Project Estimation (1of 3)

October 26, 2010

One of the areas that has always amazed me with respect to Alliance Partners and their system integration efforts is their ability to estimate and ultimately bid the project cost. It seems almost an art (perhaps a black art) as it is a science, but it is critical to the success of the business.

Project Requirements

It starts with gathering good requirements which is an art in and of itself. In a previous post, we discussed a ‘needs-based’ approach and the type of requirements that you want to gather. We also talked about probing techniques and how to deal with conerns.

Task Breakdown

Once you have a good set of project requirements, you still face the challenge of estimating the cost of the project. Hopefully, you have a good idea of the hardware requirements, but labor usually makes up the bulk of the total cost. Ideally, you can break down the project into a set of tasks to develop a system that meets the requirements. Then for each task you can estimate the effort, duration, and cost.

There are several methods for estimating the labor cost of each task:

  1. SWAG (Not recommended) – Scientific Wild Ass Guess
  2. Expert – ask an expert based on their experience
  3. Delphi – Ask a group to brainstorm and build consensus
  4. Comparative – Based on history or similar task
  5. Weighted average – a combination of estimates (e.g. Optimistic + 4*Likely + Pessimistic) / 6)

Obviously, depending on the size of the project, you’ll need to decide how much time you want to invest in this process. But, estimating project costs is critical to your profitability.

Labor Cost Variables

Other factors to consider in estimating projects.

  • Work interruption factor – no one can work uninterrupted. For instance, meetings. Such breaks in the thought process and work effort will inevitably impact effectiveness. Idea: consider limiting meetings and e-mails to certain parts of the day.
  • Part-time effect – Working on multiple projects can impact effectiveness. The developer must ramp up or down from one project to the next.
  • Skill factor – Obviously, a novice may take longer to complete a task than an expert.
By completing the task breakdown and considering the variables, you can reasonable estimate of the labor cost which often constitute the majority of the cost of the project. Next week, we’ll formulate that into a price and ultimately the proposal.
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Drip Marketing

October 19, 2010

According to About.com, drip marketing is a direct marketing strategy that involves sending out several promotional pieces over a period of time to a subset of sales leads. The phrase drip marketing comes from the common phrase used in agriculture and gardening called “drip irrigation.” This is the process of watering plants or crops.

Marketing tactics for Alliance Partners can vary widely, but I do advocate that you look at a way of staying in regular communication with your customers and prospects.

Drip Marketing Mediums

Wikipedia claims that the main mediums for Drip Marketing are:

E-mail. The most commonly used form of drip marketing is E-mail marketing, due to the low cost associated with sending multiple messages over time. Email drip marketing is often used in conjunction with a Form (web) in a method called an Autoresponder. In this method, a lead completes the form on a company’s website and is then enrolled in a drip marketing campaign with messaging appropriate to the form’s context.

Direct Mail. Although more costly, direct mail software has been developed that enables drip marketing techniques using standard postal mail. This technology relies on digital printing, where low-volume print runs are cost justifiable, and the variable data can be merged to personalize each drip message.

Social Media. The principles of Drip Marketing have been applied in many social media marketing tools to schedule a series of updates. One popular tool, HootSuite, allows users to time messages and dissemenate via Twitter, Facebook, LinkedIn, and several other social media sites simultaneously.

Plan of Action

Drip marketing is it requires a plan of action. By creating this plan and following it throughout the year you can guarantee consistent with your marketing. To get started:

  • Step 1: Develop your Plan (Plan something EVERY month)
  • Step 2: Strategize the Execution of Your Plan
  • Step 3: Decide who your Target is.
  • Step 4: Create consistency by developing your slogan or phrase. Then place it on every promotional and marketing piece.

You want to be careful not to just ‘spam’ your database. So, make sure that your content is relavant with an intent to educate them about the types of applications and solutions you provide. Success stories are nice, but so is a thoughtful article about the challenges that your customers face. If you are interested in reading more, there is a good article at  Drip Marketing: Slow and Steady Wins the Customer.


Strategic Planning in a Recovering Market (3 of 3)

October 12, 2010

Here are some of final insights from a NIWeek 2010 Alliance Day presentation given by Don Roberts, Exotek. He is a principal of a consulting and operations-support company focused solely on the systems integrator.

Objectives and Measures

The end result of good strategic planning is a set of goals considered critical to the future success of the organization. Each goal is accompanied by specific objectives clarifying what must be done and what is critical to success. Just as important, are defining the measures that will track the accomplishment of the objective? The measures should be:

  • Linked: Measurements communicate what is strategically important by linking back to your strategic objectives.
  • Repeatable: Measurements are continuous over time, allowing comparisons.
  • Leading: Measurements can be used for establishing targets, leading to future performance.
  • Accountable: Measurements are reliable, verifiable, and accurate.
  • Available: Measurements can be derived when they are needed.

Examples

  • Over the next six months, delivery times will decrease by 15% through more localized delivery centers.
  • By the year 2013, customer turnover will decline by 30% through newly created customer service representatives and pro-active customer maintenance procedures.
  • Un-billable time will get cut in half by cross training front line personnel and combining all four operating departments into one single service center.

Plans into Actions

As you put your plans into actions, determine who is the right person or team to accomplish these goals. Consider all people that influence change, including outside contributor or perhaps even a facilitator. Then, decide what the appropriate timing is. A major plan may take more than a year, but should have quarterly or monthly reviews.


Strategic Planning in a Recovering Market (2 of 3)

October 5, 2010

Last week, I shared some of the insights from a NIWeek 2010 Alliance Day presentation given by Don Roberts, Exotek. He is a principal of a consulting and operations-support company focused solely on the systems integrator. Continuing on, Don suggested some tools to assist in your strategic planning process.

Strategy maps put into focus the often-blurry line of sight between your corporate strategy and what your employees do every day

                                                – Kaplan and Norton

Strategic Maps and Balanced Scorecards

Strategic maps help communicate your corporate strategy. And, balanced scorecards are a way to measure your strategic progress. They typically focus your company strategy around the following areas:

  • Financial Perspective – How do you look against the financial objectives of the company’s owners
  • Customer Perspective – How do you look to your current and prospective customers?
  • Internal Business Perspective – What must you excel run an effective business?
  • Learning Perspective – What must you organization learn to improve your business?

These perspectives then help to layout both your strategic map and balanced scorecard. There are more details, then I could effectively cover in this blog, but there are lots of useful information available on-line. Don offered an example for an Alliance Partner.