adictoaloshombres: VALUE

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Creating Customer Value In Your Proposals

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Read any book on sales or proposal writing. Go on a sales training course. One of the first topics that will be covered is features, advantages and benefits. Ultimately, any proposal whether verbal or written down has to persuade someone to take an action and this is done by demonstrating the benefits of taking that course of action.

In a smaller sale, especially with products it is often easy to list benefits, but with larger proposals you will have to search harder to understand the client’s business problem and explain the benefits of your solution – that is, how effectively and efficiently your solution solves their business problem.

Your solution should demonstrate not only value in price, but in the services that you offer. Value is the balance of cost versus benefit, therefore you need to be explicit in highlighting the benefits to the client.

Often when a contract has been lost, the client will tell you that you were too expensive – but no-one ever gets told that they won because they were the cheapest. It is the best solution that usually wins, the one that offers the best benefits. This may be the most expensive solution, but it still may offer the best value.

So how do you create customer value? Firstly you need to take time to understand the customer’s needs. When you receive an Invitation to Tender, get back to the client immediately with questions. Call them. Ask for a meeting. You may have been involved with the client pre-tender and have an understanding of their business.

You must be able to demonstrate an understanding of their business need in order to demonstrate that your solution will deliver the required benefits.

When writing your proposal, use content tailored towards the client and their business problem. We all copy re-usable text, or boilerplate in proposals – but customise it to the client. Include their name, especially in the executive summary. Let them know that the proposal is about them, not about you.

Directly address your customer’s issues and offer persuasive ideas with distinct solution benefits and support your arguments with evidence. When have you delivered a similar service or solution in the past? How did that client benefit? Demonstrate your ability to deliver on your promise.

Make sure a value proposition is clearly laid out and easy to understand. Can you include a return on investment model for the client? If so do it you are showing the client you understand how to save their business money.

Creating, Recognizing & Measuring Value

Price is what you pay - value is what you get.
Warren Buffett, Chairman of Berkshire Securities

Keywords:

marketing,coaching,networking,presentations

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Price is what you pay - value is what you get.
Warren Buffett, Chairman of Berkshire Securities

Deliver value that your customers recognize, appreciate and reward. If you want your customers to value what you offer - you must demonstrate that you value them.

Value implies trust so start by building trust. Always under-promise and over-deliver. Be known for keeping your promise and then some. Be honest. Never promise what you cannot deliver.

Don't confuse value with cost. A product's value is almost never equal to its cost. For example, your product might cost you $2 and you sell it for $10. The value to you is $10. The value to the customer will usually be more than the selling price. If it was only worth $10 to the customer then they have no motivation to buy. But if the value to them is greater than the selling price, they are motivated to trade their money for something of greater value. It may be worth $25 to the customer. Then they will gladly give up $10 of their money for the product. The more that value exceeds the cost of the purchase, the more the customer will want to buy from you. Always offer value that is greater than the price they pay. Your challenge is to ensure the customer sees much more value than their cost.

The Value Formula
How can value be so different from cost? Examine the following formula, then discover where you can concentrate your efforts to enhance value.

Total value = real value + perceived value

Let's take it apart to understand it. Real value comprises the tangibles. It is relatively easy to measure. Real value can be expressed in this manner:

Real value = function/cost

Function is what the product or service does in mechanical or analytical terms. Imagine you are buying a new car. If you are shopping for the best real value, you would get the most function efficient ground transportation for the lowest cost. You could measure the car's function factor by comparing it with the cost of your practical alternatives; public transit, car pooling, taxi, bicycle, limousine, various car models. You might wish to consider the costs of these alternatives in terms of time and inconvenience. What does your new car give you that these other modes of transportation don't?

Having determined the new car's function factor, you can divide it by its cost. Is its function worth more to you than its cost? If so, the new car has real value. At the end of your analysis you would buy the cheapest car. Not necessarily. Remember that what you are willing to pay for your car is based on the total value to you, which is a factor of both real and perceived value. So, sometimes without realizing it, you assign value to less quantifiable benefits and buy something that you like. Liking is not part of real value, it is part of a product's perceived value.

Perceived Value = belief x emotion

Compared with real value, perceived value is more difficult to measure directly. Yet it can have greater impact on total value. Perceived value is the product of belief times emotion. It is influenced by intangibles such as image, credibility, beauty and feelings - all the benefits you should emphasize in your marketing efforts. Emphasizing your perceived value is the surest way to differentiate yourself from the competition - and gain you more profit. Perceived value is what makes a brand name more valuable than a no-name. Nike is one example of a company that built a fortune on perceived value. As individuals we think differently, perceive differently, and place different values on things. Beware of that. Use it to your advantage. When your prospect wants to negotiate price, remember to build up your product's perceived value.

How can you enhance the value of what you sell? If you are only looking at the cost of paper and ink then you are forcing yourself to compete in the commodity game. Instead find ways to emphasize the value of your relationship, the creative, - the intangibles.
Always deliver real value too but compete on the perceived value.

Get More Marketing Value From Recruitment Software

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Offering high levels of process automation, recruitment software plays an indispensable part in reducing a staffing agency's administrative burden. However, today's recruitment applications are designed to do a whole lot more than just reduce paperwork. They can make a significant contribution to a company's marketing and sales activity.

Effective client contact management and timely, personalised business communications are essential to the success of any recruitment company. The first step in getting more from your marketing and sales activity is to better understand your existing and prospective client base.

In today's frenetic business environment it's simply not enough to send generic email shots to everyone on your database and hope they generate some interest. With numerous demands on their time and attention, your existing clients and prospects surely won't appreciate another bland missive to an already bulging Inbox. Worse still, they might simply block all future email communications from you.

An audience of one

The days of “load and send” email campaigns are long over. Today email marketers are focused on increasing response, conversion and retention rates using a combination of personalisation, segmentation and triggers. Increasingly segmented and triggered emails are driven by behavioural data, such as which links a recipient clicked, whether someone did or did not open an email, what pages they visited on the sender's website or whether they did or did not take a specific action.

Design matters

Something like 95 percent of all commercial email campaigns are sent in HTML today. As a result, design has become critical for a number of reasons. Recipients might have their email setup to block images. Many people now use their Outlook “preview panel” as a handy filtering tool to weed out unwanted emails. Designers also need to consider inconsistent rendering by different email clients. The way an email looks on Gmail differs from Yahoo, for example. Some designers have adopted a purely graphical approach to email campaigns in an attempt to bypass content filters, but this brings us back to where we started.

Bombarded by evermore junk mail, most people will only read about 15-20 commercial emails per day, and in many cases much less. As a result, layout, readability and usability are critical to differentiating your emails from everyone else’s. In reality your email will have just seconds to provoke interest, convey value and trust, and prompt action.

Democracy at work

Email has been described as the ultimate democratic form of marketing communication. After all, it's the recipient who decides whether they want to opt-in or opt-out of your mailing list; if and when they open, read and act on your email; how much information they wish to share with you; and when they want to unsubscribe.

Recruiters who do not wish to fall foul of increasingly stringent anti-spam legislation and want to build genuinely lasting client relationships will learn to deploy various tactics to increase trust and build brand loyalty, such as ensuring only permission-based emails are sent from your company, switch to a double-opt in subscription process, and publicise your privacy policies. Those recruiters recognised and trusted by clients and prospects will be able to mine for more information. In turn, this will enable them to deliver higher value emails through ever-greater personalisation and segmentation.

Recruitment software mail centres

Today’s sophisticated, made for purpose recruitment applications, such as Bond Adapt, RDB Pro and Eclipse integrate with third party email clients and offer a range of contact management or Customer Relationship Management (CRM) features.

Chris Pawsey, Business Development Team Leader at Bond International Software (UK) Ltd, explains: “Bond Adapt integrates email via Microsoft Outlook. Since Outlook is by far and away the market leading product we (Bond) make use of many of the functions therein. It is also possible to integrate Bond Adapt with other email clients.”

It is this contact management or CRM functionality that allows recruitment agencies and staffing professionals to create and retain email, letter and fax templates; conduct email marketing campaigns; and record response data. However, what these applications cannot do is prepare marketing materials, or ensure promotional activity is properly monitored and measured to ensure continuous improvement.

Matter of design

If you want your emails to succeed in generating interest in your services then they must always look professional. Don't make the same mistake many applicants do when sending CVs/resumes in response to job advertisements i.e. fail to spell check and proofread them properly. If you send an email full of spelling mistakes, it will cost you sales and could permanently damage your credibility.

Next, send test versions of your emails to yourself. You can sign up to any number of free email account providers such as Yahoo, MSN Hotmail and Google’s Gmail. Include these email accounts in your test mailings. The point here is to catch any formatting errors that might show up in the different email programs. It's quite common to find a HTML email that looks great in Outlook and is missing all of its images in Yahoo or Gmail.

Before you send your email you should also ask yourself one fundamental question: "How relevant is this email to the recipient?" Don't assume that the recipients will automatically see why your email is relevant to them. Often it needs to be spelt out. Succinctly explain how your recruitment company can help them and why now is such a good time to spend money on your services. You might want to consider using a professional copywriter to help you.

Two of the most effective ways to highlight the relevance of your offer are to put a strong emphasis on the benefits and make your offer exclusive. Tailor any promotions you run so that they are exclusive to your recipients, giving them a strong reason to act immediately.

As well as facing an avalanche of commercial emails every time we visit our In-boxes these days there's also the ubiquitous spam, much of which comes with the added threat of viruses. In fact, a recent article in London’s Metro daily newspaper suggested that as many as one in every 43 emails received world-wide is infected with some harmful entity. So, not only does your email have to compete for the recipient's limited time and attention, it also has to overcome their fears and apprehensions.

Even with a good understanding of your target audience, establishing which email design elements work will be a matter of trial and error. To help you identify weaknesses and build on strengths, it's a good idea to take one email design and then produce two or three variations (split test). For example, you might use the same headline and supporting image, but change the subject line. Response levels and email tracking will enable you to identify strengths and weaknesses of your promotion.

Email Design Tips

Effective subject lines

Subject lines should be clear, direct, attention grabbing and benefits related, such as “Reduce your recruitment spend by 60%.”

Get your hooks into ‘em

Just like other forms of advertising, emails have to capture the reader’s attention within the first couple of sentences. Otherwise, it’s all over. The hook should be a distillation of your email’s overall message and strongly appeal to the reader’s self-interest e.g. what do they get, how do they benefit.

Sign posts

Generally it’s considered best practice to keep your emails text length to about 250 words. The body copy must support your “hook” with a clear focus on benefits, and then close with a clear, direct call to action. It’s extremely important that there is no ambiguity about what you want the recipient to do e.g. “click here,” “register now,” “reply.”

Mind your language

A well-written email message uses the active voice and short, concise sentences. This is critical as the stark reality is that most readers won’t progress beyond the first couple of lines. You have to be clear, direct and focus on how your offer benefits the reader.

Readability

Almost as important as what you say is how you present your text to the reader. Try to keep your paragraphs short – no longer than five lines. Use 1.5 or double line spacing, and a font that’s easy on the eye and big enough to read. Use bullets to emphasize key points, but avoid text in all caps or multiple exclamation marks. Set text width at 68 characters or less per line so it displays correctly in e-mail applications. Also, avoid breaking or wrapping URLs into two lines - it may cause technical problems. The more barriers you eliminate the better your chances of a positive response.

Keeping track

Having segmented your audience, prepared your marketing message and sent your email out, you’ll want to know it has been received and acted upon. Tracking email responses is essential if you are to identify and eliminate weaknesses and build on the strengths of your campaigns. Here are some suggestions that will enable you to monitor and analyze the effectiveness of your email marketing for free. For accuracy, be sure to use a unique tracking code for each of your different email test variables and keep accurate records.

MS Outlook provides you with a simple tracking facility which informs you when a message was sent, when it arrived and when it was opened. The downside here is if the recipient just glanced at your email in the panel view of their Inbox and then deleted the item you’ll only know because you will never receive a corresponding “read” message from your Outlook tracker.

To switch on MS Outlook 2003 email tracking:

1. Launch MS Outlook
2. Click on the Tools menu at the top of the page, scroll down and click on Options.
3. Click E-mail Options, which is top-right of the Preferences page.
4. Next, click Tracking Options.
5. Select the Read receipt and/or the Delivery receipt check boxes
6. Click OK.

One idea is to simply ask respondents to place something unique in the subject line that acts as a tracking code for your email campaigns. However that puts the burden of responsibility on your respondents, which is something you might to avoid. Instead us the following little trick to automatically place what you want in the subject line of a response email message:

Click on this example:

mailto:user@domain.com?subject=Send-Info.aboutyourcompany

Replace user@domain.com in the above example with the email address you want to use and a unique campaign code.

When the above link is clicked on in your email promotional message, the text immediately following ?subject= automatically appears in the subject line of a new email message. This should work in most email packages.

Vital statistics

If you have access to even the most basic website statistics you can track hits to your web pages by placing a question mark (?) after your web address (URL) when used in each email promotion, followed by your unique tracking code.

For instance, you send 3 email promotions. Each carries a corresponding URL tracking code:

Email Ad 1. http://www.yourdomainhere.com/homepage/htm?EM1
Email Ad 2. http://www.yourdomainhere.com/clients/htm?EM2
Email Ad3. http://www.yourdomainhere.com/applicants/htm?EM3

Hyperlinks with your own unique tracking codes added to the end of a URL don't adversely affect the ability of recipients to access your web pages in any way, but will show up in the server log files. To determine the exact number of hits that a particular email generates, look at your log files within hours or days of sending your mail shot. You can check with your ISP or web host for access to your log files.

If you don’t mind having other peoples advertising on your website then there is a range of free website tracking services available. Take a look at AddFreeStats.com and FreeStats.com.

By using some of the simple, free tracking and analysis methods explained here you can continually refine your email marketing, measure its effectiveness and get more from your recruitment software. For more information and professional help preparing your next email campaign, sales promotion or advertising visit www.charlie-the-copywriter.co.uk

Document Shredding: ‘Destroying’ The Things That You ‘Value’

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document shredding,document shredder

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What do the following industries have in common?

Law enforcement
Legal industries
Government
Banking
Health care
Financial service (brokerage)
Entertainment
Technology
Manufacturing industries

The answer: The above-mentioned industries regard information as a very important aspect of their operations. They are information-sensitive – they have a need to ensure that important and confidential data are secured and protected at all times.

What data are considered classified? Some are listed below:

Disbursement records (Wages, etc.)
Accounts records (financial statements such as the balance sheet, etc.)
Sales receipts
Bank records
Social Security records
Business letters
Customer information
Personnel records
Computer printouts
Computer discs or tapes

Why is there a need to protect such data? Industries are in constant danger of having such sensitive information to ‘fall into the wrong hands’ – people that are out to inflict damage, such as a discontented employee or a competitor, which could result to either of the following:

Bad publicity
Humiliation
Loss of staff or key personnel (probably to a competitor)
Loss of customers
Loss of job or running out of business
A possible indictment

This is why every information-sensitive industry needs a proper and secure records storage and management. However, such course of action usually requires much room (think of all those years’ worth of papers and electronic tapes piling up); it also incurs high costs. In addition, there will also come a time when the company will need to purge itself of the age-old materials. But these outdated materials will still be sensitive, and throwing away classified documents in a wastebasket will not do the trick – they can still be collected and sorted out, the information still made available to whoever would want them.

There is a truly a great need for a secure disposal of sensitive data, and an effective solution to this crucial aspect of an industry is document shredding.

Document shredding is a safe and secure option for discarding restricted documents and materials. In document shredding, sensitive files and records are destroyed, turning them into bits that can no longer be recognized; thereby ensuring that confidentiality is maintained.

The document shredding process is entirely flexible that it can adapt to any industry’s distinct requirements in destroying sensitive records. Depending on what would suit it’s needs, a company can either purchase it’s own document shredder or employ outsourced document shredding services, who can then perform the document shredding process on-site or off-site.

On-site document shredding provides industries with the opportunity to observe the actual shredding of their materials ‘on site’, right at their doorsteps. The use of mobile shredding vehicles and equipment will especially fit those who do not want their records to leave their site intact.

In an off-site document shredding, the document-shredding company collects the materials in security containers and hauls them in a safe location that may be monitored by security cameras where they are destroyed into little pieces. Aside from the surveillance cameras, industries can also send representatives to personally observe the actual document shredding process.

Once the classified records are destroyed in a proper and secure manner, the document shredding company will then provide its client with a “Certificate of Destruction,” which notes the date and time as well as the accounting of the materials shredded. This not only serves as a proof that the documents were destroyed properly; it also gives the client the necessary data for an audit trail.

There are many advantages in making use of the services of an outside document shredding company:

A document shredding service enables the company to save thousands of dollars by not having to buy a document shredding equipment and not having to worry of the depreciation as well as the maintenance costs.

A document shredding service also enables the company to save in terms of labor. Employees would not need to spend hours to do the document shredding. Employees can spend the time more effectively by doing their own jobs.

A document shredding company also helps the environment by recycling. Recycling is the final step in almost all the document shredding process. The shredded materials are collected and, through baling and/or pulping, can be used again to form other items such as boxes and copier papers, among others.

We cannot deny that protecting the interests of a company remains a crucial phase of every business, especially in this age of information. And with document shredding, we are not only securing an industry’s information, we are also helping the environment – a win-win solution.

Financial Value Of An MBA!

Keywords:

mba,mba graduate,mba gradutes,master of business administration,university,universities,online mba,m

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Most degrees are obtained with the purpose of advancing your career prospects and job opportunities. The same is the case with an MBA degree; the only difference being that an MBA degree is considered as the most valuable post graduate degree in the world and has exciting career opportunities. People take the MBA program in order to further their careers in their current jobs or to get a better job on the basis of their MBA degree.

Most MBA programs regardless of the major focus will provide you with training in basic business principle needed by any business manager including, corporate finance, economics, strategic planning, marketing, basic accounting, etc. However, if you know which career field you are interested in, selecting a specific MBA focus will allow you to specialize and better prepare yourself for your career. This means you won't just learn the basis of corporate finance, but rather advance corporate, investment finance, financial accounting and financial markets which will make you much more marketable as a financial analyst or banker.

Advance Your Career
Whether you're a real estate agent, an ER doctor, an engineer, or an editor for your local newspaper, a graduate business degree can prepare you to move into a managerial position within your field.

Where you decide to pursue a general MBA or a specific specilization earning an MBA in any field is an excellent option - especially for students hoping to land excellent jobs once they graduate. Research indicates that individuals with an MBA tend to move up the promotion ladder much quicker than those without the degree. Not only that, but most employees possessing an MBA on average earn more than their lesser-educated contemporaries. These statistics should come as no surprise given the fact that MBA graduates are in high demand at multi-million dollar companies throughout the world.

Financial Value of an MBA
An MBA degree from one of the top business schools in America could set you back by up to $100,000. This is by no means a small amount and is indeed one of the largest investments that you are likely to make in your life. So it is necessary to evaluate the value of an MBA, strictly from a financial point of view as well. So you need to ascertain the return on investment on the amount that you are likely to incur in pursuing an MBA and see if it is financially valuable to you.

Calculate all the costs that are involved in pursuing an MBA, namely application fees, program fees, tuition costs, interest on any loans, cost of materials needed, travel costs related to training etc, test fees, and any other miscellaneous costs that you may incur. Once you have estimated the cost of your MBA, you need to assess the benefits of an MBA in terms of increased salaries, better wages, and more career opportunities to evaluate the monetary value of your MBA degree.

Eight Ways to Sell Value - Not Price!

Today, more clients than ever before are questioning the value of the services they buy. With more choices, both online and offline, clients are demanding that professionals prove their worth or cut their prices.

Keywords:

sales selling value price differentiate unique

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If you want to get paid what you're worth here are eight ways to sell value - not price:

1. Be Unique. If there is nothing that differentiates you from your competition you become common. Webster defines the word common as, "ordinary or not special" and the only way buyers select one common service over another is price.
Take inventory of your skills, experience and knowledge. Are you a specialist in some area? Are you an expert in certain facets of your business? These and other differentiators can make you unique and valuable to a select group of clients.

2. Choose Your Clients Carefully: Don't ever let your clients choose you or you will be at their mercy. If a deal is going to close successfully, the true professional should be in control, not the client.
To begin controlling your business, write down the attributes of the people you want as clients and then go out and get them with targeted marketing. I hope the first item on your list of attributes is that they are people you enjoy spending time with. Being a business owner is far too difficult to work with people you don't like just to earn a living.
Turn away people who don't meet your criteria. When you reject or refer clients it tells the world that you don't just work with anyone, you are selective which raises your perceived value. It also makes you unique from other businesses who will work with anyone who can bring them a paycheck.

3. Set High Standards: If you work with anyone and everyone your value drops. If people have to qualify to work with you your value increases. Of course you know that there are prospect who will ask you to give them a bid with no intention of ever buying from you. They’re planning to use your bid to leverage a discount with their current vendor or any one of a dozen other reasons that they want your knowledge but not your services. Then there are buyers who will waste your time and then purchase through another vendor (probably a relative).
Don't ever meet with a potential client until you ask a logical list of questions to determine their seriousness and loyalty. You need to know their motivation and if they are interviewing other vendors. You also need to know if they’re financially qualified. If you don't have serious, financially solvent, and loyal clients, why waste your valuable time with them?

4. Compete On Value, Not Price: No disrespect intended to other business models, but it doesn't take any special skill, experience or knowledge to compete on price. All you have to do is be the cheapest, but this is a losing game.
Some people may remember the gas price wars of the 1960's and early 1970's when there seemed to be a gas station on nearly every corner. To gain market share, one would cleverly lower its price, but then all the others quickly followed suit and the only result was that everyone's profit margin was reduced.
The way to get paid what you're worth is to visibly demonstrate your value to your clients. Competing on price does not create value.

5. Create Value In The Eyes Of Clients: Frankly, most people throughout the country believe that people in sales do little to earn their commissions. This is our fault because we should be educating them about how hard we work before ever accepting them as clients.
Keeping my prices firm was a problem until I started tracking of all the different duties required to earn my pay. I developed lists of activities I do for customers. This amazes clients because most have no idea how complicated their orders sometimes can be (whether it’s manufacturing, servicing, fulfillment, etc.)
Since I created these lists I've never had to cut prices. If a prospect asks for a discount I simply show them the list and say, "Here are just some of the activities I must complete to earn my money. Why don't you point out the things that you'd be willing to do instead of me. If you save me time then we can talk about saving you money because I earn every penny I get." When confronted with a list that runs nearly ten pages long their eyes glaze over and they usually respond with something like, "You're the expert, I expect you to do this work!" To which I simply say, "If you want me to do all of these activities on your behalf then you need to pay me what I'm worth. If you want to pay less, I'll see if I can find someone who will do less and maybe they can save you some money."

6. Educate Your Clients About How Much You Make. After speaking to thousands of agents all over the country for the past 15 years it's clear to me that the average prospect is clueless about how your prices are determined, factoring in overhead and other expenses we have to run our businesses.
Most business owners face the reality of having to pay 33% federal, 10% state and 13.2% self-employment costing a total of 56.2%. As a result, clients often say, "Wow, you are underpaid for handling all these activities for me!" This was exactly my intent by taking the time to explain how I earn my money and how little I actually keep. This way they never try to cut my prices because they know that, like them, I earn my money and I don't make as much as they may have previously thought.

7. Provide value that no one else offers. When prospects do business with me, they get a complete outline that explains my process from start to finish. It also includes samples, a list of service providers that could be involved in the process and much more. No other competing business offers any of these benefits, so if a client wants to work with me they must pay what I ask.

8. Reject price shoppers. Studies show that only 15-18% of people make their decision to purchase a product or service primarily based on price. This means that the majority of clients appreciate value and are willing to pay for it - if they see it.

Don't forget that real professionals earn their money by helping clients maximize value, minimize costs, save time, and much more. If potential clients don't appreciate this then feel free to refer them to your competition.
You don't need every prospect and you certainly don't need every buyer to be successful. If all someone wants is a cheap transaction, send them to a vendor who competes on price and wish them both luck!

Enterprise Application Modernization - Unlocking Latent value

The successful management and re-deployment of legacy systems to meet tomorrow’s business needs is the major challenge today.

This white paper will help organizations understand the issues involved in effective management of existing legacy systems.

Keywords:

legacy application, legacy extension, Legacy Application Extension process, legacy system, legacy extension advantages, Data Modeling, Knowledge Mining, Technical legacy Extension

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INTRODUCTION

Corporations have over the years, deployed a diverse mix of software and hardware applications to gain competitive advantage. Rapid advancements in IT, combined with evolving business needs, have resulted in contrasting IT environments across enterprises.

At one end of the spectrum are open architecture applications that leverage on the potential of the of Internet, while the other end comprises traditional, close-ended, legacy software. corporate data still resides on legacy Some market research estimates indicate that more than 70% of systems. Hence the successful management and re-deployment of legacy systems to meet tomorrow’s business needs is the major challenge today.

This white paper will help organizations understand the issues involved in effective management of existing legacy systems.

LEGACY APPLICATIONS

DEFINITION

A legacy system typically consists of large applications that access voluminous data stored in legacy database management systems running on mainframes or mid-range platforms.
These systems made economic sense when they were developed. The functionality of these systems was unquestionable at the time of installation. However, as technology and business needs evolved they have become complex and uneconomical to maintain.
As the enterprise has invested a considerable amount of time and money in these systems, these investments cannot simply be written off.

PROBLEMS ASSOCIATED WITH LEGACY APPLICATIONS

In their current state, most legacy applications have several challenges associated with their functioning and maintenance. A few of the typical challenges are enumerated below:
. Legacy systems are built for internal, enterprise-wide usage, while today’s business demands that they be exposed to new, external entities. The focus was almost always on internal business logic.
. These applications are inflexible. They are not modular thus segregation of presentation, business and database logic consumes critical resources.
. The lack of documentation and skilled manpower make any modification an ad-hoc process and not a holistic one. This can lead to crashes and breakdowns in unpredictable parts of the system.

Efforts to address these challenges have been piecemeal, and have had limited impact. The combination of new systems and retrofitted older ones have ompounded the problem. Adoption of new technology and languages has often been only for technology’s sake. Finally, the need to deliver application functionality via new channels like mobile devices, with differing transaction approaches add to the problems of successful legacy modernization.

BENEFITS OF LEGACY APPLICATIONS

Organizations continue to use legacy applications on account of various reasons. Some of the benefits perceived by organizations are:

. Legacy systems were developed for, and still run, mission-critical applications.
. A large number of users utilize the system. They are very familiar with the functionalities of the applications, including look and feel. They have also gained a complete understanding of the strengths and limitations of the system.
. The underlying hardware and software of such legacy systems is time-tested and very reliable. The applications themselves have evolved over a few decades and behave very predictably.

These factors contribute to the continued usage of legacy systems. However, effective modernization of these legacy systems will ensure that these benefits can be amplified at minimal expense.

CHANGING BUSINESS REQUIREMENTS AND LEGACY APPLICATIONS

Economic and political conditions over the last few years have resulted in several emerging challenges for technology organizations.

. Time to market is going down. Organizations are moving from 18-month project cycles to 6month project cycles.
. New products and services are being introduced in rapid succession.
. With globalization and deregulation, the need for flexible systems that can synchronize with rapid business shifts has become crucial.
. Organizations are mapping cost controls to appropriate service expectations.

Such dynamic considerations have made it imperative for organizations to assess the financial viability of their IT portfolio, so that they can leverage the advantages of new-age languages and optimize returns on investment on existing applications as well.
Business leaders must consider following strategic issues when evolving beyond legacy systems:

Total Cost of Ownership -

Typically, the Total Cost of Ownership (TCO) of keeping a legacy system running can be very high as compared to the cost of running a more up-to-date system.
The TCO of a system includes components like operations (hardware, system software), production support, and application maintenance. The lines of code, quality of documentation, and the way the application is structured directly influences costs of the system.
Industry experience suggests that maintenance costs drop by as much as a factor of 3 after a legacy system is transformed. This is indeed possible if the newer system is better structured, better documented and has optimized code.

Productivity -

A legacy system typically owes its stability, scalability and reliability to the underlying mainframe platforms on which it is deployed. Any approach to modernizing the legacy system should recognize this and develop a solution accordingly.
Modernizing legacy does not imply migrating away from the mainframe platform in its current manifestation, but optimizing the existing system for enhanced performance.

Flexibility -

The technologies used in a legacy application often do not integrate well with newer technology application components that have been subsequently developed. But the main flexibility loss arises from the fact that the applications are monolithic -- unlike the more recent multi-tiered architectures where the presentation and business logic are separated. Multi-tiered architectures allow for greater flexibility and changes can be effected quickly.
Architectural rigidity is one of the primary reasons that several organizations prefer to re-architect the legacy application, even while retaining the underlying platform and language.
A transformed application makes for a multi-tiered, adaptable system, allowing easy integration of newer technology.

Knowledge Availability -

Programmers adept at COBOL, PL/1, Assembler and several other legacy languages are a vanishing tribe. These programming languages are no longer taught in computer science courses at schools and training institutes – hence, without considerable re-training, it is difficult to create these skills in-house.
The same problem holds true for database technologies used. In the past, hierarchical and network databases were very commonly used, whereas recent applications work with relational databases.
Last but not least, documentation in respect of the application’s functionalities is almost always inadequate, and only a few people possess complete knowledge of what the application does.

Extinct Vendors -

In many reported cases, the company that originally developed the application is no longer in business. That leaves their customers in a very precarious position because most often the language used to develop the system is already obsolete and no longer supported. Additionally, the system has usually been heavily customized, and there is no proper documentation maintained. This is also the main bottleneck to implementing enhancement and changes to the application.
Hence, whenever such a system has to be taken over for maintenance, it requires a high learning curve. This period can vary from 2 months to 6 months depending on the complexity of the system. Only after getting familiar with the system can a third-party be able to carry out an effective maintenance job.

Alignment with Business Goals -

Some CIOs certainly do wonder whether it is worthwhile to spend on maintaining and upgrading a legacy system. In reality, such outlay can produce a healthy return on investment should not be considered as mere running costs.
There are three distinct types of maintenance costs: preventive (e.g. Y2K, Euro), adaptive and breakdown. Preventive and breakdown maintenance expenses are necessary to keep the system running, so the costs allocated to these can be said to be running costs.
Adaptive maintenance commonly refers to enhancements or upgrading. This maintenance, though piecemeal, does improve the functionality, accessibility, and provides good business value. Unfortunately, most enhancement requests take a back seat as most budget allocations being consumed by preventive and breakdown maintenance.
Improved returns on investment can be obtained only by undertaking a sizable upgrade, and that too when the business needs it the most.
Proper planning and Return On Investment (ROI) analysis should be done for legacy upgrade to know whether value accrues from increased returns or reduced TCO (maintenance, infrastructure and operational costs).

ALTERNATIVE SOLUTIONS

Organizations moving away from legacy systems must adopt a financial viable solution that meets strategic business needs. There are various options available to the CIO when metamorphosing from legacy systems to more contemporary platforms.

Functional Extension -

Functional Extension is useful when the legacy application possesses adequate business logic, but needs additional functionality.
Functional Extension refers to closing the functional gaps in the legacy application by reengineering the existing application or by integrating it with other application.

Technical Extension -

Technical extension is useful when existing legacy applications have high operational costs and there is a strong need to share the business capabilities with partners/suppliers. One of the key drivers for technical extension is a need to web enable the legacy application.
Technical extension covers activities like:
. Code cleansing / optimizing
. Componentization
. Development of wrappers
. Legacy Integration

In both the functional and technical extension, the processes and business rules are preserved while critical components of the application are converted and adapted.

Migration -

Migration becomes an important modernization option when the legacy application has adequate business rules, but requires higher scalability and interoperability.
This option is also useful, when it is difficult to separate logic from persistent data and presentation layers.
. Selection of targeted programming language/platform/database
. Code migration
. Database migration
. Deployment migration

Replacement -

Replacing the existing legacy application with a generic off-the-shelf product or rewriting it under a new programming environment is another option.
Replacement would accrue benefits similar to re-engineering and is vulnerable to similar disadvantages. There is also the danger of overlooking important business rules that constitute the heart of the legacy application.

SELECTING SUITABLE SOLUTION

The selection of any of these four options would be based on an extensive analysis of the application portfolio around various application parameters, some of which include:
. Functional suitability
. Availability of various features
. Scalability
. Interoperability
. Maintainability
. Reliability
. Availability of standard solutions (OTS Products)
. Ease of use
. Level of documentation available
. Accessibility
. Support available from platform/technology vendor
. Applicability of Enterprise Architecture policies and standards

Portfolio analysis around these parameters will help analyze the applications based on functional gaps and technical gaps within the applications. Once the portfolio analysis has identified the functional and technical gaps, each application can be placed in one of the 9 blocks, shown in the following analysis grid. This will help in identifying a suitable modernization strategy for the application.
Portfolio analysis is the most critical aspect of the overall enterprise application modernization exercise and hence there should be a tool-based approach that would remove, to a great degree, subjectivity introduced by a pure manual approach.

LEGACY EXTENSION (FUNCTIONAL AND TECHNICAL)

WHAT IS LEGACY EXTENSION?

Legacy Extension bridges the gap between legacy and strategic architectures. It augments noninvasive integration and other project options. Legacy extension is cost-effective, time-efficient and risk adverse. The extension process consists of understanding and documenting the existing system; decomposing the application into data, presentation and processing logic; creating and extracting reusable components; and if desired, converting the legacy code into Web compatible languages.

ADVANTAGES OF LEGACY EXTENSION

Extending a legacy system offers organizations a number of distinct advantages including:
1. Up to 40% reduction in maintenance costs, with enhanced understanding of the functionality of your applications. Optimized cost of ownership of transformed system and reduced overall costs (inclusive of new resources, training and maintenance).
2. Leveraging current business processes and modern technology.
3. Improved access to the system through re-deployment and re-orientation of existing hardware and software resources. Anytime, anywhere, secured access to users and customers. Easy access to users over the Internet since no additional hardware or software is required to access
the application. User-friendly interface that requires minimal training / re-training.
4. Shifts dependence of maintenance activities from few individuals to transparent processes and tools. Ease of maintenance from a Programming / Maintenance group perspective.
5. Comprehensive documentation of system with complete knowledge of processes.
6. Ease in deployment and enhancement of functionality.

METHODS OF LEGACY EXTENSION

Legacy systems typically consist of billions of lines of code in myriad traditional languages. The extension process involves scanning code, extracting business logic, removing dead code and arranging modules into logical components. Skilled programmers can execute these activities manually. However due to various time, cost and risk implications of manual intervention, tool-based extension is a faster, easier and more cost-effective option.

TOOL-BASED APPROACH TO EXTENSION

The demand for rapid application development, along with significant advances in software development automation, has resulted in the creation of tools that automate and aid in the process of legacy extension. In legacy systems, a single program performs multiple functions, or multiple programs may perform a given function. Understanding all operations executed by a function is a difficult task in terms of magnitude, effort and complexity. Several programs may have to be analyzed to completely understand a single function. This method is time consuming and prone to error.

ADVANTAGES OF USING A TOOL

Tool-based extensions can prove to be advantageous in:
1. Extraction of business logic - A tool can extract the business logic related to the functionality, from all the programs and make the entire functionality available in the form of a business rule repository. With the automation of functional analysis, the developer can spend more time in optimization and componentization of
the code.
2. Extraction at system and functional levels - A tool can extract business logic at a system level as well as functional level. Deploying a tool ensures that the complete business knowledge is extracted from the system, while providing an accurate picture of the application(s) functionality.
3. Pictorial depiction of system flow - A tool can also provide a pictorial representation of the system flow, and highlight various modules in the program. This offers the developer a better understanding of the system. Tools can also be used for data migration efforts, whereby it is possible to model data for the target system. This is very useful in cases like VSAM to RDBMS conversion.

Typically, a tool-based approach to legacy extension involves the following steps:

Baselining the Inventory -
1. Tool captures a module-wise inventory.
2. Missing routines, programs etc are reported. For example, program A invokes another program B, and program B does not figure in the program inventory. Program B can then be imported into the tool inventory.
3. The cycle goes on till the inventory is complete.
4. Redundant programs, i.e. the programs that are not referenced by any other programs are identified and ignored.

Planning and Scheduling -
1. Imported programs are analyzed for their complexity. Different tools use different algorithms for determining the complexity.
2. The complexity analysis helps in effort estimation for extension of the programs and further planning & scheduling of necessary activities.

Generating the Process Flow -
1. The tool generates a process flow for a transaction.
2. It highlights the cross-reference and interdependence between programs, batch jobs, modules, etc.
3. The visual representation provides a better understanding of the system at macro and micro levels.

Data Modeling -
1. The tool generates an “as is” data model of the current system.
2. This model can be further normalized and optimized to suit the client’s requirements.
3. This data model can be exported for direct utilization by standard tools such as Rational Rose, ERWIN, etc, to create the target database.
4. The model can also be used to create a DDL for the target database. This feature adds more value when transforming from VSAM datasets to RDBMS.
5. Dependencies and relationships between the various entities can be modeled using graphical interfaces.
6. In most cases, the back-end can remain unchanged.

Knowledge Mining and Extension -
1. Complex rules are split into independent atomic rules. The extracted rules are reviewed and validated against the code and the current functionality. Redundant code is weeded out.
2. “Use Cases” are designed and appropriate business rules are associated with them, thereby building up the components that get translated into software in the target language. A component can consist of more than one function. The design of the components is dependent on the target architecture and infrastructure.

Deployment -
1. The re-architected application is exposed to internal users for testing its functionality.
2. The software generated is implemented on the target platform.

PATNI APPROACH

VALUE-ADDED MAINTENANCE

Patni believes that the best way to service a customer’s need is to imbibe the processes prevalent at the client’s site and blend them with Patni’ s development tools, processes and methodologies.
This approach enables Patni to provide the “best-fit service processes” that add value to the client’s IT operations.
Patni has a ‘Center of Excellence’ for Legacy Modernization. The focus of this group is to:
1. Provide in-house consulting and set benchmarks for a range of Legacy technologies.
2. Identify ‘value-add’ tools, processes and methodologies, and facilitate their usage at client sites.
3. Provide “proof of concept” and formulate solutions in e-Business, Legacy modernization and Application Management.
4. Provide cost-effective solution transfer services to Delivery Units, using a judicious mix of onsite-and offshore-based highly skilled IT professionals.
The Legacy Modernization Center of Excellence possesses expertise in executing projects on a variety of legacy platforms such as IBM mainframe and AS/400, Vax/VMS, HP 3000/MPE.

NON-INVASIVE

Patni believes that any extension of legacy systems should be as “non-invasive” as possible. As described earlier, Re-facing, Re-engineering and Replacement are the three strategies of migrating from legacy to newer platforms. These range from the “cosmetic” to the “highly invasive” methods used by vendors of specific tools and technologies.

SCOPE CUSTOMIZATION

Based on our extensive consultancy experience, Patni scopes out a cost-benefit classification. On the basis of their study, our analysts categorize applications into one of the four categories:

Upgrade / Replaced -
Application that do deliver strategically significant functionality, but have a high cost of retention, have to be retained. However, they are candidates for cost reduction through technology upgrades or through exploitation of other systems. If exploitation of Quadrant 4 (Export) systems makes it possible to replace these systems, these applications will effectively move into Quadrant 1 ( Retire)

Retired -
Applications that do not deliver any strategically significant functionality, but have a high cost of retention, are poor value for money. system that have been semiretired, or are used for historical data reference only, would be included in this category.

Retain -
Applications that do not deliver any strategically significant functionality, but have a correspondingly low cost of retention, are best retained on an "as is" basis. There's not much to be gained from retiring them, as they have a low cost of retention -- nor is there much to be gained from any further investment of time or effort. If exploitation of Quadrant 4 (Exploit) system makes it possible to replace these systems, these applications will effectively move into Quadrant 1 (retire).

Maximize Utilization -
Applications thet do deliver strategically significant functionality, and also have a low cost retention, appearto offer good "Valu for money " and should be utilised as extensively as possible. Exploitation could result in making other (Quadrant 2 upgrade/ replace) and Quadrant 3 (Retain) systems redundant, thus effectively moving them to Quadrant 1 (Retire). High Low Strategic value High

LEGACY APPLICATION EXTENSION PROCESS

Steps:
1. Legacy Understanding: Documenting existing system.
2. System Decomposition: Application is broken into data, presentation and processing logic.
3. Componentization: Create and extract reusable components.
4. Extension: Convert legacy code into Web compatible languages.
Any legacy extension will require the right tools and the right approach. Patni has strategic alliances with some of the leading “legacy modernization” and “Web-enabling” tool providers in the industry. Rich experience, customer-orientation, state-of-the-art development tools, processes and methodologies enable Patni to provide the "best-fit service processes" that add value to the client's IT operations.

CONCLUSION

1. More than 70% of corporate data still resides on legacy systems.
2. Large corporations have invested considerable resources on these systems. This investment cannot be written off.
3. Legacy systems were developed for, and still run mission-critical applications.
4. In their current state, most legacy applications have several challenges associated with their functioning and maintenance.
5. When evolving beyond legacy systems, business leaders must consider strategic issues such as:
. Total Cost of Ownership
. Productivity
. Flexibility
. Knowledge Availability
. Extinct Vendors
. Alignment with Business Goals

6. Various options are available to the CIO when migrating from Legacy systems to more contemporary platforms:
. Functional Extension
. Technical Extension
. Migration
. Replacement

7. Any extension of legacy systems should be "non-invasive.”
8. The extension process consists of understanding and documenting the existing system; decomposing the application into data, presentation and processing logic; creating and extracting reusable components; and if desired, converting the legacy code into Web compatible languages.

Creating Unique Business Alliances: Six Insights To Help Transform Your Company’s Value

Strategic alliances increasingly trumpet the word “unique” as in ‘unique alliance’ or
‘unique partnership’. Certain types of partnerships will help you acquire a unique value proposition even if you didn't develop it? This article will help you develop your company's alliance road map and projections resulting in higher order volume, added value and increased brand equity.

Keywords:

strategic alliance,business partner,value proposition,strategy,unique,deal,partnering,partner,ally

Article Body:

Recent news concerning IT industry strategic alliances increasingly trumpet the word “unique” as in ‘unique alliance’ or ‘unique partnership’. Usually these unique arrangements bring together a marketer (either a system integrator or a service provider) with a solid footprint in a niche market and a technology developer or manufacturer with an innovative or proprietary capability.

This type of alliance transfers to the marketer a unique technological edge. The marketer's objective in many such cases is to keep competitors at bay, grow market share or create enough performance value to justify a higher price. For the developer partner, aligning with the marketer provides a significantly extended market reach that simply translates into the sale of an increased number of units as well as a branding leap into greater market visibility.

This deal constitutes an excellent exchange of value for both partners. But as business alliances are not forever, the true assessment of the deal's value must be evaluated over time. In its early days Microsoft supplied DOS in a partnership with IBM's original desktop PC. In time Microsoft’s OS took over the PC market supplying all manufacturers. IBM was forced to back up out of the PC driveway, but it learned the power of partnering brilliantly transforming its business model into the world’s most prolific and successful IT services partnership network builder.

Acquiring a Unique Value Proposition

Of the many reasons for initiating a strategic alliance, the most highly-sought after type is one that creates a “unique value proposition” (UVP) — the three golden words so enticing to venture investors throughout the world.

How do you get UVP if you don't produce it?

A strategic alliance can transform nearly any traditional sales and distribution enterprise into a uniquely positioned provider -- all you need are customers! Have your considered this? Transform your company instantly into an unstoppable juggernaut simply by formulating a strategic alliance with one or more suppliers who may add a unique piece to your package, program or end-to-end offerings. Suddenly, your company acquires a UVP. More orders, greater equity value...before you know it, investors come sniffing around.

What are they looking for?

They want to know what you'll do for your next act.

Sure. That first alliance you just made was a successful move. It got attention. And it’s working. But, don't get too busy with that. Save some time for developing additional alliance ideas. You need to look at your company’s future in terms of a total, long-term strategic alliances plan.

Six key questions to formulating a long-term alliance road map

Use these six Partner M questions to develop your own alliance road map:

- What are my core competencies?
- What are my customer assets?
- How bad are the performance gaps as experienced by my customer/user?
- What are the innovative upgrades desired by my customer/user?
- How well are my competitors performing in areas where we are weak?
- Where do we perform better than our competitors?

Now answer this:
Can you locate and negotiate a deal with potential suppliers who can deliver to you
a unique product or service that:
(a) your company cannot duplicate more profitably with its core competence;
(b) will be highly valued by your customers;
(c) will fix a problem or enable you to offer customers an optional upgrade;
(d) will strengthen an area where you had been weak; or,
(e) will help insure that you can continue to outperform our competitors?

If your answer is yes to any one or more of these options, then you have the basis for a strategy that would result in higher order volume, as well as a path to added value and increased brand equity.

How do you validate that assumption?

Project the pros and cons of executing your alliance plan

Calculate a scenario assuming the amount of revenue you could generate and profits you would achieve after you’ve found one such partner and have successfully negotiated an alliance.

Be sure you have identified and adjusted your projection for any possible downside and cost of implementing the partnership. Next, forecast where you’ll be in three years without this alliance or a comparable strategy.

In addition you should assess the impact of your alliance on the competition with a sober determination of how they may react. Here is where the value of establishing a 'unique alliance' becomes so important. Paradoxically, your alliance's UVP shelf life must be viewed as both temporary and continuous. Any one alliance you enter is temporary. Your strategy must be continuous.

How temporary is your alliance? If any of your competitors can match your partnership with another and duplicate the contribution of your unique ally in fairly short order, your UVP will not last long. You may need to move faster to extend the your UVP shelf life and begin to plan your next UVP partnership. Within this scenario you would need to move faster on the alliance front or find yourself having to play deep catch up if your competitor takes the initiative before you do.

Design an ongoing alliance strategy

To develop a continuous UVP plan extend your alliance road map by duplicating your forecast calculations to include all potential alliances you foresee into the future. How far can you go using this strategy? If possible, don’t stop until you're able to imagine this process reaching a global scale or an exit strategy. Finally, your alliance plan must weigh alliance costs and risks against the benefits/costs/risks of alternative strategies.

Whether your enterprise takes the role of a marketer or a supplier, you should consider formulating a phased-in partnership plan containing a list of target partner prospects, financial validations, a timeline and undertake a marketing initiative aimed at shaping a receptive and synergistic relationship with partner executives and operational teams. Executing the plan is your next challenge. Don't hesitate to seek help in developing your plan and making it happen.