Balmori Software Inc.

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Here's a rule of thumb in the software biz: six months after you roll out a business application software at your organization, the data that you've encoded into it is already worth more than the software itself.

Think about it. When you calculate the cost of the man-hours spent encoding data into the software, and the man-hours spent training the users, indoctrinating the report consumers, and rearranging your internal processes - in six months you're likely approaching or exceeding what you originally paid to purchase the software to begin with.

But what takes the value of the data over the top is a new circumstance: the organization-wide realization that you now rely heavily on all that encoded data. The new ability to coordinate effortlessly that couldn't happen before, because that encoded information simply didn't exist then.

The thrilling new clarity about business information that simply wasn't available before. The ability to produce on-demand MIS reports to guide faster, more confident decisions. The new speed at which things get done compared to before.

All of this adds up to productivity gains whose value far exceeds the original cost of the application. (You wouldn't have bought the software otherwise.) And it's the gift that keeps on giving; the longer you use the software, the longer your productivity gains abide, and the further back in the dust the cost of the software is left behind.

But mind, computerization brings with it its own problems. Human society - and the world of business in particular - concluded long ago that the benefits of computerization far outweigh the problems it creates. Reasonable people have made the calculation that computerization's problems can be dealt with, but the problems do indeed lurk.

What are the relevant computer-related problems for the typical business concern? Experience shows that the biggest headaches for Philippine SME businesses are a) algorithm obsolescence, and b) data corruption. (At Balmori Software, data corruption is 70% of our technical support practice.)

Algorithm obsolescence, for one, is an inevitability. Take payroll. Philippines-based companies are required to deal with, and report to, at least four government institutions: the Bureau of Internal Revenue (BIR), the Social Security System (SSS), the Philippine Health Insurance Corporation (PhilHealth), and the Home Development Mutual Fund (HDMF).

If just one of these government entities requires a new report, or changes the arithmetic of the employee contribution computation, all organizations that have employees must change their algorithms for whatever report or computation has been affected by the regulatory change. This means that all payroll processing software in the Philippine market, regardless of who developed it or wrote its source code, has to be rewritten.

The required rewrite can be minor or massive; you'll only know once the regulation gets promulgated. A payroll application that is not revised to address the new regulation will provide "wrong" results. And wrong report outputs usually result in formal penalties, and also a lot of time-consuming data reconciliation.

When external conditions like these render your software algorithms obsolete, or your data get corrupted, all the wonderful computerization benefits that your company has come to rely on ... stop. Until you can get someone on the case.

That someone is called the technical support provider. And not just any technical support provider, but a knowledgeable technical support provider.

Unless you can count on reliable, knowledgeable technical support for a software application, then you can't count on being able to build a business for the long haul using that application. (We're talking here of mission-critical applications like logistics and integrated back-room, not tools like spreadsheets or word processing.) At some point, there'll be a crash and then you can't perform your business mission to the standards your customers have come to expect.

Sure, you may enjoy smooth sailing for a few months; but sooner or later, trouble will strike. A new law or tax regulation will eventually render your current algorithms obsolete, or your data will get corrupted; then what do you do? You'd better have knowledgeable technical support that'll get you back on track really quick.

Consider what it would be like to buy a car that doesn't have a dealer service organization. "Oh, it looked so sleek in the pages of Car and Driver I just had to buy it!" Sure, for a few months it'll run well.

Once the mechanical problems start, what are you going to do? You either repair it yourself - and good luck with that, Mr. or Ms. White Collar - or you bring it to a generalist talyer. Or a specialist talyer ("We specialize in all kinds of cars"). And the generalist talyer, or the specialist talyer, with its knowledge base of general principles of the internal combustion engine from models of 10 years ago, will muddle its way through this strange brand's fuel injection system, or use trial and error to figure out how to rip out the panel covering the aircon evaporator. And they'll do this every time you come back for servicing, thus butchering your exotic, technically-unsupported pride and joy - in slow motion.

Filipinos may long for the quirky charm of Renault Twingos or Dacia Dusters or something or other from Brazil or Poland or Tuguegarao, but most of them are smart enough to stick to Toyota Corollas and Honda CRVs and Hyundai Tucsons, because these things have the one thing that - for the down-to-earth person - outweighs sexy looks and interesting design specifications: technical support in times of trouble.

Similarly, a business application needs a reliable technical support infrastructure before you dare count on it for more than two weeks as an enabler of your critical business processes. If you're intending to build a business that you can take to an IPO or bequeath to your children, you need more than just "cool" software; you need software you can count on day in and day out for five years at a stretch or more.

Algorithm obsolescence. Software algorithms get obsolete all the time, through no fault of anyone. The past couple of years alone have provided some fine examples.

In December 2019, R.A. 11223 (the Universal Health Care Act) increased Philhealth premium contribution requirement. Furthermore, the increases were specified for the period 2019 to 2025, thus forcing a major algorithm change.

Mere months before that - effective April 2019 - SSS Circular No. 2019-005 increased the monthly contribution rates.

And again, before that, R.A. No. 10963 (Train Law) - effective January 2018 - changed the tax schedule.

These are just three relatively recent regulatory changes; but look back further and you'll find very few years have escaped some algorithm change or other imposed by government.

Every new law, every new implementing regulation, contains the potential to disrupt or upend longstanding business practices in many industries - and consequently the computational algorithms in the software that these industries rely on.

Industries are entitled to expect that a software solution provider should respond quickly to these disruptions, by making updated versions available immediately after each big - or small - regulatory change.

Data corruption. What are the specific causes of the data corruption that makes otherwise "good software" useless for the long haul unless underpinned by technical support? The interesting thing is, most of the problems are external to the software itself. So, you can have very good, well-designed software but still be vulnerable. The most common causes are:

1) Viruses. This is well-known and needs no explanation.

2) Electrical fluctuations. This has given birth to a product category designed to compensate for it, the UPS appliance (uninterruptible power supply). But UPSs die, too. Though it looks like a sleek household appliance, a UPS is not; it's more like a car battery, only with less grime. In the Philippine market, it typically has a lead-acid battery inside, which dies in about three years like a car battery, which of course most users never realize. Many keep plugging into a UPS long after its battery has died, and the next time there's a power fluctuation, they get... data corruption.

3) Bad PC hardware components (motherboards, RAM chips, power supplies, etc.). There are two types of bad hardware components: poor-quality branded components that are questionable out of the box, and respectable, conscientiously manufactured components that have simply reached the end of their lives. Either one can damage your hard-earned data.

Of course there is a powerful protective behavior we can all undertake against data corruption; it's called backing up your data. Let's be clear here: anyone who neglects to back up his data deserves all the grief that he's going to get when disaster strikes, plus a smart slap on the back of the head from the security guard at the reception lobby.

Backing up is basic behavior, no question, but back-up disks or flash drives can still get lost. Or get tossed in the washing machine. Or you could be backing up data that's already corrupted. Hence backing up is no guarantee against data corruption.

So, the bottom line is, you'll take your hits eventually, just like the rest of us, even Fortune 500 companies. When that happens, you better have competent technical support you can turn to. Because if you don't, you'll simply have to start again from scratch or go back to manual data processing (we never could understand this except as a gesture of despair).

If you have to restart from scratch, you know that your business operations - perhaps your ability to deliver critical services - will be degraded for a few weeks or months. Is this really an option? Keep in mind, the whole world has already gotten used to seeing you go 100 kph; suddenly you're doing 30?

And that means your image of reliability among your customers and suppliers will fray. And that might result in their becoming more open to, ah, alternative relationships. Like, with your competitors.

What conditions should you look for in order to assure yourself of a decent expectation of reliable technical support?

1) Ideally, the technical support is provided by the company that created the software to begin with. The creator knows the source code, possesses the source code, and therefore knows the product intimately, most relevantly the file and data structures, since these are the very things that have to be fixed after a new republic act or a data corruption episode.

2) Ideally, the application itself already has a large installed base. A large user base means the vendor's tech support department has "seen it all," as it were. Therefore, such an experienced tech support department can get to the heart of the problem fast, without a lot of back and forth and a lot of experimentation.

3) The organization providing tech support is stable, and can be expected to stick around indefinitely, and not vanish when immigration laws suddenly ease in Zambia or Mars, or when a particularly sticky problem emerges (see passage on software robustness below).

4) The software product being supported should be robust to begin with, so that the need for technical support is infrequent, and its causes confined to external circumstances, rather than flaws in the software itself. If disruptions to business operations caused by exogenous variables like viruses and bad hardware are expensive and vexing, then problems caused by bad program code are unforgivable. Unforgivable because they'll introduce you to exquisite tortures that are totally avoidable in the first place - by you refusing to deal with any but truly competent providers. -rsr



Title:   What really makes the world go 'round: love, money... and technical support




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