Oaksys Tech Update

Ofgem, the Energy Regulator, reports that the UK needs a £200 Billion investment in its energy infrastructure if we are to avoid power shortages. What steps has your business taken to protect the security of its energy? Does it have a UPS and load shedding policy that is routinely exercised? Has it considered local generation of power, possibly under a CHEAP scheme? If you do not preplan it is inevitable that at some time in the future your organisation will lose productivity due to regional power outages or brownouts.

Guru

I attended a seminar where Microsoft’s latest tools for managing Hyper-V were demonstrated. Virtualisation is creating an increase in the complexity of the Server environment. Businesses will need increasingly skilled personnel to manage the environment. They will need good software tools to be able to perform effective management of the environment.

The other thought which struck me is the need for operations management to have good tools to measure/track the operational cost (and cost recovery) of running applications in a multi-server data centre. It takes considerable capital expenditure to set up a full loaded Microsoft/VMWare environment. The servers have to be powerful as does the storage environment. Recovery of the capital cost during the financial depreciation period will be an additional loading on the operational costs. Fortunately such software tools do exist to help track the costs and to bill the user business. More on this later.

Guru

It is fascinating to see that BP is of the opinion that in concentrating its supply chain for IT to one supplier – Computacentre, that it will reduce costs.  I have no axe to grind on Computacentre. I have used them before and they are a thoroughly professional outfit, but they were not always the lowest cost supplier. As an IT Manager I usually found that I could reduce costs by multi-sourcing, but it did take some management time to monitor the arrangements and performance.  An upside of the management involvement was that I was fully aware of the service level provided by the various vendors. It gave the opportunity to reward/punish service levels accordingly.

When I moved to a larger organisation (from 1500 employees to 75,000), that had streamlined vendors, I found that the support charges to users were five time higher than my previous employers. The service level monitoring by the client company of the single service organisation was significantly poorer and the goods supplied were more expensive.

In effected the client company had tried to outsource a management responsibility to one of its suppliers. Eventually this poor service level was mitigated, but not resolved, by employing additional Relationship Managers within the employing organisation.

BP need to be very sure of what problem they are trying to solve by removing 540 suppliers and replacing them with one. They may not get the result that they expect. Their financial processing may be simplified a little, but they may find that account management is much more difficult.

Guru

The government/local authorities did not order or stockpile enough road salt for treating ice on the roads and pavements. What is the cost of this governmental negligence? The lost production and the additional injuries of people slipping on icy pavements represents a cost to the country.

Somewhere government officials, individual people, took the decision to restrict salt stockpiles and to rely on a just in time delivery system from a single major supplier. The officials did not analyse the impact of severe weather. They got it wrong and should be held to account for the consequences. It is not good enough to bleat that this is an exceptional winter. The extremely high salaries for the Local Authority CEO’s was supposed to provide the best people. It hasn’t. They should be removed from post.

This disaster was easy to foresee, in fact the AA predicted it, but  David Sparkes of the Local Government Association described the predictions as “ridiculous scaremongering.” If there wasn’t a 250.000 shortfall in national/local road salt stockpile the problems wouldn’t be so bad.

According to Independent on Sunday newspaper councils are paying £120 / tonne for salt that is purchased now. In the “offpeak” sales the charge is about £30 / tonne. Does it really cost £90 to store a tonne of road salt for a few months?

Guru

We just had a sales call from a software security firm wanting to open business relations.Our reply “No, your Company screwed us about 7 years ago. We don’t do business with you.”In this world of “just in time”, CRM Systems and marketing led business models it is easy to forget that businesses and people have long memories.Sharp practice is never forgotten and is quite often retold to other people.Guru

A report on the BBC News website says that the Local Authorities are 250,000 tons short of road salt compared to a few years ago having switched to “Just in Time” ordering. A retort from the Local Government representative was that this was scaremongering by the Automobile Association and “…It’s up to councils, not the AA, to decide whether it is a good use of their council taxpayers’ money …”

Well this taxpayer has watched the councils fritter away taxpayer’s money on ludicrous vanity projects whilst council tax has increased massively above inflation. The councils have increasingly ignored their basic duties and reduced the “service” on things such as road salt etc etc. The Local Authorities assume that there is an inifinite supply capacity [at the Salt Mines] at the time of highest competition from the consumers of the product.  It is clear that the AA has got it right and the arrogant attitude of council officials is wrong. It is business who pays the cost of the unpreparedness of the local authorities.

Guru

The poor performance of the Royal Mail is so bad it is almost fraudulent. They have halved local deliveries, they have halved local collections. The number of Post Offices in the area has almost halved, causing longer queues for customers. Yet they have increased their prices well above inflation in the past few years. Their “First Class Large envelope” scheme is another money raking scheme. They treat their staff so poorly there are frequent strikes.

All this decreased service level just transfers the cost to the customers. A classic MBA type solution where a monopoly is involved.

This morning they couldn’t deliver a small packet, because I was out (there is no way of predicting when the mail will be delivered). So they just posted a “come and collect card” through the door. Both my adjacent neighbours were in at the time, but the Royal Mail chose the solution most convenient for themselves and most inconvenient to me. Now I have a 30 minute round trip to the sorting office. To rub salt into the wounds they included my neighbours mail in with the letters that were pushed through my door. So I had to deliver the mail for the Royal Mail!!

The current Royal Mail bosses should be fired! Their cost to the business infrastructure is unbearable.

Alaric

Oaksys Tech Ltd has been in operation for over 10 years and we place great emphasis on good customer relations. Going that  extra mile is important. Imagine our surprise when we discover the situation with a new supplier of printing services to ourselves. We ordered a batch of USB memory sticks to be printed for marketing purposes by this “new” company.

First they demand payment up front, because they have not dealt with us before. Understandable, but an irritant and a bit one sided.

Then they can’t handle the artwork which has been used by other printing companies, because they don’t handle pdf format files. We have to fork out an extra £25 for the file to be converted by them. They are starting to test our patience.

When we placed the order, we mentioned that there was no rush because we will not be using the product before 1st Oct 2009. We sent a cheque for the full amount 16 days ago. Since then radio-silence from the printer. Knowing that typically such a job takes about 4 weeks with previous printers we sent an email enquiring about their estimated delivery date.

You’ve guessed it already - they are planning to deliver on 1st of October 2009, some 10 weeks after the date of order. These people must either be extremely busy or have some weird scheduling process. I’ve checked with other printers and they have told me that once the artwork was available it would be only 30 minutes work maximum to print the USB memory sticks.

What really irks me is the lack of communication from this printing company. In these days of email it is inexcusable. It would have cost them nothing to send an email saying - “thanks for your order … this is when we intend to deliver …” How do they stay in business if they treat their new customers so poorly. I don’t think that they will see any repeat business from us.

Guru

I’ve just had a Sales guy on the phone. He sounded desperate, as though he was calling all of the contacts in his CRM system in the hope of finding potential business. Strangely enough I was looking at another site in the USA last week who say this is precisely what you should not do if you want to make sales.

This sales guy was making some classic mistakes:

• He was talking and not listening;
• He was offering price concessions before the client was negotiating;
• He was making service commitments without knowing details of the order;
• He was rushing, as though his objective was to make as many calls as possible in the morning;
• He was constantly using my forename, in almost every sentence, even though he does not know me personally.

In short he convinced me that he was a lightweight sales person whose job was under threat. I deal with very wealthy clients who put a great deal of store in the integrity of their suppliers. I would not expose my clients to this person, even indirectly.

Alaric

One of my company Internet links is down due to the incompetence of BT OpenReach. Fortunately we have diverse links from two suppliers so we are not dead in the water. The existing link had an horrendous error rate, so after several engineer visits and a full equipment swap out the ISP (Easynet) decided to pay BT to install a new line to the premises.

The BT Openreach engineer turned up the day after the agreed date without prior notification and installed the new line. After disconnecting the old line he then discovered that the preparatory work at the exchange had not taken place.  So now we are waiting and as yet no Ready For Service date.

This negligent approach to works by BT OpenReach shows a corporate disrespect for the end-customer. It is a simple line installation which if properly organised should have been straightforward and error free.

BT are not going to get away with this disrespect. My company advises financial organisations on IT Infrastructure and we often see opportunities to improve our client’s service levels and reduce their costs by finding alternative suppliers. This advice often results in the removal or downgrading of an existing supplier. In a recent case one company we advised diverted all of their outgoing call traffic to an alternative supplier. There was no capital spend to achieve this and it halved their operational costs for call charges. At the same time we managed to double their resilience of their telecoms infrastructure.

You’ve guessed it of course. The incumbent supplier had previously annoyed our consultant. We didn’t charge our client any extra for this advice and they have saved a lot of money.

In the days when Account Managers were real people who met their clients, rather than spotty clerks sitting in a Call Centre with a CRM system, this might have been resolved amicably. We would have called a friendly account manager and warned him/her of the costly outcome of corporate negligence. Some Bean Counter somewhere probably “saved” a load of money by reducing the account managers and moving the function to a call centre. It all boils down to really knowing your customer.

Guru