Saturday, June 26, 2004

Measurement, or -- be careful what you wish for

A friend of mine (let's call him Howard) once worked for a very respected IT company in the early days.  His job was to service the giant printers that they used to have. Howard regularly and scrupulously maintained the printers for his clients -- in fact so good was the servicing that not one of his clients suffered a printer breakdown while he was looking after them.  This reliability was in fact a key value proposition for the IT company.  But what was actually rewarded?
A Client of Howard's colleague had a catastrophic printer breakdown the day before the payroll was to be printed.  (It is hard to think of a single application that has more importance to the morale of staff than printing the payroll.  It's also hard to think of a more visible failure.)
The colleague went to enormous efforts to try and determine the problem, to get replacement parts air couriered, to meet a specially hired plane at the airport, to get the parts installed into the printer, and to get it working to complete the payroll run. The colleague worked through the night. For his outstanding efforts in client service the colleague was given a special client service award.
However .............. During the entire time that Howard was servicing clients printers, and not one of them breakdown, Howard received no formal recognition.  And no special reward.  Magnificent as the overnight effort was by Howard's colleague, if the printer had been serviced correctly in the first place, it would not have broken down.  The stress, the disruption was all avoidable.....
What was rewarded?  Be careful what you measure, and be careful what you reward.

e-Commerce Web Site Scorecard

I found this old set of scorecard measures for ecommerce sites and am sharing it because it is still a useful base for further measures. The measurment site used to publish this information so it was commercialy useful.

To create the criteria we review all of the features and services that are delivered online (and to some degree offline) across an industry. All criteria evaluated by the Scorecard are technically and economically feasible, as well as permissible from a regulatory perspective.
... Scorecard categories are:

1. Ease of Use: The Web site of a top firm in this category boasts a consistent and intuitive layout with tightly integrated content and functionality, useful demos and extensive online help. Roughly 30 to 50 criteria points are assessed, including:

  • Demonstrations of functionality.

  • Simplicity of account opening and transaction process.

  • Consistency of design and navigation.

  • Adherence to proper user interaction principles.

  • Integration of data providing efficient access to information commonly accessed by consumers.

2. Customer Confidence: The leaders in this category operate highly reliable Web sites, maintain knowledgeable and accessible customer service organizations, and provide quality and security guarantees. Roughly 30 to 50 criteria points are assessed, including:

  • Availability, depth, and breadth of customer service options, including phone, e-mail, and branch locations.
    Ability to accurately and readily resolve a battery of telephone calls and e-mails sent to customer service, covering simple technical and industry-specific questions.

  • Privacy policies, service guarantees, fees, and explanations of fees.

  • Each ranked Web site is monitored every five minutes, seven days a week, 24 hours a day for speed and reliability of both public and secure (if available) areas.

  • Financial strength, technological capabilities and independence, years in business, years online, and membership organizations.

3. On-Site Resources: The top firms in this category not only bring a wide range of product and services and information onto the Web, but provide depth to these products and services through a full range of electronic account forms, transactions, tools and information look-up. Roughly 30 to 50 criteria points including:

  • Availability of specific products.

  • Ability to transact in each product online.

  • Ability to seek service requests online.

4. Relationship Services: Firms build electronic relationships through personalization, by enabling customers to make service requests and inquiries online and through programs and perks that build customer loyalty and a sense of community. Roughly 30 to 50 Criteria points are assessed, including:

  • Online help, tutorials, glossary and FAQs.

  • Advice.

  • Personalization of data.

  • Ability to customize a site.

  • Re-use of customer data to facilitate future transactions.

  • Support of business and personal needs such as tax reporting or repeated-buying.

  • Frequent buyer incentives.

5. Overall Cost: Gomez looks at the total cost of ownership for a typical basket of services customized for each customer profile. Costs include:

  • A basket of typical services and purchases.

  • Added fees due to shipping and handling.

  • Minimum balances.

  • Interest rates.

Survival for Your e-Company

I came across this practical Advice From a Media Veteran By J Moses, president and CEO, UnderGroundOnline (from the excelllent

Get to breakeven fast: The world changes when you're self-financing. Get there with great speed. Make certain that every employee in your company understands what it takes to get to breakeven and that revenue target is posted in workstations.
Understand your business: Vertically integrated businesses were created by the infusion of too much capital into start-up companies. Pick a business. Do it extremely well. Don't deviate.
Be Darwinian: "Those that are most flexible survive." Pay attention to the market and build a flexible business.
Conserve your cash: Cash is the lifeblood of a company. Spend it wisely and hold on to as much as you can for as long as you can.
Make sure your infrastructure is in line with your revenues: Don't be fooled by spreadsheets. Build a cost structure that can be supported by real revenues.
Simplify, Simplify, Simplify: Now is the time to be like Thoreau. Your systems were probably built for a much larger model and therefore are more complicated than they need to be. Attack them and make them simpler.
Break down the empires: Your managers are emotionally attached to your old business: they built it and they'll do nearly anything to keep it intact. Do your own analysis and be decisive.
Renegotiate future obligations and contracts immediately: There will never be a better time to improve your balance sheet and to renegotiate contracts. Be aggressive and put together long-term deals now.
There is less traffic on the high road: If you decide to affect changes in your headcount be honest, direct and handle the lay offs with compassion. Treat your outgoing employees with the respect they deserve and you'll get it in return, in spades.
Don't look back: There's nothing you can do about your past actions except learn from them. Sunk costs are just that: sunk. There -- you just got the benefit of my business school education.
Communicate often: Most of your employees have never seen a recession in their business lives. If you don't communicate, they will assume the worst. I meet with every person in the company at least twice a month. Morale will take care of itself.
Open your books to the company: Share financial information with your employees on a regular basis and they will be more invested in the Company. It's scary at first, but it works.
Keep the heart and soul of the company intact: Understand the core assets of your company and protect them with great tenacity. The long-term value lies within them.
Get your hands dirty: There is no room for hierarchy and politics when times are difficult. Everyone at UGO has a functional responsibility. I am heading up sales and it is fun.
Continue developing your brand: Your marketing budget is the easiest to cut. Don't abandon the effort. Improvise by buying cheap in the market or implementing guerilla marketing techniques. Remember, you can benefit from the downturn in the ad market.
Service your customers: Help them solve their problems and they'll help you solve yours.
Raise funds constantly: As a small private company, you can never have enough cash. If possible, dedicate a partner to investor relations.
Understand the value of your options: Getting inflated options at Internet media companies in the past was ill advised. Getting low-priced options at a well-funded Internet media company today makes enormous sense. Believe in your equity and treat it with great respect.
Swim upstream: Believe in what you are doing even if it means being a contrarian. People of vision build great businesses. The history of the media business is littered with naysayers.
Hit your revenue goals: And all that is good follows.

The Bill for Zero

Purpose: To discuss error handling (exceptions in Use Case terminology). This used to be a main focus of training - how to limit damage when things go wrong. As major software suppliers seem keen to demonstrate, some of this focus has slipped. Since first posting this story I have been assured that the Bill for Zero is a cyber myth. I am reluctant to delete the story though - like all good myths it is a morality tale of terror and excitement with good triumphng in the end - and I got it from a reliable source ... I think ... if only I could remember where ........

Interviewer: Derek Guille ABC
Thursday, 24 January 2002

A piece as read by Derek Guille on his afternoon program on Thursday 24th January 2002. In March 1999 a man living in Kandos (near Mudgee in NSW) received a bill for his as yet unused gas line stating that he owed $0.00. He ignored it and threw it away.

In April he received another bill and threw that one away too. The following month the gas company sent him a very nasty note stating they were going to cancel his gas line if he didn't send them $0.00 by return mail. He called them, talked to them, they said it was a computer error and they would take care of it.

The following month he decided that it was about time that he tried out the troublesome gas line figuring that if there was usage on the account it would put an end to this ridiculous predicament. However, when he went to use the gas, it had been cut off. He called the gas company who apologised for the computer error once again and said that they would take care of it. The next day he got a bill for $0.00 stating that payment was now overdue. Assuming that having spoken to them the previous day the latest bill was yet another mistake and he ignored it, trusting that the company would be as good as their word and sort the problem out.

The next month he got a bill for $0.00 stating that he had 10 days to pay his account or the company would have to take steps to recover the debt. Finally, giving in, he thought he would beat the company at their own game and mailed them a cheque for $0.00. The computer duly processed his account and returned a statement to the effect that he now owed the gas company nothing at all.

A week later, the manager of the Mudgee branch of the Westpac Banking Corporation called our hapless friend and asked him what he was doing writing a cheque for $0.00. After a lengthy explanation the bank manager replied that the $0.00 cheque had caused their cheque processing software to fail. The bank could therefore not process ANY cheques they had received from ANY of their customers that day because the cheque for $0.00 had caused the computer to crash.

The following month the man received a letter from the gas company claiming that his cheque has bounced and that he now owed them $0.00 and unless he sent a cheque by return mail they would be taking steps to recover the debt. The man then tried to file a debt harassment claim against the gas company. It took him nearly 2 hours to convince the clerks that he was not joking but convince them he did. They subsequently provided statements which were considered substantive evidence of the aggravation and difficulties the man had been forced to endure during this debacle.

The matter was heard in the Magistrate's Court in Mudgee and the outcome was this: The gas company was ordered to:

[1] Immediately rectify their computerised accounts system or show cause, within 10 days, why the matter should not be referred to a higher court for consideration under Company Law.

[2] Pay the bank dishonour fees incurred by the man.

[3] Pay the bank dishonour fees incurred by all the Westpac clients whose cheques had been bounced on the day our friend's had been.

[4] Pay the claimant's court costs; and

[5] Pay the claimant a total of $1500 per month for the 5 month period March to July inclusive as compensation for the aggravation they had caused their client to suffer.

It's such a good story ... I wish it were true.

Web Use Survey - April 1998

Purpose: included to show how the Internet use evolved prior to the first dot com bubble. Initially there was a view that "old folk didn't surf". The facts didn't support this even then.

The 50-and-over age group, highly attractive to advertisers because of its generally high disposable income, surfed 19 percent longer than all other Web users combined during April, and spent nearly an hour more on the Web last month than they did in March, the survey said.

Women over 50 used the Internet on an average of 9.9 days in April, 20 percent more than in March, according to the survey.

"This is evidence that the Web is becoming increasingly mainstream and is no longer just the domain of the
technologically sophisticated," said Tim Cobb, president of RelevantKnowledge, in Atlanta.

The top 10 overall domains by average days viewed for Americans age 50 and older during April were (from 1-10),,,,,,, ESPN, and, the survey showed.

The top 10 overall domains by duration in minutes for American women age 50 and over during April were (1-10),,,,,,,,, and, according to the survey.

The top 10

In the category of most highly-trafficked individual Web sites for all Americans during April, the top 10 sites were:

1., with about 32 million users
2., with about 21 million users
3., with about 19 million users
4., with about 18 million users
5., with about 16 million users
6., with about 14 million users
7., with about 13 million users
8., with about 11 million users
9., with about 10 million users
10., with about 7 million users

A full explanation of the company's survey methodology is offered on

The Old Days - Risks with Internet Kiosk First Appearance

This is an extract of an old email discussion.
Purpose - to show unplanned outcomes from poor implementations. Mind you, when I started working on the internet in '94 one really had to go looking for porn - wasn't that a long time ago!

Date: Thu, 23 Apr 1998 09:45:22 +0200
From: BROWN Nick
Subject: Risks of Internet kiosks

Last week I had my first look at a public access Internet kiosk, in a motorway restaurant in Germany. The results were not encouraging - the Internet is a long way from being a consumer product.

At first sight the setup looked rather neat. You insert 1 DM (about 50c US)in an old-fashioned parking meter, which then appears to activate some device that allows the keyboard and mouse to talk to the PC for ten minutes. However, that was about the only impressive feature of the setup.

...the designers of the system obviously had no experience of designing anything for the general public to use. I watched in amusement as a boy of about 15 decided to show his grandparents how cool the Internet was. The instant he deposited his coin and touched the mouse, the screen saver cleared to reveal that the previous user of the system had decided to visit what I believe is termed an 'adult' site. The user quickly closed Internet Explorer, only to find another picture from that site had been set as the Windows desktop wallpaper. On restarting Internet Explorer, he found that the home page had been set to yet another page which he probably wasn't looking forward to explaining to his elderly relatives.

When the family left in embarrassment, I set the home page to something more suitable, .....

Nick Brown, Strasbourg, France