for your ID to go ‘home’…)

While there I visited Stonehenge, Avebury, Salisbury, Warwick Castle, and the Windsor Castle. One day Bryan and I left Fran and David at home to go to the famous baths in Bath (maybe Dallas should be renamed ‘Hot’). These warm springs go back to the early Roman days BC. It is now a 4 story modern facility with saunas, cold and warm pools, restaurant, etc. A wonderful day. Needless to say, I slept the entire way back to the base. Worn out by out that water.

The family is doing well…flourishing in England, proud to be serving our country in the armed services.

After visiting the Windsor castle, they kicked me out of the car at the Slough train station. I caught the train to London Paddington, and from there took the underground to the Covent Garden station. I was staying in London for the week to work with a client.

While making my way to Covent Garden, I heard the 3 Magical Words (not knowing at the moment that would hear these words at least a thousand times before I departed London a week later):

M I N D T H E G A P

These words permeate every aspect of the London Underground system. On video inside the subway car, constant audio reminders – both in the cars and while waiting at the station. Mind the gap. Mind the gap. Mind the gap. It never ends…

So, what does Mind The Gap mean?

It means to not fall in the gap between the subway car and the station platform. Apparently, this is a problem…(I don’t see how because the ‘gap’ is about 4 inches wide…). I mentioned this to my main contact at the client’s office…he busted out laughing telling me that his mother had fallen in the gap when he was a young boy. So, of course, I laughed too – then realized that I was laughing at my client’s mother falling into the ‘Tube’. He told me that he thinks the whole never-ending mantra was developed because of her….Too funny.

I had a free weekend in London so I went to see the sites: Big Ben, Westminister Abbey, Buckingham Palace, Kensington Palace, Royal Albert Hall, London Bridge, Tower Bridge, London Eye, Hyde Park, St. James Park, Winston Churchill Museum, Parliament…and a bunch of pubs. I went to all of these places via The Tube. Standing for long periods of time smashed like a human sardine with the pleasant, insistent message of Mind The Gap, Mind The Gap, Mind The Gap floating through the subway car…got me to thinking.

I really should mind the gap…in my life and in my business.

Like the gap between my intentions and my execution. The gap between my thoughts and my actions. The gap between what I want to do and what I should do. The gap between what is comfortable and what is new and awkward.

And the gap between what my company offers and what our customers want.

I have this sign up in my office now…To remind me of my most wonderful trip to England, and to, well, Mind The Gap…every day and every way.

Headline: Britney Spears’ Mother’s Publisher Delays Release of Her Advice Book, ‘Motherhood,’ In Light of Britney’s 16 Year Old Sister’s Revelation She is Pregnant

No, in case you missed this, it is a real news item. Incredibly, Britney’s mother did have a book of parenting advice and stories from raising Britney coming out, and it was not a joke book. It was intended to be taken seriously, and presumably would be and eventually will be by a media that has become a bunch of ‘professionals’ barely able to read teleprompters and in perpetual drool over celebrity. The fact that this is news at all speaks volumes about the sad state of affairs. But what’s REALLY comical, yet also instructive from this three-way train wreck is the mother’s statement expressing puzzlement at her 16 year old’s pregnancy because, quote (honest)

“she always came home before curfew.”

Laugh. But are you similarly guilty of such ‘insight’ in the operation of your business (department, organization, club, etc.)? Particularly with regard to the software that runs the operation of your business…

I recently completed a quick strike effort at talking to some of my customers with regard to the pain associated with their daily jobs. One of the issues that was discussed quite a bit was the notion of stepping back and looking at what you have from a system perspective – particularly when you have just completed a major implementation effort. I noted last month how Phil Jackson at Price Edwards and Company did just that. Finished the implementation – took a breather and then invested in an effort to see where the holes were.

We have a wide and large client base in the real estate industry. Very few of you are doing this. Stepping back and taking a look. Not saying all of you, but most of you are not doing this.

As part of that review you should be looking at some of the peripheral, non-ERP solutions as well. Chris Stopps at Yes! Communities has done just that…except she hasn’t done her review after the fact, she has done it before. Yes! Is a brand new outfit and Chris in her role as CFO has determined out of the box that she wanted to outsource as much as she could. So along these lines she has outsourced one aspect of her accounting operation to one software company and simultaneously outsourced another accounting function to their bank. Both outsourcing service providers ‘pitch’ and ‘catch’ transactions to their core property management system. Kent Barner at Behringer Harvard has taken a similar approach with regard to outsourcing.

Many of Lupine’s clients, after going through the rigors of a major implementation, think they are done dealing with software vendors. They take the big breath and say something to the effect of “I am SO glad we are done with that”. This is a mistake.

I recommend that you maintain an ongoing dialogue with the software community. This will pain you to hear this – you should always be on the lookout for your next solution. The re-implementation timeframes continue to get tighter and tighter as your competition gains competitive advantages through software solutions, and as the software packages add new functionality. You just think you are done. Rich Danhauer, IT Director of Pinnacle Realty is a very big practitioner of this as is Doug Prichard at Kennedy Associates Real Estate Counsel. (Both in Seattle – hmm..) They see having a continuing dialogue and review of real estate software products as part and parcel of their job.

I see a lot of software hopping going on in my client community. Sometimes, just sometimes, it is because of functional advantages of one product over another. The real reason, and the reason most people don’t want to talk about, is that the software vendors for the most part do a terrible job of ‘touching’ their customers. Of keeping in contact with them on a frequent, recurring basis. Of adding value through a newsletter, by providing weekly tips on best use or insider strategies on getting more use out of the software. Or by informing their customer base that a new upgrade has come out and is available.

To my software company readers: And the most ridiculous part of all this is that the marketing ‘touch’ can be handled, to an extent, by software! High ticket expenditures require high ticket marketing strategies. I talk with lots of software salespeople. It is not unusual for a software company to have a person or team in charge of ‘troubled’ accounts. This person is responsible for going around and talking to customers who have grumbled or threatened to leave. I have never made this comment out loud before – but they are missing the point. This team should be abolished and the monies allocated to a customer retention program that starts at the point of sale and provides so much value to their customer base that they can’t imagine leaving – even if there are problems with the product.

Sorry Mrs. Spears, you really can get pregnant and still make curfew.

When I started working, my response to any directive was: YES SIR.

On CNBC the other night I saw yet another ‘instruction’ for business owners on the need to provide the ‘new employee’ with (I swear to God), breakfast cereal in the morning and free buffet lunch, a game room, afternoon naps, daily grades and praise sessions, and “meaningful emotional connection” to every “request.”

I’m not big on turning the workplace into kindergarten…and the first person to skateboard through my office would be shot on sight.   I do not believe this is the right path. This seems to me something being packaged up and sold via media and fad-gurus-of-the-moment like other liberal, fantastical ideas. The workplace is not called the amusement park or the sports bar or the gymnasium or the playroom for a reason. Further, I don’t see this stuff going on in most successful businesses – it seems province of California-weird public companies awash in Wall Street investors’ capital, and such companies have a funny way of rising to ridiculous over-valuations than dissolving and imploding.

You have to go to great extremes to surround yourself with productive people – employees, vendors and associates – who do not require back rubs, peppermint candies and coddling as if you were their nanny. Hard-driving, high-flying, in-a-hurry entrepreneurs need to find and surround themselves with particularly thick-skinned people who are “about” getting the job done. I rather doubt Donald Trump needs to give George Ross free manicures and Pop-Tarts, applause, and “emotional connection sessions” with every negotiating project put in George’s hands. And I rather doubt George is dispensing such new-age niceties to his subordinates either. Yet they do seem to be running very successful businesses and minting money.

Of course, the first person you must hold ruthlessly accountable for self-directed, self-motivated, consistent high performance behavior is: you. If you need a boss (or nanny), you can’t be a leader.

Here’s a simple thing that remains a mystery to many throughout their lives: achievers are all about achievement. Non-achievers put a long laundry list of other things before achievement. A dog needs a belly rub. An achiever does not.

Defining the scope of the Software Evaluation project is the first critical step. Do not assume that everybody is on the same page.

As described in my book “Software and Vendors and Requirements, Oh My! – A Project Team’s Guide to Evaluating Business Software”, I start all of my software acquisition planning and implementation meetings asking for the scope of the project. More than half of the time, there is disagreement in the room. Know this: You cannot implement a moving target. Write the scope down, and then read it out loud. Keep doing it until everybody agrees. If there is not agreement, then this will be the first item that you will run up the flagpole to the Steering Committee.

“What is a scope document?”

The scope document defines the boundaries and limits of the project. It is a clearly written description of what the project is. It should include the items in scope as well as those that are not in scope. For scope definition, consider:

• areas of the client’s organization
• package or modules of a package to be evaluated
• descriptions of enhancements to be evaluated
• business functions or processes
• affected or replaced systems or subsystems
• relevant hardware platforms
• contemplated or required interfaces
• features or functions of a piece of software to be evaluated
• work that must be done to complete the project

Beware of a phenomenon known as “scope creep,” the changing of the previously agreed-to scope during the course of the engagement. This is not unusual in systems projects and if you do not handle it correctly it can derail all of your hard work to date. When this project poison rears its head, the project manager must address it immediately.

Do not assume that everybody knows when a change in scope occurs or that they agree with it. For example, a project is kicked off with a scope of evaluating accounting packages, and then it is agreed that point-of-sale packages should be evaluated as well as part of the ongoing process. This is scope creep. It’s now a new project with a whole new set of considerations. At this time, the project team and steering committee can decide to:

• let the point-of-sale project be its own project with its own selection team or
• expand the scope of the accounting acquisition project. If the project is just kicking off, this is probably fine. If you have software vendors coming in the next week to show their wares, you are most probably starting the entire process over from scratch.

When scope creeps rears its ugly head (and it probably will at some point), act on it immediately by putting the steering committee and project team together.

One other comment on scope: There may be times when you want to cut the project scope back. If the “bite” of the project is too big and will strain limited human resources to the breaking point, go ahead and reduce the scope. It’s better to have a smaller success than to have a larger failure. Knock out the smaller project and live to fight another day.

My firm was engaged several years ago to do a soup to nuts evaluation of a governmental entity. Included in the engagement was a definition of needs, a documentation of existing processes, the creation of an RFP, and facilitation of the vendor evaluation effort. Overall, it was a good effort—we came in on time and on budget.

The problems arose during the vendor selection effort: we had two firms that were a virtual tie in terms of functionality and price.

Early in the process, I had mentioned the notion of creating x factors (tie breakers) for just this purpose. The team didn’t want to do it because they said the factors were not measurable.

So, there we were, stuck in a conference room with no direction and every person in the room looking at me. The executive director of this organization walked in the room at that time and he also wanted to know what was going to happen. At this point, I mentioned the team’s reluctance to create tie-breaker mechanism in advance. Everybody nodded and continued to stare at me. Crickets chirped.

This was new terrain for me, and then I had a terrific idea.

I tossed this little nugget out on the table: “How would everybody feel if we took a straw poll and everybody wrote on a scrap of paper who they think should be our vendor of choice?“ The executive director looked and me and said he was thinking the same thing. Well, there we had it…a new methodology.

Everybody wrote down their decisions and handed them to me—and I read out the answers. One vendor had seven votes and the other had two votes. A little more discussion was had, but the vendor with seven votes won the contract.

My lesson learned was encapsulated in the deafening silence and stares. My mistake was not making them come up with tie-breaker criteria. Never again. I have kept the scrap pieces of paper in my office as a memento and a reminder that there is always something to learn.

A little over 6 years ago, I was hired by the CFO of a large property management company to facilitate its software selection. The company’s situation was a little bit different—two finalists already were chosen, but the firm had not compiled their requirements. And even more troubling was the fact that they were not bringing in any other operational areas of the company for the evaluation. This was an accounting deal all the way around.

Uh-oh…Danger Will Robinson!

The company did a good job of creating the requirements. We created and prioritized the scorecard together and went through the vendor demonstrations. We did not have a tie, and the contract went to the better vendor.

Now it came time for the implementation. My firm was chosen to lead this effort. It was probably the most highly functioning implementation I have been on ever. I never ever met with one person from the operational area during the entire implementation. The entire process was driven by accounting—100 percent.

So, why did this go so well? It had all the symptoms of another difficult job. The client didn’t use an RFP and didn’t incorporate the major functional areas of the company into the process. The vendors were pre-selected based on hearsay and vibe. At least the client brought a consultant (me) in to facilitate the sessions.

It took me a while to realize why this worked so well.

And the reason was that there was almost zero internal politics at this organization. Most of the people working there had been together for at least ten years. Everybody was comfortable with each other and, most importantly, the company trusted the three people on the team to do what was right. There was so much institutional history in the company, and trust that going this route was the best call for the client. Why invest the time of six employees when you trusted these three to look after your interests?

Hidden agendas are rampant in many of these software acquisition projects. There were none with this client. And because of it, there was a quick forty-five-day software selection and a six-month implementation.

One of the biggest time wasters on a software selection effort is the request and review of prospective software vendor’s financial statements.

The determination of financial soundness is in itself a subjective determination. Does having a large cash balance mean that you are financially sound or does it mean that you have not been investing in new technologies or reinvesting back into the company? Does having no debt mean that you are financially sound or does it mean that you are missing the boat by not borrowing to take advantage of business opportunities? If you had a bad year last year, does it mean that this year is doomed? And so on.

To me, the past is past. What you want to know is whether the vendor is viable at the moment and how big its customer base and recurring (stable and future) revenue stream is. If you want to go into a full-blown analysis of the financial condition of a software vendor, you need to determine in advance what the criteria will be for financial soundness. I have been a CPA since 1982 and I can tell you that this is a slippery slope and not easily done unless you get audited (not a compilation and not a review) financial statements from a CPA.

This activity of asking for financial statements is something everybody thinks you need to do. I agree with checking out the financial viability of a prospective software vendor…just don’t think that asking for historical financial statements is the way to do it.