At various times in this blog I have discussed the buying process that enterprise software buyers go through, and suggested some tips and things to avoid. I have just come across an entertaining and useful “mini book” by ex software salesman Doug Mitchell, which you can read here.
Some of the anecdotes are funny, but many of the points being made are serious, discussing the things that software buyers should really be asking the salesman, as distinct from what often happens. Points such as the utterly self-defeating “savings” made by buyers in skimping on training in the software they are buying ring very true: I can remember exactly such conversations when I was at Kalido. I hope at some point Doug manages to expand this into full book form, as there is very little out there written about the interaction between software vendors and their buyers.

Happy New Year. There was a useful post in SearchStorage.com regarding 2007 technology IPOs. Some of these are outside the scope of this column, but what I found interesting was that it seems that enterprise software companies were able to tap the capital markets at levels of revenue and profitability unseen over the last few years. A couple of years back the message from investment bankers was that you needed quarterly revenues of not less than USD20 million (and preferably more) and several quarters of profitability before even considering an IPO. Yet Netezza’s IPO got away OK despite a lack of profitability (though strong growth), while Sourcefire had quarterly revenue of under USD 15M and was still not profitable, yet also managed an IPO. It looks as if the markets have taken a slightly harder view since then judging by the early performance of these shares, but these IPOs would simply not have happened in 2004 or 2005.

What is less clear is whether 2008 will show the same softening of view, or whether the financial debt crisis afflicting banks will have collateral damage in the IPO market. Software companies and their backers will be hoping for a continued thaw rather than a return to the wintry outlook the capital markets have seen in the past few years.

A blog that I have had a lot of reaction to was “The Joy of Call Centres”

http://andyonenterprisesoftware.com/2006/11/the-joy-of-call-centres/

If you follow the link you will see a trail of similar bad experiences under the comments. Just to present the other side of the story, I will share with you how good a call centre can be when it is well run. Those of you who know me personally will be aware that I am more attached to my Tivo that most people are to their family pets. Tivo’s innovative technology was matched only by the ineptness of their UK marketing, which sadly means that you cannot buy a new Tivo in the UK, only in the US, though the product is still supported via a call centre in Edinburgh. A few days ago the event I have dreading for years came to pass: my Tivo passed away quietly in the night. It wasn’t immediately apparent that this was the case since my little darling still had its green light on, the equivalent of its eyes open staring into space. Anyway, the point of the story was to explain how incredibly un-BT like the Tivo helpdesk was. It actually took a fair bit of diagnosis to confirm that the Tivo hard drive had actually snuffed it, and the help-desk engineer (a gentleman called David Stoke) was extremely patient and helpful as I went through various steps of diagnosis. What was more impressive was what happened when we were sure that the box was dead. Instead of doing what any regular script-following helpdesk operative would do i.e. hang up, he went off to the internet and actually found me a Tivo for sale on eBay conveniently near where I lived and emailed me the link to it, so that I could quickly replace it. This worked out well and within four days I had a working Tivo up and running again. The attitude of David (and the other people I have spoken to on the Tivo help desk) could not be further from that of the procedure-driven “I’m just reading the script” approach that we have sadly become all to used to in the UK from the likes of BT.

It would seem that I am not unique in this view, and a number of UK companies like Abbey National and Powergen have had enough and are pulling their call centres back to the UK:

http://news.bbc.co.uk/1/hi/magazine/6353491.stm

I don’t think this is anything really to do with the call centre staff being in India rather than, say Scotland or Ireland (though obviously a shared culture and language skills matter to some extent). I am sure that BT would be capable of training ineffective, hostile call centre staff anywhere in the world given half a chance. However the key is that companies need to understand that a call centre is actually the primary (maybe the only) touch point that exists for most customers: the impression that the call centre staff leave reflects directly on the impression that the customer has of the company as a whole. In the case of BT’s shambolic Mumbai helpdesk I was left with the view that BT was, well, like it always used to be. By contrast the Tivo helpdesk left a very positive impression of caring, enthusiastic staf who were passionate about their customers and the company’s products.

All the marketing in the world means less than these individual real experiences, and it does seem absurd to spend a fortune on direct mail and advertising and then blow it all by having a lousy call centre. By contrast, investing in high quality front-line staff that care about customers would seem to me something that has a very real return on investment.

Therr will be a short intermission in the blog as I am off to India for a couple of weeks. There are many things to love and admire about India, but the quality of their internet connections outside the main urban centres is not one of them, so doing the blog from there will be impractical. I’ll just have to concentrate on the beaches of Goa instead; I expect I’ll cope.

Normal service will be resumed in February.

We have got used to Moore’s Law, whereby hardware gets faster at a dizzying rate, though there ought to be a caveat to this that points out that software gets less and less efficient in tandem with this. A neat summary of this situation is “Intel giveth, and Microsoft taketh away”. However when it comes to software development, the situation is very different. Sure, things have become more productive for developers over the years. My first job as a systems programmer involved coding IBM job control language (JCL) decks, which entertainingly behaved pretty much as though they were still on punch cards, with all kinds of quirks (like cunningly ignoring you if you had a continuation of a line too far to the right, beyond a certain column). I just missed Assembler and started with PL/1, but anyone who coded IBM’s ADF will be familiar enough with Assembler. However it is not clear how much things have really moved on since then. In the 1980s “4GLs” were all the rage, but apart from not compiling and hence being slower to run, they were scarcely much advance on Cobol or PL/1. Then there were “CASE” tools like James Martin’s IEF, which promised to do away with coding altogether. Well, we all know what happened to those. Experienced programmers always knew that the key to productivity was to reuse bits of code that actually worked, long before object orientation came along and made this a little easier. Good programmers always had carefully structured code libraries to call on rather than repeating similar code by editing a copy and making minor changes, so I’m not convinced that productivity raced along that much due to OO either.

This is all anecdotal though - what about hard numbers? Software productivity can be measured in lines of code produced in a given time e.g. a day, though this measure has limitations e.g. is more code really better (maybe implying less reuse) and anyway how do we compare different programming languages? A more objective attempt was to measure the number of function points per day or month. This had the big advantage of being independent of programming language, and also works for packages - you can count the number of function points in SAP (if you had the patience). Unfortunately it requires some manual counting, and so has never really caught on widely beyond some diehards who worked in project office roles (like me). Well, we always used to reckon that 15-30 function points per man month was pretty much a good average for commercial programming, and when Shell actually measured such things back in the 1990s this turned out be pretty true, almost irrespective of whether you were using a 3GL or 4GL, or even a package. Shell Australia measured their SAP implementations carefully and found that the function points per man month was delivered was no better (indeed a little worse) than for custom code, which was an unpopular political message at the time but was inconveniently true. Hence, while 3GL productivity definitely was an advance on Assembler, just about every advance since then has had a fairly marginal effect i.e. programmer teams writing today are only slightly more productive than ones in 1986. By far the most important factor for productivity was size of project: big projects went slowly and small projects went quickly, and that was that.

A new book “Dreaming in Code” by Scott Rosenberg is a timely reminder of why this is. Many of the issues of writing a moderately complex application are not to do with individual programmer productivity and everything to do with human issues like a clear vision, good team communication, teamwork etc. All the faster processors and latest programmer tools in the world can only optimise one part of the software development process. Sadly, the human issues are still there to haunt us, having moved on not one jot. Scott discusses the Chandler open source project and its woes, reminding us that software productivity is only a little bit about technology, and a great deal about human nature.

http://www.amazon.com/Dreaming-Code-Programmers-Transcendent-Software/dp/1400082463/sr=8-1/qid=1168361266/ref=pd_bbs_sr_1/102-6088231-4592927?ie=UTF8&s=books

When I was doing technology planning at Shell I always had a rule: if a problem was constrained by hardware then it would be fixed quicker than you expect, but if the problem was a software issue it would always take longer than you would think. This book tells you why that is not a bad rule.

Happy New year to everyone. This period is one which journalists and bloggers dread since there is virtually no news of note (unless someone did something really naughty at the work Christmas party). Fortunately Gartner’s Andreas Bitterer has come to the rescue with the idea of a virtual cocktail party for a few bloggers, who are invited to reveal five things about themselves:

http://bitblueblog.com/2006/12/you-got-tagged.html

This is certainly a fine distraction from coming up with original observations about the software industry, so in the spirit of New year here are five things about me:

1. In 2004 I completed visiting every 3 star Michelin restaurant in the world at that time (see www.andyhayler.com for more on this).

2. I have cuddled a full-grown cheetah (in South Africa at a sanctuary where they bring up baby cheetahs and then release them back into the wild; they purr just like a regular cat)

3. I have eaten fugu (the poisonous puffer fish) when in Japan and lived to tell the tale.

4. I was a junior county chess champion (Somerset is a small county).

5. I once sat next to Madonna and Guy Ritchie at a restaurant (Zafferano in London) and didn’t recognise Madonna as she was wearing glasses, but I did recognise Harry Shearer (who does most of the voices on the Simpsons) a few weeks later. This may reveal something about my grasp of popular culture.

Well done Andreas - an inspired rescue idea for bloggers everywhere in search of material this week. Someone go and take someone else over soon please so we can all get back to worthy commentary.

I am just back from the CBI (Confederation of British Industry) conference, the first time I have been invited.  It certainly had plenty of high profile attendees, with CEOs of many of the UK’s largest companies.  Moreover the speaker list was hard to top, with in-person attendance from Gordon Brown, Bertie Ahern (Taoiseach of Ireland), US Treasury Secretary Henry Paulsen and a certain Tony Blair.  David Cameron was supposed to be there but elected to head off for a photo-op in Iraq at the last minute (a rather curious piece of timing that presumably is supposed to signal that the new Tories are not in the pockets of business, or some such political gesture).  Business speakers included luminaries such as Lakshmi Mittal (the richest man in Britain) and the European head of Google, Nikesh Arora, along with assorted top CEOs. 

A major theme was the rise of China and India as global economic powers, and what this meant for British Industry.  In 1820 China and India accounted for 40% of the world’s economic output, and at the present rate they will do again by 2025. In case you thought China was all about low-cost manufacturing, China Mobile was revealed by Martin Sorrel to be the world’s fourth most powerful brand in a new WPP survey, with a little matter of 268 million subscribers.   The sheer scale of China can be hard to take in, as I discovered when I went to Shanghai earlier this year.  There are 184 cities in China with population of over 1 million people, and according to one panelist the premier of China reckons that there may be 1.5 billion people now in China instead of the conventionally quoted figure of 1.3 billion.  The notion of 200 million people popping in as a form of rounding error speaks volumes to the scale of the place.

As well as the China and India theme there was discussion on energy security and the changes of ownership of companies through globalisation.  In Tony Blair’s session he emphasised how important education was, revealing that 7 million adults in Britain have a reading age below that of an average 11 year old child.  I would like to point out that,  that, perhaps not by coincidence, this is also the exact audience figure for the X Factor.  Blair’s session was primarily Q&A, which he handled with his characteristic aplomb and good humour.  He even remembered my name when I asked him a question - a smooth operator. 

The conference itself was held in the slightly odd setting of the British Design Centre in Islington, which as a venue leaves quite a bit to be desired.  I felt a couple of drops of rain come through the roof, and there seem to be two small toilets for the entire place, which are reached down a maze of ill-lit corridors that look like the sort of ones you walk down when exiting a dodgy cinema into a dark alley.  Security was understandably tight, but less forgiveable were the grand total of four staff issuing badges at reception, resulting in long queues, while a crowd of other staff at a vastly over-manned nearby desk for press stood around chatting to each other and generally being as useful as a chocolate teapot. 

The lunch appeared to be arranged by someone from a Soviet-era canteen.  There were half a dozen identical areas with food, but instead of guests just forming a short queue at each we were shepherded to the end of a long corridor and then formed a single very, very long queue for one section while the other sections remained empty “until the first one runs out of food” as it was carefully explained by a manageress who perhaps was an Aeroflot stewardess in a previous job. 

It does seem odd that the CBI can attract the top political and industry leaders, up to and including the prime minister, but seems unable to address the most basic elements of conference organisation.  Perhaps they should outsource the conference organising to India. 

It seems to be the trend these days to move your technical support call centre from the US or Europe to India.  While the staff are no doubt cheaper there can be problems, as Dell found out and I personally experienced when they shifted their previously award-winning centre from Ireland to India. While hardly a scientific analysis, let me offer you the following real-life example of how such a move can go wrong.  I would like to preface this by saying that I love India and go there most years on my holiday.  Let me now begin the saga. 

Last Thursday my BT broadband internet access stopped working.  I called the technical support number and was put through to a call centre in Mumbai. I explained what I thought might be the problem but the support engineer insisted this was irrelevant and that I work though the scripted set of things in front of him.  This included deleting a surprising number of files (some utterly unrelated to BT broadband) and existing connections.  When I asked whether it would not be wise to take a backup of these first the engineer said “no, no, we’ll restore them from the original CD later.  You do have that - right?”.  Well, squirrel that I am, I did indeed have the original CD from four years ago, but maybe checking before instructing the customer to go on a delete spree would have been prudent?  Anyway, we get to the stage of reloading drivers from the BT CD, and guess what - the necessary drivers seem not to be there.  “Oh” he said.  Oh indeed.  “I will despatch a CD to you - it will take up to 5 days”.  5 days. Have BT discovered the UK postal service yet?  Apparently not.

“But surely it may be a line fault?” I protested. ”After all the status icon of the broadband software showed the drivers were all clear until you insisted that I deleted them?”. 

“I cannot test for a line fault until I eliminate all other possibilities”.

“Well, the last four times that the broadband stopped working it turned out to be a line fault; does that not indicate it might be worth at least a look?”.

“No.  We have to follow the procedure.”

After going round in circles for some time I gave up and decided to call back and maybe get someone more useful. I was away until Sunday (no CD yet) and so the next conversation began.  After going through much the same process this engineer was at least able to find some drivers on the original CD that I had (in an entirely different directory to the one the previous guy had told me to look for).  Any temporary illusions of hope were shattered when, after nearly an hour of software configuration, unplugging cables, trying alternative filters etc, he said “Well, everything is correctly installed now”. 

“Er, but the status indicator says “modem not responding”. 

“Nonetheless, it is fine.  It must be a line problem.  I will now authorise a line test; someone will call you back within 5 days”.  After a long debate he promised to “escalate” this and would call back shortly.  A couple of hours later he did and said “Ah - it is indeed a line problem; someone from another team will call you tomorrow”.

So Monday, comes and no call from BT.  I do get a peculiar message while I popped out for a sandwich saying “we noticed that you have no BT email account with us; we recommend that you set one up.  To do so call…..”

I thought this was a bit cheeky, to put it mildly, but decided to ignore the provocation.  Finally I called back and gave the problem number. 

“Ah, the case has been closed”.

“What?”

“The notes show that someone spoke to you, asked you to set up a BT email account and closed down the problem as fixed”.

I will skip the precise words I used at this point but suffice it to say that the engineer did acknowledge that it was perhaps a tad premature for the problem to be closed by his colleague.  “indeed, we have a zero tolerance policy of bad customer behaviour”.  Uh huh.  So, what was the result of the line test?

“Well, we haven’t run one.”  Where was the CD with the drives supposedly originally requested on Thursday? 

“We have no such request”. 

A lengthy conversation ensued.  The engineer actually said “You are very calm.  If I was you I would be screaming at me by now”.  I guess this was a compliment, at least; no internet access, but at least I had avoided an insane rant.  So, we did the usual dance: deleted some more files, reinstalled some files, unplugged some cables, plugged them back in again etc.  At the end of it the status light was still showing no connection to the modem.  “That must be the problem; it must be the drivers”.

“But your colleague reckoned the drivers were fine”.   

“He was wrong.  It might be the line, but I can’t run a line test until we have tried some more things.” 

Autumn turned to winter and finally we reached the stage where the advice was “I need you to find where the BT main line enters your house, take a screwdriver, remove the face plate and see what the wiring looks like”.  I suggested that this seemed a pointless and generally bad idea, as well as possibly unsafe.

“There aren’t that many volts running through it - you’ll be fine” was the priceless response, but by now my faith in the technical savvy of the Mumbai BT helpdesk was a tad lower than at the beginning, so I declined to start poking around with a screwdriver into some wiring somewhere in the dark outside the house, however few volts were running through it.

“Ah, then I cannot escalate the problem.”

“I just want you to send someone round and fix this”.

“We cannot do that.  You are not prepared to check the wiring so I cannot do anything more; I can pass a message on, but they won’t look at it.” 

At this point I decided to give up and drink a lot of alcohol.  By Tuesday it had been six days with no internet access and I decided on a fresh approach.  I called BT sales and asked if I could buy broadband.  “Certainly - what is your phone number?” which was followed by “Oh, but you already have broadband”.  I explained that I may well be paying for broadband, but certainly did not actually have use of it, nor was I ever likely to in the future at this rate.  At this point the sales girl took pity and passed me on to a UK technical guy.  A very nice man from Newcastle called Jaz talked me through the situation, got me to reconfigure some files and in 15 minutes I had broadband up and running again.

So, Newcastle helpdesk 15 minutes; sorted (mostly fixing the problems caused by the previous “support”).  Mumbai helpdesk over 3 hours on the phone, five days elapsed and something close to a nervous breakdown for the caller.  It was so comforting when I switched on the news and saw that BT’s profits were up and were “investing in 6,000 new jobs in India”.  At the productivity rate of 12:1 that I had found that would be equivalent to 500 people in Newcastle.  I hope they are really, really cheap in that Mumbai call centre, Mr Verwaayen.  I do know a man called Jaz who could perhaps usefully do some training over there….

I spent the early part of this week at ETRE, an unusual IT conference that has been running since 1990.  Organised by ex-journalist Alex Vieux, the conference is for technology CEOs and founders, general partners at VCs and the usual hangers on, rather than for customers.  It moves around to a different European city each year, and this year attracted about 500 people.  The conference is notable for two consistent things: the very high quality of people attending (Bill Gates used to be a regular) and the utter inability of the “organisers” to keep to schedule. This year, it has to be said, the overruns were of more manageable proportions than usual, and indeed the opening session only started 14 minutes late.  John Thompson of Symantec and Niklaas Zenmstrom of Skype were the star names this year.  Skype now constitutes 7% of all long distance calls, which does rather make one wonder at what point the phone companies who generously provide the infrastructure will send the boys round to collect some money from eBay.

The “future of enterprise software” session was definitely the odd one out, since the future was clearly all about social networks, at least in the eyes of investors.  They have a sort of Dragon’s Den session called ”meet the money” where early stage companies pitch to a panel of VCs, and this year the company funkysexycool.com (I couldn’t make that up), a sort of myspace wannabee for mobile phones whose business cards feature a voluptuous fantasy woman, had the VCs lining up to throw money at it.  By contrast a shipping ecommerce company, who had been around a few years, had several million in revenues and was profitable, could not have caught a cold, never mind funding.  Perhaps a social networking site for melancholy enterprise software executives?  No takers?  Oh well.

What interest there was around enterprise software was confined to “software as a service” companies.  Rightnow has now reached USD 100 million in revenue, joining salesforce.com in that rarefied air, and certainly there seem to be a few other early stage companies branching out into software as a service for things like HR and ERP.  Given that as much as 80% of technical problems with software are to do with the client environment (often some odd combination of software versions that the vendor had not, or could not, test) then the model certainly makes a lot of sense.  The drawback is that the rental model that usually goes with this means relatively slow growth, though the recurring revenue generated certainly means less sleepless nights near the end of a quarter for software executives.  

One of the few enterprise areas prospering was security, where there was a general consensus that the hackers and spammers were comfortably winning the war.  I was impressed with a company called BitDefender, who are a Rumanian security software firm that has grown since launch in 2001to USD 60 million in revenues.  This has all been done without a dollar of venture capital (there are not too many VC conferences in Bucharest).

The lack of organisational skills of the conference remain legendary.  They denied all knowledge of my booking until I produced the bank transfer details, though they at least seemed embarrassed when I pointed out that they had done exactly the same thing last year.  The conference check-in was a procession of people with lost reservations and people who had booked airport transfers that never arrived.  To be fair, a very helpful gentleman called Farley Duvall did a bang-up job of sorting out my misbehaving video presentation, and the Red Herring people always seem to cope with problems with willingness and good humour. Perhaps they just need some German organisers. 

With its baffling inability to stick to a schedule, ETRE remains something of an enigma.  Attendees wonder aloud whether it is worth the high cost, and yet each year they come back as there is nowhere else quite like this for networking.  If your company is not there, what does this say about you?  With other conferences very much in decline (even Esther Dyson’s US conference just bit the dust) you certainly have to give a lot of credit to Alex Vieux and his team for managing to attract a healthy turnout of people back every year.  Not many tech conferences can claim a 17 year unbroken heritage.

Earlier this year I spoke at a conference in Madrid where Ventana research unveiled research that showed, amongst other things, that companies that rely heavily on spreadsheets take several days longer to close their financial books each month than those that do not.  This makes sense.  Excel is the analyst tool of choice, but its very ease of use presents issues.  It is not easy to document well, and when I was at Shell we had a whole team providing spreadsheet auditing and design services.  For some of the very complex financial or other models that end up being developed it turns out to be very difficult to make sense of a model when someone moves on.  In the IT world we are used to dealing with support issues and at least in theory have plenty of experience with documentation standards and debugging tools.  As we all know, even in mature systems the documentation can be a nightmare, but imagine how much worse it is in Excel when you are asked to take over a thousand line Excel spreadsheet where all the cell formulae use the default grid references e.g. “=Sum(c3:c27)”.  Instead you can use the facilities in Excel to assign meangingful names to cells e.g. this would become something like “=Sum(expenses)”, which is a lot easier to figure out, but how many peopel do this?   Indeed when audits of spreadsheet models were carried out then errors were frequently found, which is worrying given the kinds of decisions being taken that rely on these models. An article this week explains how eXtensible Business Reporting Language (XBRL) offers the prospect of some relief since it defines tags which are independent of cell location. By separating the definition of the data from its cell-specific information it becomes easier to keep track of things, and easier to combine worksheets from multiple sources.  Whilst this is a welcome development I suspect that there is a long, uphill climb involved since the problem comes down to people rather than technology.  It took a long hard struggle to get programmers to (sometimes) document things properly, and I cannot see most finance or other end-users really caring enough.  It is always quicker to use things like cell references rather than proper names, for example, and so it will always be tempting to do so and not worry too much that your pretty model is almost incomprehensible to anyone else.  

It will be interesting to see whether regulators take a firmer view of things over time, since in my experience the quality of spreadsheet models is distinctly patchy.  Insisting on proper audits of spreadsheets used for serious purposes (e.g. statutory accounts, investment decisions) would be a start.  I suspect that most companies have little idea of just what a can of worms they are relying on for the numbers on which they make their decisions.