Economy

Paying Down the US Debt

I don’t use this blog to make political statements, but being a researcher at heart and using data every day, I couldn’t resist sharing a few data points from a short video a friend of mine sent me. The video was produced by an organization called Government Gone Wild and the title is, “Brother, Can You Spare a Trillion?” (As a registered Independent, I don’t subscribe to this or any political organization, but watch it here if you are interested http://governmentgonewild.org/brothercanyouspareatrillion ).
I’ve learned through my research efforts that specific numbers make much more of an impact on the psyche than generalities. So, per the video, did you know?
·         The United States spent $413 billion in interest payments last year
·         Since 1988 the total spent in interest payments has been $8 trillion. That’s a bigger number than many of us can comprehend. Just to put it in some context, it would be enough to buy every citizen in the US a Lotus Evora (luxury sports) car.
·         The Congressional Budget Office predicts by 2021 (just 10 years away), interest payments will be $1.1 trillion a year, which is more than one and a half times what we spend on defence.
·         If our Congress stopped ALL spending today and starting paying down the debt at a rate of $100 million per day, it would take 389 years to pay it off.
No, there is no easy answer.
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Have you heard of the “he-recovery?”

While I mostly keep up with news online, once in a while I like to be nostalgic and watch world news on TV. Last night I managed to catch the news on ABC and learned a new term – the “he-recovery.” As Diane Sawyer said, “The race is on for jobs” and men are definitely winning over women. While during the recession men lost twice as many jobs as women, now the tables are turned. According to ABC, of the 1.3 million jobs gained in the recovery, 1.1 million (that’s 90%) have gone to men and 113,000 (10%) to women.
Why is that?
Some of it has to do with the kind of jobs that have been created through stimulus efforts… think construction and transportation in which women only make up a small percentage of the workforce (13% women in construction and 5% in transportation – also according to ABC). But even in retail, which has traditionally been dominated by female workers, men have gained 100,000 jobs while women have lost 100,000. Others that were interviewed in the segment last night also hypothesized that men were given more jobs because they needed them more as the traditional breadwinner of the family. Yet women are the chief breadwinners of 40% of households in the US. Hmmmm.
I’ve officially been in the workforce for 36 years, and I had summer and part time jobs (sometimes more than one) while I was in school for 7 years before that.  During that time I would venture to say that I’ve seen it all.  I’ve been associated with some male-dominated environments, and others that are not so much. My first job out of college was working for a manufacturing company. There were plenty of women, but one other woman and I were the only two that were salaried and managers. Later I worked for a software company started by a woman who was then the president and CEO. I had plenty of women peers but I carried the title of Manufacturing Consultant (or a Manager of that same position) and I looked about 18 years old (I was in my 30’s). I knew when I went into a company for the first time I had about 37 seconds to prove my credibility or they would write me off. Nobody wrote me off.
I went to college in the early 70’s, during the height of the feminist movement, but I have never been much of a feminist. I always just concentrated on getting the job done and expected to be paid fairly for it.  But I have also worked for companies where I experienced a glass ceiling in spite of the fact that I am damn good at what I do. This tended to be where the “old boys’ network” was firmly in place, but I have experienced a “young boys’ network” as well. Same result, but it hurt more.
The bottom line is there is still a gender gap. A different ABC news segment also reported that the amount women earn (as compared to men) had increased by two cents over the past year. That’s the good news. The bad news is that means women (in aggregate) still earn $.81 for every $1 earned by men in similar positions in spite of the fact that women are now as well-educated as men. There is always speculation about why that is. Men tend not to interrupt careers for babies, but then fewer and fewer women today do any more. Some point to personality differences, but let’s face it, women are not all alike just as men are not all alike.
I do however think that women in general need to be assertive, not aggressive and younger women need more female role models and mentors. I’ve done my part through the years in working for corporations mentoring both men and women. As I start my own company, I start down a new and different path – one that by definition has no ceiling at all, glass or otherwise. Any women out there in need of coaching and support, give me a shout (cindy@mintjutras.com) .
For those that would like to listen to the ABC news segment….
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Infor announces hiring plans along with Q3 software license growth of 17%

This morning  Infor announced it will expand its engineering organization by hiring approximately 400 additional software developers and plans to add significantly more new features and releases this year than ever before.  Reinforcing, the strategy shift away from building middleware, all these new hires will be focused on building business applications.
This signals an increase in investment in product development under the leadership of the new management team put in place by Charles Phillips who took over as CEO, bumping Jim Schaper to chairman of the board.  Infor also announced license growth of 17% and increased cash operating margins of 24% (which includes Infor and Softbrands Q3FY11 results over Q3 of Fiscal Year 2010). Infor added 400 net new customers last quarter. This is an important statistic since we have witnessed slowed growth of ERP solution providers, coupled with the downturn in the economy over the last two plus years. Indeed, Infor’s customer count has hovered around 70,000 for the past five years, ever since the acquisition of SSA Global, Systems Union and Extensity in August 2006. Since then, new customer growth has compensated for attrition, but has not moved the needle significantly.
New releases, standards based integration through Infor’s new ION platform, and planned changes to a new and universal user interface are all necessary components in order for Infor to break out this year and grow that number, especially if it wants to grow organically, as well as through acquisition. This announcement comes just days after the new of the proposed bid to acquire Lawson by Infor and its major investor Golden Gate Capital. Clearly Infor management wants to send the message that while acquisitions are likely in the near future, organic growth is also important.  
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Plex Systems grows while others stall

I’ve been watching Plex Systems now for about 5 years. It is one of the bigger small ERP solution providers. Not being one of “the big guys” you might not have heard of them. But if you are a manufacturing company in search of an ERP solution, the company is one you might want to get to know – that is if you are either in active search for or are at least willing to consider SaaS ERP. Because that is all they offer. Unlike some of the new entrants into the SaaS ERP market, “as a service” is the only way Plex delivers its solution. But also unlike these new entrants, Plex has been serving up SaaS ERP for more than 10 years.
How and why they began offering a SaaS deployment model for ERP long before it was “hot” is an interesting aside. Plex’s founder didn’t go looking for SaaS. He was an advocate and a pioneer of rapid application development and he was looking for a way to deliver new enhancements at an equally rapid pace. SaaS was his answer. But SaaS presented an obstacle to selling in its early days, particularly in selling ERP. When I was at Aberdeen and first started following the SaaS ERP market I called ERP “the last bastion of resistance” to SaaS and openly questioned whether it was a chicken or egg kind of problem. Were companies unwilling to consider SaaS ERP because there weren’t many options back then or were there not many options because people weren’t willing to consider it?
That’s a moot point today because the barriers are starting to break down and there are more options to choose from. But interestingly enough, one of the reasons software vendors were unwilling to offer SaaS models was because of the subscription-based pricing that now seems so appealing to both software suppliers and consumers of software. In an era when budgets were cut and credit was tight, accounting for the purchase as an operating expense instead of a capital expense was (and still is) very appealing.
However, making a move from selling on-premise solutions to SaaS has some immediate impact on fiscal reporting. When you sell an on-premise license, you get a bunch of money up front. The on-going maintenance is of course a recurring revenue stream, but that nice chunk up front was pretty hard to give up and if the software supplier gave up too much of that too quickly, revenues would also take a hit. If you were a public company that could very well be a hit you couldn’t afford to take.
You might think that Plex System dodged that bullet by offering a SaaS solution throughout the last 10 years. But in reality, the company didn’t always price their solution as SaaS. In the early days, prospects bought Plex in spite of its being SaaS, not because of it. In order to counter this and remove one obstacle, Plex priced it just like an on-premise solution. In fact it was quite a creative answer to a problem, but it did leave money on the table. That revenue leakage was something they knew they would eventually have to plug up. And they did. Several years ago they made the switch to more traditional (for SaaS) subscription-based pricing but they were smart enough to do it while they were (and are) still a private company and didn’t have Wall Street breathing down their necks.
They not only survived and thrived through that transition, but they are now very actively growing. During a year when most ERP solution providers struggled with a downturn during the first half of the year (some started to see growth in the second half), Plex saw substantial growth. They not only added 54 new employees (they now have 175 so the percentage growth is even more impressive) but they grew revenues by 27% and software sales subscriptions by 26%.
How did they do that? While they may still be a relatively small ERP solution provider, their solution is anything BUT small. I lost count of the number of modules they offered long ago – suffice to say it is a lot and quite complete. It also dives deeper into the shop floor than the typical ERP solution and they have particular strength in automotive. Not surprising because in their early days much of their selling was done locally in and around Auburn Hills, Michigan.  But today their strength pushes well beyond automotive to food processing, medical devices, aerospace/defense, industrial and consumer products. Part of the reason for the impressive footprint is the approach to rapid application development that drove them to SaaS in the first place.
The other significant factor is their very engaged installed base of customers. Enhancement of the product is driven entirely by customer and prospect requests and innovation is delivered every day. So in one way, everything is customized. But in another way, nothing is customized, because all enhancements are added to the product in such a way that the customer opts in to turning them on.
Mark Symonds, CEO of Plex Systems sees this growth continuing through 2011, with specific opportunity arising within the food-and-beverage industry because of the new federal food safety laws. Compliance and traceability has been part of the Plex DNA from the beginning and should position the company well in this new era of requirements and regulations.
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