Jun 172011
 

Customers find what they value, one way or another

“We’ll just stop all new development while we plan our new course.” This is a statement I see a lot in developing strategies to exploit new technologies.

This isn’t a post about the “rightness” or “wrongness” of that kind of approach. It may sound really obvious, but everyone faces trade-offs. We have to choose what we will do from all the things we can do.

So it is for us as individuals, and so it must be for the IT organization and the custom software shop.

And it makes sense from time to time to slow down and maybe even stop one course of action to plan something new.

But all too often we lament our incapacity to try new things because we are too consumed just maintaining our previous direction.

In the IT industry, we often refer to “keeping the lights on” expenses (KLO) as a part of our budget allocated just to support infrastructure, core communications and operational systems. A common benchmark is the proportion of our budgets available to “new development” versus KLO expenses.

With new technologies, especially ones that seem disruptive to established ways of doing things, a conflict appears quickly between keeping the lights on and taking a new course. If there were just a minor difference, it wouldn’t be nearly as big an issue as when we anticipate any new action in one direction will be wasted effort or thrown away in the long run.

…And then there’s the risk that we chose the wrong direction in the first place.

So we see the trade-offs. We need to think, we need to plan, we need help… but we can’t take forever. One thing that seems to make sense at the time: at least let’s stop moving ahead on the old course while we figure this thing out.

Here’s the main point of this post – just because we stop to plan doesn’t mean our customers’ need for help is gone. Our business customers always have concerns to care for that require help, from us or from someone else.

That we don’t take care of them with new features or new releases doesn’t make their concerns disappear. Moreover, there is a decent chance that prolonged delays will have them looking for help from other places. To some extent, it may be unavoidable.

As a result, taking care of our customers may mean accepting we can’t do it all ourselves. We need a means for providing ongoing support, planning new capabilities AND leaving open some way for them to get help where we lack the capacity. And to stay valuable to them throughout, we need to be actively involved in facilitating all three.

Do you try to take on all of your customers’ requests? Have you found that you can’t handle everything? Would they agree with you?

Do you help your customers find help where you lack capacity?

  4 Responses to “No new development”

  1. I read a book, don’t remember the name, on investment strategy for institutional investors some time ago, the strategy mentioned was one which examined the (Form 10k) SEC filings for R&D expenditure. They did this to see the amount of money invested in the development of new products and offset this to the amount of earnings that the company had. They described a golden ratio, which I can’t remember, and showed that there was a correlation between the amount of money spend in R&D and the revenue when the company spend the amount round golden ratio. It being an investment strategy it assumed, up to a point, that spending more meant a higher valuation for the company and calculated whether a stock was trading above or under it’s ideal valuation.

    More important than new development is to research the possible directions of the new development, which is what the R in R&D stands for. This includes market research with current customers and potential customers. Many companies assume that their customers will know what they want, this is often not the case and research can help to separate the chaff from the wheat and determine the direction of the new development.

    • Daniël, it sounds like an interesting book. I have read different web resources on sales-to-R&D ratios. I agree with you, though, that the size of the ratio is not as important as to what R&D funds are allocated. If a company has no practice for reading-the-world, the best it can do is drift as the market does… which means I cannot keep pace with innovation or produce new competitive advantages. And reading the world requires that we can interpret the meanings, relevance and value of new advances and marketplace drift to the plans we have in mind.

      When it comes down to it, having no plans, objectives or priorities is one way you can guarantee you will struggle to make decisions about investments. There may be no “return” on investment if you cannot measure against your goals, it is only gambling and hoping things turn out… not a powerful strategy.

      If you come across the book, let me know.

  2. […] Meanwhile, it is easy to feel like the victim when overwhelming requests and obligations leave us struggling to survive the onslaught. […]

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