Software Information |
Software Companies: Generate New Revenue Streams and Decrease Costs with Custom e-Learning Content
It's no secret that software companies operate in a very competitive space where rivalry is increasingly fierce and where profit margins can be razor thin. New, smaller software companies are sprouting up each month and the leading software companies continually make strong advancements forward leveraging massive cash flow reserves. This cycle makes it difficult for the mid-sized software company to compete because (a) they don't typically have the cash flow necessary to take giant leaps forward in the industry and (b) because they need to continually move forward to stay ahead of the smaller software companies that are vying for their slot in the marketplace. Consequently, making the jump from an unknown to a mainstream brand can prove to be very difficult for the mid-sized software company. Finding ways to create new revenue streams and to decrease current costs is imperative to the success of companies caught in this cycle. They need to be thinking on their feet, thinking ahead and thinking creatively, all at the same time. This can be a daunting task, as any software executive will tell you. Despite all of the challenges that face the mid-sized software market, there are several ways to create these much needed revenue streams and to decrease current costs. New advancements in technology and its use in training and development make generating these revenue streams possible. Setting the Stage It is almost taken for granted that when an organization purchases a software package from a reputable vendor, a certain amount of end-user, customer training will be either bundled into the purchase price or made available to them for an additional cost. If training isn't available to the end-user customer, the learning curve on the new software package is going to be fairly steep, depending on the complexity of the software. Typical training expense categories associated with most mid-sized software companies include: 1. The salaries of offline trainers These expenses should be under a watchful eye and should be consistently viewed as expenses that could be alleviated to some degree to not only improve the company's attractiveness in competitive bid situations but to increase the profit margins of the supplemental training services provided by the company. At the same time, in the background, mid-sized software companies should be looking for ways to create new revenue streams that they aren't currently capitalizing on to work in collaboration with their cost-reduction initiative. Step 1: Lowering Training Costs Using Custom e-Learning Content The first step to any well laid-out cost-reduction plan is to decrease the costs the organization currently incurs in order to get a better handle on profit potential from sheer cost savings. Previously we outlined what our target cost categories are?now we're going to lower the costs associated with those categories by leveraging custom e-Learning content. Take this scenario: A mid-sized software company that develops intranet portal systems currently employs 3 trainers that are onsite with clients for end-user training 3 days per engagement and they each average approximately 50 engagements per year for a grand total of 150 days on the road per trainer or 450 days on the road collectively. For these trainers, the onsite training program for the end-user customer may look something like the following: Day 1: Software Introduction and Primary Functions Lowering the costs: By leveraging custom e-Learning content, the company used in the above scenario, can effectively reduce the onsite time required for each trainer, thereby reducing all costs associated with the training program across the board. By using a professionally designed, self-paced, custom e-Learning module to focus on the Software Introduction and Primary Functions training that normally occurs on Day 1 and then delivering that learning module online to their end-user customers at the time of purchase through an e-Learning Management System (LMS), this company could decrease travel time for all 3 trainers by 1 day per engagement. This would decrease travel time for each trainer by 50 days per year, or 150 days collectively during the year. In addition the end-user customers will already be familiar with the software package before the trainers ever set foot in the front door. This would successfully: Enable the company's trainers to perform more training engagements OR enable the company to decrease the number of in-house trainers it employs. Taking it one step further: Reducing each trainers travel schedule by 1 day is good, but it isn't good enough. Software companies employing this cost-reduction method should take it one step further to enhance their end-user customer's experience. They need to make sure that their end-user customers are learning what they need to know to ensure time isn't being wasted covering the same topics when the trainer visits the customer site in-person. To do this, the software company needs to look at how they plan to deliver the online training to their end-user customers. They will want to make sure that the end-user customers can track and manage the online training portion of their sessions, whether it is self-paced custom e-Learning content or real-time online trainer/student collaboration. Selecting this delivery platform can be difficult but it should include the following basic functions: 1. Student Knowledge Assessments By selecting a delivery platform that addresses all four of these facets of end-user customer training, the mid-sized software company can not only decrease their own costs but enhance their client/vendor relationship by delivering more than what is normally expected or experienced in today's software market. What's the bottom line? The customer is pleased with their user's performance and the value they received from the software company. Step 2: Creating Revenue Using Custom e-Learning Content Now that we have lowered our costs, the company needs to look at how they can use their new learning technology to generate new revenue streams for their organization. Take this scenario: The mid-sized intranet portal software company used in the scenario above now has their own proprietary basic end-user e-Learning module to cover 1 day's worth of what was previously onsite training. The company has effectively reduced their overall, offline training costs. Now it is looking for ways to generate new revenue streams using this technology to (a) make back their initial purchase costs and to (b) create more profit potential for the entire organization. Creating the revenue: One way for a mid-sized software company, such as the one we're using in our example, to create this much needed revenue stream is to create subsequent, more advanced, self-paced, custom e-Learning training modules. Attractively priced, these learning modules could be made available to their end-user customers online without incurring any additional offline training costs. In order to do this efficiently and without incurring additional offline training costs, the company needs to make it easy for the end-user customer to purchase the more advanced training content and make it easy for the end-user customer to track their own learners as they attend the training courses so they can readily see its effectiveness. By investing the money today to build the more advanced, custom e-Learning content, this mid-sized software company could realize profits from the training modules within 12 to 24 months once they begin marketing and selling it to their existing client base. Such profits would be dependent on development timeframes, how they market their new training service and their chosen modes of delivery. Taking it one step further: Making the more advanced e-Learning content convincing and attractive to purchase from the client standpoint takes some ingenuity. People are very susceptible to purchasing something that is located right next to the checkout lane at Target. Similarly, it stands to reason that client of this mid-sized software company will be more apt to purchase additional e-Learning content if it is readily available to them and if they can purchase it without any hassle. One way to accomplish this is to publish the new, more advanced, self-paced e-Learning modules to the company's LMS portal and then make the modules available for purchase via credit card using e-Commerce or via standard invoice with a single phone call. This essentially acts as the product stands we all see at Target next to the checkout lane. Since everyone needs to pass through checkout lane, it makes sense to put additional products available for purchase there. In other words, if the mid-sized software company is delivering portions of their beginner training program online to their end-user customers, this more advanced e-Learning content should be available for purchase right next to those basic training modules, thus, increasing its visibility and increasing the attractiveness to buy from the client perspective. The Completed Solution Because of the tight software market and the strain put on mid-sized software companies to perform, if these companies can decrease the costs associated with their current training programs and create new revenue streams at the same time, it becomes a win/win situation both for the vendor and for the customer. The software company gains a competitive edge and continues to move forward while the client gains an easy-to-engage training program and added value from their software vendor. Synapse SE Staff Contributor For questions about this article, please contact: Shawn Torkelson, Synapse SE, 612.501.2620, www.synapse-se.com
MORE RESOURCES: Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting |
RELATED ARTICLES
Cisco CCNA Certification: Becoming A Truly Valuable CCNA. I've been active in the Cisco Certification track for four years, working my way from the CCNA to the coveted Cisco Certified Internetwork Expert title, and during that time I've conducted job interviews and casual conversations with hundreds of CCNAs and CCNA candidates. The CCNA is an exciting beginning to your Cisco career, but just having the certification simply isn't enough. Beware of The Pirated Software E-Mail Scams! You have gotten those E_Mails buy software at deep discounts. It is very tempting to save 85% to 95% on your favorite Software Titles. Microsoft RMS - Great Plains Integration - Overview For IT Specialist Microsoft Great Plains and Microsoft Retail Management System (Microsoft RMS) are getting new market share due to the Microsoft strong marketing campaign. Both products: Microsoft Great Plains and Microsoft RMS are coming from the same Microsoft subdivision - Microsoft Business Solutions (MBS), however due to the fact that both products were bought by Microsoft from different vendors, the integration between the two is not an easy thing. Screenshots Vista Windows FeaturesAdditionally, Vista will include many other new features.AeroVista will include a completely re-designed user interface, code-named Aero. Should I Use Windows Update? Should one use Windows Update?This topic has good and valid arguments on both sides. Some would say keeping your windows up to date is essential in keeping it free of the newest, worst viruses and the like. What is Groupware? Vince Lombardi once said that, "The achievements of an organization are the results of the combined effort of each individual." If this is the case, then what do we need to do in order to insure success in our companies? How can we combine the efforts of each individual as Mr. Popular Fleet Maintenance Programs Some companies that are in need of fleet management may choose to utilize the services of a fleet maintenance program. These programs can generally handle all of you fleet management needs. The Truth about Colossus: Are You Just A Magnetic Image? What is Colossus?Colossus is software licensed to about twenty-five insurance companies to aid in predicting the settlement value of claims. The insurance industry maintains it is a useful tool because it considers a great many factors, and the settlement values are just a range for use in any way the insurer wishes. Does your Company have Documentum? Are you lost in the mess of documents that get passed around your company, never knowing what the latest version is and which one you should work on without worrying if someone else has already made the same editions that you are making? Perhaps you have heard of collaboration software solutions such as Documentum to help your company manage its documents that are passed around. Documentum is a very good solution to this problem but is it the only one? In this article you will be presented with some basic information about the differences in collaboration software from Documentum and NextPage. How To Choose A Fire Wall Software Program In the real world a "fire wall" is a fireproof wall that is built to stop thespread of fire from one part of a building to others. In the Internet world afirewall has a similar purpose in that it stops the spread of harmful virusesand attacks from entering your home or office network. Daffodil DB: Web Database What is a Web Database?A web database is a database for the internet. You can get access to your data via the internet from anywhere in the world. Outlook... Not Just for Email! Using Your Outlook Calendar Microsoft Outlook is one of the most widely used software programs for email, but if you're only using it for email, you're missing out on a great productivity tool! This month's column looks at a few ways you can use the Outlook calendar to make scheduling easier.* Add public holidays to your calendar automatically. OSI Layers Model IntroductionDuring the early years of our modern computer era, very few standards and protocols existed between various manufacturers. However, as time went on and computer technology continued to improve and become more widespread, it became apparent that standards would be necessary to ensure compatibility. What is Software Piracy? There are several kinds of software piracy. The bottom line is when software is pirated, the developer does not receive compensation for their work. Microsoft CRM Integration with Microsoft Retail Management System (RMS) - Overview Microsoft Client Relation Management system (Microsoft CRM) and Microsoft RMS are both Microsoft SQL Server based applications, however historically Microsoft was purchasing industry leading software applications, such as QuickSell which is now Microsoft RMS. So, RMS design fundamentals were minted a long time before Microsoft CRM. Explore the Internet in a Whole New Way For a long time now Microsoft's Internet Explorer has ruled as 'King of Internet browsers'. Like many of Microsoft's products an initially brutal marketing campaign pushed Internet Explorer into the mainstream's consciousness and from then on it was the logical, default choice. How to Choose the BEST Charting Software I suggest that you do not spend a lot of money on charting software as most perform very similar functions. Often the price is inflated to capitalize on the mentality that expensive is better. Ukraine IT Myths Dispersed While Ukraine is becoming a new popular IT outsourcing destination, there are still many myths about it and no clear understanding of the opportunities outsourcing to Ukraine can present. Let us look closely at some of those myths and find out whether there is any truth behind them. Making The Decision To Automate Your Software Testing Not every software testing project can or should be automated. Before your department accepts a new test automation project, you should establish a process by which projects are reviewed and either accepted or rejected. SQL: Querying Microsoft Great Plains - Overview for Database Administrator/Developer Looks like Microsoft Great Plains becomes more and more popular, partly because of Microsoft muscles behind it. Now it is targeted to the whole spectrum of horizontal and vertical market clientele. |
home | site map | contact us |