Posted by: James Murray
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when relevant content is
added and updated.
Working and building my Seattle IT Consulting Company my clients are the SMB market but in the last 18 years most of my previous clients have been a mixture with a predominance of fortune 500 companies. I like this because it has allowed me to see the beginning, middle and end of the technology spectrum. It also gives me a unique viewpoint in that I’ve watched many businesses struggling with the same problems despite business size. One of the pitfalls every new business struggles with is the entrepreneurial (feast or famine) business cycle. Technology experts who aren’t aware of this cycle will unintentionally lock a business into this feast or famine cycle by listening to an non-technical manager express technical requirements. The modern network architect needs to understand the feast or famine cycle and help businesses circumnavigate this cycle.
If you start a new business you need a service (or product) and a customer. The new business is in constant search of customers. Then once a customer is found the service is provided and the business gets paid. Then the cycle starts over again with the business looking for clients again. The reason I call this the feast or famine cycle is because during the customer finding stage, the business is not making money. During the customer service phase the customer is making money. So either the business is in the feast (servicing customers & making money) or famine (Finding customers & not making money) cycle. The goal is for the business to make a continuous income with continual sales and customer service cycles.
One of the problems I see are businesses that never break out of the Feast or Famine cycle. 100′s of business owners give up on their businesses because they can’t seem to break out of this cycle. Other businesses assume the cycle is typical and invest in technology that will lock the business into the feast or famine cycles. Talk to many business owners and the focus is on new sales. The goal seems to be to have too many customers. The problem that occurs for the business is that with too many customers, customer service suffers. In the information age, every customer expects customized service. In return for that customized service the customer returns a much higher level of customer loyalty. Without that highly customized offering, there is no customer loyalty. The business ends up cycling new customer over and over. In the process the company wastes resources focusing on new customers and ignoring the 20% of customers that provide 80% of the company’s income.
Many business owners mistakenly assume they need to invest in customer finding technologies at the expense of customer capacity technologies. Does the owner invest business resources in business capacity to support more customers? On the other hand, should the owner invest resources in marketing and sales to find more customers? Many owners are seduced by the thought that the money the owner receives from the new customers will be used to increase the customer service capacity of the business. What really happens is that the resources are instead funneled back to bring in more new customers into the business. The business capacity to support customers never grows. The business owner is locked into a cycle of finding more and more customers, then dealing with more and more customer churn. Eventually the business fails when key business systems fail.
When I walk in the door it’s often after a key business technology has failed. The reality is that enterprise technology hardware has about a 5 year life cycle before it fails. The business has often taken the funds for capital expenditure spending on new technology and moved them into marketing the business. A new customer sales campaign can easily overwhelm a technical system that is already over-taxed. I get to share the bad news with the new client that the technology expert before me should have explained and prevented. It’s unfortunate that when the systems and the business is down, it’s always easier to get an owners attention. The job of the technology expert is to get the owners attention before things fail. What if the technology expert is just a technology expert? After all a technology expert isn’t trained in business? That’s actually one of the differences between the technology expert and the technology architect.
Technology experts are 90 to 100% technology focused. Often technology experts aren’t even aware of the business services or products the company produces. System administrators are still highly focused on the technical system they manage, but need to be able to discuss the systems with technical managers. The next level, the System architect must have a 60% or better understanding of the business vision, goals and strategies in order to build a new system. A strong architect can help a business owner understand how the feast or famine business cycles affect the business. The technical architect, along with the CTO, work as a team to identify opportunities. Then the architect can design the future technical solutions. That move the organization out of the feast or famine cycle.