Some interesting venture capital deals that took place in March this year are as follows:
Google has joined a $5.75 million investment round for Pixazza, a start-up that hopes to profit by overlaying photos on the Web with links that let people buy the products in the images.
Audience, a maker of mobile-phone technology intended to drown out background noise, has nabbed $15 million in a fourth round of funding. Investors in the latest round include New Enterprise Associates, Tallwood Venture Capital, Vulcan Capital and VentureTech Alliance.
Flat World Knowledge, an online textbook publisher, has landed $8 million in its first round of financing. Investors in the round include Greenhill SAVP, High Peaks Venture Partners and Valhalla Partners.
HyTrust, a virtualization start-up, launched its flagship product Monday with $5 million from its backers, VentureBeat reported. Trident Capital led the round, which included participation from Epic Ventures.
Revolution Money, an online payment firm backed by AOL co-founder Steve Case, said on Monday it has received funding of $42 million from a group that includes a Goldman Sachs affiliate and earlier investors Citigroup and Morgan Stanley, Reuters reported.
Redbrick Health, a provider of employer insurance, landed $15 million in a third round of financing led by Kleiner Perkins Caufield & Byers. Fidelity Ventures, Highland Capital Partners and Versant Ventures also contributed to the round.
Mostly sourced from Venture Beat. If you know of any other interesting venture finance activity please let us know.
Monday, March 30, 2009
Tuesday, March 24, 2009
Cash is still king
The typical response of a business in hard times is to start cutting costs. But managing cash more effectively can have equally significant results. According to the Credit Management Research Centre (CMRC) at Leeds University, there’s one and a half times the volume of the primary money supply (from banks and financial institutions) swilling around in unpaid debt. Since over 80% of B2B business is done on credit, revising your credit policy, improving debtor management or even outsourcing parts of the equation can make a big difference.
Implement and communicate your credit policy
A survey by the CMRC found that trade debtor liabilities are the major and riskiest assets on corporate balance sheets, representing up to 30-35% of total assets. Trade credit, it says, is a key source of funding for companies, particularly at the smaller level, where it is typically twice the size of funds from bank credit. But it also points out that this is a two-way street. Credit is both an asset and a liability – many companies, particularly those at an intermediate point in the value chain both use trade credit as customers (accounts payable) and provide it as suppliers (accounts receivable). The key is balancing the two to improve cash flow.
The Better Payment Practice Group has been campaigning over the past few years to improve payment terms for small businesses. A good starting point, it says, is to establish a company credit policy which includes credit limits, both in days and sums outstanding, and a framework for staged payments. However, the CMRC research says that for small businesses this is a particular sticking point. Its report found that 52% of all companies had a written credit policy, but at the smaller-end the figure was much lower – a separate online survey by the BPPG found that only a quarter of small firms confirm their credit terms with customers in writing.
The CMRC points out that now is a good time to revisit your credit policy. “Pro-active credit management is necessary to cope with constant change to adapt to market and economic conditions and that may result in the need to make a change in any credit policy,” it states.
A good credit policy should be prescribed by the senior management of a company but it must also filter down to the different levels of the business to ensure it’s applied. Part of the problem in credit management is that if the policy is not part of common parlance with customers, sales, marketing and account management staff are likely to invent their own credit terms to win business and then pass the buck when it comes to chasing debts.
Focus everyone on debtor management
Debtor management is also a good discipline to focus on – and here the organisational challenges come into sharp focus even in the smallest of company set-ups. Debtor management attempts to pull together the different and often conflicting interests within an organisation towards the common goal of ensuring a debtor pays up the agreed sum on time.
The problem with debtor management is that different parts of your company have different agendas. Sales wants to maximise the value of a deal – and if given carte blanche will do everything it can to ensure the customer gets the best credit terms available. Support will want to ensure that it’s delivering consistent service to the customer on an ongoing basis, regardless of whether they are actually paying their bills. Finance is responsible for chasing the payment, but won’t want to step on anyone’s toes and ruin an ongoing customer relationship.
The financial systems and processes a company uses to log and communicate customers’ ongoing payment situation can help. When a payment is overdue, for example, a flag to the sales team to not continue advancing credit to that customer and to the support team to mention the outstanding payment on an account will often spur the customer into action – preventing the more heavy-handed collections that kick into place when a customer becomes a bad debt.
Taking a risk-based approach to debtor management is also a good idea. To take control of a credit situation, a company needs to understand which customers are least likely to pay on-time, what their credit-worthiness is, where the greatest exposure lies (if for example a handful of large customers account for most of its sales) and what the impact of non-payment would be on the ongoing health of the business – in other words, how much risk it can afford to take.
Drafting in a third party
Involving third parties is another option, one that enables management to focus on its core business while handing over financial management concerns. One approach is to factor debts, where you effectively sell your invoices off to a third-party factoring company. The third party will pay you up to 90% of the invoice value up front, easing the impact of customer delays on cash flows.
One potential downside of factoring is that customer relationships could be damaged if a factoring company is too heavy-handed – and it can be perceived as a sign of a company in trouble. You also might still need to step in if the debts turn bad as the arrangement cannot be terminated until all the debts are settled.
There are other outsourcing options too, such as invoice discounting (where the third party gives you an advance on your debt but you are still responsible for chasing it), credit insurance and using debt collection agencies. In practice, firms will use a combination of devices depending on their situation.
The CMRC survey found that late payment was more of an issue for small firms, where average debtor days was 43. And despite the introduction of the EU late payment directive in 2002, a majority were still not making customers aware of it. Small firms told the CMRC they would wait an average of 39 days before withholding the supply of goods to a late payer – compared with 22 days for large companies. Clearly small firms are still seen as a soft touch when it comes to credit. Perhaps now is a good time to get tough.
For South African Business Invetment Opportunities and Capital check out SA Investors Network
Implement and communicate your credit policy
A survey by the CMRC found that trade debtor liabilities are the major and riskiest assets on corporate balance sheets, representing up to 30-35% of total assets. Trade credit, it says, is a key source of funding for companies, particularly at the smaller level, where it is typically twice the size of funds from bank credit. But it also points out that this is a two-way street. Credit is both an asset and a liability – many companies, particularly those at an intermediate point in the value chain both use trade credit as customers (accounts payable) and provide it as suppliers (accounts receivable). The key is balancing the two to improve cash flow.
The Better Payment Practice Group has been campaigning over the past few years to improve payment terms for small businesses. A good starting point, it says, is to establish a company credit policy which includes credit limits, both in days and sums outstanding, and a framework for staged payments. However, the CMRC research says that for small businesses this is a particular sticking point. Its report found that 52% of all companies had a written credit policy, but at the smaller-end the figure was much lower – a separate online survey by the BPPG found that only a quarter of small firms confirm their credit terms with customers in writing.
The CMRC points out that now is a good time to revisit your credit policy. “Pro-active credit management is necessary to cope with constant change to adapt to market and economic conditions and that may result in the need to make a change in any credit policy,” it states.
A good credit policy should be prescribed by the senior management of a company but it must also filter down to the different levels of the business to ensure it’s applied. Part of the problem in credit management is that if the policy is not part of common parlance with customers, sales, marketing and account management staff are likely to invent their own credit terms to win business and then pass the buck when it comes to chasing debts.
Focus everyone on debtor management
Debtor management is also a good discipline to focus on – and here the organisational challenges come into sharp focus even in the smallest of company set-ups. Debtor management attempts to pull together the different and often conflicting interests within an organisation towards the common goal of ensuring a debtor pays up the agreed sum on time.
The problem with debtor management is that different parts of your company have different agendas. Sales wants to maximise the value of a deal – and if given carte blanche will do everything it can to ensure the customer gets the best credit terms available. Support will want to ensure that it’s delivering consistent service to the customer on an ongoing basis, regardless of whether they are actually paying their bills. Finance is responsible for chasing the payment, but won’t want to step on anyone’s toes and ruin an ongoing customer relationship.
The financial systems and processes a company uses to log and communicate customers’ ongoing payment situation can help. When a payment is overdue, for example, a flag to the sales team to not continue advancing credit to that customer and to the support team to mention the outstanding payment on an account will often spur the customer into action – preventing the more heavy-handed collections that kick into place when a customer becomes a bad debt.
Taking a risk-based approach to debtor management is also a good idea. To take control of a credit situation, a company needs to understand which customers are least likely to pay on-time, what their credit-worthiness is, where the greatest exposure lies (if for example a handful of large customers account for most of its sales) and what the impact of non-payment would be on the ongoing health of the business – in other words, how much risk it can afford to take.
Drafting in a third party
Involving third parties is another option, one that enables management to focus on its core business while handing over financial management concerns. One approach is to factor debts, where you effectively sell your invoices off to a third-party factoring company. The third party will pay you up to 90% of the invoice value up front, easing the impact of customer delays on cash flows.
One potential downside of factoring is that customer relationships could be damaged if a factoring company is too heavy-handed – and it can be perceived as a sign of a company in trouble. You also might still need to step in if the debts turn bad as the arrangement cannot be terminated until all the debts are settled.
There are other outsourcing options too, such as invoice discounting (where the third party gives you an advance on your debt but you are still responsible for chasing it), credit insurance and using debt collection agencies. In practice, firms will use a combination of devices depending on their situation.
The CMRC survey found that late payment was more of an issue for small firms, where average debtor days was 43. And despite the introduction of the EU late payment directive in 2002, a majority were still not making customers aware of it. Small firms told the CMRC they would wait an average of 39 days before withholding the supply of goods to a late payer – compared with 22 days for large companies. Clearly small firms are still seen as a soft touch when it comes to credit. Perhaps now is a good time to get tough.
For South African Business Invetment Opportunities and Capital check out SA Investors Network
Aspects of Due Dilligence
Due diligence is the final stage in a long investment process, so it's unlikely much can go wrong at this point, right? Wrong - but there are steps you can take to tip the balance in your favour and using the latest business plan software technology will support you with this process.
It's an entrepreneur's worst nightmare. You've given countless presentations and sat through endless meetings with VCs before finally getting a terms document from an interested investor. Then, as due diligence is carried out, the VC's advisors find out a 'dirty little secret' about your company that throws the whole deal into jeopardy.
For many organisations, due diligence is seen as a difficult and time-consuming exercise that caps a stressful and exhausting investment process. But there are a number of steps you can take to help the process go more smoothly, and with the right preparation you can even short-circuit it. Preparation means just that - in many cases, the documentation you will need to present to investors will stretch back over years, so it's important to keep everything up to date as your business grows.
To begin with, keeping secrets of any kind is a singularly bad idea when you're dealing with current or potential investors. 'VCs hate surprises,' says Keith Arundale, author of the British Venture Capital Association's Guide to Private Equity. 'If there's something that's significant to the investment and you don't disclose it until the due diligence stage, that's going to be a problem.' Arundale advises entrepreneurs to outline anything they think might be of the slightest relevance up front and update investors on any new developments in a disclosure letter. Mike Bowman, investment executive at g2i partner company eSynergy, adds that holding back early on may come back to haunt you: 'What you may perceive as a problem may not be a problem to the investor. Problems aired early can be dealt with. Problems uncovered by the investor towards the end of due diligence may well halt the deal.'
Richard Anson, CEO of Reevoo, the on-line reviews service, is even more categorical. 'Honesty is not just the best policy, it's the only policy - there is no other way.'
Reevoo secured $5m from Eden Ventures towards the end of last year to expand its services and tackle new markets, both geographical and vertical. Anson found the due diligence process relatively painless precisely because of the way the company had prepared, beginning with its documentation. He points out that these documents include contracts with customers, suppliers and partners; details of intellectual property (IP) rights; the technology in use at the company, employee service agreements; compliance with relevant legislation; information about key processes; and insurance documents. While the company's advisors may be presenting this 'bundle', it's important to remember that it's the directors themselves who are signing off on it, including providing warrants. The most common example of a warrant required by a VC is to the fact that there's no outstanding litigation against the company, but an investor could ask for warrants about any verbal statement you might have made that if untrue, would affect its investment position.
Equally from the VC's perspective, due diligence is just the final stage in an investment process that starts with an initial application, runs through presentation meetings and deal assessment, includes negotiations over deal structure, and proceeds to approval, offer and completion. At each of these stages, the VC will be screening the prospective investee on different aspects of the deal - 'peeling the onion', as some due diligence experts refer to it - which minimises the formal work that needs doing at the final stage and reduces the risk of surprises.
Arundale, who is about to publish a more in-depth version of his private equity guide in book form called 'Raising Venture Capital Finance in Europe', says: 'Once they've seen business plans or an exec summary and met with the team, the VC will already be carrying out their own informal due diligence enquiries, and they'll do this to the point where they're interested in making the initial offer. It's only once that's in place that they go about the more formal due diligence.'
Questioning assumptions
So what exactly does due diligence cover? The areas entrepreneurs usually think about are the financial figures, including evidence supporting the assumptions that underpin the company's projected growth. But investors will also be looking hard at the business opportunity, the quality of the management team, the technology behind the product and various intangibles, such as the IP. Often external consultants will be brought in to examine these different areas.
eSynergy's Bowman says that as much as digging into the details of the product, due diligence is designed to test the responses of the management team. 'It's about getting to know the company they are investing in and how they deal with the issues raised. This is just as important as the details of the plans and markets, as the team is the most important aspect of any investment.'
One of the most difficult areas for potential investors to judge is market positioning, particularly in emerging technology sectors where it's tough to assess how large a slice of an emerging market you can take. Real customer references - or agreements in principle to make purchases - are the favoured evidence here. But VCs might also bring in technology experts - perhaps from a University department with a particular specialism - to examine the technology opportunity. 'It can be difficult assessing the size of the market, particularly if it's a new technology,' agrees Arundale. 'Maybe the VC will have to carry out new market research about whether people are actually going to buy the technology. There's no point in having fantastic new technology if no one's going to buy it.'
Given how exhausting that process is, you might assume that any unsavoury issues will have been eked out long before you get to the due diligence stage. But not necessarily so, says Arundale. Business changes fast, and during an investment process lasting six to nine months, much can happen. Typical problems include the day-to-day risks that every business faces, such as a big customer contract falling apart at the last minute - which is not unusual, and not necessarily a dealbreaker. More serious problems are rarer, but they can happen. One due diligence advisor, examining a company that had been approved for investment by a VC, found most of its R&D work going through a partner in Dubai. That breached the rules of the government-supported funds that the company was relying on, which require any investment to benefit the UK economy.
Finally, some entrepreneurs are concerned about giving away confidential information to investors, fearing they'll use the information to help their existing portfolio companies. It's difficult to say whether these fears are well grounded, but there are measures companies can take to allay them. Some VCs will refuse to sign non-disclosure agreements upfront, simply because too many ideas cross their desks, but many will do so as discussions progress - the BVCA, for example, provides a confidentiality letter template which its members should be willing to sign. An alternative approach, Arundale adds, is to ask to deal with a different investment executive at the VC firm to the one who's already made investments in your competitors. Ultimately, however, there has to be a certain amount of trust in any business relationship, particularly when you're dealing with reputable firms. 'Hopefully they are people of integrity and trustworthy, so it shouldn't be a major issue,' he says.
By David Longworth, Webster Buchanan Research
It's an entrepreneur's worst nightmare. You've given countless presentations and sat through endless meetings with VCs before finally getting a terms document from an interested investor. Then, as due diligence is carried out, the VC's advisors find out a 'dirty little secret' about your company that throws the whole deal into jeopardy.
For many organisations, due diligence is seen as a difficult and time-consuming exercise that caps a stressful and exhausting investment process. But there are a number of steps you can take to help the process go more smoothly, and with the right preparation you can even short-circuit it. Preparation means just that - in many cases, the documentation you will need to present to investors will stretch back over years, so it's important to keep everything up to date as your business grows.
To begin with, keeping secrets of any kind is a singularly bad idea when you're dealing with current or potential investors. 'VCs hate surprises,' says Keith Arundale, author of the British Venture Capital Association's Guide to Private Equity. 'If there's something that's significant to the investment and you don't disclose it until the due diligence stage, that's going to be a problem.' Arundale advises entrepreneurs to outline anything they think might be of the slightest relevance up front and update investors on any new developments in a disclosure letter. Mike Bowman, investment executive at g2i partner company eSynergy, adds that holding back early on may come back to haunt you: 'What you may perceive as a problem may not be a problem to the investor. Problems aired early can be dealt with. Problems uncovered by the investor towards the end of due diligence may well halt the deal.'
Richard Anson, CEO of Reevoo, the on-line reviews service, is even more categorical. 'Honesty is not just the best policy, it's the only policy - there is no other way.'
Reevoo secured $5m from Eden Ventures towards the end of last year to expand its services and tackle new markets, both geographical and vertical. Anson found the due diligence process relatively painless precisely because of the way the company had prepared, beginning with its documentation. He points out that these documents include contracts with customers, suppliers and partners; details of intellectual property (IP) rights; the technology in use at the company, employee service agreements; compliance with relevant legislation; information about key processes; and insurance documents. While the company's advisors may be presenting this 'bundle', it's important to remember that it's the directors themselves who are signing off on it, including providing warrants. The most common example of a warrant required by a VC is to the fact that there's no outstanding litigation against the company, but an investor could ask for warrants about any verbal statement you might have made that if untrue, would affect its investment position.
Equally from the VC's perspective, due diligence is just the final stage in an investment process that starts with an initial application, runs through presentation meetings and deal assessment, includes negotiations over deal structure, and proceeds to approval, offer and completion. At each of these stages, the VC will be screening the prospective investee on different aspects of the deal - 'peeling the onion', as some due diligence experts refer to it - which minimises the formal work that needs doing at the final stage and reduces the risk of surprises.
Arundale, who is about to publish a more in-depth version of his private equity guide in book form called 'Raising Venture Capital Finance in Europe', says: 'Once they've seen business plans or an exec summary and met with the team, the VC will already be carrying out their own informal due diligence enquiries, and they'll do this to the point where they're interested in making the initial offer. It's only once that's in place that they go about the more formal due diligence.'
Questioning assumptions
So what exactly does due diligence cover? The areas entrepreneurs usually think about are the financial figures, including evidence supporting the assumptions that underpin the company's projected growth. But investors will also be looking hard at the business opportunity, the quality of the management team, the technology behind the product and various intangibles, such as the IP. Often external consultants will be brought in to examine these different areas.
eSynergy's Bowman says that as much as digging into the details of the product, due diligence is designed to test the responses of the management team. 'It's about getting to know the company they are investing in and how they deal with the issues raised. This is just as important as the details of the plans and markets, as the team is the most important aspect of any investment.'
One of the most difficult areas for potential investors to judge is market positioning, particularly in emerging technology sectors where it's tough to assess how large a slice of an emerging market you can take. Real customer references - or agreements in principle to make purchases - are the favoured evidence here. But VCs might also bring in technology experts - perhaps from a University department with a particular specialism - to examine the technology opportunity. 'It can be difficult assessing the size of the market, particularly if it's a new technology,' agrees Arundale. 'Maybe the VC will have to carry out new market research about whether people are actually going to buy the technology. There's no point in having fantastic new technology if no one's going to buy it.'
Given how exhausting that process is, you might assume that any unsavoury issues will have been eked out long before you get to the due diligence stage. But not necessarily so, says Arundale. Business changes fast, and during an investment process lasting six to nine months, much can happen. Typical problems include the day-to-day risks that every business faces, such as a big customer contract falling apart at the last minute - which is not unusual, and not necessarily a dealbreaker. More serious problems are rarer, but they can happen. One due diligence advisor, examining a company that had been approved for investment by a VC, found most of its R&D work going through a partner in Dubai. That breached the rules of the government-supported funds that the company was relying on, which require any investment to benefit the UK economy.
Finally, some entrepreneurs are concerned about giving away confidential information to investors, fearing they'll use the information to help their existing portfolio companies. It's difficult to say whether these fears are well grounded, but there are measures companies can take to allay them. Some VCs will refuse to sign non-disclosure agreements upfront, simply because too many ideas cross their desks, but many will do so as discussions progress - the BVCA, for example, provides a confidentiality letter template which its members should be willing to sign. An alternative approach, Arundale adds, is to ask to deal with a different investment executive at the VC firm to the one who's already made investments in your competitors. Ultimately, however, there has to be a certain amount of trust in any business relationship, particularly when you're dealing with reputable firms. 'Hopefully they are people of integrity and trustworthy, so it shouldn't be a major issue,' he says.
By David Longworth, Webster Buchanan Research
Monday, March 2, 2009
The Web 2.0 Band wagon
One of the in jokes at IBM’s support centres is about people who ring up asking to upgrade to Web 2.0. Explaining that it doesn’t come in a box, nor can it be downloaded, inevitably leads to the question: “Well, what is it exactly?”
All the usual suspects have had a go at providing an answer and as usual, when the subject is rather nebulous, nobody can come up with a very good explanation. So it was interesting to see Stephen Fry, the well known “Writer, Broadcaster and National Treasure” as he’s now billed, having a go.
He does a pretty good job, explaining that it’s “an idea in people's heads rather than a reality. It’s actually an idea that the reciprocity between the user and the provider is what's emphasised. In other words, genuine interactivity, if you like, simply because people can upload as well as download’. In other words, it’s the way we use it.
When we were first connected to the internet, we booked flights and read the football scores. Then we started using the web to communicate, writing blogs and interacting with friends through social networking sites such as Friends Reunited, MySpace, Facebook, and YouTube. And without anyone telling us, we were upgrading to Web 2.0.
Human nature being what it is, though, it wasn’t long before we got bored with who we are, and started to step into the shoes of the character we’d like to be. And so we expanded our networks to meet lots of other characters doing just the same thing, using Virtual Worlds, such as Second Life or moove.
Because these virtual worlds became so popular so quickly, and because they’re being used innovatively, it was inevitable that businesses would see commercial opportunities for them. IBM, Cisco, Mattel, HP, MTV and Disney are all at the forefront of exploiting the opportunities that virtual worlds offer. You can buy and sell virtual stuff already, while you chat with virtual friends over a virtual drink and listen to the London Philharmonic playing a virtual concert.
It’s not just the chance to trade that’s attractive though – there’s plenty that we can do in a virtual world to help us in the real world. Many of the firms spearheading the use of virtual worlds are looking to find better ways to do things that they have to do anyway. Some of the first applications were fairly obvious ones – technical or post sales support for example, where the graphic capabilities of virtual worlds offer a great way to show someone what to do, rather than just tell them.
Teleconferences, online meetings and web seminars are also starting to move into virtual worlds, again because of the interactive and graphic potential. And companies like IBM are now setting out to move business processes and procedures onto a virtual world, where they can be done better, more quickly and more efficiently. IBM already communicates with business partners and some customers like this. New hires, for example, go through the onboarding process on Second Life, and are trained in the same way. It’s also used as a collaborative tool for remote teams to work together on projects and delegate tasks to contractors, and a host of other tasks and applications will follow.
Onboarding and training are necessary if somewhat mundane tasks that confront us all – being able to do it in IBM’s virtual replica of the Forbidden City might at least make it a bit more fun.
By George Fletcher, Webster Buchanan Research
For South African Business Invetment Opportunities and Capital check out SA Investors Network
All the usual suspects have had a go at providing an answer and as usual, when the subject is rather nebulous, nobody can come up with a very good explanation. So it was interesting to see Stephen Fry, the well known “Writer, Broadcaster and National Treasure” as he’s now billed, having a go.
He does a pretty good job, explaining that it’s “an idea in people's heads rather than a reality. It’s actually an idea that the reciprocity between the user and the provider is what's emphasised. In other words, genuine interactivity, if you like, simply because people can upload as well as download’. In other words, it’s the way we use it.
When we were first connected to the internet, we booked flights and read the football scores. Then we started using the web to communicate, writing blogs and interacting with friends through social networking sites such as Friends Reunited, MySpace, Facebook, and YouTube. And without anyone telling us, we were upgrading to Web 2.0.
Human nature being what it is, though, it wasn’t long before we got bored with who we are, and started to step into the shoes of the character we’d like to be. And so we expanded our networks to meet lots of other characters doing just the same thing, using Virtual Worlds, such as Second Life or moove.
Because these virtual worlds became so popular so quickly, and because they’re being used innovatively, it was inevitable that businesses would see commercial opportunities for them. IBM, Cisco, Mattel, HP, MTV and Disney are all at the forefront of exploiting the opportunities that virtual worlds offer. You can buy and sell virtual stuff already, while you chat with virtual friends over a virtual drink and listen to the London Philharmonic playing a virtual concert.
It’s not just the chance to trade that’s attractive though – there’s plenty that we can do in a virtual world to help us in the real world. Many of the firms spearheading the use of virtual worlds are looking to find better ways to do things that they have to do anyway. Some of the first applications were fairly obvious ones – technical or post sales support for example, where the graphic capabilities of virtual worlds offer a great way to show someone what to do, rather than just tell them.
Teleconferences, online meetings and web seminars are also starting to move into virtual worlds, again because of the interactive and graphic potential. And companies like IBM are now setting out to move business processes and procedures onto a virtual world, where they can be done better, more quickly and more efficiently. IBM already communicates with business partners and some customers like this. New hires, for example, go through the onboarding process on Second Life, and are trained in the same way. It’s also used as a collaborative tool for remote teams to work together on projects and delegate tasks to contractors, and a host of other tasks and applications will follow.
Onboarding and training are necessary if somewhat mundane tasks that confront us all – being able to do it in IBM’s virtual replica of the Forbidden City might at least make it a bit more fun.
By George Fletcher, Webster Buchanan Research
For South African Business Invetment Opportunities and Capital check out SA Investors Network
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