The VAR Guy

Maybe it’s time for The VAR Guy to put his Web site (and his LinkedIn Rolodex) up for sale. After all, the value of his house is plummeting faster than the fuel gage needle in his Hummer. And now there’s talk about a Web 2.0 Bubble. Say it ain’t so! (Then, take a minute to watch this video.)


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Regardless of when oil hits the $200 per barrel figure, it is time to start preparing for the realities of the energy crunch. As such, solutions providers and information technology departments must start preparing to support remote workers.

The cost of employees goes beyond the normal metrics tracked by the HR department. In addition to salary and benefits, smart solutions providers and their customers will also begin to track the energy consumption of their workers.

Every time someone enters and leaves your offices, they are impacted by energy costs. The figures skyrocket when you also include the electrical impact of computers, desktop calculators, personal digital devices, light fixtures, coffee machines, refrigerators, water heaters, electric staplers, printers and all other electronics.

So, the smart enterprise will encourage their workers to telecommute. Your employees will be happy because they will save money on gasoline, tolls and wear on their automobiles. They will also be spared the stress of the daily commute.

Generally speaking, worker productivity is easy to measure so you don’t need to worry about employees wasting time.

What all this means is that IT departments and solutions providers need to start preparing for telecommuting now. They need to adapt to the realities of the energy crunch. While many pundits are touting the advantages of “greening” your IT, by implementing a telecommuting strategy you will be reducing your total business impact on the environment and saving money too.

Contributing Blogger Louis Rosas-Guyon is a business technology expert with R-Squared Computing, Inc. His opinions do not necessarily reflect those of The VAR Guy.

We’re heading into a holiday weekend. Wonderful. It’s always nice to unplug a bit. But be careful: Technology companies are notorious for announcing bad news late on Friday or even on Saturday during a holiday weekend. Also, three-day weekends are a great time for companies to hammer out big partnerships or acquisitions in quiet solitude. If Yahoo and Microsoft are going to break bread, The VAR Guy believes it will happen this weekend.

First, watch for alarms: Tech companies often hope bad news will get softened and stretched out over the holiday. By the time everyone plugs back in Tuesday morning, so the theory goes, the bad news won’t feel quite so bad. The old Computer Associates used to leverage holiday weekends frequently for bad earnings announcements. (Thankfully, the new CA is far more transparent.)

Meanwhile, holiday weekends are a great time for high-profile CEOs, boards, financial advisors and lawyers to huddle up without many people noticing. Microsoft and Yahoo, for instance, seem interested in talking again. A Friday night dinner date that stretches into a weekend romance could be in order.

The VAR Guy will be watching…

On June 12, executives representing managed service providers will gather for a Webcast aptly named MSPmentor Live: CEO Exchange. During the fast-moving online event, MSPs will be able to ask peers and experts their most pressing questions about pricing and service level agreement strategies.

Register now for this one-hour June 12 event, which starts at 2pm eastern. Hosted by The VAR Guy’s sister site, MSPmentor, the event will show MSPs how to avoid some of the commodity pricing battles occurring in the managed services market right now.

Confirmed speakers include:

• Scott Goemmel, co-founder and partner, PMV Technologies (#15 on the MSPmentor 100)
• Nick Vossburg, CEO, TechAssist (#20 on the MSPmentor 100)
• Jim Alves, executive VP, Marketing, Kaseya
• Joe Panettieri, editorial director, MSPmentor

Registration is simple. And the event will truly be an interactive opportunity for you to ask MSPmentor’s guest speakers your most pressing questions.

You can tune in June 12 for MSPmentor Live: CEO Exchange. And then tune back in on June 25, when MSPmentor Live: CEO Exchange returns with such featured guests as Autotask CEO Bob Godgart.

If you are thinking of leaving your corporate job to start a business, nothing is more important than having Reserves. I am talking about a great big virtual warehouse filled with tangible and intangible items. If you don’t have them when you start your business, your engine will soon fail.

If you run out along the way, you’ll be stalled on the side of the road in the blazing hot west Texas desert sun with no water, like that guy in No Country for Old Men. “Agua, agua!” And you know what happened to him. So here’s a list of what you’ll need to pack for your journey.

(Note to readers: I am addressing Baby Boomers – by and large, people with families, mortgages, and age. If you’re 25, some of this may be interesting but you are young and invincible so you can ignore my warnings.)

1. Plenty of cash. (Not that cash did Josh Brolin much good in No Country for Old Men, which I can’t stop thinking about.) So many businesses have failed because they run out of cash. It’s heartbreaking to see. Within my own franchise, and all other franchises, many people leave the business not because they didn’t believe it would be a winner eventually, but they could not afford to get to Eventually.

How can you avoid running out of cash? The best way is not to start the business. And that’s a better outcome than starting it, spending all you have, and risking being left with nothing. If you are not absolutely positive you have, or can easily lay your hands on, enough dough to get through not one year, but several (I’d say five) under adverse conditions, please, please, please keep your job or find one you like better, but don’t start a business.

Don’t break your family’s hearts by taking a chance on losing your house and your retirement. Speaking of retirement, I am vehemently against people tapping into their IRAs and 401(k)s for money to start businesses. That is retirement money! I don’t give a #(%(@ about the Dennis Hopper commercial.

2. Plenty of family support. At your Reserves Central virtual warehouse, you will want to have an entire section with at least 100 tractor-trailer bays to load in all the family support you will need to be an entrepreneur. I have seen marriages break up because both spouses weren’t firmly behind the idea of starting a business. One spouse indulges the other because it’s easier at the time than saying, “No freakin‘ way are you spending our money to open a healing-crystals store!”

Your significant other has to be in for the whole ride. That means if he has to get up at 3AM to make the donuts on a snowy February morning because you’re sick, he’s okay with that.

3. A team and network you trust. Finding a great CPA isn’t something you do after you start the business. (Hint: the guy who does your taxes today probably isn’t the guy you need.) You find the CPA six months before you start the business. Same thing goes for attorney, business coach, virtual assistant, and any other critical members of your startup team. You reach out into the local business community through the chamber of commerce, Kiwanis, and other groups before you start the business, not after. You join BNI before, not after.

This is a case of “do what I say”, not “do what I did.” I didn’t do any of those things before starting my business just hurled myself into the flames. While I have many amusing stories to tell my future grandchildren of near-catastrophic injury (physical, emotional, financial) they were mostly all avoidable.

Too bad this blog wasn’t around for me seven years ago! Stay tuned for more Reserve ideas in future posts. And let me know what you think should be on the list.

Contributing blogger Mitch York is a personal friend of The VAR Guy. York coaches executives who are evolving into entrepreneurs. Find York — and his personal blog — at www.e2ecoaching.com.

Think of your business — or your customers’ business — as a potted plant. As the plant grows, you’ll need to move it into a bigger pot if you want to sustain healthy growth. Now, let’s apply that example to a typical office accounting system.

As a business grows, you should reassess the company’s accounting software capabilities. You want to prevent problems that might slow growth. And you want to be pro-active. Installing a new accounting system is not something you want to try when your company’s resources are stretched thin.

The first step is to study a business’s exact needs. How does a company expect to evolve over the next three years? What will the business need over that time, and how much spare capacity needs to be factored into a potential accounting system?

Remember that accounting systems can offer the most reliable data when they are used properly over a several years. You must choose a system that will fit medium-term business plans. You must also allow enough time for training of workers so they can efficiently use the new system.

What To Expect from A New System

Good accounting software is more than just number crunching. Contract management, customer relationship management (CRM), e-commerce, multiple currency management, logistics, project management and digital dashboard/business intelligence systems can all now be integrated into accounting systems.

This provides a total data analysis and reporting capability hitherto unknown in business. You can now command the most timely and critical data at your fingertips for rapid and accurate decision making.

All these features are only available in mid to high-end software systems for medium to large-sized businesses. All these systems include very expensive up-front costs for the proper integration of the various service offerings required by your company. However, once that expense is amortized over the life of the system, it is ultimately negligible compared to the enormous benefits gained.

Purchasing Considerations
As always, there are several issues to consider before you — or your customers — spend money on a new syste,:

• Can the new accounting software be customized to fit specific business needs?
• Can it accommodate growth (e.g. more users)?
• Will the new system be able to communicate with older systems?
• Can the manufacturer provide competent customer service?

Again, I must stress to be sure to budget enough time for training. At minimum, your accounting staff should receive all the training required to ensure the orderly conduct of business after the new system is implemented. Your old system information should be migrated to the new system to ensure continuity of information and to provide you with the immediate analysis benefits. While you can rely on printed materials for training purposes, nothing is better than actual human teachers that can give classes.

For additional questions to ask before you buy any technology system, check out some of my more extensive thoughts here.

Contributing Blogger Louis Rosas-Guyon is a business technology expert with R-Squared Computing, Inc. His opinions do not necessarily reflect those of The VAR Guy.

Are you ready — and qualified — to launch your own business? Before you quit your day job, check in with Mitch York, an executive coach who helps corporate employees become successful business owners. York offers some practical tips and some reality checks to would-be entrepreneurs in a MSPmentor Live: Podcast for May 1, posted on our sister site.

The VAR Guy is locked in a hotel room tonight in Atlanta. The business coverage on CNBC is depressing. Inflation. Rising consumer prices. Rising energy prices. Is there any good news out there? Actually, yes. We all owe Intel a big thank you today. Here’s why.

With one small statement, Intel pumped some confidence back into the PC market. And the chip giant managed to perk up investors a bit, too. Although Intel’s Q1 income wasn’t all that impressive, the company said it it stands by its margin guidance for this year.

Sweeeeet.  Intel shares apparently jumped 8 percent on the news. Alas, The VAR Guy isn’t an INTC investor. He’s too busy pumping his money into room service — which still hasn’t arrived.

Still, he’ll sleep a little better tonight — now that Intel has lifted his spirits.

Each day, companies die a little when their employees utter these seven fateful words: “We have always done it like that.” We are, it seems, victims of our own inefficient habits. Consider this real-world example of antiquated workflow, and its potential business impact.

As I mentioned, this example comes from an actual former client of mine. But I’m you’ll recognize some of your own customers in this antiquated purchase order workflow:

1. A Customer submits a Purchase Order via fax. The fax is picked up by a Sales Assistant, who makes three photocopies of the Purchase Order. One copy is filed, one is given to the salesman and the last is submitted to the Credit Manager.
2. The Credit Manager reviewed the Purchase Order and determined which customer account applied to the order. This former customer created separate accounts for the same customer based on payment terms. Still, no one could understand why customer sales reports were always filled with errors.
3. Now the Credit Manager determined if the customer had sufficient credit to order based on the payment terms. The Credit Manager also submitted the order to the Accounts Receivable factoring company that provided credit insurance for all orders.
4. If approved for credit and for insurance, the photocopied Purchase Order was then handed to the Logistics Manager. Please note, as of this moment, not one scrap of information has been entered into a computer. All requisite information has been hand written on the photocopied purchase order! The Logistics Manager now determines if the customer has any special shipping requirements or instructions and staples those instructions to the purchase order. If the order is supposed to ship within the next 30 days, the Logistics Manager submits it to the Operations Manager. Otherwise, the Logistics Manager files the paper purchase order in the appropriate shipping month.
5. The Operations Manager now allocates inventory to fulfill the order. Using a pen he marks which products are available for shipment and which must be backordered. Also, because he doesn’t trust the Logistics Manager, he double-checks for special shipping instructions.
6. Now that three different people have handled and written on the photocopied purchase order, it is finally submitted to the poor Data Entry Clerk who has to decipher everyone’s handwriting and input the order into the computer system. But wait, there’s more! The Data Entry Clerk prints out two Packing Tickets. She staples the original tattered Purchase Order to one and files the other. The stapled mess is then sent to the Warehouse Manager for fulfillment.

The most depressing aspect of the aforementioned process was how everyone simply accepted it.

From the moment I started consulting with this former client, I realized this was one of their major problems. When I recommended changes to streamline the order entry process, I encountered enormous resistance because “we’ve always done it that way.”

Meanwhile, the Data Entry Clerks were being penalized for “transcription errors,” no one could understand why so many orders went missing or why there was so much friction between departments. Worse yet, customers could never get a straight answer regarding their order status.

If you want your business — and your customers’ business — to succeed, you must abandon the “we’ve always done it that way” mindset. You must seek to improve and streamline every aspect of your business. You must do away with outdated processes and implement simple strategies to reduce errors and improve profitability.

Just because you have enjoyed success doing things “that way” doesn’t mean the good times will continue. Eventually the ever growing complexities will poison the process and that will be the end of your business. Be smart: simplify.

Contributing Blogger Louis Rosas-Guyon is a business technology expert with R-Squared Computing, Inc. His opinions do not necessarily reflect those of The VAR Guy.

Ouch. The VAR Guy spotted some troubling news about tech spending within the retail vertical. ScanSource, which distributes point of sale and barcode technology, released disappointing quarterly estimates this morning. For VARs serving the retail vertical, this could be a major warning sign.

Although The VAR Guy tends to be a “glass half full” type of dude, he does worry when distributors issue sales warnings. Companies like ScanSource are economic bell weathers for the IT channel.

ScanSource expects sales for its Q3 end in March to be about $509 million to $515 million, but Wall Street was expecting sales to top $560 million, according to Barron’s. Translation: We’re looking at a 10 percent shortfall or so at ScanSource.

Not exactly a comforting thought as we all hope the economy is improving, rather than contracting. Also of note: If ScanSource says sales of bar code scanners were slow this past quarter, does that mean bar code leader Symbol Technologies (now owned by Motorola) also has experienced a sales slowdown?

The VAR Guy will keep an extra close eye on the retail vertical as well as other IT distributors in the days ahead.

Update, April 7, 10:42pm: Sounds like ScanSource is pointing the finger of blame at Avaya partner program changes, rather than overall weakness in IT retail spending.