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Thursday, August 24, 2006

Working with Foreigners

Many in the tech industry worry that tough US immigration policy is damaging the country's long-term prospects and benefiting emerging economies such as India and China. That could transform the face of technology entrepreneurship, writes Keith Rodgers.

If you've traveled to the United States recently and been photographed and fingerprinted at the immigration desk, you'll have sympathy for the concerns being raised in Silicon Valley about the future of the home-grown technology sector. Software vendors and venture capitalists alike are voicing fears that a combination of anti-terror measures and misplaced efforts to protect US jobs are keeping some of the sharpest technology minds out of the country - to the benefit of emerging tech economies in India and China.

The problem is partly political, partly bureaucratic, but the issue has become more prominent over the last year as fears over terrorism have started to be weighed against longer-term economic factors. Universities have complained that tough visa requirements and lengthy processing delays have deterred many foreign graduates from applying to US schools, potentially depriving the economy of the talent it needs to drive forward innovation in the long term. At the same time, the number of H1B visas - the type typically used by US companies recruiting skilled foreign professionals - has been restricted following a temporary increase during the dot com boom. Add to that delays in processing work-related green cards, which give foreigners permanent status in the US, and there's a powerful disincentive for people to settle.

At a recent investment conference in San Francisco, Rob Chandra, general partner at Bessemer Venture Partners in Silicon Valley, invited the audience to take a trip to a local office of the US Citizenship and Immigration Services and see for themselves what foreign applicants go through. Like many bureaucracies, the USCIS can be slow moving, and it's often time-consuming for foreigners to jump through the administration hoops required to get their spouse and children into the country. Not only does this deter people from coming in - it also encourages some foreign students studying at US business schools to leave the country rather than put their newly-acquired skills to use within the US economy. As Chandra points out, if you've attended one of the world's best business schools and carried out ground-breaking research that could create American jobs, you probably believe that you deserve a little better. 'Today, the US government has a policy of keeping the brightest people out of the country,' he says. 'Immigration needs to be separated between those who create jobs and those who do not.'

The clamour for a more flexible immigration policy has not gone unnoticed. Only last week, the Senate Judiciary Committee agreed to increase the number of work-related green cards by 90,000 and H1B visas by 30,000. But the debate is much broader than a numbers game, and becomes embroiled in more politically-charged controversies over the treatment of legal and illegal immigrants. Opinion in the US is sharply divided, for example, as to whether undocumented labourers should be offered amnesties and work permits. Within California - where an estimated 2 million to 3 million illegal immigrants prop up the economy in sectors such as leisure and agriculture - the large Hispanic community plays a big role in ongoing debates over whether undocumented aliens from Mexico and elsewhere should be allowed to carry drivers' licences (a road safety measure that would allow them to get vehicle insurance). These debates, which can swing elections, are unlikely to be resolved in the short-term.

In the meantime, Chandra and others believe that the US VC community needs to reach out to the many talented individuals who in the past might have moved to Silicon Valley, but are now helping grow economies elsewhere. 'In our opinion, entrepreneurship is shifting in a dramatic way - we're looking for those entrepreneurs that the [USCIS] is keeping from Silicon Valley,' he says. Instead of looking to emerging economies as a source of cheap labour through off-shoring, he argues that tech companies should seek out the best talent from these markets and see how they can best be harnessed to help Western companies grow. 'The worst way to leverage this is to turn bright people in India and China into hired help,' says Chandra. 'We think about getting the brightest people.'

Thursday, August 3, 2006

On Selling and Sales

If you've already made the move from R&D to commercialisation, you're probably generating a host of information about your customers and prospects. But how effectively are you managing it?

Just as every business manager's wardrobe needs a minimum number of outfits for different occasions - from client dinners to casual weekend meetings - so certain business software applications are all but compulsory on a start-up's IT systems. Applications for fundamental tasks such as financials and payroll top the list, but one that doesn't always get a look in is the one that could ultimately make the most spectacular impact - sales management software.

Sales automation applications were around long before the much-hyped arrival of 'Customer Relationship Management' suites in the late 1990s, which were supposed to usher in an era of customer-friendly service and marketing. In fact, sales automation has existed for decades, although early incarnations tended to focus more on the administrative side of storing contacts and tracking interactions with customers. Until relatively recently, the business case also tended to be a little defensive - it was as much about keeping your business running if your top salesperson walked out with their contacts book as it was about selling more effectively.

Today, while those fundamentals are all still valid, the focus tends to fall on improving efficiency and information management. Sales management applications arm employees with information about a customer's preferences, purchasing history and previous interactions, all of which help during negotiations and closing. They also provide managers with a better insight into all levels of sales activity, from high-level meetings run by the CEO to pitches made by the most junior employee. That includes information about where prospects are in the sales cycle, how sales are doing against forecast, and what proportion of leads are being converted and by whom.

As well as helping companies monitor individual performance, over time this data can be pulled together to provide trend analysis to help with future sales and marketing activity - what kind of campaigns generate the most valuable leads, which vertical markets are proving most responsive and so forth. As such, for any business that's moved beyond R&D and early pilots and is starting to sell in volume, it's as much about business intelligence and performance management as it is about automating processes. Even if you only have a handful of people actively selling, this kind of trend analysis can bring powerful new insights, telling you not just what's been sold (which you probably already know) but how - what product or marketing campaign triggered the initial enquiry; what objections were raised and how they were overcome; whether pricing was a stumbling block and so forth.

The software industry has gone through something of a revolution over the last few years in providing this kind of capability at an affordable price. While specialists have long targeted smaller businesses, the leading midmarket and high-end software vendors have also shifted some of their attention to start-ups and small businesses, bringing new capability with them. They include the likes of Siebel, one of the top CRM vendors which was recently acquired by Oracle, as well as SAP, Microsoft and Sage. Users also enjoy different purchasing options, with the likes of and many other leading vendors offering a hosted service for users to 'rent' applications on a monthly basis. As a result, setting up doesn't have to be expensive - prices for hosted applications start as low as �45 per user per month.

Like any software project, of course, there are a number of challenges associated with implementing and running these applications. If the experiences of larger organisations are anything to go by, one of the most significant issues will be tying together customer-facing applications with software in the 'back-office', such as financials or warehousing. Many companies look to give salespeople read-only access to information about stock levels and delivery schedules, either from their PC or via a remote device, and this requires some integration work. Others have gone as far as to link their sales application to credit control, so that the system triggers an alert whenever a salesperson pulls up a record for an overdue customer. Not only does this prevent a salesperson wasting time with a customer who's on credit hold, it also adds valuable extra resource to the cash collection process.

In each case, it's useful for organizations to have thought through in advance how they want to link these applications together. Some will be content using pre-built integrations offered by packaged software vendors or building their own: others will prefer to have as much of their sales, marketing, service, engineering and other customer-related information in the same database, so that they can easily access it from one place.

By Keith Rodgers, Webster Buchanan Research