

Wanted: Software that helps you make money  - softwarejim
http://softwarejim.blogspot.com/2008/01/wanted-software-that-helps-you-make.html

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rhiltd
That's easy. My wife has PhD in Statistics and works for a large bank. She
spends her life building predictive models using archetypes. She has made
hundreds of millions in revenue for the bank but now is working with the
Australia Federal Police to detect both fraud and money laundering.

According to Mastercard her bank has one of the lowest fraud rates in the
world.

Most large companies could increase their revenue by millions if they only
knew how to understand the data they already have. It would only take 1 or 2
seriously smart people but the limiting factor is the ___political_ __will to
do it.

~~~
softwarejim
gotta agree - the common problem for any serious BI implementation is getting
the executive buy in.

~~~
henning
Wanted: executives that want software that helps you make money.

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skmurphy
I think that anything that accelerates the product development process would
fit into this category: e.g. CAD/CAM, collaboration tools, prototyping or
software development tools.

I accept Peter Drucker's thesis that a "firm has only two real functions,
marketing and innovation, and everything else is cost," and would broaden the
"make money" definition to include innovation.

As a side benefit many of these innovation tools also help to cut costs,
although if there is unmet internal demand for a function you may actually get
more usage and not affect total cost that much. Lowering the marginal cost of
an activity can increase its frequency. In other words, even though the
transaction cost is lowered, the total amount of time and dollars spent may
stay the same or go up slightly because the firm is consuming more of it.
Examples might be the amount of time spent on E-mail vs. hard copy letters,
screen views vs. plots or printouts of a complex object, or daily builds of
large systems with integrated regression testing vs. weekly builds two decades
ago.

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gibsonf1
The key is to provide software that helps business increase customer value :)

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edw519
"However costs are finite."

Probably doesn't seem that way to most business owners.

After all these years of applying IT to business, there is still a long way to
go.

And don't forget the incredible effect of margin multipliers. If I'm running
at 10%, then I could increase my profitability 2 ways, either by increasing
revenue by $10 or decreasing costs by $1.

Say I sell $100 worth of stuff and earn $10. If I want to earn $11, I could
either increase my revenue $10 and sell $110 worth of stuff. Or decrease my
cost by $1 and earn $11. Without spending anything to increase revenue
(people, marketing, fixed expenses, etc.)

The formula: IncrementalRevenueIncreaseNeeded * margin =
IncrementalCostDecreaseNeeded. Pretty powerful stuff.

In many cases, it's still much easier to decrease cost than increase revenue.
As one wise man once said, "It's all gravy (profit)."

~~~
skmurphy
"In many cases, it's still much easier to decrease cost than increase
revenue."

It's also a more reliable sales focus, especially in an uncertain economy, to
attack a cost stream that is real. Future revenues are a possibility, costs,
especially recurring costs, are a tangible reality.

