Maybe I’m old fashioned…but to me cash is cash. What I am going to talk about here is something that has benefited me greatly over the past 15 years…but has always been a puzzler. Often times when my consulting companies have been engaged to provide services, our fees have been capitalized on our client’s books. In other words, the debit goes to an asset rather than an expense account. This is due to the fact that a software evaluation or implementation benefits the organization for many years, and therefore must be accounted for as an asset. And I would hear things like, “Who cares what it costs, we’re capitalizing it anway…” or things of that nature. Who was I to inquire? After several years, it hit me what was going on. Nobody is responsible for or held accountable to a capitalized consulting fee asset GL account. In fact, nine times out of ten…there is no budget. It only hits the income statement through the amortization of that asset. And once again, nobody is held responsible for the amortization budget…because there isn’t one.In essence, it’s free budget money…many of my savvy clients are hip to this accounting/budgetary loophole to get things ‘done’ in their department. The other puzzling side of all this is the insane lock on FTE count as my client goes through the implementation process. A good technical person can’t get hired because ‘there is no money in the budget’. But there is money in the consulting fee capitalized asset ‘budget’ to pay 300k to a consulting firm…makes no sense most of the time. I’ve also heard the argument that why hire somebody for just 18 months if we may have to let them go at the end of it? Or we don’t want to increase our overhead….Or we don’t want to upset the balance or our core team. As a business owner, this type of talk makes my head spin…and I guarantee you the owners/shareholders don’t know this stuff goes on. Because they know that cash is cash…whether it is budgeted, unbudgeted, asset, or expense.

I was talking with a colleague yesterday…he’s a member of my group and gets my daily emails – just like you.

He asked me an interesting question.

He said DW, “During a troubled software evaluation and implementation effort – what percentage of the problem is attributable to the software companies and what percentage to the customer?”

Good question…and one that I did not hesitate in answering.

My answer is 85% purchaser and 15% Software Company. He was stunned – he figured I would have the ratio the other way.

The software vendors make two mistakes over and over again. One, they aren’t that good at implementing their own products. There is an inherent conflict of interest when they are project managing their own product – when push comes to shove (i.e. problems occur) who are they going to represent? Their company or their project?

I think you know the answer to that question.

The second recurring mistake is they do a poor job of managing expectations during the sales process of what the implementation will entail. There are afraid of saying how tough things are during these implementations because they think their competition will say the opposite.

When software vendors have paid me for advice in this area…I always tell them to ‘rip the band-aid off”. Almost all prospects/clients will appreciate the honest feedback…gives you mucho credibility. If the software vendors were good project managers, they would then say, “But, here’s how we are going to minimize the pain and stress.”

But they don’t. See mistake number one.

The rest of the mistakes rest with the purchasing organizations.

Sometimes their internal resource capabilities are not in alignment with their go-live desires. (This is called the biting off more than you can chew syndrome.) Other times, clients are unwilling and ready to do the hard work…and other times, they have chosen an ill-fitting software package – by the way, that’s the client’s fault, not the software company.

The reason it seems like the software companies (and consultants) are more to blame is simple.

It’s because we are blamed…by the people who pay us. It’s a one-way street.

Yep, 85/15 is just about right.

Years ago…well before I started Lupine Partners and Software Selection Mentor, I worked for a bank in Dallas as an internal IT consultant.

We were going through a data migration effort to a new system and we had hired a consulting firm to help us through the effort. There was a big ceremonial meeting where the firm passed out their ‘study’ for everybody to look at.

They were very proud of their study.

And they should have been – it was thick as a brick.

I started turning the pages…okay, I’m at page 7…nothing of substance….page 12 – colorful triangles and then some ball shaped thing with arrows all going in a counter-clockwise direction indicating….who the hell knows what.

Finally, at page 19 to page 24 – substance! In fact, it was all you needed to read. The remaining 150 pages was junk…and pure billable time. This was a shakedown pure and simple…the bank had major buckaluckas and the consulting firm had to create ‘something’ to show how impressive and important they were.

I remember thinking right then and there that I would never do that. I wouldn’t even know how to create one of those ‘bricks’. What a waste of time and energy…

My firm has been on a major evaluation effort the past 7 months…we have 5 more months to go. We were awarded the contract over all the other big firms in the country. And I have a theory why we won…besides the fact that we kick butt.

Our answer to their RFI was only 7 pages. I gave them something they could and would read. They did and said we want this small firm who doesn’t waste our time.

The other firms came back with unreadable bricks.

Never pay for a study. Never.

What do you do when a software vendor shows up at your offices to do the product demonstration two-step, and you realize after a not-long period of time that they are the wrong vendor, with the wrong product, with the wrong message, at the wrong time?

That train wreck scenario happened to me several weeks ago…

Several things contributed to this across-the-board waste of time:

One, the vendor somewhat misrepresented themselves in their written and verbal communications. They didn’t outright lie…but they did shade the truth.

Two, they didn’t listen to me in our pre-demonstration conference several days before the demo. (You ARE having these conferences beforehand…aren’t you?). I was quite clear on what my client wanted to see, and what the client’s requirements were.

What happened is the vendor came and showed the client wanted the vendor’s strengths were…despite the fact that it had nothing to do with what the client required…

So, I had to stop the session…kick my client out of the room, and raise hell with the vendor. In a sense, they were glad that I did as well as they could feel the tension and anger in the room building. After that break, the sales professional did better…but their opening hour killed any chance of them gaining the trust of the client. Plus, their product just doesn’t fit.

Even more puzzling about this…is that the vendor flew a VERY long way to do this demo.

This is what happens when you sell features instead of solutions.

One More For The Ages

To those of you who know me now as the gray-bearded, even-more gray-haired, guitar playin’, real estate software consultant to the stars…

Well, there was a time years ago…when I had no beard, my hair was brown, I didn’t play guitar, and my experience level was green.

And that’s when I started evaluating software for clients…

Boy, what a mess I was.

I remember my first gig. Was actually an in-house selection for my employer at the time. Since I was in my early 30s…I knew it all.

I rejected all the good advice I had been given by my boss. I didn’t get buy-in from my constituency, designed the software product myself – in a vacuum of course. And essentially said the hell with everybody else…I knew what was best.

I remember the day like it was yesterday. Unbeknownst to me – there was a coup going on. I was being overthrown – and I didn’t even know that my ‘people’ were unhappy with me.

I had to go to my boss and admit that I was a know-it-all idiot…and then hid behind his skirt while he cleaned up my mess.

Best thing that ever happened to me. There is nothing like professional humiliation to ‘learn you up real good’.

So, here I am years later at AARP minus one…mucho wiser, but still making mistakes. Difference is that now I embrace them…smile and say, “That’s one more that I can put away for the ages – good job Wolfe.”