Your Field Mobility Tool Isn’t Broken: 3 Steps to Ensure Its Success

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Many Oil & Gas services companies still opt to use a manual process for scheduling service delivery, gathering field data, and translating that data into various systems. But in today’s day and age there are abundant options to perform the same activities in a more accurate and efficient way.

A field mobility tool is an application installed on handheld devices, such as a tablet or smartphone, that enables the field Technicians to capture, send and receive data that is used by several departments across the Company. Yes, the tool is geared towards and primarily used by field technicians going to customer sites, performing a job, and finalizing invoice information – but the process doesn’t end there. Once the job is done, how does the captured data impact the rest of the organization?

There are consistent pain points we see across the services industry that can be addressed and resolved when introducing the right, fit-for-purpose mobility tool. The tool will introduce vast benefits that impact all aspects of the company, if selected and implemented the right way.

Common Pain Points & Benefits of a Mobility Tool

Internet Connectivity
Issue:
Most commonly, Oil and Gas services companies and their personnel travel to desolate or off-shore field locations where internet connectivity is sparse or non-existent. This disconnect is the most disruptive issue and impacts real-time, daily activities. Without communication between the field personnel, back office coordinators and integrated systems, the process takes much longer to complete. As a result, the field users find their own “creative” ways to get the job done.

Benefits:
By implementing a field mobility solution, the dispatcher has the ability to view a technician’s availability and schedule jobs accordingly, a completely automated process. When technicians receive job notifications electronically, they can review details including job specifications, location, pricing and parts needed to complete the service. A standard scheduling system also allows for quicker scheduling time and reduced mis-bookings.

But what if no internet is available once the technician arrives onsite? No problem! The mobility tool will store the job information offline, which can be reviewed with the customer prior to beginning work. Once the work is complete, the technician can update the electronic field ticket to reflect actual time and materials used capture the customer signature and submit the ticket for invoicing. A copy of the field ticket can even be sent to the customers email straight from the handheld. Data can be collected offline and will immediately sync with integrated systems the next time the device is connected to the internet.

Of course, many customers in the industry do still require paper field tickets with job details. Even without internet connectivity, the mobility tool can directly connect to printers on-site or in the technician’s vehicle and print the updated information and signatures.

Information Gathering
Issue:
In the world of hand-written field tickets, a Dispatcher will quickly jot down job details on paper field tickets, but complete and accurate customer information is rarely collected. And is that a coffee stain? When the Dispatcher is in a hurry or half-headedly filling in the paper form, information is sloppy, incomplete and often illegible. Additionally, many services companies do not have standardized templates for pricing from a price book and collecting customer requirements.

Benefit:
By implementing a field mobility solution, the end users are required to provide all necessary information up front. Price books can drive job pricing, based on area of operation and required job details will always be provided. This will ensure all information required for customer billing is captured and sent to the invoicing group upon job completion and the data is actually legible! Accounts Receivable clerks spend much of their time reviewing field tickets and reaching out the field technician for guidance; but most of all, they are coordinating the invoice details with the customer. When all information is available and the customer signature is provided, there is not much a client can dispute. Ultimately, this leads to decreased Days Sales Outstanding (DSO) and personnel overhead expenses.

Integration with ERP
Issue:
A field mobility tool is a standalone solution that incorporates the scheduling, pricing and field information gathering processes. When a field ticket is sent to the back office, the accounting staff must re-input the information from the mobility tool to the accounting system. This is a dual effort and an unnecessary use of time. Maintaining a dual effort input process is feasible, but it’s not ideal, and increases the risk of human error and overall process timeline.

Benefit:
Building an interface between the field mobility and accounting system is not something that happens overnight but, with the correct ERP system and Third-Party Integrator, the long-term benefits are well worth it. Such integration would give the company the ability to further reduce DSO by removing the need to enter data in multiple databases and would reduce customer disputes, often due to human error. Overall, an automated and streamlined Order to Cash process reduces the Company’s DSO and SG&A, and increases process efficiency and customer satisfaction/retention.

How to Ensure Success
1. Select a Fit-for-Purpose Tool
Many companies will select a tool that is demonstrated as a fully-functional and robust solution. What we often find is the company is over-promised and under-prepared to take on the implementation on their own. Conducting a full field mobility system selection is critical to ensure a successful implementation. Reviewing several options, comparing functionality to Company requirements, and performing a Total Cost of Ownership comparative analysis (TCO) give the Company the information needed to make the most fitting long-term decision.

2. Identify the Right Resources
Along with engaging the right consulting company to perform a system selection, a Company should asses the appropriate Project Managers to guide the implementation. The worst approach a company can take is not planning the implementation steps, resources, budget and timeline. Internal resources and Third Party integrators should be discussed and determined early in the planning stage to delegate responsibilities and expectations, and to reduce unknown factors and downstream issues.

3. Engage the End Users
Focus on change management and get all users involved to buy into the project before it begins. Choose key resources who are respected by their colleagues and hardworking individuals. Interview and understand what makes their jobs more difficult (see above for their answers) and determine how the implementation would benefit their job. If stakeholders are engaged from the beginning of the project and are included throughout the duration of the project, their coworkers will understand the reasoning, giving them the ability to see the benefit. Although not all end users will buy in so quickly, introducing the idea early and reiterating the long-term benefits with increase user buy in.

Many companies are living in the Stone Age of manual field processes. There are plenty of failure anecdotes to deter companies from making the plunge into digital. However, the reality of the benefits of digital are easily realized when the tool is selected and implemented correctly. When the current manual process is compared against the long-term benefits of the right field mobility tool, the answer is simple.

Trenegy is a non-traditional management consulting company that helps companies identify the best fit-for-purpose field mobility solutions and implement based on the company’s unique business model. For more information, contact info@trenegy.com.

The Untapped Power of Journey Mapping

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Have you ever tried to look at a 3-D image without the accompanying 3-D glasses? The image is somewhat blurry and doubled, heavily washed out with varying shades of blues and reds. You can make out the image, of course, but you are not getting the true picture. Putting on the 3-D glasses, it is a whole different story. Not only is the image clear, but you are seeing it in greater quality and dimensionality than ever before.

This metaphor easily translates to preparing for and carrying out system implementations. The information gathered through a typical procedure—reviewing documentation, processes, and brief employee interviews – gives only a blurry, discolored perspective of the picture.

So, you want the 3-D glasses? In implementations, the glasses come in the form of journey mapping.

What is Journey Mapping?
Journey mapping considers a user’s experience from beginning to end of a process. Journey mapping should be done for any process that 1) interacts with the customer (internal or external) or 2) is a frequently completed process. While it is often used to improve customer experience, the process can also increase efficiency and user acceptance throughout an implementation. Though the employees (users) of the system are not a typical “customer,” they are the individuals on the receiving end of the new system. The users’ buy-in or rejection of the solution can have very real consequences on the attainment of implementation goals.

Journey maps view process flows from a new angle. Rather than interviewing employees and simply noting the hard facts relating to the process, journey mapping actually takes into account an employee’s thoughts, feelings, pain points, and frustrations associated with the process being defined. It is important to understand that journey mapping does not slow the implementation process down at all. As noted previously, all the information is already being conveyed during interviews, workshops, and facilitated sessions; the data has just not been meaningfully captured in the past. Journey mapping supplements the design phase with richer and deeper information, making change management even more powerful.

The majority of implementations consist of a company selecting a best fit system and making the necessary customizations to meet the company’s critical requirements. Breaking down the typical implementation process shows how journey maps can be woven into the plan to strengthen the overall implementation.

Selection
When selecting a system based on process flows alone, an ideal, but not necessarily realistic picture is painted. Process flows often show how a vast array of functionality can be used, though a journey map would reveal that much of this functionality is non-essential. The resulting benefit is the ability to choose a less expensive solution with less features and potentially even greater efficiency. For example, a manufacturing and distribution company assumed providing competitive costs during the sales order process was critical to customers. Filling this requirement would have resulted in the acquisition of an expensive third-party product. Through the use of journey maps, the company discovered customers were indifferent, and the costly third-party product would have been a colossal waste of money. Journey maps enable companies to target what they need to buy and implement, inevitably leading to a reduction in overall cost. Benefit in Selection: While process flows show which features and functionalities could be used, a journey map shows that not all are needed.

Configuration & Testing
Throughout configuration, journey maps help to focus efforts in potentially unexpected but high return areas. For example, the standard AP invoice processing functionality in all ERP systems will result in paid bills. However, journey mapping the process often exposes the need for custom forms and screens to support head’s down data entry in high volume environments. Without this, the bill paying process would slow, making it difficult to obtain critical supplies in a timely manner. Benefit in Configuration: A process flow will show that ‘out-of-the-box’ would work, but the journey map shows that it is not as efficient and creates a huge bottle neck.

Journey maps are used throughout testing. From the very beginning, they are referenced when creating test scripts to ensure the critical requirements are adequately tested. Process flows allow for testing that the system accomplishes its end goal, journey maps allow testing that confirms the end goal is reached with the least resistance, room for error or employee frustration.

During testing, journey maps confirm that the processes and system configurations make sense by highlighting bottle necks or areas where there is a great amount of change. For example, if there is a new field ticketing system requiring people to use structure, price lists and technology they are unfamiliar with, journey maps will identify and highlight the new process as high priority for testing. Ensuring all critical requirements are operating per user expectation eliminates resistance during training and go-live. Benefit in Testing: A process flow will show that the process is streamlined and doable, the journey map shows that it is not done easily but then serves as a roadmap to navigate the bumpy road ahead.

Training & Roll-Out
Journey maps allow focus to be placed on the right training, so training is not wasted. The groups that undergo the greatest change or trouble are identified and prioritized during training and support. Leadership is empowered with an in-depth understanding of the steps of the process that have been simplified for users, as well as the steps that will be more tedious and potentially frustrating. With this knowledge, leadership can clearly explain the purpose and importance of more tedious steps to aid in change management. Journey maps help to apply change management concepts in a realistic manner, enabling effective and lasting change management. Following roll-out of the new system, journey maps continue to serve a purpose by aiding leadership in prioritizing support and on-going training, first to areas of highest criticality. Benefit in Roll-out: A process flow will show the steps for training, the journey map shows the feelings, expectations and stumbling blocks associated with these steps; equipping leadership to train with sensitivity to achieve lasting change management.

In every step of the implementation process, there is a place for journey maps to make the overall picture more clear, leading to stronger and more effective implementations.

Trenegy is a non-traditional consulting firm—using journey maps is one example of how we are different. Contact us at info@trenegy.com to find out why different is better.

GE Oil & Gas and Baker Hughes Merger: Opportunities for All

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The GE Oil & Gas acquisition of Baker Hughes will create tremendous opportunities for not only the new GE, but also for the existing regional or specialized oil & gas services companies and for companies yet to exist. The U.S. Justice Department required GE to spin off its Water and Process Technology Division. The creation of a new company generates new opportunities. Regional and specialized services companies competing against the new ‘Goliath’ will find themselves at a competitive advantage. Going forward, they are competing on agility and responsiveness with one less ‘Goliath’ in the oil patch.

Newly created and current regional players will be ripe for success.

Why? First, company spinoffs continue to outperform the market. The Guggenheim exchange-traded fund CSD focuses on investing in 6 to 30 month-old spinoff companies. CSD has outperformed the S&P 500 by almost twofold in 2013. Spinoffs provide a unique opportunity for a company to start fresh. The new company’s executives are no longer under the directives of the mother ship and often experience a sense of optimistic liberation.
Second, regional players are more agile than the massive ‘Goliaths’ in the market. The regional and specialized players can quickly respond to customers’ needs, slipping in as the replacement service provider. The larger company GE Oil & Gas staff may find themselves encumbered with checking their every move for compliance with the new corporate ‘handbook.’

We have worked with spinoffs and specialized service companies to achieve outstanding results by focusing on the following 5 core elements:

1. Eliminate Waste
A new spinoff or specialized service provider with eyes on success will simplify business practices and eliminate waste. Targets for simplification include back office administrative tasks. Simplifying budgeting and reporting is usually the first target to reduce any unnecessary administrative burden on operations.

In Practice: We helped a large oilfield services spinoff eliminate over 100,000 hours per year by overhauling the legacy budgeting process. The fallout was an elimination of over 100 reports and spreadsheets containing mounds of CYA data.

2. Shed Excess Information Technology
In the immediate term, the spinoff organization typically has no choice but to use the former parent’s ERP environment under a transition service agreement (TSA). Moreover, the specialized service company systems are fit for operational purposes instead of fit for the often bureaucratic parent. One of the first priorities is to shed this expense as quickly as possible by moving to a fit-for-purpose ERP.

In Practice: A mid-size oil and gas spinoff was under a $10 million per year TSA agreement for ERP and systems support. When the spinoff implemented an ERP that closely reflected their business needs, the cost was less than half the annual TSA support fees. The new ERP annual administrative support cost was less than 10% of the TSA annual fees. The return was realized in less than one year.

3. Choose People for Success
The newly appointed spinoff executive team is positioned to handpick management. Typically, the former parent company will attempt to slough off the dead weight and move poor performers into the spinoff organization. Do not allow this to happen.

Second, the specialized services companies have an opportunity to handpick talent from the newly merged ‘Goliath.’ Highly talented engineers and sales professionals often find the new larger bureaucracy is not for them.

In Practice: The shrewd spinoff executive team from a newly formed chemical company resisted the pressure. The spinoff CEO and CFO halted the random assignment of employees and began an intentional selection process for management positions. The spinoff was marketed as an avenue for people to be a part of something new and exciting. Positioned properly, the best and brightest can be attracted to the spinoff.

GE Oil & Gas has an opportunity to gain global market share, but the new company must go through some level of realignment of people, processes and technology to remain lean and nimble.

4. Reorganize the Corporate Structure
Combining two organizations always involves the integration of two different organizational structures. The priority is setting the structure of operating units.

In Practice: A global oil and gas drilling company merger allowed our client to examine the differing corporate structures and pick the best of both. The company completely reorganized global operations. Following the change in operations, the finance, human resources, and information technology functions followed suit. A 30% reduction in general and administrative costs was achieved, and the company outperformed analysts’ profitability expectations.

5. Rationalize Business Processes
A merger creates an opportunity to streamline and simplify business processes. Rationalizing business processes should start at the corporate office.

In Practice: We worked with one of the largest energy company acquisitions and helped the company completely overhaul the planning, forecasting and reporting processes. The new process cut thousands of hours out of the planning process and reduced the mountains of reports by 50%. Operations could focus on execution instead of never-ending corporate planning meetings.

For GE Oil & Gas, regional specialized players, and the spinoff companies that result, the months to come will be an interesting time. Make the most of the coming opportunities.

4 Reasons Why Corporations Are Losing in the New World of Platforms

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We have all witnessed countless examples of new technology platforms turning traditional industries on their heels. Uber is wrecking the taxi industry. Amazon is shuttering big box stores. Hotels.com is boarding up travel agencies. What industry is next? Realtors? Technology? Consulting? Energy?

The burning question is: why aren’t traditional corporations at the forefront and winning the platform race? The traditional companies have a clear advantage over the upstart. Traditional corporations have money, an existing base of customers, customer data, and the staff. Not to mention, the traditional companies have the physical assets and infrastructure to manufacture, service, and deliver to the customer.

Why are the traditional corporations losing to the new guys on the block? And what can they do differently?

Assign the Right Champion – All too often, corporations will hand the platform challenge over to the CIO. It’s technology right? The CIO approaches the challenge not unlike the last ERP implementation, gathering existing requirements and implementing the system that meets most of them. The system is not as user-friendly, and adoption is met with resistance. This approach is problematic for several reasons. By definition, a platform eliminates resistance and friction. The purpose of a platform is to make the connection between buyers and sellers easier, with little to no resistance. Platforms are built with “ease of use” and engagement as the primary driver, not by a list of requirements. Building a platform begins with mapping and understanding the customer’s journey. Journey Mapping is a fundamental starting point. Platforms don’t start with technology, so punting the development to the technology guys is a big mistake. Find an internal champion who is forward-thinking and intimately knowledgeable of the customer – no prior technology experience required. Most importantly, the champion should be able to select his team out of the business rather than asking the business to elect people.

Pretend as if the Corporation Does Not Exist – Corporations tend to build platforms around what already exists or what is known within the organization. The MVP (minimum viable product) becomes over-engineered. Most of the time and effort is wasted trying to integrate the platform with the legacy systems and the data inside the company. Traditional corporations have an array of products, inventory locations, transportation mechanisms, etc.. It is very easy for a company to fall into the trap of trying to mirror the data and information already existing within the company into a new platform. Dell Corporation was one of the first traditional companies to jump on the early eCommerce bandwagon. How did they get there first? Their eCommerce platform started with a simple customer interface. All customer product and order data was manually entered in their internal systems for processing. Building a platform for collaborating with external parties should start with integrating the customer experience – not the internal technologies. Internal integration can come later, once the platform is proven to attract customers.

Get the Board Excited about It – Entering the platform world is not for the faint of heart. The corporation will want to get endorsement and encouragement from the board. Why? Because it is that important. The long-term costs associated with launching a platform will likely be well within the purview of your board’s spending approval. More importantly, the strategic benefits will be enormous for the corporation. Furthermore, once the rest of the organization realizes the new “platform initiative” has the board’s support, every executive are encouraged to contribute in a positive way. Every board deserves to hear about the fun and exciting stuff the corporation is doing. The endless discussions on cyber security and Sarbanes-Oxley controls are not what get board directors excited about the company they are representing.

Eat or Be Eaten – In every industry, there is an entrepreneur out there with a new platform idea already in the works. The concept has been developed, but the entrepreneur might be struggling to get the traction needed to take the platform viral. The platform may need to integrate with a larger existing companies’ distribution, manufacturing, or service network – or the entrepreneur may just be out of funds. Why not buy out the entrepreneur or join forces with him? Then, the corporation will at least have a starting point with a concept to build upon with their industry expertise. Or, the corporation can follow the Whole Foods model and wait for the platform to eat them up with an Amazon appetite.

Large corporations are well poised to enter the platform economy. They already have the legal, technical, financial, and human resources to accelerate an entry into a platform model.
For further reading on Platforms, please click here to read Five Tips for Building the Right Multi-Sided Platform for Your Company.

Deciphering the Dodd-Frank Repeal: What Does It Mean?

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The strongest proponents of Dodd-Frank know the sweeping legislation passed in the wake of the Great Recession could use some tweaking to unlock the potential of America’s “Main Street” with appropriate funding. The GOP has proposed a bill to roll back the measures they feel harm their constituents, are ineffective or allow government overreach. “The Financial CHOICE Act” is the vehicle of choice for the current House and targets specific titles within Dodd-Frank to replace and/or repeal. It is impossible to predict how this bill will look after House and Senate negotiations, or if it can get passed at all; either way, it has potential to significantly impact financial markets and businesses.

Easing Capital Flow to Small and Medium Sized Businesses

Overall lending has increased since Dodd-Frank was passed, empowering critics of the repeal effort to maintain that the law should remain intact. However, statistics largely ignore macroeconomic post-recession factors, the historically low interest rate environment, and most of the lending has missed “Main Street.” The fed small business survey published in 2016 showed that 50% of loan applicants faced a financing shortfall, which is why the bills described below have received bipartisan support and why several have even passed unanimously.

The Financial CHOICE Act will incorporate dozens of capital formation bills having already passed the house or committee intended to help small businesses and job creators. For example, the “Helping Angels Lead Our Startups Act,” or the HALOS act, allows startups to pitch to a wider array of potential investors. Similarly, the “Supporting America’s Innovators Act” allows venture funds to raise capital from more investors. The “Small Business Credit Availability Act” aims to increase business development companies’ ability to provide funding to small and medium sized businesses. In addition, nearly two dozen other bills are incorporated to help community and smaller financial institutions provide more financing to individuals and small businesses in the forms of mortgages and loans.

It appears both houses of congress agree, at least in part, with former SEC commissioner Harvey Pitt when he says, “The only businesses that can obtain loans are those that can prove they don’t actually need the loan.”

Decreasing Financial Regulation

The CHOICE act will break some of the Dodd-Frank shackles on the finance industry and take regulatory power away from Washington. Less than a decade removed from the “Great Recession,” many argue the banking industry requires the stringent oversight provided by Dodd-Frank. The act will overhaul the Consumer Financial Protection Bureau, eliminate the Volcker Rule which prohibits excessive speculation by banks, prevent the implementation of the fiduciary rule that binds financial advisors to act in their client’s best interest, reduce bank stress-tests to only once every other year, and force the SEC into slower administrative proceedings and a higher burden of proof when enforcing securities law.

A full repeal of Dodd-Frank would be far too unpopular, because strategically nestled within it, there are pieces of legislation that help small businesses grow. An example is the bill that allows for the “smaller reporting company” distinction, exempting small companies from having to comply with SOX 404(b). The Republicans must use the CHOICE act — or something similar — to accomplish their goals of funding small and medium sized businesses and eliminating Washington’s “supervisory regime” of banks.

Dodd-Frank is an imperfect bill with several impactful pieces of legislation with bipartisan support for amending. Unsurprisingly, it seems unlikely that the CHOICE act as it stands will be able to make it through in this political climate. To pass one sweeping piece of legislation, the GOP will need 8 Democrats to avoid a filibuster. In other words, the CHOICE act passed committee, but it has a long way to go.

To see the details of the various acts mentioned, read more here.
Trenegy helps companies unlock growth potential and manage change in their organization and their market.

Five Tips for Building the Right Multi-sided Platform for Your Business

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Commerce as we know it today is in the beginning phases of a paradigm shift. The traditional pipeline business model, where producers have provided a product or service and pushed it through a channel down to consumers, is being replaced. A new business model known as the multi-sided platform is gaining traction in the market. The multi-sided platforms are directly connecting the mass of buyers and sellers in a single electronic marketplace.

Amazon is strangling traditional retail stores. Uber is decimating the taxi industry. Airbnb is keeping hotel chains on the edge of their seats. Most companies recognize the new economic trend. Yet awareness is only the first step in a long and complicated process to shift the traditional pipeline model toward utilizing platforms effectively. Traditional companies do not know all it takes to successfully implement platform technology. The companies are throwing more money into projects that do not produce the desired results. The lack of understanding of how multi-sided platforms work and create value is causing failures and delays.

So, what exactly is a multi-sided platform?

According to Platform Revolution by Parker, Van Alstyne and Chouda, a platform is defined as a business model which brings together producers and consumers to facilitate the exchange of information, currency and goods or services. The platform marketplace generates value by connecting communities using technology. The connection reduces friction by enabling mutually beneficial transactions to take place between two or more parties without a middleman.

Another key element of many successful platforms is the use of crowd-sourcing. Crowd-sourcing is the method of gathering either funding or resources from outside the company, usually through various channels on the internet. By leveraging third party resources, platforms can remain nimble and scalable while keeping fixed costs low. Platforms have virtually rewritten the book on valuation by de-linking assets from value. This unique approach has allowed companies such as Uber and AirBnB to receive appraisals in the tens of billions of dollars without owning a single car or home, respectively. Combine crowd-sourcing with the concept of positive network effects – the idea that the more people use the platform, the more valuable it becomes – and we begin to understand how multi-sided platforms are achieving unprecedented levels of growth and success.

Ok, where do we start?

One of the biggest misconceptions about successful platform technology, you must completely rewrite your business plan, hire expensive software engineers and move your company to Silicon Valley. This misconception is simply untrue. Many companies in traditional industry segments leverage platform technology to increase efficiencies and reduce friction without changing their overall strategy. Moreover, the new platforms are popping up across the country. We have assembled five tips for building the right multi-sided platform for your business below:

1. Understand the User Journey

Many projects nose-dive from the start due to failure to focus on the most important aspect of any multi-sided platform: the user journey. Before development begins, a platform must clearly articulate the specific type of end-users it is targeting and the overall experience it wants to deliver. The definition can be achieved by creating two crucial items– user personas and journey maps:
User Personas: Creating a series of user personas will clearly define the type of people the company envisions will be using the platform. For example, one persona for Uber might be Jeff, a 21-year-old biology student who needs a ride home after he’s had one too many at the bar. Another persona could be Sharon, a 30-year-old project manager who lives in Chicago without a car and needs to get to and from work every day. By understanding the customers who will be using the platform, developers and marketers can better tailor the technology to the demographic target market.
Journey Maps: Journey mapping is the process of visualizing and understanding a user’s journey he or she goes through to accomplish a goal while using the platform. Journey maps are like process flows, yet with more emphasis on the user experience. Journey maps are used to identify user needs, emotions and pain points before development begins.

2. Develop Wire Frames

First impressions are important and creating a clean and inviting interface is important. In many cases the user interface is more important than the actual functionality of the platform application. Wire frames are skeletal outlines of a website or application that depict exactly how every screen and step throughout the process should look once the final product is up and running. Wire frames are an essential piece in the planning phase because they communicate the overall aesthetic and usability to developers, marketers and potential investors. Wire framing often requires the enlistment of graphic artists to ensure high quality.

3. Scope the MVP Appropriately

Contrary to its name, an “MVP” in this context has nothing to do with sports. The acronym stands for Minimum Viable Product, which is the first functional version of a new piece of technology. While you may have grandiose plans for how your platform will ultimately work, a trimmed down version allows a company to start with something small instead of spending years trying to build the perfect application. An MVP is essentially a skeleton of the product. It is just functional enough to communicate your message and experience given a very limited budget. Do not get caught trying to boil the ocean here, or your platform will never make it off the ground. The purpose of the MVP is to hear feedback along the way to understand what the users desire in the application. Only after you have wooed your intended audience and listened to their feedback, you can start adding the user desired bells and whistles.

4. Define Test Markets

In a similar vein to the MVP discussion, the initial test markets for your platform must be properly identified. Test markets are small, specified groups used to test the viability of a platform before its’ official launch. Test markets are most commonly siloed to a certain geographical region, such as a city, or a specific demographic of “test users.” The test markets must include a sample of users you anticipate will be using the platform going forward. Otherwise, your test marketing data will be unreliable and will not coincide with how your user base will react when the platform is launched. Third party firms that specialize in this type of testing are often hired at this stage in the development process. Accurate test marketing is critical because it allows for last second tweaks if any key issues are exposed.

5. Prepare for Failure

No one likes to dwell on the potential of failing, yet the sobering truth is many platform launches are unsuccessful. At least some aspect of every platform endeavor will fall short of expectations. The key is to be realistic when setting goals and to remain motivated even when parts of the plan do not come together perfectly. It is wise to face the threat of failure head-on by creating a backup strategy in case your platform is ever at risk of falling on its face. The back-up strategy might be other uses for the platform or something as simple as changing the target market for the platform. Favor started out as a “burritos and beer” delivery service and is now connecting delivery drivers who can deliver anything from food to school supplies.

Whether the goal is to transform the company into the next tech unicorn or simply to create more efficiencies within your own walls, these five tips apply. At Trenegy, we have developed a comprehensive Multi-sided Platform Development Checklist that contains a guide to make sure any company does not miss a step. Contact info@trenegy.com for your complimentary copy today.

Master Data Management: The What, Why, Who and How

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It is day three of driving a brand-new, shiny SUV around town when the letter carrier delivers an unexpected letter from an unfamiliar tire manufacturer. The letter explains the tires on which the oh-so-pretty SUV sits have been observed to unexpectedly explode when travelling at high speeds. After remembering going eighty-five down the highway in a rush to get to work yesterday, the following question arises – how do tire manufacturers determine who is driving on their tires? The answer – Master Data Management (MDM).

What is MDM?

MDM is a process-based model used by companies to consolidate and distribute important information, or master data. The idea is to have an accurate version of master data available for the entire organization to reference.

Master data is the agreed-upon core data set of a business. As opposed to reference or transactional data, which could be something as mundane as the amount of invoices completed in a day, master data refers to data directly linked to the meat of a business.

Master data varies depending on the organization and industry, but typically includes detailed information about vendors, customers, products, and accounts. Master data is critical, because conducting business transactions without it is near impossible. Without first establishing product codes for a particular model of tire, the manufacturer would not be able to track which tires are sold to which customers.

Why is MDM Important?

In the example above, the only way the tire manufacturer would have the correct customer information for the owner of the new SUV is if the dealership gave it to them. And you can already see why maintaining a database of all their customers is important. Sure, they might inundate their customers with flyers and ads in the mail, but wouldn’t you appreciate the notification about potential tire explosions?

Managing master data is important, because business decisions are based on the story the company’s data is telling. Even the simplest of errors in master data will trickle down, causing magnified errors in other applications utilizing the flawed information.

Companies with non-existent or underdeveloped MDM processes often encounter finger-pointing and displaced blame as a result of data discrepancies. Data discrepancies can be seen when month-end sales reports are delivered with conflicting data in the accounting systems and manufacturing systems. Discrepancies make it difficult to determine which system, if any, has the most accurate information.

Who is Responsible for MDM?

MDM is often mistaken for data quality projects or technology systems owned by IT. Although IT may be involved in the distribution of master data, there is not one sole owner of MDM. To be successful in maintaining the integrity of critical company data, there must be a company-wide effort and to the ongoing maintenance of master data.

It is important to clearly define ownership of the components of MDM including: establishing data governance (standards around how data is used), creating an MDM strategy, and developing procedures for maintaining and distributing information to the people who need it.

A successful MDM program should include holding people accountable for maintaining master data and streamlining the sharing of critical data between departments.

How Do I Create an MDM Organization?

Improper maintenance of master data causes reporting inaccuracies and can lead to poor business decisions. The steps below should be followed to establish an MDM organization:

  1. Define which data is master data—products, customers, vendors, etc.
  2. Determine primary data sources and consumers—the CRM system owns the customer master list which is owned by the credit department and used by sales team.
  3. Designate ownership of each master data set—the AP Clerk is responsible for entering and updating vendor information.
  4. Develop data governance processes—all new product information requires review/approval from the management team prior to product entry into the accounting and manufacturing systems.
  5. Design necessary tools and workflows—technology can be implemented to help automate approvals and the flow of information.
  6. Deploy processes for maintaining master data—businesses can create templates and enforce procedures to capture requested master data updates.

Organizations large and small are faced with data challenges. Occasional focus on cleaning up critical data is not enough. Creating a comprehensive MDM strategy is the starting point to having confidence in company data. Avoid the pitfalls of poorly maintained master data by establishing processes to manage the creation of new master data and enforcing everyday practices to maintain the data over time.

 

Trenegy is a management consulting firm equipping energy and manufacturing companies for growth and change.

The Power of Storytelling

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Making change endure and building culture are two of the hardest things a leader has to accomplish. Fortunately, there is a powerful tool available for leaders to use: storytelling. In this article, we will explore the power of stories, why they work, and the elements that form a great story.

The power of stories

Appropriately, let’s begin with a story.

Jesus lived on this earth until approximately the year 30.  But most scholars believe that the books of the New Testament were not put down in writing until the year 50 or 100. Even then, the challenge of remembering the events of Jesus’ life did not end. The stories of the New Testament were primarily passed down orally, because copying the gospels by hand was banned until the emperor Constantine allowed it at the Council of Nicaea in the year 325. For almost 300 years, the accounts of the New Testament were primarily passed on orally from person to person! Furthermore, from that point until the invention of the western printing press in 1439, the Bible was copied primarily by hand; thus, very few people owned the Bible.  Therefore, for almost 1400 years, the stories in the New Testament of the Bible were learned primarily through storytelling. I would venture to say that most people in western civilizations can recite one or more stories from the Bible. That, dear reader, is some powerful storytelling.

Here’s a more recent example. Steve Epstein was a lawyer for the U.S. Department of Defense and in charge of the Standards of Conduct Office. When he conducted training, he found that reciting the rules alone was not working. The message did not seem to “stick”. So, he created the Encyclopedia of Ethical Failures in which he collected stories of compliance failures in chapters titled “Bribery”, “Abuse of Power” and the like. Here’s a real gem from the encyclopedia:

A military officer was reprimanded for faking his own death to end an affair. Worthy of a plot in a daytime soap-opera, a Navy Commander began seeing a woman that he had met on a dating website. The Commander neglected to tell the woman that he was married with kids. After six months, the Commander grew tired of the relationship and attempted to end it by sending a fictitious e-mail to his lover – informing her that he had been killed. The Commander then relocated to Connecticut to start a new assignment. Upon receipt of the letter, his mistress showed up at the Commander’s house to pay her respects, only to be informed, by the new owners, of the Commander’s reassignment and new location. The Commander received a punitive letter of reprimand, and lost his submarine command.

This story, although better than just reciting policy statements, can still be improved. We will look more into that later in the article.

Why stories work

In 1944, Heider and Simmel conducted a study that showed that our brains are wired for stories. They played a movie to groups of students (you can see the movie here). The movie shows silent geometric shapes moving around the screen. One group was given directions to describe the story they saw. The other group was given little direction prior to seeing the movie, and then was asked to describe what they saw. Not surprisingly, there was very little difference between the two groups: they both saw the story of an angry triangle and its confrontation with a friendly triangle and circle.

This experiment shows how important putting data into the context of a story is to our brain.   In fact, 65% of our conversations are stories – primarily in the form of gossip. Why is that?

When processing facts, only two areas of our brains are engaged. These areas do nothing more than decode the words we hear into their dictionary meaning. But when we listen to an effective story, many other parts of the brain are activated. This results in interesting activities happening in our brains.

The first is neural coupling. Neural coupling allows the listener to turn words into virtual experiences. For example, smell words such as “lavender” and “cinnamon” activate the smell centers of the brain as if the listener had actually smelled them. Similarly, using active sentences such as “Bob kicked the ball” activate the portion of the listener’s motor area associated with leg motion.

The power of neural coupling lets an effect called mirroring to take place. Mirroring allows a story teller to relate personal experiences directly with the listener.  Since the motion and sensory areas of the brain are activated by action and sensory descriptive words, a story teller can almost recreate his or her reality in the listener’s brain by using those words.  When a story teller relates an effective story, the listeners’ brains are literally living those events.

Finally, the brain releases dopamine into the system when it experiences an emotional event – even through storytelling. Dopamine imprints a memory and makes the event easier to remember with more clarity. This is why saying “don’t go near that dog” is not as effective as saying “my friend was mauled by that slobbery, mean dog, so stay away.” The combination of neural coupling, mirroring and dopamine makes storytelling 22 times more effective in helping the listener retain information than data alone!

Furthermore, people are not rational beings by default. Our brain operates from two systems – sometimes called Fast Thinking (System 1) and Slow Thinking (System 2).

Fast Thinking is intuitive and uses less energy; therefore, it is the default system our brain uses. This is the system that allows you to talk while driving your car; to play the guitar without looking at the strings; or to just know that 2+2=4.

Slow Thinking is the rational and deliberate system. This system uses significantly more energy than Fast Thinking; therefore, it is not the one our brain chooses to use by default. Slow Thinking is the system which makes you think through a process, or figure out a problem. It is how the brain is operating when you’re trying to calculate 17 x 54 (which by the way is 918). Also, when you learn a new skill – think of driving a car – your brain is relying on Slow Thinking. The person learning a new skill has to think through every step, and when that person is done, they feel tired and drained. But as one is going through this learning, the brain is literally rewiring itself. New connections are made in the brain until the new skill can be performed without really thinking about it.

Again, our brains are designed to use Fast Thinking as the default. It is more energy efficient and faster. If our caveman ancestors would have had to use Slow Thinking for everything, we would not be here today. They would have been eaten by saber tooth tigers while they thought about how to react when they saw one!

These peculiarities of how our brains function are why flight simulators work for training an aircraft pilot. Without first practicing in a flight simulator, a mistake by a first-time pilot while landing in an unfamiliar airport (or on a short landing strip, or with a strong crosswind) could result in death, fire, and mayhem. But with a flight simulator, the same pilot can try the landing many times – and fail many times – without anyone getting hurt. All the while, the pilot’s brain is rewiring to be able to perform the real landing using their Fast Thinking brain.

Stories work like flight simulators on our brains. Because a well-crafted story causes our brains to activate as if we were experiencing the events (through mirroring), stories take us into intense simulations of situations that we are able to experience in parallel to our real life. We can have that rich experience without getting hurt at the end.

Stories rewire our brains much in the same way that a flight simulator does. These new brain connections then allow us to react using our Fast Thinking brain when exposed to similar real-life situations as those that we were exposed to through stories.

Connecting through stories

In his book I and Thou, the German philosopher Martin Buber states that humans are defined by two pairs: I-Thou and I-It.

Our relationship with things, the I-It relationship, separates us from that object. Our relationship with others, the I-Thou relationship, eliminates the boundaries between us. That is why, even if one is an extreme naturalist, one has no qualms over cutting down a tree for fire to warm one’s cold family.  The connection you have with your family — the I-Thou relationship – bonds us to them, while the I-It relationship with the tree separates us from the tree.

Storytelling allows us to see the subject of the story in an I-Thou relationship instead of an I-It relationship. When implementing change in an organization, simply putting lessons learned into policies and procedures keeps us separated from the results, and therefore does not create a sustainable culture. Understanding the “thou” behind a story builds a long-lasting connection.

In the medical field, many hospitals are now using this concept to avoid medical mistakes. Instead of referring to patients solely by their medical condition (believe it or not, medical staff used to call their patients names like “the broken leg in room 2”), the staff in encouraged to build the “story” behind the patient in their charts and conversations. This has been shown to help reduce the number of medical errors, since now the staff is connected to the patient through an I-Thou relationship instead of an I-It relationship.

Building a great story

The steps to building a great story can by remembered through the acronym “CAR”, which stands for Context, Action, and Results.

Context sets the background for the story. Where and when did it happen? Who is the main character? What does your character want to accomplish? Who is the villain, or what stands in your character’s way? The main character in your story needs to be someone the audience can connect to, and the villain (which doesn’t need to be a person, but could be a situation) needs to present a real challenge.

Action is the substance of your story. What does your character do? Action must include an obstacle, setback or failure.

Finally, Result is where you reveal your character’s fate. To be effective, you must subtly give the moral of the story.

To be fully effective, you must remember why stories work. Create an experience that induces mirroring by using action words, words that stimulate the senses, and avoiding clichés. Engage the audience by illustrating a real struggle. Pin your character against real villains – whether they are people, equipment, procedures, a change initiative, or whatever. Finally, admit flaws. Rosy pictures are boring.

Next time you are in a movie theater, look around you and watch the people. If the movie is effectively telling a story, you will see everyone reacting as a single organism. They will all laugh at the same time, flinch together, gasp simultaneously… A great story builds a common thread across a group of people. The story does not even have to be told to a group that is together. Think about the connection you feel with other people who also saw the latest blockbuster movie. You do not have to be in the same movie theater to share the experience.

Just as in the days of the early Christians, stories continue to serve the function of building a community through common experiences. Common stories build a culture. They encourage a group of people to behave in a unified way. Effective change management and the building of a strong culture cannot be done without the transformative power of storytelling.

Don’t Avoid the Checkup – Embrace the New Lease Standard

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How many times have we cancelled our dental checkup, because we are too busy? Tooth pain reminds us to visit the dentist, and he says, “you should have come sooner….”. The FASB issued a new lease standard, Leases, (ASC 842), on February 25, 2016. Are you ready to move forward with implementing the new standard or do you want to delay until the pain is felt?

The key provision of the new FASB lease standard is that lessees will recognize virtually all their leases on their balance sheet by recording a right-to-use asset and a lease liability. This includes operating leases, having previously been recorded off-balance sheet. The existing lease standard has been criticized for failing to meet the needs of users of financial statements, because it doesn’t always provide a faithful presentation of leasing transactions. The new standard proposes to provide for greater transparency in financial reporting. Companies that lease assets including real estate, manufacturing equipment, vehicles, airplanes and similar assets will be impacted.

Public company implementation dates for the new lease standard are fiscal years starting after December 15, 2018. Non-public companies must comply for fiscal years starting after December 15, 2019. Financial executives may look at the implementation dates and be inclined to focus on projects with more immediate due dates and address the new lease standards later. Financial executives can devote some time now to analyze the potential complexity of the implementation and the impact on company resources. The analysis can help a company decide when to move forward with the implementation process and avoid unnecessary financial reporting risks.

The AICPA recommends six steps to an effective implementation of the new lease standard:

  • Assigning an individual or a task force to take the lead on understanding and implementing the new standard;
  • Updating the list of all leases;
  • Deciding on a transition method;
  • Reviewing legal agreements and debt covenants;
  • Considering IT system needs;
  • Communicating with stakeholders.

At first glance, the six-step recommendation seems simple and manageable. Before we get too comfortable with its simplicity, let’s peel back the onion with a few questions. Do you have technical accounting staff available to spend quality time understanding the lease accounting guidance and determining how it impacts your company? Do you know of all your lease contracts and where they are located? Is your company public, and how do you determine whether to transition with the retrospective (requires restatement of comparative periods in your financial statements) or the modified retrospective method (does not require restatement of comparative periods in your financial statements)? Do you have debt covenants or other legal agreements limiting debt levels or requiring approval prior to incurring additional debt? Do you utilize an IT system to manage your lease records or do you use Excel or similar process? Have you discussed the impact of the new leasing reporting standards with executive management, board of directors, debt holders, or other stakeholders?

You may not have answers for all of the questions above, and as you move forward with the implementation of the lease standard, many more questions will arise. The implementation process will not be limited only to the accounting staff. Moving to the new reporting standards will be a company-wide initiative with communication and cooperation among several departments including treasury, legal, facilities management, purchasing, logistics, and fleet management, to name a few. To achieve success with the implementation requires development of a project plan including input from a wide range of functions and requires commitment from executive management.

Companies should look at the implementation as more than a compliance project and use the opportunity to create value for their company. Below are examples of opportunities for value that may be identified during the implementation process:

  • New avenues to improved communication among different departments within the company
  • Improvement of existing internal controls and processes, updates to related documentation, and communication of improvements and changes to affected parties
  • Selection of cost efficient IT solutions to track leases and to meet reporting requirements for the lease standard
  • Consolidation of lease vendors and negotiation of improved pricing
  • Termination or buy out of stale and unneeded operating leases

Companies have the opportunity to identify additional opportunities to achieve value beyond compliance. Challenging the organization to always be vigilant in identifying value-creating opportunities in all our daily tasks is critical for continuous improvement.

 

Trenegy helps companies to implement new accounting guidance and to identify opportunities for companies to create value through process, controls and system improvements.