Wednesday, February 27, 2008

Customer Satisfaction and Micro MNC

The day I wrote my last post, I received an e-mail from Zach Nelson, CEO of Net Suite, and a  phone call the day after from the VP of finance. Both of them were apparently concerned about our unpleasant experience with the company. I have to acknowledge that it was good to get the reassurance that our negative experience was an isolated incident and was not a management backed culture at Net Suite.  I do understand that life is not perfect, things can happen, people can makes mistakes, systems can break, and misunderstanding can occur in any organizations but as a customer I expect them to be politely acknowledged, logically explained and reasonably resolved for me to be satisfied and move on to business as usual without any bad feelings.

Having said that, I also strongly believe that most of the customers are like that whether they are buying a software service or an air purifier. Although customer satisfaction is important for every business but this is a concept that any entrepreneur running a micro-multinational must understand. The reason is that the chances of things going wrong are much higher in trying to manage an international business with limited money and staff.  Hiccups in the business process that will upset customers are just  inevitable  but  it is amazing the results a business can achieve  by simply admitting to a customer that a fault has occurred and comforting him/her that the steps will be taken to remedy the unpleasant situation. The chances are that this particular customer will turn out to be a bigger asset for the business than the one who never experienced any problem. (Note: Now for all those wise entrepreneurs thinking to play the trick on every customer to make them a 'bigger asset', please don't. First of all there is a financial cost associated with making mistakes and then fixing them later. Secondly, don't even think about doing it without having a feature in your business management software to keep track of the 'trick' because customers will only tolerate it once. :)

At Heaven Fresh, when a customer calls or writes with a complaint, we try our best to receive it with open arms and a humble attitude believing that there must be something wrong on our side for the customer to contact us. We listen attentively and we investigate thoroughly and most often it turns out that the customer's satisfaction is just a matter of a simple explanation and a few comforting words. For the times when we find a mistake on our part, admitting the error, apologizing for it, rectifying it, and offering a discount or a complimentary gift for the inconvenience  makes a customer the happiest person on earth.

With a limited budget for advertisement and no money for developing new products to compete with resourceful competitors, up close and personal customer service and a deep care for the customers' satisfaction is the single most powerful weapon that can set a micro-multinational apart from the competition to earn the customer loyalty for its brand.  That is precisely the kind of loyalty for the Heaven Fresh name we strive for every day to keep these customers coming back and bring their friends with them. The beauty is that we can achieve this goal by just being courteous and respectful ,  without spending any money - the money that we do not have.

Sunday, February 24, 2008

Software as a Service - NetSuite

Being a software engineer and an entrepreneur, I am a big proponent of Software as a Service (SaaS).  SaaS works great for a micro-multinational like Heaven Fresh for several different reasons and the main ones are as follows:

  1. A cash-strapped mmnc does not need to make a huge up front investment for purchasing expensive software licenses and maintaining in-house technical infrastructures.
  2. Since the SaaS is Internet based, partners and employees across the globe can seamlessly use one software platform to share their time and talent among various offices.
  3. The service provider can quickly update the software to incorporate new features and latest trends.
  4. It is much easier to implement or find plug-in modules for a well designed software service.
  5. Due to the vast number of users sharing the cost, the service provider can maintain a robust server pool which benefits all the participants.

When Heaven Fresh grew out of the Quick Books and home grown MS Access/Excel applications phase, we desperately started looking for a business management software that could help us streamline our processes, improve collaboration among various offices, outsource the routine jobs to the developing countries, and unify various data banks in one place.  There are many expensive ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), POS (Point of Sale) and accounting packages in the market but not having the luxury of large budget for the software system, we wanted to get one without having to pay an arm and a leg for it. Naturally, the very first thing that came to our mind was 'Open Source'.    Therefore, we embarked on the journey of researching the available open source solutions. After looking  at various systems such as Tiny ERP (www.tinyerp.com), Open Pro (www.openpro.com) and Compiere (www.compiere.com), we found Compiere to be the one offering most comprehensive set of desired features (at least in theory).

With years of extensive software development experience under my belt and with other friends around me, with degrees in computer science, willing to help customize Compiere at the cost of taking them out for dinner, I was confident that we will have Compiere up and running in no time.  But this dream of acquiring an extensive business management software platform for "free" was shattered as we dug deeper into the customization and commissioning of Compiere. To cut the long story short, after struggling with Compiere for three months, we abandoned the project with a candid realization that it would be way more expensive in the long run to deal with an Open Source package than to go for a commercial software. If any one is interested, I will be more than happy to discuss in detail the issues and the reasoning behind our decision in a separate post.

After the eye opening experience of open source, we started investigating the propriety software packages that were being touted for small business. We  explored software such as Microsoft Dynamics, Sage, Distribution One, OpenBox and a few others and rejected them one by one because either they were very cost prohibitive, did not have the required functionality or were too difficult to integrate with other applications and customize. A half decent business software package can easily cost anywhere between $50,000 to $100,000 in just license fees not including the consulting costs from the vendor and the cost of any equipment to run it.

At that point in time, we had already been looking for a software platform for few months and it was getting more and more difficult to manage the daily affairs of the business. Disappointed and under pressure, we decided to signup for OrderMotion (www.ordermotion.com) that offered some major functionality instead of the comprehensive feature set for a monthly subscription plus a per transaction fee.  The price was right (about $500/month) and we were happy to have the core functionality as a stepping stone until Heaven Fresh was in a stronger financial position to opt for a more comprehensive software package.

As soon as we started using Order Motion, to our dismay, it became apparent that the software was very US centric. It could not handle multiple levels of Canadian sales taxes (GST, PST, QST, HST) and any permutations of them as required by the Canadian law. We could have used Order Motion for Heaven Fresh US but were not very keen on training existing/future personnel on multiple systems as it can be quite a daunting task to get people up to speed on these complex business management software systems.  Since the sales department had falsely assured us about the software's ability to handle Canadian taxes, Order Motion acknowledge the mistake and refunded our money.

Frustrated with the lack of software choices for a micr0-multinational company, we stumbled upon Net Suite (www.netsuite.com). The Net Suite looked like a good choice as it had most of the functionality that we were looking for and we had the luxury of paying in quarterly installments.  Although Net Suite could cost us more over the years, our rationale was that  NetSuite would help us grow with minimum up front investment and as more operating cash becomes available we could potentially switch to other solutions down the road.  Initially we implemented Net Suite both for the Heaven Fresh US and Canada offices and eventually started using it for Heaven Fresh UK operations. Without a doubt, Net Suite software has helped us tremendously in running the business over the last year and a half.

Although Net Suite has made life much easier for us in terms of managing the daily operations, implementing it has not been a breeze. There is a huge time investment involved for moving the historical data to Net Suite as well as getting the employees trained to use it even though most of us at Heaven Fresh have a strong technical background.  Then there are software bugs as well, but having developed the large software systems myself, I know well that software bugs are inevitable in any new system. However, it seems that Net Suite development team is quite responsive about fixing the broken functionality in each upgrade.

Despite the shortcomings of Net Suite, it is the best of the worst systems in the market today for micro-multinational companies and we have been quite happy with it until the latest episode that has flipped our perception of the company. It has nothing to do with the system itself but the Net Suite's treatment of its customers. I would characterize it the worst customer treatment I have ever experienced. In a nutshell, due to some technical issues in Net Suite accounting, some of our payments were not recorded and our credit card was over charged and also our invoices were not sent to us in a single combined format that we had been promised. When we contacted them to investigate the issue, we encountered a very rude behavior.  We had expected it to be a simple matter but instead we started receiving repeated threats to block our access to the system. That's when we realized how vulnerable we were by leaving our business data and software in some other company's hands.  After months of back and forth communication, Net Suite only backed off and and decided to investigate our complaints when we told them that we would hold them responsible if there were any damages caused to our business due to the lack of access to the system. And sure enough, they found their mistakes. If this was done to us due to a a glitch on Net Suite's part, I cannot imagine what would a customer experience who happens to be on the wrong side of the fence.

This incident made us lose our confidence in Net Suite.  It left such a bitter taste in our mouth that if it was a simple task, we would have moved to another system the very next day. Net Suite is very well aware of this dependence and for some reason they have chosen this power and responsibility to black mail their customers and make them feel like a hostage.  Net Suite has the edge with a relatively decent product in their hands at this point but I am sure that this edge will not be there for long. Since the software system itself is not unique, it is just a matter of time before other companies will be competing with Net Suite. I believe that a vendor offering SaaS should use a threat to disconnect the service to a business only and only if the world has turned upside down.  Secondly, we are paying about $36,000 / year to use Net Suite for the Heaven Fresh US, Canada and UK offices. We were very keen on implementing the system for our other offices as well but the current Net Suite pricing model is more cost effective for up to 3 countries. When combined cost of more than 3 international offices is compared,  the other higher end business management software systems start looking more lucrative.  Unless Net Suite drastically changes its customer treatment culture and the pricing model to accommodate a micro-multinational, we are very unlikely to expand our business relationship with the company or even continue the existing one.  It is a pity that a company can develop a good product but can lose customers due to utter disregard of its customers' satisfaction.

Monday, February 18, 2008

Cuba - Beyond the Tourist Resorts

It was a cold welcome back home from Cuba couple of weeks ago and I have been busy trying to catch up with all the piled up work since then. We have had record snow in Toronto this year.  When I look out my balcony,  I see mountains of snow in the parking lot and along the roads. If I close my eyes, I still find myself on the sunny beach in Cuba with countless gorgeous and sexy women in bikinis from all over the world. I stayed at  Sol Sirenas Coral resort and it was like being in a dream. As soon as I got there, I wasn't even thinking about the extreme cold weather of Toronto or crushing stress of running a micro-multinational. For one whole week, there was nothing else to do but to enjoy the clear blue ocean, lovely scenery, Caribbean music, local hospitality, delicious food,  tropical drinks, Cuban cigars, peaceful sleeps, reading books, beach strolls, flirting around, aimless wandering, beautiful sunshine and heaven fresh air (no pun intended).

Here are few of the pictures:

039 I'm enjoying the afternoon with a book and two cups of cappuccino. 
035 A relaxing view lying down by the swimming pool at the resort. Don't you wish you were there? :)
010 My friend Celal with the Havana museum in the background. The boat used by Castro to come to Cuba and the missiles from the Cuban crises are on display there.
013 A pictures in the streets of Havana showing the horse carriages. How's my tan :)
032 Tourists and the locals in a festive mood.
IMG_0125 I had the most delicious Piña Colada at a pit stop on our way to a day tour in the capital city of Havana. One glass cost me 2.5 Peso (about 3 dollars)
019 Lot of old American cars on the streets of Cuba. Our tour guide told us the reason behind it. Interesting story. Little too long to type here.

Cuba was all heaven in my eyes until I asked the courtesy question, "How is business?", from the two Cuban gentlemen selling souvenirs at the beach on their bicycle cart.  The boss, Jose, spoke several different languages fluently and sounded like a shrewd businessman as I had already heard him negotiate prices with a Canadian tourist in French.  Jose told me that on a good day they could sell as much as 200 peso worth of merchandise and on a bad day the sales could be as little as 15 pesos.  According to them it was a tough job as they had to pull and push the bicycle cart on the sand more than 5 miles every day. As the conversation unfolded, to my biggest surprise in Cuba, I found out from Jose that the small bicycle cart was owned by the Cuban government and each one of them only got about 5% of the sales as a compensation for operating the cart.  A sudden visit by the government auditor could get them in trouble if they were found selling any articles other than the ones provided by the government.  Apparently the men were happy to have a job that paid an average of 150 pesos every month as compared to the jobs outside the tourism industry that only paid about 40 pesos. It was not the amount of their compensation that struck me, it was the fact that the government was involved in managing a small souvenir cart. In my opinion, these two very capable gentlemen would have done a million times better job of running that small business if the government was not meddling in their affairs.

My second shocker came during the day tour to Havana. Our tour guide, Orlando, was giving the group a very detailed history of the cities, buildings, currency and other related subjects. His presentation was so impressive that I could not keep myself from speaking my mind to him that he was more than a mere tour guide. He hesitated for few seconds and then told me that he was a professor of history and literature before taking on this tour guide job.  In a country where average salary is about 40 to 50 pesos per month, being a bartender in a tourist resort was probably the most lucrative job where the Canadian and European tourists did not even think twice about paying generous tips in all-you-can-drink bars for mojitos, piña coladas,  tequila sunrises, rum cokes and all the glasses of beers.  According to Orlando, doctors, engineers and other qualified Cubans were quitting their regular jobs to work in the tourism industry for the sake of gratuity.

A micro-multinational thrives on utilizing the individual talents, knowledge and hard work to the maximum possible degree.  An environment  that does not reward such traits would be the worst place on earth to incubate the new breed of 21st century multinational businesses - the might micro-multinationals.