Monday, 19 October 2015

What would higher interest rates mean for you?

Last week there was another round of suggestions that the Bank of England might raise interest rates sooner than expected. Following up from our previous story about China, we thought we would take a look at what a rate rise would mean for British businesses, and offer some recommendations to help your business prepare.



The BoE policymakers are confident that the UK can weather the storm that has engulfed China, and had knock-on effects in Brazil, Russia and the US. Beyond that, they believe that problems in the Eurozone won't affect the UK as badly - especially if Britain leaves the EU. This means that now may be the time to focus on your domestic market. Your business will be safe from turmoil abroad if you're able to find customers locally.


Beyond that, higher interest rates may mean consumers will be more likely to save their money. Now, this is great if you're a bank or a pensions company, but a problem if you're a retailer. You'll need great offers to entice customers out, and if that allows you to steal a march on the competition, that's all the better.

Finally, it may help you in the long run to save more of your company's own money. Because rates are only likely to rise when the economy has fully recovered and the BoE don't think it's at risk, your day-to-day operations may be able to continue as normal with you saving a higher proportion of your income than you are right now.

Thursday, 15 October 2015

Argos's challenge to Amazon

Argos has recently announced that it's going to offer same-day delivery on 20,000 of its products in a new service called Fast Track. This move seems designed to combat Amazon Prime's same-day service.

The two companies have long been rivals since Amazon's swish online store replaced Argos's bulky catalogues and complicated collection service in the hearts of many customers.

Fast Track looks like a great deal. Prices at Argos are broadly similar to Amazon, especially for cheaper items. And the delivery cost is only £3.95 (compared to £6.99 for Amazon Prime - plus another £79/year in Amazon Prime fees). What's more, Argos's service is countrywide, whereas Amazon Prime Now is restricted to parts of London.

James W Copeland / Shutterstock.com
Arguably, Argos's Fast Track is more useful. London is extremely well catered for shop-wise, so if you really need a new TV of a certain type, you can find one at a sensible price if you're willing to trek up and down Tottenham Court Road for a while. But if you live in the highlands of Scotland? Forget about it!

However, with Amazon Prime, you get access to Prime Video (formerly LoveFilm) - an online video streaming service with a similar range of titles to Netflix. Like Netflix, they've even started to branch out and make their own shows.

Here's what our consultant, Artur Oganov, said: 'On paper, at least, it looks like Argos are way ahead. All that remains to be seen is if they can deliver (no pun intended) on their service in remote areas.'



Tuesday, 13 October 2015

How is Tesco turning itself around?

After stories of profit warnings, falling stock prices and decreased market share, it's clear that Britain's biggest supermarket is in trouble. But Tesco has a new CEO and is trying to turn its fortunes around by making some changes.

1000 Words / Shutterstock.com
Most recently, Tesco has announced it's going to sell off its operations in South Korea. Like the ill-fated Fresh & Easy in the US and its Japanese efforts, these have been unsuccessful. In Tokyo, nearly half of Tesco stores didn't make a profit, and its Japanese market share was never above one per cent.

We think this is a good example of recognising your strengths and playing to those. Not everything you experiment with will be a success, and it's important to realise when you've started to throw good money after bad. The same lesson can be applied to any of your business processes if you analyse them correctly.

The other recent step is replacing vouchers for its Price Promise scheme with a direct price reduction at the till. At the moment, you get a paper voucher if your shop would've been cheaper at ASDA, Sainsbury's or Morrisons. This encourages you to come back to get the discount, and keep shopping in the same place. But our lives are already filled with bits of paper and they're easy to forget or lose. By automatically applying any discount, Tesco is taking the admin out of the process and streamlining it - another great lesson for your own business processes.

Our consultant, Artur Oganov, said, 'This is a good change. Anything that makes the process quicker is useful. And I think it will work for Tesco. People will always go there now, knowing they get the best deal right away.'

Thursday, 8 October 2015

What's the future for technology in business?

A recent study from Quinstreet Enterprise suggests that business leaders have identified Business Process Management, along with security and smart technology as their main focus for 2015.

What's more surprising, perhaps, is that they say that cloud and mobile technology is already mainstream and that companies need to look elsewhere to innovate.

Companies say that a lack of resources for IT and the fact that information technology is always getting more complicated the two major problems they have to deal with in the IT field.

We'll focus on BPM, which 22% of the 250 executives surveyed listed as their next major IT initiative.

According to the report, 'BPM is an investment that promotes automation and can help with cost cutting and controlling headcounts.' In this time of economic uncertainty, the latter two points are critical for all businesses, not just in the IT sector. As budgets decrease, being able to "do more with less" has become the mantra not just of the public sector, but the private sector too.

Our consultant, Artur Oganov, gave us his thoughts: 'The decline in cloud and mobile investment suggests that the data from those things is going to be pushed into companies' processes through BPM. Businesses will be able to automate more of their processes and improve their customer services. The fact that BPM makes businesses cheaper to run is also an important factor. Once you've laid out the money for cloud infrastructure, you have to make that money work for you and BPM can do that.'

Monday, 5 October 2015

Who's the latest challenger to Salesforce?

Today we're going to look at Base, a CRM startup who recently raised investment of $30m (£19.7m) to help it grow and challenge market leader Salesforce.com.

The advantages that Base has are few, but significant. It's a much smaller operation, so it's more agile and more easily able to adapt and make changes to meet changing customer demands. This has included geolocation on its mobile app, so you can see which businesses are near you, and what they're looking for.

Base focuses most of its work on the Cloud and the idea of Software as a Service. These two ideas have been critical for CRM in the last few years, and will only become more important. They're the foundation of Base's operation, but not Salesforce's.

Base lets users make calls from any device, including web browsers, and capture the information from them automatically. This simple innovation saves a lot of time.

Base takes itself seriously as a challenger to Salesforce. Its CEO, Uzi Shmilovici, has always made it clear that he wants his company to replace Saleforce.That's why Base, unlike many startups, hasn't tried to undercut Salesforce on price. He doesn't want to undersell his product, and that builds customer confidence.

Thursday, 1 October 2015

Is 140 characters enough?

There have been recent indications in the media that Twitter might allow users to write messages longer than 140 characters. The company has already removed the character limit for direct messages between users, so it's clearly not a question of data capacity.

PiXXart / Shutterstock.com
But the microblogging service (and, indeed, the whole idea of microblogging) is based on a short character limit. Originally, this was because many users posted tweets from their phones via SMS. But now most people use the Twitter app, so the limit is less of a problem.

So is it a good idea? I mean, if people wanted to post longer messages, wouldn't they just use Facebook instead? Well, Twitter is public by default. Anyone can follow anyone else (unless their account is restricted). On top of that, many celebrities have large Twitter followings that they'd struggle to get on another platform.

Twitter focuses on the here and now. The character limit may help people concisely describe current events - that's one of the reasons it's a great source of breaking news for many journalists. A longer message medium would lack the same immediacy and urgency of its content. And people are forced to be more creative with the character limit too. I like to say that restrictions breed creativity.

What are the potential benefits of removing the character limit? I asked our consultant, Artur Oganov. Here's what he said: 'One problem with Twitter is that it's hard to get nuance into your messages. And tone is a problem too, although that's true of any text medium. Longer limits could help people express themselves more clearly. But I don't think Twitter should lose its USP. If people know one thing about Twitter, it's the short messages. Users won't want that to change.'

Monday, 28 September 2015

The console price wars

Sony's latest console, the PS4, has recently dropped in price to match its rival, Microsoft's XBox One.

The two companies have been fighting a war over three generations of games consoles. First the PS2 hugely outperformed the original XBox. Then the PS3 went up against the XBox 360 where they performed roughly equally (although both were thoroughly outsold by Nintendo's Wii). So far Sony is winning the latest battle, outselling both the XBox One and Nintendo's new WiiU.

The price wars really started with the previous generation. The XBox 360 was much cheaper than the PS3 until late in its life, mostly because the 360 didn't have a Blu-ray player. Meanwhile, the XBox One was about $100 more expensive than the PS4 at launch, although they've now reached roughly the same price.

Here are the lessons we think any manufacturer can learn from the console wars:

1. Don't jump on bandwagons. The PS3 struggled against the XBox 360 on price. And most of that was down to the integrated Blu-ray player. Now, for a Blu-ray player, the PS3 was really cheap. But it wasn't competing with other Blu-ray players; it was competing with the 360. Beyond that, when the PS3 came out, Blu-ray was still fighting with HD-DVD over what would be the next media standard. This mean many people were reluctant to commit to one side or the other by buying a player. The expense of the Blu-ray disc drive meant Sony ended up selling consoles at a loss for a while - a disaster for any manufacturer.

2. Expand your market. The Wii was such a huge success because it appealed to a much wider audience than its competitors. By focusing only on 'hardcore' gamers, Microsoft and Sony really missed out.

3. Move quickly. The XBox 360 was out for nearly a year before the Wii or PS3. And when the PS3 finally arrived, it wasn't much more powerful or graphically superior than the 360 (the Wii took a different strategy, as I cover above). With great games like Call of Duty 2 at launch and Halo 3 arriving at practically the same time as the PS3, XBox was able to steal a march on Playstation.

4. Innovate. The WiiU hasn't performed nearly as well as the Wii. That's because it doesn't offer much new to anyone who already owns a Wii. The next generation of consoles may end up using VR headsets like the Oculus Rift to add another dimension to the gaming experience.

5. Steal what works. After the success of the Wii's motion controls, Microsoft and Sony followed suit with the Kinect and Move for their respective consoles. This helped them capture some of the magic and wide appeal of the Wii.

Thursday, 24 September 2015

How can VW recover from the emissions scandal?

Volkswagen is in a lot of trouble. It faces fines of up to $18bn (£11.6bn) for manipulating emissions tests results. Essentially, VW engineers programmed the software in some of their diesel cars to recognise when the cars were being tested and dramatically reduced the cars' emissions for the duration of the tests. As soon as the tests finished, they went back to their normal high levels (nearly forty times the legal limit) because the lower levels are impossible to sustain during normal driving.

We're not talking about an insignificant amount of extra emissions, either. If the 11 million cars that VW has admitted to rigging were putting out emissions at the higher rate, the extra would be roughly the same as the UK's total combined emissions for all power stations, vehicles, industry and agriculture.

The advantage for Volkswagen is obvious: by cheating the tests, it's able to produce cars more cheaply. Kevin Drum has written a good piece for Mother Jones covering exactly what VW did. We're going to look more at what VW should do to fix the problem.

VW has started well by having CEO Martin Winterkorn apologise. Their US Chief Executive, Michael Horn, has also admitted wrongdoing, saying, 'Our company was dishonest with the EPA, and the California air resources board and with all of you, and in my German words: we have totally screwed up... We are committed to do what must be done and to begin to restore your trust. We will pay what we have to pay.'

But apologies are clearly not enough. Winterkorn has now resigned - he didn't really have a choice. Either he knew about it and was complicit or - possibly worse - he didn't know and was incompetent. Horn and others may well both be forced to resign too. And the fines are, again, a good place to start, but it's possible that VW executives may face criminal charges too.

Our consultant, Artur Oganov, said, 'It's going to take nothing less than a total restructuring of the entire company to restore consumer confidence. VW has a long road ahead of it.'


Wednesday, 9 September 2015

How black cabs are fighting back against Uber

Uber has been in the headlines again recently. The app has quickly risen to capture a large market share from taxi drivers in London and other cities all over the world. London's black-cab drivers are fighting back, though. They've started offering discounts of up to 30% on journeys of six miles or more at off-peak times - as long as passengers use a new app called Gett, that is.

Uber is infamous for charging more at busy times (the much-maligned 'surge pricing') and has come under fire for huge price increases during the recent Tube strikes. Gett, meanwhile, is selling itself on the opposite offer - it'll be cheaper when it's quiet and priced normally when it's busy.

This is an interesting approach by the black-cab drivers. But it doesn't solve the fundamental problem they face - black-cab drivers can't afford to work at the prices that Uber pays. Between training, the cars, maintenance etc. their overheads are simply much greater than those of Uber drivers.

Our consultant, Artur Oganov, gave us his thoughts: 'I use Uber every day, nearly. I can't remember the last time I was in a black cab. The service is the same to me. I could give Gett a try, maybe. But unless it's cheaper, I can't see me using it regularly. The black cabs have to compete on price and convenience, or nobody will use them. A new app is a good idea for convenience, but if it doesn't address price, it won't work.'

Monday, 7 September 2015

What's the best way to phrase your questions?

The UK is going to have a referendum on whether it will remain part of the EU. There was some concern about what exactly the question on the voting paper would say. This made me think about how we phrase questions and how it can affect the answers you get.

The suggested question was 'Should the United Kingdom remain a member of the European Union?' (with the answers being 'yes' or 'no'). The Electoral Commission, the independent body responsible for election rules, said this was a leading question. 'Yes' is a more positive answer than 'no', and it could have led to people leaning that way.

To look at it another way, it could equally be phrased as 'should the UK leave the EU?'. But it shouldn't be, for the same reason: both phrasings put undue weight on one side or the other.

The final form of the question will be 'should the United Kingdom remain a member of the European Union or leave the European Union?' (with the answers being 'Remain a member of the European Union' and 'Leave the European Union'.) This has much less room for bias regarding positive and negative.

We think you should phrase all questions you ask people carefully - especially if you're looking to get honest feedback from customers or your staff. If they lead people towards being unduly positive or negative, you won't get accurate results and could miss important stuff.

And you'll find that open questions give you a better understanding of the bigger picture than simple yes or no ones.

Let us analyse your feedback processes and tell you how you can improve them. Call us now.

Thursday, 3 September 2015

Why the Chinese government can't save falling stocks

Following on from our story about the Greek stock market crash, we're looking at the Chinese markets today.

The Chinese government has thrown everything but the kitchen sink at their falling stocks: cutting interest rates, limiting short selling, limiting sales from big investors, giving people loans to buy stocks, forcibly devaluing the renminbi, and allowing pension funds to buy stocks.

We're going to look at these measures one by one, explain the theory behind them, then offer an explanation of why it didn't work.

Interest rate cuts

The government cut interest rates unexpectedly on the 29th of June. The logic here is the same as it is in the UK, which has had a 0.5% base rate since March 2008. If people can't get a decent return on their savings by keeping them in the bank, they're more likely to spend them on stocks, which should prop up the falling markets. This hasn't been effective because the kinds of people who usually keep their money at the bank are probably quite risk-averse, and the stock market is extremely volatile right now. Shares are too unsafe an investment for these kinds of investors.

Short selling restrictions

Buying stock with the assumption that its value will decrease is called short selling. Basically, you borrow a share, then sell it. Then, if its value falls, you can repurchase it at a lower price then return it to the person you borrowed it from and pocket the difference. That's why it's an attractive option when markets are falling. But short selling can end up driving prices lower because it affects investor confidence. By limiting the number of people hoping that prices fall, the government is trying to stop price falls. But limits on short selling have historically not worked, most recently during the 2008 crash.

Share selling limits

On the 9th of July, the government limited investors with large stakes in listed firms from selling for at least six months. Like the restriction on short selling, this is designed to boost confidence because certain stocks will be less liquid and therefore more likely to keep their value.  But the investors with large stakes are naturally still worried that they are going to lose a lot of money because prices keep falling. It's just that now they can't do anything about it! This didn't help because there is still a lot of instability elsewhere in the markets.

Loans

This measure is similar to the interest rate cut: if people have extra money to spend on buying shares, that will prop up prices. The government gave out loans of around 1.3tn yuan (£134bn) - a vast amount, but tiny compared to the over 25tn yuan the stock market has lost since June. That's the main reason it hasn't worked; it's just a drop in the ocean.

Devaluation

The renminbi was hit hard in mid-August by a series of devaluations. The Chinese government were trying to improve competitiveness by inviting foreign investment. But the crash in their market has had a huge knock-on effect in the US, Australia and other markets where Chinese companies do a lot of business. Companies there are likely to remain reluctant to invest until the problems in China improve.

Pension fund investment

The government changed the rules for pension funds, and they are now allowed to invest in the stock exchange. As with some of the other measures, the hope is that having more investment in the markets will boost prices and restore confidence. Unfortunately, pension funds tend to be even more conservative and risk-averse than bank savers. They need to guarantee a steady rate of return, and no stock is offering that right now.

Conclusions

The stock market devaluation is probably symptomatic of a bubble popping in China. It's just a symptom, and all the measures we've looked at are only trying to treat that symptom, not fix its causes. The root causes are to do with overconfidence leading to speculation. And the Chinese economy has been facing a general slowdown, especially in manufacturing and construction - two key Chinese industries - for a while.

This is likely a simple market correction and government attempts to fix falling markets by using so many measures so intensively may, in fact, have made things worse by knocking investor confidence and making them believe the situation is more serious than it is.

Tuesday, 1 September 2015

The problem with mergers: Ladbrokes, Coral, Paddy Power and Betfair

A few weeks ago, high street betting shop giants Ladbrokes and Coral have announced plans to merge. And, last week, their rivals Paddy Power and Betfair did the same. Now, these mergers still need to be assessed by the competition regulators to make sure that these two new giants won't have unfair monopolies, but there's plenty to recommend the deals - especially for the struggling Ladbrokes.

Martin Good / Shutterstock.com
One thing we think is important for them to consider is how they integrate their processes. The different chains have different offers and selling points, although a broadly similar customer demographic. All of them are focused in particular on the controversial fixed-odds betting terminals and on their online offerings. They will need to carefully consider how to get their systems to work together, especially their websites and apps, which could prove challenging thanks to technical limitations.

And, if the new groups do end up having to divest shops, they should carefully assess which locations to sell. They should consider things like: proximity to other shops (either owned by them or their competition), turnover, overheads, staff performance and potential changes to their local areas.

Our consultant, Artur Oganov, said, 'It's the fixed-odds machines that could be the biggest problem. There are laws about how many each location can have, so that's why there seem to be more and more betting shops on the streets. But the machines account for 52% of profits from the shops, so they have to have them. If the new groups keep running two networks of those each, they waste a lot of money.'



A story about mergers in the betting industry - how teaming up with a competitor can help you out, but you need to merge your processes carefully.

Friday, 28 August 2015

Why you should always fix causes, not symptoms

The Greek stock market fell badly again a few weeks ago. It had only recently reopened after a five-week suspension intended to stop huge writeoffs for Greek companies. But the shutdown didn't work. The market lost nearly 15 per cent ($10bn) of its value.

The problem is that a shutdown to prevent losses is treating the symptom, not the cause. Greek companies, especially Greek banks, are bound to be worth less with the Greek economy tanking. If the Greek government really want to save their companies, they need to be bolder.

Our consultant, Artur Oganov, commented, 'They need to get foreign investment. And that's a hard sell for Greece because of systemic problems with their economy. It's interesting that some people have said that a Greece outside of the Eurozone is actually a better-looking investment. I tend to agree. If they leave, they can devalue the currency, and the companies can recover. There's the chance to make a lot of money if people are willing to take the risk of buying now.

'I think you should take the lesson here of trying to fix causes instead of symptoms - that doesn't work in the long run. Always investigate problems in your business processes as deeply as you can and work out what to do there. And always get an expert's help. Protobase Labs are here if you need us!'

Wednesday, 26 August 2015

ATTENTION: You no longer can change your mobile network provider in the UK

The following horror story comes from our consultant, Artur Oganov.

I don't know if I've been the victim of poor customer relationship management or a strange new marketing strategy.

Let me explain. I've been trying to change my mobile network for about two weeks. If you've ever done it, you'll know the first step is to get a PUK code. This is a PIN number that keeps your SIM card safe, and links your mobile number to a particular SIM.

So I thought I'd head down to my local store, get the code and be done in no more than an hour. How wrong I was. The store employees couldn't help me, but they gave me a number to call.

I have called this number. I've called it every. Single. Day. For two weeks. I've called about 10 times a day at all hours, and I've never got through to the department I need. And not just a quick minute here and there, I've been waiting for ages. I must've made hundreds of calls and wasted countless hours.

I've even tried getting around the problems by calling a different department and asking for help. But all they could do is transfer me - more waiting! And all of it with a soundtrack of pop music and periodic messages like ‘we are working hard to improve our network’ and ‘you are now in the queue’. Very tedious.

I began to think this was deliberate. After all, if your customers never leave, your business looks a lot more successful than it is. I'm starting to believe my network think they can string me out long enough to get a few more monthly payments, or maybe even convince me to give up with switching altogether! Not gonna happen.

It's clear that this approach isn't working on me, and I doubt it would work on anyone else. When a customer decides to leave, you need to either convince them to stay with the quality of your service, or else let them go quickly and easily. An angry customer can be worse than no customer at all.

If you've ever had problems leaving Three or another mobile network, let us know in the comments. And help me out by sharing this post so they fix their terrible service!

Monday, 24 August 2015

When can words do more than actions?

The Bank of England's Chairman, Mark Carney, has always tried to be open about the future plans for rises to the base rate that influences mortgage interest rates (among others) in the UK. He describes this openness as 'forward guidance', and it's designed to make sure that there aren't any surprises for banks or homeowners which could cause problems in the financial markets.

Put simply, Carney says the BoE base rate won't go up until there's less unemployment, income and spending improve and the country is meeting its output potential. The problem with this is that every time it looks like the rate might go up, as these things improve, the banks start to worry and the markets get jittery. This forces Carney and the rest of the Monetary Policy Committee to reiterate that things aren't going to change just yet.

So you see, the fear of potential change is as damaging as any actual change would be itself. This is actually quite a lot like the situation in Greece, where the uncertainty over whether or not the country would get a bailout from the European Central Bank led Mario Draghi to eventually say that the ECB would do 'whatever it takes to preserve the Euro' in 2012. This was a clear sign that he would be willing for the ECB to act as a lender of last resort to Greece and other crisis-hit countries. This was good, because it reduced fears about a Eurozone breakup and Greece's interest payments fell too. The ECB didn't actually have to step in, in the end, but convincing the markets that it would was enough.

Our consultant, Artur Oganov, contributed his views: 'If your business is having trouble, sometimes being convincing that you're going to fix stuff is as valuable as taking the steps to fix it. It can help with problems with your share price or any time people aren't confident.

'The problem with Carney was he moved the goalposts. I mean he said first "unemployment", but then added the other things. And things were meant to change after the general election, but now it seems more likely by the end of the year or early next year. This uncertainty is the big problem, but if he says "the rate will change to 1% on January 1st", then that doesn't help either because the banks price that into everything. He's in a bad spot.'

Thursday, 6 August 2015

What's different about the five biggest companies in the world?

We're doing something a little different today. We're going to look at the five biggest companies in the world by market capitalization, and examine what they're doing differently to everyone else.
kaarsten / Shutterstock.com

Apple

Apple is the biggest name in town. It owes a lot of this success to the vision of Steve Jobs, and the products that made it a household name: the Macbook, iPod and iPhone. It continues to innovate with each passing year, diversifying its range of products but sticking to simple and cool devices that have branding to die for - and a price to match! By keeping a tight lid on the software side of the equation as well as the hardware through market-changing innovations like the App Store, Apple has secured its position as a tech sector leader.

Exxon Mobil

Exxon Mobil is a bit different to the others on the list. It doesn't have a visionary behind its success (maybe John D. Rockefeller, but his contribution is long over!) and it isn't in the tech industry. But it's definitely an innovator. Most of its success has been built on oil, the lifeblood of just about every industry on the planet. However, companies like Exxon are a dying breed. Unless it's able to move away from oil, its long-term future will be limited.

Berkshire Hathaway

If Apple owes a lot to Steve Jobs, Berkshire Hathaway owes even more to Warren Buffett. The so-called Sage of Omaha has a talent for investing that no-one else seems able to match. He's very straightforward, never investing in anything that he can't personally understand. And he writes every annual shareholder report as if he's explaining what's happened to his sisters, Doris and Bertie. These simple rules have led to a highly diversified range of investments that can weather any storm. The oldest company on the list, Berkshire Hathaway is here to stay - at least as long as its CEO and his simple rules stay in place.

Google

Google is another company that found that simplicity was the best way to work. Its search engine remains at its heart and has barely changed in the nearly 20 years it's been active. Or, at least, the webpage you visit to use it hasn't changed much - the complicated PageRank algorithms are updated regularly so Google is sure it's always providing useful results. After all, that's how they managed to get such a big share of the market in the first place. And it's hard to talk about Google without mentioning Larry Page and Sergey Brin, two of the smartest guys in the industry.

Microsoft

Microsoft is the big rival to both Apple and Google in different areas. It's big innovation was making sure that it cornered the market in terms of software, and pushed hardware vendors to ship computers running its flagship Windows products. Again, you can point to Bill Gates as the innovator who made the personal computer truly personal. Microsoft has moved more into hardware with the XBox and the acquisition of Nokia, with mixed results. But the newly released Windows 10 suggests there's plenty of life left in the company yet.


So what do these companies have in common? There isn't one single thing that unites them all, but here are a few ideas: being built on a solid foundation; having charismatic, intelligent leaders who understand business; sticking to a simple approach that doesn't stray too far from their core business; but, at the same time, holding on to a desire to innovate and keep innovating.


 

Monday, 3 August 2015

Should expenses be means-tested?

MPs' salaries jumped up to £74k recently. And some of them are still claiming nearly half as much again for expenses. And the same is true of the House of Lords, where peers can claim up to £300/day for attendance, no questions asked - although they aren't paid a salary on top of that.

We think this is a classic example of a broken system. If there are people out there claiming hundreds of pounds for short journeys made by car or on foot, the system is clearly being exploited. So we think that the public bodies that deal with MPs' and peers' expenses could emulate the finance departments of large companies. Just as those companies are ultimately responsible to their shareholders, the Members of the two Houses are ultimately responsible to the taxpayer. This means that all expenses claims should be investigated, especially if they're large.

So, should expenses for MPs and peers be gotten rid of altogether? We're not sure. They are paid a lot and there are definitely plenty of MPs from wealthy backgrounds, but there are also people like 20-year old Mhairi Black.

Perhaps means-testing would be a better solution. The expenses system has been a sore spot since the scandals of 2009. If taxpayers didn't feel like they were subsidising the lifestyles of the rich, but that they were supporting MPs from different backgrounds according to their circumstances, they might be happier with it.

What do you think? Let us know in the comments.

Thursday, 30 July 2015

Should the Royal Mail abandon the letter?

The Royal Mail, although no-longer state-owned, is a British institution. But it's struggling to deal with a world of email, text messages, Twitter, WhatsApp etc.

The number of letters it handles has been dropping, and its parcel business could be in trouble from competition with companies like DPD and big customers like Amazon jumping ship to set up their own services.

We think that the way the Royal Mail has tried to focus on the parcel side of the business is a smart move. It now makes up nearly half of their turnover. But there is undoubtedly still a need for letters - I actually got back into the habit of exchanging letters with a friend recently. There's nothing quite like hand writing a note to make a message more personal.

So how should Royal Mail operate its letter service? Well, we think it might make sense to run letters as a loss leader, or maybe with a very slim profit margin. We think putting up the price of stamps is only going to discourage ordinary people from sending letters. It could pass on price increases to corporate customers, who will probably send out mailshots regardless. (And, if they decide not to, I know I'd be happy to get less junk mail!)

Tied to this, it could run an advertising campaign on another relic of the pre-digital age - the television. A nostalgia-based message all about the personal impact a letter can have could resonate with a generation who've seen incredibly rapid changes in communication. I'm just about old enough to remember a time before mobile phones - when you would have to call someone and hope they were home, or else you wouldn't be able to get in touch. And with the current 90s revival in vogue, it might just work.

If the Royal Mail stuck to a good message and tried to make the process as efficient as possible by e.g. reducing the number of days that postmen deliver (after all, who cares if a letter is a day late. If you're in a hurry, you'd be using email) we think it could still turn its fortunes around.

Monday, 27 July 2015

How can you get your processes to fix your culture?

Last week Toshiba revealed that it had overestimated profits by more than £780m because senior management had been systematically altering their accounts. The scandal led to the resignation of its president and chief executive Hisao Tanaka and several other senior staff. The independent investigation which uncovered the fraud suggested the culture at Toshiba was partly to blame.

Sergiy Palamarchuk / Shutterstock.com
This culture included employees trying to keep their bosses happy by 'not going against [their] wishes', according to the fraud investigators. Bosses were worried about the impact of the Fukushima nuclear disaster in 2011. So they would set ambitious and even unrealistic targets and, because their employees felt they had to achieve them, would 'carry out inappropriate accounting practices' - cook the books, in other words.

This kind of culture is toxic and some hefty fines are probably not too far away. So how can Toshiba turn its fortunes around and stop any accounting problems from happening again?

Artur Oganov, our consultant, had this to say: 'Your processes can dictate your culture. You should set up and use Key Performance Indicators to work out what is realistic for your employees. These targets must be achievable - there is always room for improvement, of course. But it is very demoralising to employees if they can never achieve their targets. They should feel like they have input into the targets. Your conversations about targets should always go both ways. Japan has a different corporate culture, it's true, but I think they could learn from Western business here.'


Thursday, 23 July 2015

Was Amazon Prime day a flop?

I know some people who complain about 'artificial holidays'. They claim that there are days that are basically designed to sell greetings cards and gifts that are made up by companies.

Certainly Halloween and Valentine's Day were much less of a big deal in the UK 20 years ago, but what's the fuss about? Everyone likes an excuse to celebrate, right? And some 'imported' holidays like the American Black Friday have given us a whole new range of sales - admittedly at the cost of the odd undignified scene of people fighting over flatscreen TVs.

Frank Gaertner / Shutterstock.com
Well, Amazon recently decided that they'd add a new date to the sales calendar - last week's Amazon Prime Day. They're celebrating their 20th anniversary, in case you were wondering. By some reports, though, it was not a huge success.

We're sure that Amazon executives will be racking their brains and carefully analysing what they did to find out what when wrong and why. But we've made some educated guesses of our own below.

Firstly, Amazon restricted the sale to Amazon Prime users. This was possibly an attempt to get people who aren't signed up for Prime to join the service. Whether that's a great idea or not, we aren't sure - after all, Prime is famously a loss leader for the company. But the theory that Prime users are more likely to buy from Amazon in the first place is probably sound.

Secondly, Amazon had the sale on an otherwise-boring Wednesday. Without a holiday or anything else to tie it to, there wasn't much incentive for customers to log on and check things out when they'd normally be at work.

Thirdly, Amazon chose some strange products to put in the sale. While there were TVs and Kindles and other items that sold out quickly, there also seemed to be a large number of less-desirable items. Non-slip socks and knee braces and the like.

Finally, Amazon didn't market it properly. I spoke to a couple of Prime users who weren't really aware that it was coming up until the day itself, or just before. If they'd known things they were going to buy anyway were going to be on sale, they might have delayed purchases and boosted Amazon's turnover.

We'll see if Amazon Prime Day returns next year, but we'd be surprised if it does.

Monday, 20 July 2015

When's the best time to increase your prices?

John Lewis recently announced that it will start charging a £2 fee for customers to collect items they've bought on its website from stores unless they cost more than £30. And last week, Tesco said it's charging more for delivery too - it already has a minimum order of £25 and charges delivery fees on top of that. It's going to start charging an extra £4 if your order is less than £40. This also applies to in-store collection. These two recent changes come on top of Amazon raising their threshold for free delivery to £20 earlier this year.

These higher costs reflect the fact that having someone pick out specific goods for an order takes time and effort - there's a reason that grocers/supermarkets moved to a self-service model in the first place. The companies have calculated the costs involved and, even when trying to make them as efficient as possible, realised they couldn't afford it at the prices they were charging.

We don't think this is a cynical cash grab. They're simply changing their processes when they are no longer economical so they better reflect the costs involved.

So when is the best time to introduce a price increase? We think that John Lewis actually chose a great time. By doing it right after Tesco, it suggested that this was an industry-wide thing, and it was simply following a trend.

Our consultant, Artur Oganov, said, 'This is a good plan for John Lewis. They haven't increased prices by more than they need to so customers will continue to trust them. They're good at that. Tesco has lots of other problems, so I think this will slip through the net in terms of how people think about them. Amazon, as always, sings from its own hymn-sheet. Predicting what it's going to do or trying to copy it is a risky business.'

Thursday, 16 July 2015

Why new processes need everyone on board

We're based in London, so naturally we had a lot of hassle getting into the office last week thanks to the Tube strikes. And we weren't alone - around four million people use the Tube each day.

We're not going to get into the thorny issue of who's right and wrong, but we think there are some important lessons that both sides can learn.

William Perugini / Shutterstock.com
We think this is a good example of a company (TfL in this case) designing their processes top-down, without properly consulting their people. An all-night weekend service on the majority of the network is an exciting prospect for customers. And it's no mean logistical feat to organise on one of the oldest underground rail systems in the world.

They've clearly planned all that out very well in terms of maintenance, technology and trains, but not in terms of their people. The service was announced without proper consultation with the transport unions about what would be expected of their members, and the compensation they'd get for the extra night shifts.

For the unions' part, it seems like they had reservations about whether TfL were acting in good faith in their negotiations. We think they could have tried harder to establish a dialogue.

Both sides really need to be more flexible and willing to compromise in order to get the system up and running - and, crucially, fully staffed - by September. At the moment, it seems like TfL and the unions are both looking to paint the other side as the problem, and themselves as blameless.

Protobase Labs consultant, Artur Oganov, said, 'It's a classic mistake: management decides something, then expects everyone to fall in line. That might work in some businesses, but when you have workers in unions that are that powerful, it never will. Let's hope they resolve their differences in time to stop the next strike, scheduled for August.'

Monday, 13 July 2015

How should Greece manage the biggest change in a generation?

The latest on the story of the Greek economic crisis is that they aren't leaving the Eurozone. But that hasn't stopped us speculating on what would need to happen if they did.

Ververidis Vasilis / Shutterstock.com
We think the first order of business would be to organise re-denomination. The new Greek central bank would need to set a suitable exchange rate for Euros to neo-drachma (or whatever they end up using) - presumably one-to-one. Then they'd need to start the printing presses, both figuratively and literally. There are nearly 3000 bank branches in Greece that handle cash. They'd need cash, and quickly, to distribute to Greece's population of 11 million. After that, they could change things like vending machines (which would need to be reconfigured for new coins) more slowly.

Next, they'd need to determine what, if anything, they intend to repay to their creditors, and when. While the Greeks will obviously be intending to devalue the new currency as quickly as possible, there is the risk of hyper-inflation and long-term economic depression if they're reckless.

And they'd need capital controls to prevent a bank run - we already saw that a couple of weeks ago when the Greek government closed its banks for a week and restricted withdrawals (still in place as of this writing). All told, it's a lot to organise, but they managed to convert from the drachma to the Euro back in 2001, so it's obviously possible.

Change management on this scale is expensive, but, for all its economic troubles, Greece can't afford to cut corners here. It will only lead to disaster further down the line.

Our consultant, Artur Oganov, said, 'It's always a big thing to change currency - even if a lot more money is electronic now. We think the Greeks should have a plan for 'Grexit', just in case. It's better to have it and not need it than need it and not have it. The plan must have clear goals, a proper legal framework and be prepared for every possibility. For me the big question is how long should the capital controls last before they devalue?'

If you're planning your own smaller-scale change, give us a call and we'll see how we can help.

Thursday, 9 July 2015

Why does the leap second matter?

Did you know the clocks went back on the 30th of June? No? Well, maybe that's because it was only by a second, instead of the usual hour in autumn when British Summer Time ends.

Ever since 1972, scientists have been adding extra time in the form of leap seconds to the clock, to help compensate for the Earth's irregular rotation. Our days are exactly 86400 seconds long, but the planet moves at a rate that's a bit more variable. You probably know that there aren't 365 days in a solar year, but closer to 365 and a quarter. That's why we have a leap day every four years.

Now, you may be thinking, 'that's all very interesting, but what does it have to do with my business?'

There are some downsides to having leap seconds. For starters, most computer software isn't programmed to deal with time appearing to stand still or go backwards. In fact on the 30th, internet access was briefly disrupted in Australia, and the NYSE had to shut down to prevent problems too.

But we think the leap second is a good example of how important accuracy is. If scientists ignored them, or decided to make a year exactly 365 days and never added any extra, it would take a while, but eventually our year would get messed up. You'd have no idea what season it would be in July in any given year. It could be boiling hot on Christmas day.

You can take this message and apply it to how you measure and examine your data - a more precise measurement adds up to a more precise business. Accuracy matters, down to the second.

Friday, 3 July 2015

Did KFC really sell a deep-fried rat? Don't be so sure

Just a quick one today. Remember the 'deep-fried rat' that was in the news a few weeks ago? You know. This one:

Well, it turns out that, no matter what it looks like, it was apparently perfectly normal chicken. No, really.

We think this is a great real-world example of why our unofficial motto of 'Assume nothing. Test everything' is so important. Do you have any similar stories? We'd love to hear them in the comments.

Thursday, 2 July 2015

Will there be an Ikea on your high street?

A few weeks ago, we wrote about how Amazon might approach launching a series of high-street shops. Well, it might be Ikea's turn next.

The Swedish company has long stuck to its successful model of having large warehouses out of town, often near motorways or other locations that don't seem much like conventional retail spots. But there are only 18 Ikea stores in the UK and they're worried that this makes them inaccessible for a lot of people. Although the company do offer a delivery service, it's only within a comparatively small area around their stores.

To fix this, Ikea are going to trial a smaller order and collection site at a retail park in Norwich. This follows successful similar models in Spain, Norway and Finland. And Norwich is just the start - plans for having a shop that could fit on a normal high street might not be too far behind.

As with Amazon, a big change in Ikea's business model will require a lot of planning before the first lease is ever arranged.

Ikea has obviously considered expanding its online store and setting up a distribution network to offer delivery throughout the UK and decided that the atmosphere in its stores is an important part of its customer experience. Or maybe they don't feel they can compete with Amazon online. So clearly they've started the process to manage the change, and it will be interesting to see where it will lead.

Our consultant, Artur Oganov, said, 'It's a bold move for Ikea. The idea of having just a few large stores is very 90s. I think their decision reflects a broad trend in retail to move away from large stores that are out of town and back to the high street. The big supermarkets have done it and, while Ikea's model is necessarily a bit different, I think they could benefit too. Maybe the next step will be a chain of meatball cafes!'

Monday, 29 June 2015

Cloud computing could be worth $500bn by 2020

According to Byron Deeter of Bessemer Venture Partners, the global market for cloud computing could be worth as much as $500bn by 2020. His report into the technology industry predicts that much of this expansion will be down to CRM systems, which will be responsible for 62% of all cloud computing traffic by 2018. The expansion will be led by Salesforce, who Deeter thinks will have a majority share of the CRM market as early as next year.

You can watch the full report here.

Cloud computing is a great solution for CRM systems. It's a much easier way to manage the databases required to store all the CRM information for small companies than having their own servers - not to mention a lot cheaper. And, when you're starting up, you often have to work in a lot of different places, so being able to access your systems no matter where you are is really useful.

Our CRM expert, Artur Oganov, had this to say, 'Deeter has invested in cloud computing pretty heavily, so it's worth taking his words with a pinch of salt. But even so, I agree with him when he says "the overall trend-line will be up and to the right." CRM is a big business and it's expanding. Cloud technology is a big part of that. It's easier than ever to set up a system and get it online.'

If you're still not sure if it's time to move your CRM system to the cloud, get in touch with us and we'll explain the benefits.

Thursday, 25 June 2015

How NatWest could get more out of its CRM system

Are you making the most of your CRM system?

Let me back up a bit and tell you a story. NatWest has been in the news again recently because of a technical glitch that has caused problems with payments to and from customer accounts. What's more, this isn't the first time some of its customers have been struck with exactly this problem. We think it's fair to say that a bank account that has trouble with sending or receiving payments on such a frequent basis is really no bank account at all.

With NatWest's IT department and banking associations blaming aging systems that are too expensive to overhaul, I'm sure some customers feel they're owed more than a refund for overdraft fees, late payment charges etc.

NatWest and RBS need to address the problems these continual glitches are causing to their reputation. If they can't afford to replace or fully fix the systems, they have to fix their reputations by owning up to that. Some well-placed adverts claiming responsibility for the mistakes and apologising, simply and honestly, would go a long way to repairing the damage.


But apologies are just the start. Our consultant, Artur Oganov, had this to say, 'Perhaps NatWest might want to use its CRM system to identify which customers have had trouble because of the glitches - recently and longer ago. It could use this data to give them special perks to help compensate them for the poor service they've received. This would help them convince customers that they really sympathise with their frustrations and hopefully keep them from switching to another bank.'

NatWest isn't really making the most of its CRM system. And the question remains, are you?


Wednesday, 24 June 2015

Protobase Labs partners with Alpha Capital Compliance

We're pleased to announce that we're now partnered with Alpha Capital Compliance. ACCL specialises in helping financial services startups get FCA licences and deal with all their compliance needs. This includes helping companies set up Anti-Money Laundering and Combating the Financing of Terrorism processes, helping with template documents, and explaining how to deal with their Knowing Your Customer data. ACCL wants to make the whole process much quicker and less of a hassle than it is at the moment - just like we do with CRM. That's why we're a natural fit.

ACCL's managing director, Paul Sawyer, has worked in financial services for nearly 40 years, so he's well placed to offer advice and help startups avoid common pitfalls. If you're thinking about setting up a new company, visit the ACCL website, get in touch with Paul and he'll see what he can do.

Monday, 22 June 2015

SF1 shows there's plenty of enthusiasm for Salesforce

We went along to a conference all about Salesforce a couple of weeks ago. SF1 was a huge gathering of vendors, developers and experts that focused on the best ways for people to:
  • get more value out of their CRM systems
  • expand what they use their systems for
  • use their systems to solve specific problems with their businesses in other areas

The people at SF1 talked about using CRM systems as a focal point around which other business activity should be built. CRM activity should be built into each stage of the marketing and sales process, especially as more and more people are working outside of the office.

People thought that without consistent processes, CRM systems aren't any use. So it's also really important to make sure that users get a good experience. And - again, because so many people are working in different places - the experience on smartphones and tablets is the same as it is on the desktop. This is the best way to make using the CRM system part of normal working practices.

Finally, we were left with a question about how the industry should innovate, especially as the economy has started to turn around. How should companies capitalise on opportunities to grow and steal a march on their competition?

The consensus from SF1 attendees was that the best way to do this was by using your CRM systems better than other people use theirs. Part of this involved automating some elements of the CRM process so it was quicker and easier, and part of this involved developing new features that would expand what the system was capable of.

Mark Ghahramani, one of our business development managers who attended SF1, said, 'It was a great event. I think we all learned a lot about the future of CRM and about how improving your systems can make a real difference to your bottom line.'

If your CRM system isn't up to scratch, get in touch now and we'll discuss how we can help you.

Thursday, 18 June 2015

Should Amazon open a physical store?

Amazon.com is a household name, and a massive online success. But it has always shied away from the idea of opening physical shops. However, with the recent expansion of its Locker service (where people can collect things they've ordered online), the setting up of a 'pickup and drop-off' centre at Purdue University in West Lafayette, Indiana, and the acquisition of a 470,000 square foot office block in Manhattan 'primarily' for office space, they're clearly expanding their ambitions.

A recent survey suggested that 53% of people would be open to the idea of visiting an Amazon store on the high street. And Amazon are famous for making low profits, because they put the bulk of their revenue into expanding their market share - certainly going 'offline' would be one way to do that. Maybe physical stores are the next logical step.

So, if they did decide to open a network of high street stores, what would they need to do?

Managing a big change like this would need to start at the top.

Here's what our consultant, Artur Oganov, had to say: 'This would be a huge project. Amazon would need a comprehensive plan with clear goals. They'd have to undertake a thorough analysis of what the physical stores should sell, how many to set up, where they should be and how to make these enormous changes without disrupting their current successful business model. If Jeff [Bezos] is reading this, he should give me a call, and we'll have a chat!'

If you aren't the CEO of Amazon, but still want help with expanding your business into a new area, we'd love to be involved. Get in touch and we'll see what we can do.

Wednesday, 17 June 2015

Why did poor compliance checks damage Plus500?

Plus500, an online forex trading company, was recently bid for by Playtech, an Israeli online gambling company. Shortly before the takeover bid, Plus500's share price had plunged by 60 per cent, so Playtech are likely to get a great deal. Why did it fall so much? Because the Financial Conduct Authority had frozen the accounts of their subsidiary Plus500UK.

So why did the FCA do that? Well, it all comes down to KYC. KYC is Knowing Your Customer and, while it sounds like it might be a sales mantra, it's actually about fraud. Or, more precisely, stopping fraud.

Companies like Plus500 have to collect data on their customers that proves they are who they say they are. It's the same as taking your passport and a utility bill along to your bank when you open a new account. But the FCA said that Plus500UK's checks on these pieces of KYC information were inadequate, and that there was a risk of money laundering or other fraud. Plus500UK weren't able to allay their fears, so the FCA instructed them to freeze the accounts of most of their customers, in effect shutting them down.

If Plus500 had been able to store their KYC data more easily, or if they'd been better able to keep an eye on Plus500UK, it's possible they wouldn't have had so many problems with compliance, and would have stayed safe from the FCA.

We offer automated services to help you manage your compliance data and risk assessment. If you're worried about how your company is handling this or think you could benefit from doing it better, get in touch and we'll see how we can help.

Thursday, 11 June 2015

Is the sun setting on fossil fuels?

Mark Moody-Stuart, former Chairman at Shell, made a perhaps unexpected remark about fossil fuels last week, saying '[fossil fuel] divestment is a rational approach.'

Granted, it's not the most reactionary language, but it's still startling to see a prominent person from the oil and gas industry admitting that it's time for a change. And it's clear that shareholders are realising it too - resolutions tabled by some of the industry's harshest critics have starting finding their way onto some shareholder meeting agendas.

We think this represents a great opportunity for fossil fuel companies to prove they can listen to their investors and make changes that will ultimately benefit everyone on the planet. They need to seriously consider the future and start developing processes that will change their businesses from being almost exclusively about oil and gas to being all about renewable energy. A big industry-wide change is not entirely unprecedented. After all, the fossil fuel industry moved away from coal in the 1980s and 1990s - the very fuel that had been its backbone for over 100 years.

Redesigning and re-engineering processes of this scope across several enormous multinational companies (some of which are state-run) requires co-operation from governments and workers at every level of the business. And many companies see little point in deliberately hamstringing their profits. In spite of Moody-Stuart's comments, they must worry that shareholders will be concerned only with the size of their dividends and are keen to stick to what they know.

That's one reason that change has been so slow. And the other, of course, is the difficulty of managing our existing ways of living. Electric cars have come a long way, but they're still relatively rare compared to fossil fuel cars. If the world's governments banned driving petrol and diesel cars tomorrow, you can be sure that only a few people would obey.

But the change remains worthwhile, if less popular and profitable in the short term. And, in the end, change is inevitable. The sooner Shell and others start to make concrete plans to deal with the biggest change their industries have ever seen, the sooner that they'll regain investor confidence.

Thursday, 4 June 2015

Ringfencing means banks need better risk management

Last week, the Bank of England announced that it plans to publish new rules in 2016 on how retail banking should be ringfenced and protected from investment banking in large British banks. These proposals have been on the cards for a while. They're mostly designed to prevent the kinds of bank failures that end up with ordinary depositors losing their money, as happened at Northern Rock in 2008.

The Bank of England's measures can be seen as a form of risk management. The new rules are designed to protect the government as well as depositors. This is because the Financial Services Compensation Scheme guarantees individual deposits of up to £85,000 - so if a bank collapses, the government (and, ultimately, the taxpayer) picks up the bill.

 
I'm sure most of us would rather that banks that make poor investment decisions punish their shareholders rather than people who've deposited money with them - or us taxpayers.

These ringfencing changes mean that the investment arms of banks will be investing more of their own money. If you work in an investment bank, you're obviously not investing your money, but you do assume some of the risk. After all, if the investments the bank makes are bad, you're likely to lose your job. So you need to be responsible, and to make sure that your colleagues aren't taking on more risk than is safe.

Improving your automated risk management system could help with this. You'll be able to easily monitor what your colleagues are doing and get a look at your risk profile across the business. We've got expert developers who can help out, so get in touch if you need us.




Monday, 1 June 2015

Is Salesforce worth $70bn?

Last week, Microsoft bid a huge $55bn (£36bn) for Salesforce.com. The CRM leader rejected the bid, putting its value closer to $70bn (£46bn). Only Microsoft, or one of their competitors in the sector - Oracle or IBM, perhaps - could manage such a large figure.

So why does Salesforce think it's worth so much? Well, one answer is that Salesforce understands CRM much better than these old and traditionally dominant tech giants. Microsoft, Oracle and IBM are all trying to offer more services using Cloud computing and this is an area where Salesforce is extremely strong. The giants are used to buying out smaller companies that do things they haven't got a handle on yet.

Beyond that, Salesforce is inventive and isn't afraid of trying new things. It's won Forbes' Most Innovative Company award for the last four years. Part of that is down to how it's championed Cloud computing. This has meant that many small companies have been able to harness the resources of large companies, without paying so much.

But Salesforce famously hasn't made a profit since it was founded in 1999. Is it really such an attractive potential purchase? Well, like Amazon, it's mostly unprofitable because it reinvests most of its revenue into growth. Last year, Salesforce spent nearly half of its revenue on marketing. This strategy means the company pays less tax, while still looking like a good investment, because its revenue continues to grow.

If you're looking to get started with Cloud computing using Salesforce, we've got a great range of solutions to boost your revenue and growth.





Thursday, 28 May 2015

Monitor your data better to stay out of trouble

The foreign exchange markets were rocked by fraud again last week. UBS was fined £350m by the US Department of Justice for manipulating exchange rates. Although £350m is hardly pocket change, the fine was less than it could've been because UBS went to the DoJ and admitted what they'd been doing. They were only able to do this because they had detected the fraud themselves by spotting irregular patterns in their data.

Having compliance rules and procedures to stop fraud and money laundering, and to manage risk is obviously important. It's not just a legal obligation, but a moral one too. But, in this case, it seems that a group of people decided to break the law and there is precious little that rules can do when people deliberately ignore them. Instead, as a compliance manager or business owner, you need to understand how your business operates and what is normal for it.

You need to monitor your data very closely to be sure that there aren't any telltale signs of bad behaviour. Our CRM systems come with some automated tools to help detect fraud, but that should be only the first step in the process. It's just as important to have a human being looking over the data to spot the subtle shifts that could indicate a problem.

This isn't the first time that UBS have been in trouble for exchange rate manipulation. It's clear that they took the lessons they learned from their previous experience and used them to develop better systems and improve their fraud-detection methods. If it's impossible to stop people from manipulating exchange rates, the least you can do is to ensure you detect the manipulation as quickly as possible. That's why UBS is only facing fines of hundreds of millions of pounds, not billions.

If you are struggling to manage and understand all your data, get in touch with us and we'll discuss how we can help.

Tuesday, 26 May 2015

CRM is booming. Does your system do everything you need?

The CRM industry is increasingly big business. It grew 13.3% last year, according to a recent report, and the whole industry is now worth nearly £150bn.

The company spearheading new ways to think about CRM systems is Salesforce.com. Over the last year, they've increased their share of the CRM market to 18.4%, but there's plenty of room in the industry for smaller companies to carve out a niche.

We think the flexibility of Salesforce's platform is what's pushed them further ahead of their competitors over the last year.


In a competitive market, you need to be able to distinguish yourself from the competition by properly understanding your customers. A good CRM system can help with this because it allows you to store all your customer information. This makes it easier to access and to understand similarities between different customers. This will help you target your marketing more effectively, run more successful promotions and, ultimately, deliver a better service to your customers. The more you know, the more you can do to help them.

If you want help with a CRM system based on Salesforce, SugarCRM or another system, get in touch with us to discuss it.


Thursday, 21 May 2015

Instant Articles - a smoother business process from Facebook

Facebook recently introduced a new way for people to view content. People using the Facebook app on iOS will be able to read articles without leaving the Facebook app. The first nine companies to be involved with these Instant Articles are: The New York Times, National Geographic, BuzzFeed, NBC, The Atlantic, The Guardian, BBC News, Spiegel and Bild.


The advantages for them are that they get to use Facebook's platform, but keep their design, branding and ad revenue. The advantage for Facebook is that the app user won't have to wait for a
n external website to load, which tends to be the point that most people stop using their app.

This idea of saving time is the really important part about instant articles for us. For many users, a good interface is more important than accurate information. Take Google, their simple logo + text box design has barely changed in nearly 20 years because it's simple and it works. The minimalist layout meant that in the slow days of dial-up internet, their page loaded quickly, so people could search faster. And they still include the amount of time a search takes (even if it's now down to fractions of a second), because speed is and always has been important to their users.

If your CRM system has a user interface that you find clunky, slow or difficult, it lowers your productivity. We can help improve it. We'll take the same approach as Facebook did with Instant Articles: we just need to understand where the bottlenecks are and to remove anything that's slowing you down.

This could be as simple as changing information boxes that are mandatory - but end up filled with 'N/A' most of the time - so they're no longer mandatory. Or it could be as complicated as carefully going through the whole process and working out exactly how much time is spent on each part of the it and what takes longest and why.

Whatever is slowing your processes down, we'll make sure our solutions don't damage the process in a different way. You'll have faster, smoother processes and more time to spend on your customers.

Monday, 18 May 2015

Change management in the Cabinet

The Conservatives' majority at the election led to a Cabinet reshuffle from David Cameron. We said goodbye to several Liberal Democrat MPs and hello to some lesser-known Conservatives. Although Cameron hasn't moved many ministers to different departments, it'll still be a change for them all.

We think this is a good opportunity to talk about change management. Whenever anyone joins a new organisation, they have to adapt to new ways of working. Or, if you're a manager taking over a team, everyone has to co-operate to find places where the existing methods work well, and where you can bring in new ideas that have been successful for you in the past.

Big changes can be disruptive. And you could argue that the country as a whole will be dealing with some big and disruptive changes the government has proposed: repeal the Human Rights Act, devolve more power to Scotland and some English cities, cut the welfare bill by £12bn, hold a referendum on EU membership, expand the Right to Buy scheme and offer more free childcare to working parents.

The civil service, local councils, the NHS and the education system will all have to adapt to these changes. We suggest they think about:
  • How changes in one area are likely to affect other areas and how to avoid conflicts and problems.
  • The long-term impacts of certain changes. These are often difficult to predict accurately, but being aware of the range of possibilities is important.
  • The risks that changes might introduce, for the public sector and for the people they are serving. Full risk assessments will help to mitigate these.
  • The best ways to explain the changes and the reasons for them. Clear communication will make the transition easier.
If you need help with managing changes, big or small, give us a call.

Thursday, 14 May 2015

Why your people need to understand your processes

We often encourage people to re-examine their business processes to ensure they're still working the best way they can. But that's very different to trying out something new based on little more than a gut feeling.

There was nearly a serious rail crash in early March. The cause isn't certain yet, but evidence suggests that the train crew ignored an alarm and signals warning them to stop. Then they seem to have turned off the train's safety systems.

Fortunately, they appear to have realised the danger in time and stopped the train before it crashed into another train.

If the safety systems were working as intended, but the crew decided to use their own judgement to override them, that suggests they didn't trust the processes that were in place. And instead of assessing the potential risks when the alarm went off, they went ahead and made a decision that could've been fatal.

It's safe to say that when you're in the engine room, it's hard to see the bigger picture - whether that's driving a train or working in a certain part of your business. It's difficult to stop and think, take a step back and properly explore the possible consequences of your actions when you're at the coal face.

That's why we recommend getting an outside consultant to come in and help you understand your business processes. We get a thorough understanding of how they work so we can be sure that we can suggest suitable changes. Analysing and testing thoroughly in a safe environment is the only way to be sure that big changes won't cause problems.

If you find that your business processes aren't being followed properly, maybe we can help you make them more user-friendly. After all, if the theoretical process doesn't match up with the practical experience, it's valueless and it needs to change.

Monday, 11 May 2015

Could political parties benefit from better CRM?

Last week's election delivered a few shocks. Both the Liberal Democrats and Labour lost a lot of seats. We're just speculating, and we're not entirely serious, but maybe they'd have been more successful if they'd applied some of the principles of good Customer Relationship Management to how they ran their campaigns. In fact, maybe more MPs could use CRMs to manage the relationship with their voters more generally.

What do we mean? Well, many candidates deliver flyers to every house in their target constituency. This obviously costs quite a lot. They might be able to make better use of their resources by working out who they should target with mass mailings.

They'll know who else is standing and maybe some of their assistants, so those names can be safely removed. Then anyone who's donated large amounts to other parties - you're unlikely to swing them either. It's a start, but it's saved you a few dozen leaflets.

The next step might be to exclude everyone who's a member of your party already from the mass mailing (obviously excluding your volunteers and anyone else whose vote you can be certain of). Then maybe design a special campaign for them. This could talk about your core values and try to appeal to them personally. People appreciate feeling like they aren't just another name in a mail merge, so addressing their interests and concerns could help get them donating or volunteering - as well as their vote on polling day.

Candidates could use a CRM system to store all this information and use it to manage who to approach and how. We think this could really help you make your money go as far as it can if you're in a marginal constituency and are expecting to do several rounds of flyering.

Another example of poor political CRM: in Scotland,  the progressive-left SNP was much more popular than centre-left Labour, who had advocated retaining the status quo by opposing an independent Scotland. Labour's 'marketing' in Scotland could have been better targeted to appeal to voters who wanted more powers devolved from Westminster. Or Labour could have made more of the party's history as the home of many Scottish political heavyweights. Or maybe they made the wrong decision by sharing an anti-independence platform with the Tories in the first place.

Labour also lost votes in northern cities to UKIP. By trying to appeal to potential UKIP voters, they may have lost part of the non-white vote and other liberal pro-immigration voters. Or maybe they failed to understand and address local voters' worries in other areas. In both cases, it seems Labour failed to understand its existing 'customers' or its potential new ones.

Knowing which groups you're marketing yourselves for is just as important for political parties as it is for companies. Alienating your core vote (or market) by trying to diversify can often hurt more than it helps. Maybe managing campaigns with a great CRM system could help decide who to target and how to target them.

Finally, we think there's a lesson to learn from the election for pollsters. The pre-election polls were all rather wide of the mark. This may have been because they used outdated methods and nobody has looked at how they're done in a long time. Pollsters need to analyze their processes, make improvements and to ensure they're more accurate next time.

So what do you think? Are CRM systems the future of political campaigning or not?