Everyone in business today is constantly seeking ways to improve. No one can afford to remain stagnant or complacent, unless they want to be overtaken by their competitors in an ever-growing market. Here are seven surefire ways to improve your business and get ahead of your competitors with very little effort or investment.

1. Use Key Performance Indicators (KPIs) to gauge success.

KPIs are used to measure the performance of an organization, frequently through measuring activities such as performance improvement derived from training, labor utilization rates, or customer satisfaction. KPIs are often tied to strategy through techniques such as the Balanced Scorecard, but they don't have to be as complicated as that to be useful and effective.

As with most things, simplicity increases efficacy.

KPIs can differ depending on strategy. They help an organization to measure progress towards their organizational goals, such as increased penetration of existing customers or markets, on time delivery or reduced scope creep.

A KPI is a key part of a specific measurable achievable relevant time-based goal (a SMART goal) which is made up of a direction, KPI, target and time frame, e.g. "Increase Average Revenue per Sale to $10,000 by December." In this case, 'Average Revenue per Sale' is the KPI. The above mentioned goal wouldn't be SMART if it wasn't an achievable goal. Nor would it be SMART if the word December' was left out or if it was not relevant, e.g. if this was a portion of the organization that had nothing to do with sales or marketing, like HR.

2. Track time in order to manage project risk.

Time data can make a fundamental difference to your company if collected and used correctly. One of the ways in which time tracking can lead to success is by using it to plan for projects and then follow their progress along the way. Knowing a project is behind schedule or over budget towards the end of the project's life span does no one any good. Knowing this information sooner, however, will help you act accordingly and stop wasting time and money.

How can you do this? It is quite simple. The early phases of a project are usually referred to as requirements,' design,' or specification.' Let's say that after carefully tracking time on a batch of similar projects you find that the first two phases take approximately 10% of the project time. You can then use that data to predict the length of future projects. I've found this project estimation technique, an example of which is illustrated in the following diagram, to be extremely accurate, regardless of whether your company's magic number is 3% or 30%.

3. Automate your time tracking system in order to reduce errors in data collection.

Not only should you track time within your company, but you should find the appropriate time accounting platform to automate it for you. According to a major research advisory firm, fully automating the timesheet process reduces errors and staff time by 75 percent or more. Automation technologies and practices reduce improper time tracking activities and associated costs by validating project/cost code lists and monitoring approval processes electronically. Additional savings are realized by eliminating paper costs, and policy and regulatory compliance is improved.

4. Ensure that your company complies with SOX, DCAA and/or other relevant standards.

When payroll executives implement time and attendance systems to automate payroll, they often miss the chance to facilitate greater profitability throughout the entire company. These payroll executives are, of course, payroll experts. They are usually not, however, experts at project accounting or billing automation.

However, the time data, if collected appropriately, can also be used to automate project management, project accounting, project tracking and project estimation improvement, as well as for internal, external and reverse billing automation - and any of these can become SOX concerns. Most payroll and HR executives know little about these subjects, but increasingly, they are being asked to rise to new challenges with federal regulation requirements being just one of them.

5. Effectively manage PTO.

Controlling and understanding PTO expense allows you to recruit better talent. You can promise people more vacation than your competitors if you know that it's controllable. This tips the balance in your favor, allowing you to build a better team. It's another way to win.

The first issue businesses need to address when creating their PTO plan is what to do about employees who quit or are terminated. Many states require that the balance of vacation pay be paid when an employee leaves the firm unless the company has a policy that states otherwise. If you choose to disallow vacation time to resigning employees and you run a company of high turnovera fact of life in certain industries, like retail or food servicethis allows you to reallocate the PTO that those who leave might have used in favor of those who stick around. In essence, you can offer more generous PTO packages when recruiting than your more lenient competitors can offer, at no additional cost. Considering the fact that employees deserve benefits commensurate with their loyalty, it is also arguably more ethical.

According to a recent Expedia.com study on U.S. vacation habits, in 2002, a typical American was granted 16 vacation days, but only took 14 days off. Consequently, American workers handed back over $21 billion in unused vacation days to employers that year. So be generous when you hire. They probably won't use it all anyway.

6. Consider SaaS (Software-as-a-Service).

We've already covered the need for an automated time tracking system. A Software-as-a-Service or SaaS solution may be just what you need to increase profitability through time tracking. Consider the following:

*It removes much of your IT cost.

*It reduces the risk involved in acquiring new software.

*It allows you to influence product and service quality via an ongoing relationship with the vendor.

*It gives you the flexibility to change usage commitments as business circumstances change.

*It allows you to predict more accurately your ongoing expenses as your IT budget is tightened and scrutinized.

*The prevalence of hosted project- and time-tracking solutions is on the rise, and many companies will be willing to try the model out - especially if they understand the clear benefits. After all, all they have to lose is one month's rent.

7. Improve employee buy-in by clarifying rewards.

Choosing the appropriate time management SaaS solution will only benefit your company if you can get your employees to actually use it. Hourly workers are easiest to convince because they want to be paid, so they already have an incentive. And yet, everyone regardless of status should want the company to be a success, so once they understand that using time tracking to automate billingthereby making it more accurateleads to more revenue, they should become more open to it. (If your employees do not care about the success of your company, timesheets won't help you. In that case, you'd better go back to the basics of creating a moral, compelling vision of how your company makes the world a better place.)

Project accounting is more abstract than payroll or billing, and you don't want to wind up with unnecessary overtime, stressful blown schedules, bad estimates or cancelled projects. Try relating specific examples where good time collection could have prevented problems in order to make that connection in the minds of your employees.

Time tracking and SaaS solutions are the tools that will see your business through to the next level of profitability, and in today's competitive environment, thoroughly understanding your costs is no longer an option.

My company sells employee time tracking software, and we have had many experiences where the employees of our clients are unaccustomed to accounting for their time. At times, the change has stirred up intense emotions in people. Apparently many just don't want to track their time. But why is this?

The first reason is that people believe that reporting their time can threaten their status. Salaried people, especially those who have been employed in an hourly "time clock" environment, might feel that having to report their time means that they have somehow been demoted. Conventional wisdom (that I disagree with) is that "professional" people are more trustworthy and less in need of supervision than "blue collar" people.

Another reason is that employees may fear to ask the question, "What if I find out that I don't work as much as I like to think?" Some people-often the most productive-garner self-esteem from the large number of hours they work. Sometimes, however, they're not sure if they believe their own braggadocio, and the thought of finding out the truth intimidates them.

Time can also be a bad metric for effort or productivity. Knowledge workers know that managers, who have the power to reward some people over others, often forget the vague and aggregated metrics of real productivity in favor of some simple numbers like time records. Managers may take the easy path of rewarding based on time spent rather than developing more subtle and appropriate metrics of real productivity. Take my advice ... don't do this.

And finally, the "I'm too busy" excuse. All responsible employees-even the most productive ones whose time is in highest demand-will, sooner or later, always have to stop what they are doing and fill out a timesheet. Star employees tend to procrastinate, subordinate the task, refuse to do it, or create flawed records. On the other hand, marginal producers will often create perfect time records and never submit them late. This creates an impression in the minds of both that the whole exercise is worthless.

So, it's an imperfect world, and people hate tracking their time for many reasons. But how can you possibly run a project-oriented organization, especially one that bills for its time, without time accounting? The answer is that in this increasingly competitive world, you can't. If you don't get every hour billed that should be, or don't know which projects are profitable and which ones aren't, you're going down... hard. You must realize that somewhere in your wide array of competitors is a company that's getting it right.

With the advent of the Internet in the early 90s, the technology world seemed ready for the concept of Software-as-a-Service (SaaS).

It was hyped like everything else about the Internet, reaching a peak of inflated expectations in early 2000 as venture capitalists funded dozens of SaaS solution providers.

As venture funding dried up later that year, certain cracks in the SaaS model came to light. The business plans assumed zero customer attrition, an uncompetitive landscape and IPO's in the absence of revenue. Disillusionment set in and most of the companies flopped. The strong, however, survived. Now, through the success of companies such as Journyx (for timesheet software), WebEx and GoToMyPC (for desktop sharing), Concur (for travel expense management) and Salesforce.com and Rightnow.com (for customer relationship management), SaaS is back with a vengeance. Analysts claim that by 2010, 30 percent of new software will be delivered via the SaaS model.

What is SaaS?

Also known as "on-demand software," "hosted software" and the application service provider (ASP) model," SaaS gives companies the opportunity to rent web-based software that is hosted at the provider's site. For many small businesses, SaaS is the best way to roll out new technology. In short, SaaS has proven itself and is here to stay.

Naturally, SaaS is not a panacea. Just as software from Microsoft or Oracle frequently have problems, some SaaS providers have had problems too. One example of such is Salesforce.com, which recently had outages that vexed customers and gave the company a considerable amount of unwanted media attention.

The company's timely response was to implement a load-balancing system made up of three separate data centers that will have fail-over capabilities to prevent further outages. It is expected to go live sometime this quarter. CEO Marc Benioff stated that Salesforce.com intended to establish a public web page called Trust.Salesforce.com that would detail performance statistics.

Are SaaS providers generally more or less responsive to critical issues than licensed software providers? Let's look at Microsoft, for example. It has taken the company years to beef up its security, enabling companies like Symantec to become very large just by filling in the gaps. The SaaS model, however, demands a much quicker response becauselike E. Coli at a restaurantit doesn't take much to destroy a business.

Why Should Small Companies Care About SaaS?

In any case, there's a good chance that SaaS is right for you. Consider:

• Low cost of entry. Instead of paying high costs to roll out a complex solution across the entire company, customers can roll out tests involving one department consisting of relatively few people. The risk is very low if it fails, and they don't have to involve their busy IT staff. This is especially true for small organizations since they often do not have the capital to pay large lump sums in advance for software. Also, small companies often have less capable or more overburdened IT staff and may lack robust systems for backup, security control and high availability services.

• The Onus is on the vendor. If the vendor's software is broken, they won't be getting money from any customer for long. The company is highly motivated to fix the problem; after all, its success and livelihood depends on keeping you happy.

• The vendor works for the buyer. Customers don't have to rely on their IT department to install an application because everything runs securely at the vendor's location.

Less risky investment. Instead of spending, say, $60,000 all at once, customers pay for the software monthly. That's less risky, and less scary.

Vendors must provide a secure data environment, or they're out of a job. Most vendors understand that data must be backed up religiously, and security is the top priority. Customers' IT departments are typically pulled in many directions and can't be as focused on one solution. With SaaS, however, customers can rest assured that their data security is better off than it would be in-house.

What's Available in SaaS?

The most successful project-aligned SaaS initiatives by far are in the project tracking and time management arena. Companies that provide project time tracking via the SaaS model include Journyx, Clockware and Unanet.

Customer relationship management (CRM) tools are also growing in the SaaS world, with names such as Saleforce.com (for automating sales team management) and RightNow Technologies (for automating support department workflow) at the forefront.

Some of these companies provide the software only in the SaaS model, while others provide both installed and SaaS versions. Companies that provide both versions enable early rollouts of the software. In this case, the customer can begin using software on the hosted site to determine its value. Managers can then decide whether or not to install it at its site. This provides maximum flexibility and some level of disaster recovery since you know you have the option to host the software with the vendor if your local site goes down.

Safety First

There are several questions to ask in order to ensure that you're dealing with a reputable SaaS firm that won't lose your data or go out of business.

The first question should be, How well has the vendor has integrated its service operations into its core business?

Many software vendors are only experimenting with the SaaS model, and unfortunately, it might be an operational change that is inconsistent with the existing culture as a software product provider. Sometimes the way the personnel deliver the service is not well-developed or even internally agreed upon. To avoid falling into such a trap, try to get a clear understanding of the prospective vendor's internal operational commitment to a SaaS delivery model. The value proposition of having the same company build and manage software will be of no value if that sentiment is not accepted and demonstrated across its operations.

Is the software producer hosting the software for you or have they outsourced that to a completely separate company that basically acts like a reseller?

If they are not hosting the software themselves, they are less likely to make improvements that will enable the SaaS model to evolve appropriately.

How many clients do they have on the SaaS solution today? What percentage of their business is it? Can you talk to a few of those clients?

Where is the computer that will be used to serve your application? Is the data center where it is located staffed 24 hours a day, seven days a week? What staff is on-site?

What physical security measures are in place at the data center?

Is there redundant power? If so, what is it?

What cooling and fire suppression systems are available?

How many Internet service providers (ISPs) do they buy connectivity from?

Do they have a disaster recovery plan if your data center becomes unavailable?

Are servers dedicated to each customer, or do multiple customers share a single server? (The latter situation, called multi-tenant installation, is more scalable.)

What data do they back up and how often? How long do they keep backups? Do they store backups off-site?

If you ask questions like these, it will go a long way towards ensuring success. Compare the answers to those you get from your own IT staff. Small companies often find that they already face risks from natural disasters, equipment failures and security breaks. Reputable SaaS firms with good answers to the above questions can alleviate those risks for the application they're providing.

A SaaS CRM or time management solution may be just what you need. It removes much of your IT cost, reduces the risk involved in acquiring new software, allows you to influence product and service quality via an ongoing relationship with the vendor and gives you the flexibility to change usage commitments as business circumstances change. Furthermore, this approach allows you to more accurately predict your ongoing expenses and lets you focus on your real businesswhich, I imagine, is not managing software applications.

The prevalence of hosted CRM and time tracking solutions is rising, and many companies will opt to try it if they understand the clear benefits. And why not? All they have to lose is one month's rent.

So how is the internet changing telecom?

Skype freeware comes to the telephone

The freeware model for software delivery is a proven method for quickly creating a large user base for your product. Products such as WinZip and Journyx Timesheet have quickly garnered huge market share due to their zero dollar entry prices. Similarly, LinkedIn, Yahoo! Mail and Gmail have taken off in the Software-as-a-Service (SaaS) space.

Another example is Skype, an internet-based PC-to-PC voice communications application, which has irrevocably altered the market by proving that many users will accept inferior levels of call quality in return for free usage or extremely low pricing. This is causing other voice communications firms, including some long established providers, to drop their prices.

Far more important than the commoditization price race to the bottom' that Skype started is the fact that Skype convinces people that the PC can act as a voice terminal. Skype has demonstrated that voice over the internet, especially when combined with instant messaging and chat technologies, provides some unique advantages.

There is nothing particularly unique about Skype; any competitor could offer the same service. However, its first mover advantage which resulted in a large established Skype community limits the likelihood of users switching to another service. This means that the race to the bottom will just quicken as new entrants (like Google, which now offers voice-enabled chat on its Gmail service) enter the market with similar free offerings.

Dick Tracy has finally arrived

Forty years ago people dreamed of video-phones. Now that they're here and available in online web-meetings via services like Webex, it's surprising that they are not more popular. As availability and usage of these internet-native applications grows, it must ultimately affect how people view their telephone. Traditional telecommunications companies have no choice but to innovate quickly or end up a relic.

The result will be that they will ultimately end up only providing the network access. The pace of innovation in the software world is so much faster than it is in the network provider world that incumbent telcos who are used to longer product life cycles will find it impossible to match a company like Skype, which releases new software every quarter.

HOW THE TELECOMS ARE CHANGING THE NET

Cell phone pricing

Not long ago, a company like Tivoli or Vignette was able to sell software at high prices to desperate CIOs at cash-rich companies. Those days, however, are over. SaaS providers like Freetimesheet.com or Amicus.com (provider of Zimbra hosted mail services) have adopted a pricing model that originally came from cell phone service providers.

If you had to prepay for 5 years of cell phone service when you bought a phone, you would examine your options much more carefully than if you were just handed a free phone and a low monthly fee. Every software maker has seen the writing on the wall by now: what it says is SaaS.

Speech recognition

Other telecom technologies, like speech recognition, are starting to appear in integrated web applications. Consequently, you will be able to, for example, fill out your timesheet by talking into your cell phone while you're stuck in traffic.

Commoditization pricing

When AT&T broke up, long distance prices began to plunge from 25 cents per minute to zero. This took about 30 years. Software creators are finding that the twin gravitational forces of SaaS and open source are moving prices similarly for undifferentiated software applications, except software makers will not be given 30 years. Try three years - maybe. The world is flatter now and things are moving dramatically faster.

The Future

Network providers will slowly but surely give up on providing applications to end users, while software creators run away with that prize. Wimax and more prevalent and higher quality video chat capabilities will enable us all to work from home when the freeway is backed up. Not only that, but it will all happen much more quickly than anyone thinks. Twenty years ago, who expected that ten year olds would one day be running around with cell phones? "Bet on the innovators" is better advice than ever.

I remember a time when there were three TV stations, and all you had to do to sell a product was put it in front of that captive audience with some music and silliness and you'd be rich.

Now there are over 1,000 channels with mute buttons and TiVo, plus a million more on the Internet. The attention spans of consumers are so short that marketeers are at a loss as to how to reach them except by screaming louder or lewder.

If you're anything like me, you naturally ignore every commercial you see, from the ad on the Starbucks cup to the ad on the gas pump handle.You lean heavy on the mute button and change the radio channel when the truck ads come on. I'm a marketer's worst nightmare.

And I'll bet you're just like me.

The most amazing thing about all this is that when messages do get through to me, they are virtually ineffective. This is because they do not answer the four basic questions that everyone has when confronted with a sales message:

1. What are you selling?
2. How much does it cost?
3. Why should I care?
4. Should I really believe this, coming from you?

If you finally master the magic of getting your message through to a prospect, either by Google ads, direct mail, cold calling, networking, or television, you need to be sure that your message includes a basic answer to those questions. If not, please don't advertise to me.

I live in Austin, Texas. For some reason, everyone here seems to own an enormous pickup truck-even though they're all city dwellers who never haul anything anywhere. Their trucks are always really clean because they never go off road. I guess we all just enjoy shredding hundred dollar bills at the gas pump. Or maybe other Austinites have been more influenced than I have by the really horrible truck ads on TV. Which go like this:

Volume increases 100%

"Texans know trucks and people who know trucks come to BillyBob's Trucks. We're selling 1,000 trucks this weekend, zero down, 0% financing. It's never been done before! ..."

It goes on and on. It's very loud. For a Texan he talks extremely fast. There are many videos of trucks jumping over things with clouds of dust everywhere and horses running around.

People do buy a lot of trucks here, but I just can't believe that these commercials explain why. These ads mostly fail the "Should I believe this coming from you?" test.

They also fail the "What are you selling?" test in a subtle way. Obviously they're selling trucks, so they technically answered the question. And yet, they haven't shown how they do it differently than anyone else. They have no specialty. I can get what they're selling just about anywhere, so why would I go to them or even remember who they are?

The first step to improving your marketing plan is being able to answer all four of the prospect's questions in three seconds or less, for example:

"Business services companies learn how much profit they make on each customer via our patented time and expense tracking software for about $10 per employee per month. Thousands of companies testify to this at Journyx.com."

Ok, that was more than three seconds, but I'm working on it. My favorite of all time is:

"When it absolutely, positively has to be there overnight."

That answers number one and number three. For number two, it is implied that you shouldn't care. And the FedEx brand delivers implicitly on number four.

It's almost poetic.

We could all learn how to specialize and market by studying FedEx.