The Dharmesh Test is a quick, simple set of yes/no questions to gauge the likelihood of long-term success of a SaaS (Software as a Service) company. It is inspired by the highly popular “Joel Test” for measuring software development teams. [Disclosure: I am an angel investor in Joel’s company Stack Overflow]
Now, if you know me, and you know Joel, you know that I'm no Joel. He's smarter and is a better writer. So, why did I have the audacity to write the "Dharmesh Test"? Because I'm passionate about SaaS companies and have spent the better part of the last 6 years studying them and learning from folks that should have written this article. And, I've taken what I've learned and applied it to my own company, HubSpot -- which is doing very well and scores a respectable 13/16 on the test (yes, I've got work to do).
This is alpha Version 0.80 of this test. Will be iterating on it based on community feedback.
The Dharmesh Test: 16 Questions For Better SaaS Companies
1. Is there exactly one version of your software that services all users?
Or stated differently, have you resisted the temptation to have custom code for an individual customer or small group of customers? Ideally, in steady state, the same master code-base would be servicingall customers. Any customizations are done through application configuration or via APIs and plugins. If you have different versions running temporarily to test new versions with a subset of customers, that’s fine.
The vast majority of CEOs believe that sustainability issues will be critical to the future success of their business, and they want investors to more accurately value sustainability in their long-term investments, according to a new survey by Accenture and the UN Global Compact.
The survey involved 766 CEOs and top executives, including face-to-face interviews with over 50 of the world's foremost business executives.
This new research found that:
93 percent of the CEOs polled believe that sustainability issues will be critical to the future success of their business.
86 percent want investors to better price sustainability issues into valuations.
CEOs are addressing sustainability issues in new ways. For instance, 58 percent of survey respondents cited the consumer among their most important stakeholders, even above employees (45 percent) and governments (39 percent).
91 percent of those polled said that their company would be employing new technologies and innovation to help meet sustainability goals over the next five years.
Partnerships and collaboration are increasingly important. 78 percent of survey respondents feel that companies should engage in industry collaborations and multi-stakeholder partnerships to address sustainability goals.
In 2006, the UN launched the Principles for Responsible Investment Initiative (PRI), a $20 trillion effort developed to persuade mainstream investors to better integrate environmental, social and governance (ESG) issues into valuations and investment processes. At a major UN Summit in New York City last week, Donald MacDonald, PRI Chairman urged investors to 'push further' despite recent progress.
"Time and again investors have seen how ESG issues can affect investment performance and there is now a critical mass of institutional investors who know that good management of these issues is an important factor in for the long-term financial success of their investments. I expect the next decade to be an age of responsibility for capital markets," he said.
"If a company has poor corporate governance or persists with bad environmental management then it can, and should, affect the long-term valuation of the company. The truth is that's still a relatively new concept for many investors, but there are now leaders in mainstream markets that have developed the tools and models to integrate sustainability and who can push the global capital markets beyond the tipping point on sustainability."
The 60-page report, titled A New Era of Sustainability, is availablehere.
The other day I caught up with Lanning Bennett - founder of the COI Group which is a highly regarded diagnostics provider based in Sydney with international clients. Lanning provided some interesting insights into how 'Responsible' and 'Effective' leadership could be seen as contradictions - though are still measured using the same diagnostics...
Is there a contradiction in these terms? Many would say so. Sometimes to be effective certain responsibilities may be forfeited. Responsibilities require compromises to maintain effectiveness. The balance between these two are in constant review.Lets talk about measurement – how do we know a leader is responsible. How do we know they are effective? Do the measures change depending on the circumstances – the type of leader, their role, their challenges. Of course situational leadership would say so. I would agree.However this is not to argue that different situations require different measures, simply a different balance of the same measures.Lets look at this further.Leader A is running a bank branch with an established team and a well known bank branch. What makes this leader responsible and effective? An attention to detail? Good people skills? Good infrastructure? Compliance? Yes to all of this.Leader B runs a creative team in an advertising agency. What does she need? Creativity, innovation, responsiveness? How does she balance responsibilities – to her team, client, organisation? As we all know these two situations require totally different leaders, but do they require different measurement systems, systems to asses their effectiveness?I would say no.In business we use one reporting system for all companies regardless of their size, product, market etc. Same with leadership. We measure the same things but assign them different priorities depending on the circumstances.A good leadership diagnostic will take this into account and report accordingly.
It is no longer a surprise that as a result of globalisation, specialisation and new technologies, 80 percent of jobs now involve people participating in human interactions rather than extracting raw materials or making finished goods. Jobs involving the most complex type of collaborative knowledge interaction make up the fastest growing segment.
The reasons are clear. Leading organisations recognise that by improving collaborative knowledge building they can improve real time decision making and competitive advantage.
The concept of “time-based competition” is driving efforts to accelerate organisational decision making and improve the quality of decisions. By removing time and space obstacles to decision making organisations develop more dynamic, responsive business behaviour.
A fundamental requirement for collaborative knowledge building is the workgroup’s need to analyse situations, synthesise information, evaluate alternatives, make decisions in real or almost real time, regardless of geographic location.
Real time decision making takes place in any combination of time and space – same time/same place, different time/different place, same time/different place, different time/same place.
Early collaboration tools such as email, instant messaging and web conferencing have made the Internet a fundamental component of business. Consider how web conferencing has forever changed the stereotypical image of today’s business “road warrior”. This employee left home Monday morning and boarded a flight to meet with customers all week and returned Friday afternoon to recuperate over the weekend before repeating the process the following Monday.
Web conferencing technology gave sales workers back their quality of life by allowing them to rotate face-to-face customer meetings with online meetings, reducing unproductive travel time and dramatically cutting travel costs. While webinars can be an effective alternative to face-to-face meetings, most web conferencing consists of a slide presentation with commentary, and rarely involves effective workgroup collaboration.
Yet collaboration is a cognitive activity. It requires willing people to think and share ideas about problems and opportunities and determine best courses of action. Today collaboration is viewed by an increasing number of organisations as a key factor in improving enterprise-wide performance and innovation.
Collaboration improves the way individuals (internal and external) work together on business basics such as improving decision making, reducing coordination costs, leveraging external relationships and sharing expertise.
However, the challenge for collaborative workgroups is having access to tools that enable them to replicate the way effective teams work in face-to-face planning and problem solving meetings. That means having the ability to analyse situations, synthesise information, evaluate alternatives, make decisions, create action plans and capture meeting content and actions in a formatted report.
Beyond Web Conferencing
Analysts, Gartner, summed up web conferencing meetings this way,
“Without effective meeting discipline, Web conferencing can waste more people's time across a broader geographic range than before. Group Decision Support System (GDSS), tools can cure much of the dysfunction. …We believe most organisations will benefit from combining GDSS and Web-conferencing technologies to enhance meeting performance and to reduce the number of dysfunctional meetings, regardless of the type of meeting.” [i]
If one of the most pressing business needs is to equip knowledge workers with online technology capable of squeezing more time and value out of knowledge work, then it is Gartner’s opinion that the combination of GDSS and web conferencing provides the basis for the rapid transformation of ideas into value.
Consider the example of a global leader in wine and spirits that wanted to improve and integrate the viticulture processes of several of its acquired vineyards located in different countries. Up to 200 people would work collaboratively in teams to complete the work in six months or less. Employees were not permitted to travel.
Employees selected an online web collaboration technology that could support working with complex problems and planning issues. Teams of up to 20 people worked together in real time for up to eight hours in a typical “workshop” format. The only difference was that instead of being in a room together, team members connected to the online meeting from their office PC and joined a conference call.
Using a business process improvement methodology, meetings started by using web conferencing tools to present in PowerPoint slides the agenda, objectives and meeting process to be followed. Other web conferencing tools displayed relevant documents and process maps for review by all.
Once the agenda, objectives and reference materials were clearly understood by team members it was time to start using the GDSS tools to brainstorm ideas and prioritise the best ideas for evaluation. Action plans were created for ideas that passed the evaluation stage. At the end of each meeting a report containing the content of the meeting was downloaded to each person’s desktop for further actions after the meeting.
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Total Executive June News has just been released...Core Subject: How to Achieve Digital Profitability With much more information about Leadership, Technology & Communications, Business Responsibility & Sustainability, Research and more. Our Newsletter is Complimentary with your 2010/2011 TE Membership If you are not a member yet - register for your complimentary membership now at: http://www.totalexec.com.au/membership-benefits/ View the newsletter here: - http://eepurl.com/FrVL Kind regards Grant Crossley Director
As Australians, we look forward to more Executive Recruitment knowledge on what is happening in the Australasian area... Here is info of the manufacturing/engineering side...
Hands Up Part 1: "How Creative are You?" . Does school kill creativity? Do people lose creative ability over time, and is our education system the culprit? Find out for yourself in this fascinating video... as children get older, they often see themselves as less creative. Andrew Grant and Gaia Grant went back to school to find out if children have any ideas on how adults can become more creative. They were not surprised to discover that their findings correlated with the latest research from Harvard.
We pride ourselves on thinking critically. But how do our critical thinking skills apply to what we find in our searches? Because the results seem to appear like magic, many of us tend to think of search results as being “unbiased.” But in actual fact, there are many individuals and companies working hard every day to try to push their information to the top of the page in your Google search.
The economic crisis has taught organisations a critical lesson: Only by focusing on long-term value can they ensure their survival during difficult times—and be ready to change when the opportunity or the need arises. Among the capabilities required to create value now and in the long term, we believe, is Enterprise Architecture (EA)—the process of aligning an enterprise’s structure and operations, including business functions, processes, and information systems, with its business goals and strategic direction.
Yet questions remain concerning the value of EA: Does investment in EA really deliver value to the business? If so, what types of value are being realized? What are successful organizations doing to capture value from EA, and what are the greatest challenges to an effective EA? What are the most important actions that companies should take to develop their EA capabilities? And how can EA be used in the short term and the longer term, given the challenges in the economic climate?
To answer these questions, Booz & Company recently completed a global Enterprise Architecture study, in which we surveyed EA practitioners and key business representatives at more than 60 organizations in the financial services and government sectors around the globe. The results are revealing: No matter how mature their EA efforts were, respondents at every organization we surveyed saw EA as a key capability for building long-term business value, and all of them are continuing to invest in EA. Furthermore, we found a strong correlation between the maturity of a company’s EA efforts and the amount of value captured through the process.
EA and the Link to Value
As Exhibit 1 indicates, EA has already become a critical element in creating business value, though most organizations still have much work to do to fully realize its benefits. Every organization we surveyed fell into the “emerging,” “standardized,” or “operationalized” maturity level, and more than 80 percent of them fell within either the “standardized” or “operationalized” category. The exhibit also demonstrates that, by and large, the financial services firms we surveyed scored higher than the government agencies, a difference that may be due to the fact that the public sector has more complex business models that have evolved sometimes inconsistently over time.
Our efforts to establish a link between EA maturity and value focused on four critical areas of business value: decreased cost, reduced complexity, reduced risk, and increased agility. And that link is clear: Respondents from 60 percent of the top third of organizations on the maturity scale reported having realized all four sources of business value. The very few organizations reporting that their EA efforts had reaped little or no value were all at the “emerging” level of EA maturity, and in every case, EA was still limited to IT and not yet engaged with the business.
As Exhibit 2 indicates, respondents from close to 90 percent of the top third of organizations reported that they had achieved cost reductions because of their EA efforts. As part of the study, we looked in detail at an Australian bank that had realized more than AU$200 million (US$159 million) in cost savings as part of a two-year EA effort that placed it among the top third of organizations in the study. The savings—primarily achieved through the consolidation, sharing, and reuse of the bank’s technology assets—would not have been possible without the integration of EA deep in its operations. That, in turn, involved ensuring that strategic planning efforts included input from the EA program and building a federated EA model with a central EA practice supporting domain experts in each business unit. (For more on this and other case studies, please download the complete study.)
Creating Value Through EA
Our study indicates that if organizations want to boost their level of EA maturity, they must work to develop five critical capabilities:
Strategic alignment: The extent to which the EA function is involved in both business and technology strategic planning and how well EA engages with the wider organization
Staff competency: The level of competency of EA’s leaders and practitioners and how well EA is recognized and fostered as a career path
Performance measurement: How well EA’s success is defined, measured, and improved with formal metrics
Organizational structure: The extent to which the EA function is formally structured and governed, the seniority of EA’s practitioners, and the level of recognition of EA throughout the business
Formal EA processes: The extent to which formalized frameworks, methodologies, and supporting technologies are utilized within the EA function and the breadth of the adoption of EA standards across the orgnization
As vital as all of these capabilities are to the ultimate success of EA, they vary significantly in how strongly they are linked to the value created through EA—and in how difficult they are to attain.
Respondents agreed, for instance, that strategic alignment—the degree to which EA is integrated into the business and the strategic planning process—is the most critical driver in achieving business value; after all, every EA effort must be focused on actual business results. Typically, organizations with mature EA capabilities make a point of including EA in both technology and business strategic planning processes. At the same time, however, most respondents agreed that linking the two is the most difficult of the five elements to achieve, especially if the wider organization has only a limited understanding of EA and why it matters.
Respondents cited access to highly skilled resources as another top challenge in creating a successful EA program. In a related case study, we looked at a European bank that was working to expand its EA capabilities to ensure that a variety of recently outsourced IT services were successfully integrated into all its business lines. Successful as the effort has been, the bank is still working to address “the lack of skilled [employees] who are able to speak both business process and technology language,” as one of the bank’s lead architects puts it. Plans to remedy the problem include strengthening internal training, development, and research capabilities.
EA in the Short and Long Terms
The long-term benefits of EA are many: lower costs, increased efficiency, better risk management, less complexity, and greater agility. Yet companies are finding it more and more important to be able to respond quickly and effectively to every market situation. Under such conditions, a mature EA program can also support prudent near-term planning and decision making by increasing transparency, sharpening business processes, and connecting long-term strategy more closely with quarter-to-quarter tactics. Among the short-term benefits of EA are better cost and budget control, better management of the extended enterprise, the ability to find sources of capital when needed, and greater clarity in managing regulatory and stakeholder demands.
The goal of EA is to establish, improve, and measure the connection between an organization’s structure and operations and its overall strategic goals, and thus to create value in both the short and long terms. We hope that by guiding organizations to a better understanding of the critical elements of EA and the challenges they face in improving their EA efforts, our study will help them grow more agile, become more able to adapt and to change—and ultimately generate greater business value.
For a more detailed analysis of the relationship between EA and business value, please download the full study, which includes a more thorough examination of the elements of EA, the drivers of EA maturity, the best practices of organizations that have achieved high levels of EA maturity, and the challenges they face in building their EA capabilities. The full study also includes four case studies that analyze in greater detail three organizations whose EA efforts have brought them real quantifiable business benefits.
I'm researching the views of employers (those who make the final decision whether to hire one person over another) as opposed to HR people (who generally filter applicants and compile short lists of candidates for the consideration of the final decision-maker) in the finance/financial services sector. A survey I'm using can be found by clicking here.
It is now well acknowledged that the Australian population is ageing. The number of older adults living in Australia is steadily increasing meaning that the age of our workforce will also increase. The baby boomers are approaching the traditional retirement age, most within the next two decades.
It makes sense that the longer baby boomers work, the more beneficial it will be for our economy. Compared to their predecessors, the baby boomer cohort is generally better educated, and this is correlated with higher workforce participation. Further, research has indicated that many do not intend to fully retire but wish to continue working part time or in less demanding roles.
For those intending to retire, recent events are likely to have caused at least some disruption to their plans. The financial crisis which has knocked billions of dollars of value off retirement savings, and the Federal Government's announcement that the pension age is to increase, will have caused many baby boomers to rethink their future. These and other factors may mean forced prolonged participation in the workforce.
Whether baby boomers want to, or have to remain at work - it seems that an increase in the proportion of older worker participation is inevitable.
Different industry sectors have different age profiles - I'm wondering how the finance/financial services sector - which tends to hire young graduates into a ‘churn and burn', work hard/play hard kind of culture that seems to embed the assumption of relatively early retirement - will cope with the ageing demographics. If you make hiring decisions in the finance or financial services sector, I'd appreciate your views. You can find my research survey by clicking here.
Christine Harley is currently completing her honours year in psychology at Charles Sturt University whilst also working part time in the not-for-profit sector. A Chartered Accountant, Mum of 3, who enjoys netball, running, kickboxing, photography...and now blogging! For more details about Christine's research you can contact her at charle02@postoffice.csu.edu.au
