Business Process Outsourcing: Accounts Payable – Issues and Opportunities

Posted by: R. Bokhari | Posted at: July 27th, 2010 | Posted in Business Process Outsourcing (BPO)

The accounts payable function is a critical operation in an organization as it ensures the smooth flow of products and services by suppliers by ensuring they are paid in a timely fashion. Due to the complex and vast supply chains that are the norm these days, any slight disruption caused by payment delays or inaccuracies can bring the business operations of an organization to a grinding halt. As a result, there is usually a dedicated staff that handles the invoicing and vendor payments. The staff ensures that the invoices submitted by suppliers are accurate, conform to purchase orders and corporate purchasing guidelines, and meet any required government regulations.

The work load of the team that oversees the accounts payables is skewered towards month-end financial closings and lot of their times is spent on getting the invoices corrected and completed before the closing. As a result it is quite common to see the team putting in long hours before the month-end closings to get things in order.

Due to this cyclical, and at times, tedious nature of the work, more and more companies, big and small, have started looking to outsource entire or portion of this work to outside vendors. Normally this involves companies working with trusted partners who do most of the work of ensuring the accuracy of the invoices and payments, and resolving any related issues. Generally service provides get paid either on per-hour basis or per-invoice basis that they process. This greatly reduces the need for organizations to have full-time staff just to meet the month-end load and can therefore deliver meaningful cost savings.

Just like any other outsourcing initiative, transferring of accounts payable work to an external provider takes careful planning. This is a significant business process change in the client organization so therefore has to be properly communicated by the senior management and bought-in by all the effected people. Since the work that is getting transferred involves financial data, the client has to make sure that internal processes are very well documented and the provider is thoroughly trained and well-versed with those processes and guidelines.

The transfer of accounts payable function itself is not very complicated. With advance imaging technologies widely available these days and faster internet connections, both paper and digital invoices can be transmitted efficiently through secure networks. The provider employs stringent security policies to safeguard the data, process the invoices and payments, and field any questions or concerns that the vendors may have. In the end, the provider submits all the relevant data to the client organization which incorporates that into their financial reports before the closing period.

Once the process has been setup and is smoothly functioning, the long term cost savings are substantial and worthwhile.

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Software Development Life Cycle (SDLC): Why Small and Medium Businesses Should Make an Effort to Understand it

Posted by: R. Bokhari | Posted at: June 22nd, 2010 | Posted in Technology Outsourcing

The field of Software Engineering is relatively new and introduction of scientific approaches for software development has been a recent phenomenon. As software use proliferated in late 70s and early 80s, and as programming languages evolved from assembly languages to higher level procedural and object oriented languages, software development experts in industry and universities started looking for ways to improve quality and reliability of their products. The result was introduction and refinement of Software Development Life Cycle (SDLC) and other formal development methodologies that were based on SDLC.

Today most of the big corporations and military organizations either follow industry standard processes or their slightly modified versions to guide their internal development. Rational Unified Process (RUP) is an example and is one of the most widely used development process, though more and more companies are experimenting with Agile Process that promotes faster development cycles. Readers can search for SDLC on the web to get more details on different stages of SDLC and the importance of each phase. While big corporations recognized the importance of SDLC and adopted it early, the Small and Medium Businesses were not really aware of the changes. The reasons were obvious. Either they were too small to need any automation that software brought, or if they needed any software they bought it off the shelf rather than developing it internally.  Understanding SDLC was not really of any use to them. The exception to this was any SMEs that were specifically developing and selling software to other companies.

However, the technology landscape started to shift earlier in this decade and more affordable software development platforms started becoming accessible to SMEs. We covered the popularity of open-source technology stack in an earlier blog and how it helped SMEs adopt new web based software. SMEs are now increasingly using web based applications and mobile applications to run their daily operations. In this environment where more software systems are becoming part of their business operations, it is becoming important for SMEs grasp the importance of Software Development Life Cycle and why they add value to their business.

It is important to note that most SMEs still are not developing their own software. They do not have internal development resources to do so but they are increasingly partnering with outside providers to develop internal systems. Understanding SDLC principles will better equip them to select and sustain better relationship with their outside software development partners. They would better understand different phases of development and what to expect after the provider finishes each of these phases. Completion of each phase can formally require a document that would need to be signed off by both parties. For example, if the provider mentions that it has finished the testing phase, then the customer can ask for formal documentation, such as written test plans, that would indicate that thorough testing has been performed and the results have been added to those test cases. In addition, SMEs would also better comprehend what their responsibilities are in making these software projects a success.

Documenting requirements would force them to think hard about what exactly they want in their product. Discussing test plans would also make SMEs aware of the importance of formal testing, both on the provider side and also on the customer side. We have seen, quite a few times, when SME owners driven by cost or time pressure, insisted on rolling their projects or changes to their existing systems to production environment without going through their own acceptance procedures. While life as an SME owner can be chaotic, it is imperative that they grasp the importance of following processes, since these processes will actually reduce chaos in their operations and will serve them better down the road.

Moreover, SDLC, is not a technical document – rather it’s a process document. So, as such, it is not a very technically challenging read and most readers should be able to understand the basic concepts of phased approach to software development. Time and effort they put in understanding SDLC would definitely be a worthwhile investment for their businesses.

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SME Back Office Support Model: An Interesting Case Study

Posted by: Aqeel Ahmad | Posted at: June 8th, 2010 | Posted in Back Office Services (BO)

This case study is inspired by the behavior of two Small and Medium Enterprise (SME) owners who had very similar back office support requirements but displayed a very different approach to back office support model adoption. Let’s call the two individuals “Bob Doit” and “Joe Skeptic”. While, it is understood that the difference in behavior may be partly driven by circumstances unknown to the service provider; nonetheless, the difference in approaches hold lessons for SME owners in how, and how not to approach back office support.

Understand the Challenge

Most SME owners start thinking about back office support when they are up to their ears in work and Bob and Joe were no different. The difference, however, was in how both approached the issue. Bob did his research about the pros and cons of a back office located overseas and how to make the best use of it. He also recognized the efforts required to make this arrangement work and therefore, created a priority list and allocated time accordingly. Joe on the other hand, was excited about the potential but never fully comprehended the effort required to make the relationship work.  Offshore back offices, if utilized properly, can reduce your cost and let you focus on your core business. However, they are not a silver bullet that will solve all the problems that SME owners face.

Takeaway 1: Excitement is not enough. Understand the Effort Required.

Relationship Development

Two weeks later, Bob has successfully outsourced his first task. Both Bob and the provider are now refining the process to maximize the value gained. Bob is open to new ideas and is willing to try something different. He proactively makes suggestions and tends to drive the initiative. This helped to create a positive momentum to the effort. This initial success has stimulated Bob’s imagination about the possibilities! On the other hand, things are not going so well with Joe. He is getting frustrated with the learning curve idea and thinks that the back office team should understand his business right from day one. Consequently, he is rushing everything which in turn is producing unfavorable results. These initial hurdles go on to reinforce his skepticism about the viability of this back office support model and he puts a temporary stop to this outsourcing effort.

Takeaway 2: Drive the effort. Sort out the Hurdles and Issues

Think Outside the Box

Bob and his team have been working together for three months now and have prepared a list of tasks and functions that will be handled by the back office team. Top on that priority list is the online marketing piece. Online marketing is a knowledge driven area and falls under Knowledge Process Outsourcing (KPO); therefore, Bob first quizzed his team to gauge their ability to manage this critical requirement for his business. Once Bob felt comfortable, he tasked his team to develop his online marketing strategy with an implementation plan. After a few iterations the plan was ready for implementation. In three short months, Bob has a back office team of two associates managing administrative and online marketing tasks.

Takeaway 3: Be Creative, Organized, and Open to Ideas

Explore Possibilities

Six months on, and the online marketing effort is now settling down. During this period, the project had few issues but both Bob and his team worked through the issues. Back office help has reduced Bob’s workload but he is not sitting on his laurels, instead, he now wants to offload tedious but necessary bookkeeping function to his back office team. As usual, Bob was methodical in his approach. The appropriate bookkeeping platform was selected and the assigned associated was tested to make sure he or she has the skill to perform the desired function. Initially, only transactions were entered, then accounts were reconciled, and eventually all reports were now prepared by the back office. As Bob was progressing through this new paradigm shift and rationalizing his cost structure, Joe once again contacted the provider asking to restart the effort.

Takeaway 4: Build Momentum. Focus on Solutions not Excuses

Sustain the Momentum

It’s now over a year and Bob’s team is functioning smoothly. This allowed him to move to the next item on his list. Bob’s web application has grown to the extent where it needs to be migrated over to a newer more advanced platform and would require regular support. Bob decided to task the back office team with redesign and development of the new application that will integrate his Customer Relationship Management (CRM) and other tools. The service provider had the necessary skill set and the process capability to develop and maintain large applications. Bob initiated the process by developing the Software Development Life Cycle (SDLC) document. The required skill set was added to his back office team and the development work started. Joe, by now, has offloaded a few admin tasks that required formatting documents, managing spreadsheets, and a few other basic tasks but has not embarked on a larger initiative.

Takeaway 5: Challenge the Team. Employ their Brainpower

Equilibrium Reached

Two years on and Bob is now putting 10 hour work days – down from 18 hours when he initially started the services. He has more than doubled his online marketing efforts and cut his bookkeeping and application maintenance cost by more than half. His revenues have also increased substantially during this time. In short, he has fundamentally altered his cost structure and thus, significantly increased his market share and profitability. Bob has now implemented an online project management tool to keep track of his back office team that has now grown to six or seven associates. Daily huddle meetings and weekly and monthly staff meetings are now a regular feature to keep everything on track. Knowingly or unknowingly in this two year journey, Bob has moved to a back office support model called Office Of the Future (OOF) where a team of dedicated skilled associates supports the main office.

Conclusion

Bob’s case highlights the enormous benefits that can be achieved through this model, but at the same time it underlines the dedication it requires, from both sides, to make the effort successful. Time and again, Bob, treated his offshore associates as part of his corporate team, provided initial training and guidance, and expected results from them – just like he did from his onshore team members. Once the offshore team understood his business processes, he gave them an opportunity to push the envelope and provide suggestions to improve the processes. Joe, on the other hand, started the process with “us” vs “them” mindset that divided his onshore and offshore resources. The initial training and transfer plans proposed by the provider were considered waste of time and money and were not accepted as an investment in the future. The result was that Joe was never able to maximize the benefits that he had envisioned when he started the process.

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Moving to the Cloud

Posted by: A. Gohar | Posted at: May 18th, 2010 | Posted in Technology Outsourcing

Wikipedia describes Cloud Computing as “Internet-based computing, whereby shared resources, software and information are provided to computers and other internet enabled devices.” It is an internet based delivery model, through the “cloud”, that allows home and business users to easily access hardware and software capabilities remotely over the internet.

Companies, wherever feasible, have always tried to offload non-core operations to outside providers who could run them with better cost base and efficiency. Big companies, long time ago, got away from generating their own electricity and started consuming it from the electric grids. Further advancements in technology have kept pushing the envelope of what companies can outsource to outside providers. Today every major industry relies on a chain and tiers of outside providers and suppliers that help to optimize the operational efficiency and lower the cost.

Benefits

Cloud Computing is continuation of the above trend. It represents a significant refinement of the delivery model which takes advantage of better technology and faster internet to provide computing services for companies that are charged based on consumption and hence provides better economics for these companies. Today these companies can procure computing power in a scalable manner and without significant upfront cost.

Potential Issues

It is inevitable that going forward more and more companies would be looking to Cloud Computing for their hardware capacity and software services needs. Therefore it is critical that companies are aware of potential issues of this delivery model and have risk mitigation strategies in place to address them.

• The data security issue – all of the data will be hosted on the servers of the service providers. This change, by itself, is enough for companies to think twice before moving their operations to cloud.
• Trust level – how much a company trusts its provider is the key to how fast the cloud adoption would proceed.
• Service Level Agreement (SLA ) – whether Service Level Agreements would support the business objectives of the companies.
• Internet Connectivity – whether internet connectivity is stable and fast enough to support securing cloud services over the internet.

Things to consider

Like every technology and business transformation endeavor, the shift to Cloud Computing has to be planned carefully. Below are some points to consider when planning a switch to Cloud Computing.

• Review your business strategy and make sure that it is compatible with Cloud Computing model. For example, a company that processes financial transactions may not want to give up control of their data and server operations since a breach could be fatal to their business model.
• Review the license agreements and user manuals before subscribing to any service. While bigger companies would always perform this due diligence, the smaller companies some times get locked into the contracts without reading the fine-print.
• Make sure the provider has proper backup plans of your data.
• Verify where the servers are physically hosted, where the data is stored, and what level of certifications and storage policies are being implemented on the provider side. The physical location of the servers could impact the regulatory requirements and in some cases the speed at which you receive the computing services.
• Understand the pricing structure before subscribing with any cloud provider. Different kinds of pricing models are currently being used by providers like per user cost model, total usage cost model, and fixed weekly/monthly cost model. Make sure you do your home-work and select the model that will cost you the least while meeting your requirements. Also find out how feasible it would be to switch from one pricing plan to another.
• Make sure that the provider allows data export out of their systems. It is critical for you to maintain back-ups of your data on your side and also be able to switch to another provider if needed.

Switching to Cloud Computing model represents a significant change of direction for any company but is not the best option for all of them. Knowing what issues to consider and how to address them would help you decide whether this is the best move for your business.

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BPO – An Effective Way to Grow Small Businesses

Posted by: Amna Arif | Posted at: April 30th, 2010 | Posted in Business Process Outsourcing (BPO)

With the outlook of global economy still uncertain, companies are looking towards smaller and lower risk outsourcing transactions for achieving their cost saving targets. This approach makes sense because if the larger deals go wrong, the cost for companies to roll back their investments are proportionately higher. Even when the companies are awarding smaller contracts, their expectations for quality and commitment from their providers have not wavered. On the contrary, companies expect outsourcing partners to step up their execution and show their commitment by continuously providing high quality services at a reasonable cost.

For providers, this implies that they need to step up their game. They need to put much more focus on understanding clients’ businesses, their processes, and their objectives that they want to achieve with the collaboration. This will minimize the operational, strategic, and capability risk. Secondly, the providers need to improve their delivery process. They need to incorporate the necessary technology and tools in their delivery process to make it more efficient and less error prone.

While the recession has slowed and somewhat changed the BPO dynamics, the fact remains that this segment of technology services will continue to grow. According to Baystreet.ca, the global “addressable” BPO market is worth $122-154 billion U.S., most of it in retail banking, insurance, and travel/hospitality industries, with such sectors as the auto, telecoms, pharmaceutical, accounting and Human Resources catching up.

Let’s review some of most common business process outsourcing sectors:

Accounting Outsourcing

Accounting Outsourcing is gaining popularity with SMEs because it is becoming a challenge for them to keep their books up-to-date at a reasonable cost. Accounting outsourcing services not only reduce the annual cost by 50% to 60% but also eliminate the need to maintain a separate accounting department.

Some of the services under this category include:

• Account Receivable and Payable
• General Ledger
• Fixed Assets/Equipment Accounting
• Audits and Project
• Closure of Books
• General Accounting Reporting
• Accounts Reconciliation
• Cash flow Analysis
• Sales Analysis
• Billing Services

Data Process Outsourcing

Data, once collected and properly organized, can be a powerful tool for decision makers. It can provide valuable insight and help companies formulate their future policies and growth strategies. With data process outsourcing, companies can access highly qualified resources at reasonable rates.

Some of the services in Data Process Outsourcing include:

• Data conversion from multiple platforms to single platform
• Conversion of raw data to desired format
• Data compilation from different sources
• E-book conversion
• Catalogue data entry
• Receipt and bills data entry
• Editing, sorting and indexing data

Customer Services Outsourcing

Prompt, courteous, and knowledgeable customer service is essential for survival of any business. Customers, who are not satisfied with how their complaints or questions have been handled by a certain company, are ripe targets for competitors. However, companies are always struggling to find enough financial resources to continue to invest in their core business and at the same time to hire, train, and deploy more customer service personnel. Customer Service Outsourcing is a viable option which companies can use to bulk up their customer care staff while keeping the costs low.

Some of the services provided include:

• Call centers
• Voice emails
• Email/chat support

Transcription Outsourcing

One aspect of technology advancement has been the advent of paperless office. One of the processes supporting the model is transcription from audio files. Transcription outsourcing has reduced cost and turnaround time, and at the same time freed office resources from taking tedious.

Some of the services included in Transcription Outsourcing are:

• Medical transcription
• Audio book conversion
• Meeting agendas and notes
• To do lists

Knowledge Process Outsourcing (KPO)

This part of BPO involves outsourcing of more complex business tasks and processes. While in other areas of BPO, the workers are executing a defined business process which is repetitive in nature; in KPO the workers are using their knowledge of certain area to generate valuable insight and intellectual property. For example, an analyst in an offshore location, who has an MBA and some stock market exposure, can perform stock analysis and write a report, is providing services that fall under Knowledge Process Outsourcing.

Increasing education levels in offshore locations have opened vast KPO opportunities for companies looking for skilled and knowledgeable staff at reasonable cost.

Some of the services that fall under Knowledge Process Outsourcing are:

• Learning Solutions
• Business & Market Research
• Research & Development
• Content Development
• Data Analytics
• Training & Consultancy
• Equity Research

Conclusion

BPO provides a viable and profitable business model for both buyers and providers of these services. The cost savings are well documented and understood. As long as the involved players continue to adjust to ever changing economic conditions and technology innovations, there is strong reason to believe that BPO services will continue to gain traction and, therefore, should be a part of the overall corporate strategy of companies wanting to increase productivity and to reduce cost.

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Internet Marketing – A Low Cost Strategy

Posted by: Wasif Abbas | Posted at: March 30th, 2010 | Posted in Back Office Services (BO), Business Process Outsourcing (BPO), Small & Medium Business

E-commerce has continued on a strong growth path since it became a viable business channel in mid-nineties. Approaching fifteen years, the rate of its growth is showing no signs of slowing down. According to eMarketer.com, US retail e-commerce sales are projected to grow by 11.1% to $200.6 Billion[1] in 2010. Combine this information with increase in internet usage from 361 million to 1.67 Billion users between 2000 and 2009 at a CAGR of 18.5%[2], it can be concluded that internet as marketing and e-commerce channel continues to hold tremendous potential.

Any growth area will attract attention from companies hungry for more revenues and internet is no different. As the competition heats up, the ability to rank higher in organic search engine results requires more than just a good website. Similarly, another growing area is social media marketing. According to “Best-in-Class Companies” worldwide, 63% of the surveyed companies plan to increase social media marketing spending anywhere from 1% to 25%[3].

Let’s first look at four fundamental stages in developing an online marketing strategy:

Channel

Creating a website without creating a channel is like building a shop in the middle of a jungle. No one knows it exists, so it won’t attract many, if any, visitors. Therefore, efforts such as Search Engine Optimization (SEO), Social Media Marketing (SMM), blogging, and Pay-Per-Click (PPC) to name a few, help to create that channel through which potential customers are directed to the website. The goal is to drive relevant traffic.

Hold

A successful channel funnels visitors to the website but if the visitor bounces off main or landing page, then not much has been achieved. The visitor must find the landing page relevant and/or attractive enough to explore the website. Therefore, landing page in particular and website in general must cater to what the visitor is looking for. In short, the landing page must effectively convey the value proposition.

Stay

Once a user visits the website, the goal should be to encourage the user to stay.  The website should be well structured so the user can easily find the products and/or services offered. As a rule of thumb, the visitor should visit at least three pages for him or her to get a concrete idea of what the company is about.

Yield

Last but not least, the visitor must send in an inquiry or make contact via phone, email, etc. thus, generating a lead.

While larger organizations have the flexibility to allocate their marketing dollars where required, the small businesses (in $1 – $20 million range) find cost as the main hurdle in devising and implementing a sustained online marketing strategy. One way to address the cost factor is by outsourcing the IM tasks to a reliable outsourcing partner. Almost 80 – 90% of IM tasks can be performed remotely. As a check, you may ask your partner to devise your IM strategy and how it will be implemented. This will help you understand their capabilities and experience. Once IM strategy has been devised and implemented, a good number of the tasks become repetitive in nature thus making those suitable for outsourcing.

Another important factor is your outsourcing partner’s ability to collaborate and stay up-to-date with ever changing IM area. Google and other major search engines change the search criteria when they deem it necessary. IM falls more under Knowledge Process Outsourcing (KPO), therefore, your partner must have depth in its skill set and the intellectual capacity to adapt and keep learning this dynamic area.

Successful outsourcing of your IM activities will not only create and sharpen your competitive advantage but will also contribute to lowering the cost structure – an important goal given the current economy.

[2] http://www.internetworldstats.com/stats.htm

[3] Aberdeen Group, “The ROI on Social Media Marketing: Why it Pays To Drive Word of Mouth,” March 11, 2009

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Cloud Computing: A Paradigm Shift for Small and Medium Enterprises (SMEs)

Posted by: R. Bokhari | Posted at: February 9th, 2010 | Posted in Technology Outsourcing

Cloud Computing has been generating a lot of buzz lately. The topic has been appearing more and more frequently in technology magazines, blogs, and big technology outfits like IBM, HP, Microsoft, Google, and Amazon have all setup offerings to capitalize on the growing acceptance of Cloud based services. The term Cloud Computing does not refer to one particular service; rather it encompasses collection of offerings that provide customers with an option to rent these services as opposed to spending large amount of capital to buy them upfront. While this subscription or rent based model appeals to enterprises of all sizes, it’s the Small and Medium Size Enterprises (SMEs) that stand to benefit the most from this paradigm shift. With no startup capital required, the SMEs can quickly ramp up their computing capacity, try out new enterprise applications in areas such as Customer Relationship Management (CRM), Business Intelligence (BI), or experiment with renting entire software development platforms to build and host their own customized applications.

Flexible Infrastructure

Research shows that enterprises waste a significant percentage of their physical computing capacity. The initial planning often results in procurement of hardware to anticipate the future growth in usage which, more often than not, does not materialize. This disconnect between computing capacity and the actual requirement is not limited to larger organizations. SMEs also face a difficult choice of either procuring expensive dedicated hosting solutions or, if they cannot afford that, resorting to cheaper shared hosting solutions that give them little control of their hosting environment. Moreover, keeping their physical computing setup in sync with their changing business requirements is a constant challenge. In most cases, improving capacity meant moving to a more powerful machine with more memory and that required migrating all the running applications causing headache and downtime. Cloud Infrastructure Services provide an ideal solution where SMEs can sign up with little or no upfront costs and they are billed on how much computing power, memory, and data transfer they have consumed. Amazon Cloud Services (EC2) is an ideal starting point for SMEs looking to explore Cloud Computing. They have wide range of services that cater, or can cater to an entrepreneurial entity to large companies looking for hundreds of virtual servers.

Software as a Service

Cloud Computing encompasses more than just flexible Infrastructure services. The term also includes increasing number of enterprise applications that are hosted on the servers of Cloud Computing providers and then rented out to companies who use them as a service. The data generated by the users of these applications is also stored on the servers of the providers. While some critics question the wisdom of storing important business data on outside servers, the approach does have strong appeal to SMEs who do not have resources, both financial and human, to store data on in-house servers and secure it properly. SalesForce.com has been one of the biggest successes of this model. Their CRM software has tens of thousands of customers who access the service through internet and store their data on its servers. Through its Google Apps for Businesses, Google is targeting companies to host their emails, document creation and editing, and Calendars. Business Intelligence (BI) applications are also making their way to clouds making this important segment accessible to SMEs. It is widely expected that other software vendors, like SAP and Oracle, will come out with offerings that follow the same delivery paradigm and are targeted towards SMEs.

Software Development Platforms in Cloud Environment

Another segment of Cloud Computing provides entire development platforms that companies can rent and then build and deploy their custom applications in the cloud. Increasing number of Cloud Computing companies are providing virtual machine images that have some of the common development platforms installed and ready to use. Examples include LAMP (Linux, Apache, MySQL, and PHP) web starters, Java, Ruby, and Flex pre-build environments. IBM has also made its flagship WebSphere Application Server, which is popular for building Java enterprise applications and web services, available on the cloud. SMEs which previously could not afford this IBM product can now rent its usage and deploy custom applications that can host mission critical applications.

Cloud Computing offers substantial cost benefits to SMEs in terms of how they maximize return from their IT investment. But like any other business expense, the whole process of adapting to Cloud Computing needs careful planning and execution. SMEs can partner with reliable outsourcing providers who can guide these companies through the whole process of finding reputed Cloud Providers, picking the right subscription plan, and developing, deploying, and maintaining their business applications and infrastructure using these Cloud based services.

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Some Powerful Online Tools: Best of all, most are FREE

Posted by: R. Bokhari | Posted at: January 25th, 2010 | Posted in Technology Outsourcing

Now that we are past 2010 New Year celebrations and are approaching end of January, it is time to take a pause and ask an important question: am I using all the FREE tools to my advantage? If the answer is no, or maybe, then read on. In this short blog, we discuss some of the simple, yet powerful tools, that when used properly can give you a competitive edge. Let’s start with a few that have proven their worth.

LiveZilla Live Chat Support

If you are running an online business and do not have live chat support then you are losing an important channel to connect to potential customer and, thus, are losing sales. LiveZilla live chat support tool offers great value – its FREE! It is a solid tool with good number of options and, best of all, it’s an open source application that can be easily customized and branded to fit your requirements. Research consistently shows that if the visitor has a question when visiting your website then he or she is likely to ask it to your chat support – assuming of course that it is available. Bottom line, chat support increases your probability of generating sales. Some technical expertise is required to install and configure the tool but its well worth the effort.

Google Analytics

The saying goes something like this – “if you can’t measure it, you can’t manage it.” For an online business, the ability to gather and analyze relevant sales and marketing data, is a must. Google Analytics enables you to understand website traffic sources, keywords used, and a whole range of data about your website visitors. The tool is FREE and provides intermediate level analytical information that can enable you to fine tune your marketing efforts. The cost to you is only few hours of setup time.

Skype

Skype is probably one of the best voice calling tool available in the online market place. Skype-to-Skype calls are FREE and now include video calls as well. With a large user following, this tool offers a great way for businesses and individuals to connect with each other and to potential customers. Skype also advertises reasonably priced plans which allow the users to place calls to land lines and offers other great features such as voice mails, ability to send SMS messages, and Call Forwarding. Skype is also available on popular Smart phones which is very useful for cost conscious businesses and users.

Twiddla

There are quite a few popular desktop sharing and meeting tools such as WebEx.com, GoToMeeting.com, and LogMeIn.com to name a few. Another interesting tool that is very useful for one time use or single session is Twiddla. Say you are working with a vendor to update your website and you quickly need to point out a required change. Simply go to Twiddla, generate a meeting session (with one click), and pull up your website. Send the meeting link to the other party and now both parties can mark up the site together. Once the meeting is done you can save the edited file. This tool is very useful for one-off online meetings. And best of all, its FREE.

Google Docs

This is another powerful and FREE tool available from Google. Lets say you do not have Microsoft Word installed on your PC. You receive a Word document from a potential client and need to edit it and send it back. You can go to Google Docs, upload the document, make the edits, save it as a Word document, and send it back to your client. This is very useful for SMEs who do not want to install Microsoft Office, for cost or other reasons, on some or all of their PCs. Google Docs does lot more than just editing of common document formats. Other benefits include ease of sharing and collaboration. For example, you can setup a spreadsheet and other individuals, who are authorized, can update that on a daily or weekly basis. The document can be saved in Excel, OpenOffice, or PDF format. All you need to access and start using Google Docs is a Gmail account.

Stixy Bulletin Board

This is a web-based bulletin board that can be shared with friends, family, and colleagues. On this board you can put widgets; a widget could be a note, task, appointment, photo, to-do item, or a document. There are no rules on how you can arrange your bulletin board. Its completely up to you. We found the tool interesting to use. However, this is a not a formal project management tool but a casual sharing platform. So far Stixyboards are FREE or at least we couldn’t find any pricing structure given.

Gliffy Diagram Creator

Gliffy is an online diagram creating software tool. You can draw up professional quality flow charts, diagrams, floor plans, technical drawings, and more. Moreover, you can collaborate and share diagrams with your team. The tool has a good size object library that should fulfill most, if not all, of your requirements. The basic version of the plan is FREE with certain limitations, but if creating diagrams is important to you then a single seat license for $5/month might be worth the cost.

IDrive

This is an online backup tool for your PC data. The key benefit is the ability to restore you data from anywhere. If you are an entrepreneur or a small business whose employees are on the move then this is definitely worth a look. The IDrive basic plan allows only 2 GB of FREE space but this should be enough to back up your important mission critical data. The tool has a number of features that allow you to pick and choose when and what data you want to back up on regular basis. Features include True Archiving/Sync, Continuous Data Protection, Mapped Drive Backup, Versioning, Timeline Restore, and many more. It also offers personal, family, and business plans. The paid plans are reasonably priced.

Disclaimer: Our endorsements are based on our experience in using the above tools. If you decide to use any of the above tools it is your responsibility to review its terms and conditions as Kaya Systems, its management, and affiliates will not be held responsible in any event since we have no control over any of these tools.

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The world is flat: Even for Small and Medium Enterprises (SMEs)

Posted by: R. Bokhari | Posted at: January 19th, 2010 | Posted in Small & Medium Business

Thomas Friedman in his book, The World is Flat, describes how faster and more reliable internet connections spawned an era of flatness in which companies reached across the borders and started using vast manpower pool that became available to them. The big companies were the first to take advantage of this flatness. They had the scale, risk tolerance, economies of scale, and financial muscle to setup those global information supply chains that Thomas Friedman talked about in this book. The workflow software and processes brought together work done by people in different countries, streamlined it, and truly created a global knowledge supply chain – similar to global manufacturing supply chains that started getting setup decades ago.

This global integration of manpower into companies’ every day operations is not restricted to large organizations anymore. In this second phase of flat world, SMEs (Small and Midsize Enterprises) are getting in the act and starting to reap the same benefits that compelled global larger companies to take risk on this novel concept in late 90s. This was a predictable trend. In early 80s as personal computers were introduced, initially they were mainly used in the large organizations because of their cost. However, as they became cheaper, they became available for SMEs to own and improve their productivity. The business process innovations brought by this flat world have also tricked down to SMEs which are increasingly looking beyond their borders to collaborate and improve their operations.

One of the biggest reasons why SMEs are successfully taking advantage of this flat world is that in past few years, a new crop of smaller SME focused providers have come in the marketplace. Their services are specifically tailored to SMEs and they have kept their cost structure low and thus can offer services that are affordable to SMEs. The better known and bigger outsourcing providers have primarily targeted large Fortune 500 type companies and their engagements have involved hundreds, if not thousands, of employees of the outsourcing company forming a team to service the needs of a given client. This structure does not map to the requirements of SMEs which may range any where from a single person to a team of few dozen people. The flexible outsourcing plans, that these new smaller providers offer, have targeted the sweet spot of SME outsourcing.

While the larger outsourcing providers have a bigger proportion of their workforce in cheaper locales, they still have priced themselves out of the SME outsourcing market. SMEs are very price conscious and the service cost has to be attractive enough for them to take the plunge. To keep themselves competitive for SMEs, these smaller outsourcing players, in some cases, have opened offices in other South Asian or African locations which are cheaper than India or Russia but still provide educated and well-trained workforce. The internet connectivity has vastly improved in these newer outsourcing locations and can support the activities of these companies.

The end result has been emergence of these smaller and more nimble outsourcing providers who have placed themselves well to target the under served SME outsourcing market. They have been continuously amassing experience working with SMEs in areas of Business Process Outsourcing and other more advanced areas such as Market

Research, Web 2.0 services, Virtual Assistance, Bookkeeping, and Equity and Financial Analysis. With these lower barriers to setup their own mini global information supply chains, the world has indeed become more flat for these SMEs.

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Hiring Virtual Assistant Services: Making Relationship Work

Posted by: admin | Posted at: October 19th, 2009 | Posted in Virtual Assistant Services

Large corporations, as early as late 80s, had started setting up offices or partnered up with local back office service providers in South and Far East Asia to take advantage of cheaper talent pool. These companies had the financial muscle to open offices, train employees, and adapt management techniques to fit the local environment. This option was not viable for Small-to-Mid size Enterprises (SMEs) for financial and economy of scale reasons. All this has changed with evolution in Virtual Assistant Services concept and the advancement in broadband internet access and remote connectivity tools. Virtual Assistant Virtual Assistant Services Providers now not only provide basic services but also web/desktop application development, business analysis, online marketing, and bookkeeping support to new a few.

So how do we differentiate this new crop of Virtual Assistant Services Providers from standard outsourcing firms? In my view, today’s successful Virtual Assistant Services Providers operate in a make-to-order environment with flexibility to accommodate the needs of a SME. Their flexibility and lower cost structure actually makes them attractive to any size business. The question then becomes how do you find a quality Virtual Assistant Services Provider and how should you engage the provider in a mutually beneficial relationship. While there is no silver bullet, the following seven points will improve your probability of finding and sustaining a good match.

Characteristics of Good Virtual Assistant Services Providers

First define what your needs are. Take some time to make a list of tasks using 80/20 rule; 20% of the tasks that take 80% of your time. How many of those tasks are repeatable; for example, regular content updating on your website or ad postings on a daily or weekly basis is a repeatable task. Once you have your list, then search online for providers that provide those services. Pick three to five Virtual Assistant Services Providers that have a solid website with testimonials section and provide a range of services. Google these providers to find out what good/bad information you can find. Read their testimonials, ask for references preferably from one of the clients in the testimonial list, and ask for work samples. Generally, you can expect responsive service if your requirements are at least 20hrs/week.

Expect Learning Curve

A common mistake made is not accounting for learning curve. No matter how experienced a Virtual Assistant Services Provider is and how much a client has utilized a Virtual Assistant in the past, it always takes some time to understand requirements and implement solutions. Clients that factor in the learning curve have the highest success rate. If you are going to test a Virtual Assistant Services Provider’s productivity against a specific benchmark then you must help the provider to perform at it best. In few extreme cases we came across, the client’s focus was on proving that Virtual Assistance arrangements do not create value and as a result, the relationship was more adversarial to begin with than a potential partnership. While virtual assistance many not work in all situations, the value it creates is well documented and beyond doubt. If you’ve your doubts about productivity, discuss those with your provider so an accurate assessment can be made.

Initial Settling Period

Once you have selected your Virtual Assistant Services Provider, the focus must be on building a process that suits your requirements and creates value. You must understand the variables involved. The most common variables are:

1. Time Zone Difference

By understanding the time zone difference, you can actually make it work to your advantage. If your Virtual Assistant Services Provider is located in South Asia and you are located on the American East Coast then most likely your provider is 10 to 11 hours ahead of you. If you are located in Sydney, Australia then you are most likely 4 to 5 hours ahead of your South Asian Service Provider. The main idea is that you find out what working hours overlap so you can communicate with your Virtual Assistant and clarify any issues.

2. Language and Cultural Difference

Your assigned Virtual Assistant most likely speaks and writes English well but the differences between South Asian English and wherever you are located do exist. Add cultural difference to that and it becomes all the more important that you clearly state the task/project, explain any underlying assumptions, and leave some time margin for your VA to ask questions.

Task/Project Management and Reporting

When you assign a task/project make sure you articulate the problem statement clearly. If there are any underlying assumptions make your assistant aware of those. The effort (hours) allowed for the task/project and the project delivery due date must be clearly communicated. Most Virtual Assistant Services Providers should have a basic project management tool that could be accessed via their website. It should, at the very least, convey the status of your task/project (%age complete) and authorized vs. consumed hours. Some providers will include other information as well, such as your plan related information, and payment status to name a few.

Bottom line, you must provide complete task/project information and your provider should have a mechanism to update you on the status without you having to ask for it.

Organizational Issues in employing Virtual Assistant Services

Any outsourcing of tasks/projects will be met with resistance unless those affected are involved and not threatened by it. Organizational dynamics must be carefully considered before any Virtual Assistant relationships are considered. There are numerous cases where the company management was excited about the possibilities but the employees were not on board, and as a result the collaborative benefits were not fully realized. Virtual Assistant Services Providers when employed to facilitate growth by increasing capacity, improving capability, and enhancing collaboration result in successful relationships; as opposed to, when seen as an exercise in work force reduction.

When employees understand and believe that resources freed up by Virtual Assistant collaboration can be redeployed for revenue generation activities hence improving the health of the company, the arrangement becomes a win-win situation.

Avoid Hasty Conclusions

If your Virtual Assistant misinterpreted the task and went in the wrong direction, that doesn’t mean that you have conclusive evidence that this type of relationship doesn’t work. This is actually part of learning for both you and the associate. Make sure you find out what caused the confusion and what needs to be done by you and the associate to make sure that it doesn’t happen again. If your Virtual Assistant continuously underperforms, then talk to your provider and most likely they will assign you another associate. Understand the difference between a good provider and the underperforming associate. Good Virtual Assistant Services Provider is what you should be interested in. Virtual Assistants will come and go.

While we all would love our assistant to hit the ground running, the reality is all relationships take time to develop and Virtual Assistance is no different.

Sustaining and Growing the Relationship

This is as important as finding a good Virtual Assistant Services Provider. Open communication in a closed feedback loop will ensure consistent performance. Mistakes will happen and lessons must be learned. However, the key is how your provider reacts to rectify the situation. Openly communicate your concerns and suggest ways to help the situation. This will signal to your Service Provider that you are a partner and you want to help in straightening things out.

The term virtual in “Virtual Assistant” is somewhat misleading; these are real people working in a real office with all the issues of any business. Sometimes clients expect the assistant to be available at the drop of a hat and that is not a realistic expectation. If you have subscribed to a 10hr/week plan then taper your expectations accordingly. Part-time support means your assigned Virtual Assistant is supporting multiple clients, if you need dedicate support then subscribing to a full-time plan is required.

Conclusion

Utilizing Virtual Assistants is a great way for SMEs to improve capacity and capability, and reduce cost at the same time. All supporting activities of your business are candidates for back office processing. By tapping into a Virtual Assistant relationship clients also get access to a number of other skills. You may be able to get bookkeeping support, website maintenance/development, invoicing, research etc. all through your assigned Virtual Assistant. And this is what makes a “Virtual Assistant” extremely valuable.

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