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President Obama this week made formal the White House Office of Health Reform that he originally announced back in December.  He did so citing:

Reforming the health care system is a key goal of my Administration. The health care system suffers from serious and pervasive problems; access to health care is constrained by high and rising costs; and the quality of care is not consistent and must be improved, in order to improve the health of our citizens and our economic security.

With rising healthcare costs eating into the pocketbooks of most families and 46 million Americans with no healthcare coverage at all the case for reform hardly needed a strong sales pitch from the president.  I dare say each and every American knows at least one person who has struggled to either gain coverage or pay rising medical costs.  The medication costs to treat my daughter’s recent bronchitis would have been almost $1000 had we not had insurance.  These were not high dollar brand name drugs.  Both were 30 day supplies of generic medications.  Thankfully although my husband and I are both self-employed we can afford to buy coverage for our family.  Many other self employed families we know are having to make tough decisions in the economic downturn.

As a long time scholar of healthcare policy I was struck by two themes as I read the Executive Order that created the new Office of Health Reform.  A relatively short 809 works in total but the term quality appeared 8 times and the term efficiency or efficient 3 times.  Quality and efficiency have been missing from our health reform for sometime.  Through the 90’s the theme was to push the recipients out to private healthcare companies for their benefits as a method to control costs.  This resulted in neither increased quality nor efficiency.  It was such a miserable failure it really only resulted in rampant dissatisfaction among beneficiaries and increased costs to the federal and state governments. 

The Bush Administration pretty much ignored health reform.  They gave lip service to the idea by making healthcare more accessible by giving tax deductions to those who were already paying for it but this did not show a linkage to those without coverage suddenly running out to purchases it simply to get back a few dollars on the back side in the form of a deduction.  The reality is that during the Bush Administration (2000-2006) the number of uninsured grew by 22 percent or 8.6 million.  Once full data for the last two years of his presidency is available it is expected to get even worse.

So the Obama Administration has some catch up to do.  Just getting back to 2000 numbers of 37.4 million would be seen as a significant success but Obama’s stated goal of health coverage for every American is tremendously lofty goal.  Coverage for every American that is both high quality and efficient – a modern day miracle.

~Heather Rubesch

When I talk to clients about what their marketing needs are they often ask me to craft white papers when they mean case studies and vice versa.  The confusion is brought on by the interchangeable way some companies view these two powerful business tools.  Here are a few rules I share with my clients to help them keep the two straight:

A White Paper is:

• The presentation of a specific industry problem and a proposed solution
• Sponsored by a company but rarely mentions their actual product by name
• Is meant to read like an article and be persuasive only in that it is a call to action to do something beyond the status quo
• Is typically 6 – 10 pages in length

A Case Study is:

• The presentation of a specific problem and solution encountered by a single customer
• Obvious from the beginning and throughout the company whose product is implemented in the solution
• Reads like an article but has multiple points where contact information for sponsoring company can be reached
• Is typically 4 pages or less.  Most are 2 page front and back.

Used properly both the white paper and the case study are valuable marketing tools.  For example if you draw a prospect to your website with a white paper they want more information how the proposed solution has been implemented in specific industries like theirs it is always helpful to have a set of case studies as supporting documents on your website.

What I caution clients against is writing a white paper that breaks into a case study half way in.  Readers of white papers desire research and background not a sneaky sales pitch halfway through.  If you make the correct and compelling arguments in your white paper then your call to action at the end will lead the prospect to seek that next level of data which in many cases will be your case study.

~Heather Rubesch - originally posted at www.savvyb2bmarketing.com where Heather is a founding contributor

The outrage on the AIG bonuses is giving me a headache.  I share in the disappointment that most taxpayers feel that they are paying out $165 million in bonuses after taking billions from the federal government to even stay in business but the 24 x 7 news coverage of this leaves me wondering  - where is the outrage for the $33.6 billion in Medicaid fraud?

And that $33.6 billion isn’t a one time bonus.  It is a yearly estimate by the GAO.  That is a whopping 10% of the annual spend of Medicaid.  What other entity could sustain such losses and not act immediately.  If retail stores like the GAP lost 10% of its merchandise to theft they would have full body searches of each shopper exiting the store.  A GAO study sites that 14 of the 53 Medicaid entities have no full time research staff trained and working to detect fraud.  14 states and local entities have pretty much just left the barn door open and are turning a blind eye to their share of the $33.6 billion walking out the door.  Of the other 39 are spending on average one-tenth of one percent on fraud detection and prevention.  Those 39 didn’t leave the barn door open but didn’t bother to lock it either. 

So why are we so complacent about Medicaid fraud?

Well I have my theories.  First all Medicaid is paid for in large part (57%) by the Federal Government but that money is handed over to the states for administration.  The States chip in the other 43% of the total $336 billion in annual spending.  The 43% obviously varies in dollar amount by state but on average Medicaid spending accounts for 22% of a State’s budget.  Anyone who has ever worked in at State Medicaid department will tell you it is an administrative behemoth.  Changing even the slightest thing requires a minimum 18 month project and a staff of 12 FTE’s.  Nimble and flexible it is not.

The Federal Government does care where its money is going and they have directed the Centers for Medicaid and Medicare (CMS) to assist the states in modernizing their Medicaid Management Information Systems (MMIS) with a series of transformation grants.  CMS has detailed plan to help states get off old inflexible mainframe systems and onto more modern service oriented architectures but if fraud is not addressed in a significant way in the new systems, we will not see the improvements CMS is paying for.

There are some key components of every MMIS system that can be implemented to work on identifying and recovering fraud dollars.  Data quality queries that can be set up behind the scenes that can help trained data analysts to find the needle in the haystack of fraud.  Geographic information systems can be utilized to trigger when a nursing home patient in Little Rock is being billed by a podiatrist in St Louis. Identify theft of nursing home patients is one of the most common and simplistic frauds.  Maintaining inpatient nursing home status in the eligibility systems could immediately detect and stop such theft.

So rather than calling your Congressman to complain about AIG’s bonus which is a crime but is a drop in the bucket compared to the annual Medicaid fraud fleecing.  Call and tell them you want accountability in Medicaid before we expand the system to include even more beneficiaries.  Tell ‘em the cows are out and until we corral them, we shouldn’t worry about the snakes like AIG.

~Heather Rubesch

Formulating a comprehensive Energy policy is one of three legs of our new President’s strategic footstool. This has been an off-again, on-again thing for the US, ever since OPEC put the hurtins’ on Jimmy Carter in 1973, because of US support for Israel. You’d think we’d have said: “Fool me once, shame on you…”, but, we knew that there is no such thing as Arab solidarity, not for more than a few months, anyway. So we played the game. Worked well for a while. But that’s over now. Take a look at them all now: Putin, Chavez, the Saudis, a lot of angry Nigerians, the Sudanese, Iraq, Yemen. Holy dictatorship, batman, enough already.

So, what does energy really mean to us personally, I mean, how does one connect the dots? The other day I listened to a discussion at UC Berkely on energy and energy strategy and someone said: “If you think $5 per gallon is too expensive, try pushing a car for 20 miles”. We really don’t have a relationship with the magnitude of energy we use or move around.

That got me to thinking: How many times would I have to lift a 10 lb weight to use the equivalent amount of energy that I pay for in my electrical bill? Well, I did the math. 42,000,000 times. My arm would be really tired, and I’d have just enormous biceps. Trouble is, 42,000,000 lifts in one month is a little more than 16 times a second, so I think that’s just not an energy independence strategy. And I only used 520 kwh that month - and - I heat with natural gas.

It’s so easy to flip a switch and just fantastic amounts of energy come surging in at my oblivious disposal. For example, I was oblivious to the fact that 5% of that went into standby power - wasted for no personal benefit to me. I have perpetual power-supplies in my basement - one for the cable, one for the wireless, and one for a small set of security cameras (I live in the city - it helps with the petty crime). So one power supply is like a 60 watt lightbulb, and that’s three. Then I started counting all the other ones I had: it came to 12 total. Every one of the dang electrical thing-a-ma-jigs has one. So that’s 12 x 60 watt lightbulbs, burning 24×7, using 43 kwh - another 9% - for nothing.

Now, on a side note, electrical power is mostly supplied by coal, and that’s a different devil altogether, unless you like a lot of fly-ash and airborne mercury in your soup.

To make a long story short, after I looked at the electrical towel warmer, the electric dryer, the old fridge, the big flat screen tv (LCD), and various other parasitic power consumers, I identified 20% of my monthly power bill was not supporting the quality of my life.

So the customary US American assumptive connection between a high quality of life and increased power consumption is a false one. In fact, Europeans, particularly the Germans, have demonstrated the exact opposite - the pursuit of energy efficiency increases the sophistication and quality of the devices and personal tools we use. An energy efficient house lasts longer, is more massively built, and has a higher resale value that a house that does not feature these things. The Germans have other issues, so this is not a plug for their energy policy, trust me.

It seems to me that the call for a new energy strategy is perfectly analogous to a call for greater personal and industrial productivity - which is the fundamental generator of American wealth. Global warming aside, isn’t that what we’re all about?

Strange bedfellows or a natural alliance?

Ya gotta love the software industry for its constant attempts to reinvent the wheel – and for its alphabet soup.

The timesharing services of the 1960’s and 1970’s gave way to ASPs (application service providers) in the early Internet age. This concept morphed into SaaS (software as a service), or on-demand computing, or S+S (software plus services) as Microsoft calls it. Now CC (cloud computing, a reincarnation of grid computing) and Gartner’s newly-coined SEAP (service-enabled application platforms) have entered the lexicon. Whew!

Whatever term you prefer, SaaS and its brethren are causing fundamental change in the software industry. At its core, SaaS is about moving application power from the desktop to the webtop. It’s also about many ISVs’ desire to sell directly to end users, preferably without a middleman (the dream of disintermediation). For pure-play SaaS vendors and on-premise firms working to add SaaS offerings, could this be the demise of the software channel partner?

SaaS Channel Trends
On the surface, channel partners appear to be threatened by the direct-to-buyer provisioning of SaaS solutions, as installation and upgrades have long been the bread and butter of value-added resellers (VARs). But the numbers tell a different story. Softletter’s 2009 report detailing the practices of 161 SaaS ISVs reveals that 35% already use VARs as one of their sales channels today, and an additional 18% are planning to build this channel in 2009. That would put VAR penetration at over 50% by year end.

Softletter further reports that nearly one in ten (9%) of pure-play SaaS ISVs use resellers as their primary selling means, not just an incremental channel. Underscoring this theme, Jeff Kaplan, managing director of leading SaaS consulting firm THINKstrategies, believes this trend will accelerate in 2009, predicting it may become the “year of the channel” in SaaS.

So much for disintermediation.

What’s Going On Behind These Numbers?
In a white paper entitled Channels 2.0: Delivering and Deploying On-Demand Solutions, David Thomas of FAQTORS admits that “the old distrust and fears of the channel partners have bubbled back up to the surface” with the advent of on-demand solutions, reversing the equanimity that was gained over the years in traditional on-premise software marketing. While this initial reaction is a step backward in channel relations, there is ample evidence that channels not only have a role to play in SaaS delivery, but a vital one at that.

Traditionally, channels have provided consulting, installation, upgrades and training in the software space. But with SaaS, “installation, elements of deployment, and upgrades are eliminated by the on-demand model,” according to FAQTORS’ Thomas. Nonetheless, most of the deployment (in the form of configuration), specialized training, and need for vertical expertise remains. This is good news for astute channel partners, and an important tenet for SaaS ISVs to understand.

The Role of the Channel
The heart of the channel’s value proposition is their closeness to customers, and this attribute will always have a place in successful software marketing. In a recent webinar hosted by OpSource, a web operations provider for SaaS companies, guest speaker Mr. Thomas outlined how customer intimacy plays out in five key roles in the on-demand channel:

1. Trusted advisor. Channel entities have the customer’s ear, industry experience, veto power over application selection, and an established customer base.
2. Systems integrator. The channel is in a great position to integrate SaaS applications with legacy systems, configure new deployments and consult with the end-user to successfully incorporate the new application in practice.
3. Domain expert. Vertical specialists are best able to understand specific industry requirements, and can help customers mold the SaaS application for ultimate value in their environment.
4. Feet-on-the-Street. Local VARs are able to conduct most of the face-to-face sales, training and support. And yes, personal connections still matter in spite of today’s wired world.
5. Business Process Outsourcer. Many consulting firms are now operating key business processes on behalf of their clients. This provides the SaaS ISV with access to an existing client base, high customer retention and an efficient concentration of multi-customer service.

Your Bottom Line
The changing role of the channel has many implications to the SaaS ISV, from channel-friendly product design to partner program revisions to your overall go-to-market strategy.

Is all this effort worth it? It is if you want to claim your share of the 40% SaaS industry growth forecast in 2009 by IDC. In an otherwise shrinking economy, that should be enough justification to get your partner strategy right!

Tom Kuder, Founder and Principal, Entente    Original article (and more) at www.entente1.com

There is a new buzz at the cocktail parties and water coolers these days and for once it has nothing to do with reality TV or the Academy Awards.  Now that Congress has passed the $789 billion stimulus plan IT entrepreneurs and sales people all over the country are on the hunt to follow that money.  Reminds me a little bit like the plot line of It’s a Mad, Mad, Mad, Mad World with the pairs of people careening around the country looking for buried treasure.  So where is this buried treasure?  In our version of the mad cap scramble our clues come from likes of Nancy Pelosi who lacks comedic timing but the prize we are after is far more generous than $350,000.

The final version of the bill appears to have:

$21 billion for electronic healthcare record creation

$6.5 billion for broadband expansion

$3 billion for Defense Department infrastructure modernization

$1 billion for General Services Administration infrastructure modernization

$1 billion for Health and Human Services infrastructure modernization

$700 million to Transportation Security Administration to upgrade baggage screening

$500 million to Social Security Administration for infrastructure and modernization

$100 million to the State Department for infrastructure and modernization

$100 million to Customs and Border Protection to improve port security inspection

Roughly $34 billion in spending that all have big technology implications and opportunities.  Plus let’s not forget the $54 billion in aid to the states when they will all spend on various infrastructure projects that will have technology implications.

 So how do you get the dough?  You need a solution that solves one of the problems these agencies need assistance with.  The largest piece of the pie – the $21 billion for electronic health records is going to go mostly to providers of healthcare.  Technology companies and their partners who can demonstrate success and stability in that space are going to have significant growth opportunities.

The key thing to keep in mind when selling to B2G is that government employees are less worried about ROI and more worried about stability.  They want to see your case studies, your track record, and your testimonials.  That is why government RFP’s are always the worst to complete.  They actually want you to prove you know what you are doing.  This is where good white papers with compelling business solutions targeted to the government sector are critical.  Just because you solved a problem at XYZ enterprises doesn’t mean you understand the Department of Defense’s problems.  You have to demonstrate you have an understanding for their unique pains and are prepared to stick with them long term. 

~Heather Rubesch

While googling my way through the internet this week I ran across an article on www.marketingprofs.com by Terry Welty called Five Essentials for Marketing Technology in a Down Economy.  You can read it here:

http://www.marketingprofs.com/3/welty1.asp?sp=1

Intrigued I clicked and read the article assuming it was a current assessment of 2009 economic woes.  While this article could have easily been written yesterday, it wasn’t.  The article was originally published in Nov 2003.  I strained my brain to recall 2003 and what had changed since then.

            I am sure the economy seemed bad to Welty in 2003.  I did a quick check of the DJI that week and it sat just north of 9750 the week the article was published.  Modern day technology trends like Blogs and Web 2.0 were then just in their infancy as techniques in the software sales space.  Software as a Service was an emerging technology having first been advocated in a white paper in Feb 2001.  Oh and what of that technology marketing phenomenon the white paper?  According to Michael Stelzner’s book Writing White Papers, a google search of the phrase “white paper” in 2001 returned a mere 1 million responses.  I just tried it and got 88,600,000 results.

            So while I give props to Welty and his desire to help technology sales and marketing pros of the earlier down economy.  I think it is time we give a modern review to his five essentials as it is definitely time for some new rules!

Welty #1 Know your company’s real value

It is important to have a value proposition as Welty discusses in the article but is perhaps even more important to have long haul case studies that prove it.  It is one thing to have a case study with a customer who has been using your tools for 6 months or less who gives a testimonial that it solved all their problems.  It is quite another thing to stay in touch, build the account management relationships and help your customers document the values 3 to 5 years into the implementation.  Then have compelling white papers written that give evidence to the research and documentation you have given to your value proposition.

Welty #2 Know your customer

Welty is spot on in this one.  Industry verticalization is key.  When the customer asks the subtle questions that really mean “Do you understand my business?” your every step need to echo that you do.  Your marketing materials, website, elevator pitch needs to say “I made this product just for you”.  If you don’t have in-house industry expertise – find it.  Industry analysts, retired executives, former operational managers from large players in the industry are all great places to begin.  Start with your standard marketing materials and get someone from the industry to proofread and tell you where the terminology is going to alienate.  A few well places industry terms and examples can give you a lot of credibility.

You need people in your organization who are attending the major industry trade shows.  Who are watching legislation that affects those industries, who are blogging about issues so that your website becomes a place customers look for information even when they aren’t buying from you.  You become a trusted advisor in their industry not by buying the biggest booth at the trade show but by becoming a credible source of information and demonstrating an understanding of their unique pains.

Welty #3 Keep your salespeople well informed, well educated and well armed

I have spent significant periods of my career around two unique but similar populations of professionals.  I supported fighter pilots and software sales people in two different phases of my professional career for about a decade each.  I won’t bore you with war stories from either front but I will tell you I believe both are most successful when they have:

• Significant training for the specific environment in which they are maneuvering
• Daily briefs with nuggets of information they can take into the mission with them
• Ground crew and wingman support positioned just at arms length
• A debrief with lessons learned shared among all on in the squadron

Both groups are seasoned and dedicated professionals who while they typically operate alone can simply not win the battle in a vacuum.  All the ground intelligence that you can provide going into the mission with conditions, opposition strength and appropriate fire power can give both groups the ultimate advantage towards success.

Welty #4 Stay consistently visible

Viral marketing is the best way to stay visible.  Get your name and presence where you customers are going to look for information.  White papers, articles, analyst reports are all ideal for this.  Constantly google the words of your customers pain point.  Terms like “reduce customer churn” or “single customer view”, “straight through processing” or “prevent network breaches”.  If your website or a white paper or an abstract from a tradeshow about your company isn’t in the first page of search results – fix it.  You might not be the biggest player in the space but if your name is the one they always see associated with credible information in that particular space, then you become the go to player.

Welty #5 Keep it simple

Welty’s 5^th point reminds me of a scene from the movie Say Anything.  Lloyd Dobler, kickboxing loner, gets the “it” girl from his high school to go out with him on a date.  A dorky guy approaches Lloyd at a party and asks him how he was able to score a date with Diane Court.  Lloyd simply replies “I asked her”.  The dorky guy mutters to himself as Lloyd walks away “he asked her”.

A great many technology companies are like that dorky guy.  They assume their competition knows or does something they simply can’t do.  If you don’t take the time to find out what the prospect really wants and intently listening to their concerns then you don’t have a prayer of being the solution.  Do your homework on the industry, the value proposition and the message and then ask for the date.

~Heather Rubesch