Good ideas are ten-a-penny! Great Ideas are one-a-penny! Great Ideas that you can successfully implement are “Worth Their Weight in Gold!”

It is a great idea to have an egg for breakfast. They are high in protein, highly nutritious and, contrary to popular belief, are not bad for your cholesterol levels. However, without the skill and ability to implement your great idea i.e. “cook the egg” you just have a raw egg on a plate.

If in business you want to avoid getting egg on your face, then you need a certain level of expertise to execute. What I mean by “expertise” in this article is, “been there done that and have learnt from my mistakes”. Such a person has the “know-how” the expertise and, most importantly, the skill to implement. It is difficult to quantify how valuable this ability is in business, but I would guess if you had a level of expertise where you could just “plug-in” whenever you needed it, then you would be running not only a profitable business but a highly valued business as well.

Learning from others in business is probably one of the reasons why business biography books are still so popular. The majority are hardly edge of the seat “page turners” but they do pass on practical and useful lessons from people on the front line.

The analogy that comes to mind is; if you have ever put together some self assembly furniture without instructions, how much easier it is to assemble the second time. If you are like me, even if it does have instructions it makes little difference as I don’t read them anyway. I have been told it’s a male thing.

Having access to an executive with that first hand “know how” is just like assembling furniture for the second time. They know the short cuts and where to avoid the pitfalls, based upon practical first hand experience. The end result - they can get the job done, more quickly, at lower cost and with a better output.

Daniel Defoe (1660-1731) the author of “Robinson Crusoe” once wrote:

“Set sail with a mariner who has been shipwrecked many times, for he surely will know where the reefs are”

I am working from memory with the above quotation, as I could not find any reference to it on the internet. If you know the exact wording please do let me know.

I understand the sentiment of the above quotation, however, I must confess to a certain feeling of trepidation if my mariner has been shipwrecked too many times, as he may be some sort of a Jonah or just a totally incompetent sailor. Did they have kamikaze sailors?

Business is complex and it won’t be any less complex any time soon. The range of skills required to run a business successfully is many and varied. The time we have to learn new skills is constantly decreasing as the pace of business increases. The rate of consistent change is the only constant. For the small to medium sized organisation it is not always possible or viable to have that experience “in-house” on a full time basis. However, the value of being able to access specific vertical market expertise on a “plug-in” , ‘as and when’ basis could be highly valuable for the learning curve and growth of any company in our sector.

Running a business can be a daunting task. Too often, working in the business instead of working on the business means that you lose a certain level of objectivity. That is when outside help can be useful. Taking a close look at all aspects of your business with a new perspective can yield a better business. Firstly, in diagnosing areas of the business that need prioritising for special attention and secondly, in bringing in the right level of expertise to quickly help fix the problem. A “doer” not a pontificator. - If they have the right level of experience and knowledge. What you don’t want is the “expert” who borrows your watch and then tells you the time as they wave goodbye, only stopping long enough to hand you their invoice. You need first hand, front liners who have the battle scars to prove they’ve won their ‘spurs’ who are willing to roll their sleeves up and take action.

Good ideas are ten a penny. Ask any VC. I know individual VC’s that have 30 business plans land on their desk every week. Many of these hardly touch down before continuing their flight straight to the waste paper basket. Getting the execution right is where the rubber hits the road. Get that right and you can keep the egg off your face and replace it with a nutritious breakfast.

The Time of the Small Giants

I think the time has finally come for the (smart) small and mid-sized companies within the ECM technology sector. As I have mentioned in previous blog posts, there have been some significant changes in this industry. The number of companies that are easily seen, what I call the “tip of the iceberg” companies, have now been reduced via acquisition. This now leaves the vastly unseen smaller companies that lurk beneath the surface and for the most part do not reach the light of the media attention.

Obviously, the other significant event in the past few months has been the big “R” word - RECESSION. The only good thing about the swine flu was that it took the media attention away from the big “R”. It was probably also a good thing for face mask manufacturers, have you ever seen so many face masks. I understand that some international flights have been looking like a surgeon’s convention.

How can we not be aware of the recession when every retailer is using the recession as a theme for their marketing. It seems that we can’t buy a packet of crisps without being told that eating these crisps will be an antidote for the “recession blues”. Or recession proof your grocery bill by shopping with “X”.

The recession has however hit some companies hard and they need an antidote which is unlikely to come out of a packet of crisps. Companies such as IBM have assessed the damage that the recession has made to their balance sheet and are looking towards new growth opportunities.

Mark Loughridge, chief financial officer of IBM. "I go through a deal review every week," he recently told Reuters. The current environment provides a "fertile" hunting ground for acquisitions, he added.
Ari Balogh, Chief Technology Officer of Yahoo believes that current tech valuations are "amazing" when compared with their levels just a few months ago. “It's a good time to be buying now," Balogh told Reuters. Yahoo is in the process of acquiring some new companies. "I can guarantee you there will be some acquisitions," he said.

The second part of this year is expected to show an increase in the number of acquisitions and for the ECM sector this will undoubtedly involve the small to midsized companies in this market.
This could create many new opportunities and some of the more profitable smaller companies could gain considerable attention. However, in order to be a small giant they need to ensure that they are prepared for what the next 18 months is likely to bring.

Potential acquirers will often look at a business in a completely different way than existing management of the smaller companies in the ECM sector. By the time a company board decides that they are open to being acquired there are often many inbuilt issues with their business which stop maximum shareholder value being achieved. Some of the problems can also scare away “good fit” acquirers from a “Smart Acquisition” or merger.

Part of any good ‘due diligence’ process is looking at the weaknesses and risks associated with a business and deciding, is it an acceptable and mitigated risk?
The problem for management is that by the time, the acquisition process is commenced it is too late to fix these problems. If these can be identified early, many of the risks can be mitigated & built into a company’s business strategy. This is something that I will be banging on endlessly about over the next few weeks as Document Boss prepares to launch a new service that addresses this and many other closely related issues to the above. The factors that effect equity value are often not aspects of the business that can be changed in a matter of a few months. Historical data about the business also greatly effects value not just what is happening NOW!

Transparent attempts to increase profitability by cutting short term costs and the expense of long term success just prior to an acquisition are all to obvious. Such companies need to start thinking and behaving like a small giant well in advance of any M&A activity if they want to achieve GIANT returns. There may never be a better time for the smaller companies in our sector to shine but only if they learn to walk and talk like the big boys!

“You Should Always be Grooming Your Business for Sale Even When it is not “FOR SALE”

If you are not constantly "grooming" your business to be sold then you have already sold it. To yourself! And guess what? You have probably bought a dud!

The idea that the company should constantly be grooming itself to be sold, even when the prospect of selling the company may not be on the agenda, is, I believe, a very good one.

How does an outside assessment of your business make you feel?
Imagine for a moment that an outside expert from the same industry will tomorrow be given access to scrutinise all aspects of your company. Imagine that the expert who will be arriving at your door is of above average intelligence, will not miss anything and will not be bamboozled by clever sales talk by way of explanation. All they will see are the facts! When you assure them that you have a clearly defined and communicated sales process, yet when questioned, your sales people cannot articulate, follow or even describe this process that you say is ingrained within your company, then everything will be laid bare for them to see. How does that thought make you feel? Having the unbiased outsider delve deep within your company?

How about if you had the magic to make time stand still for six months whilst you made the changes to your business? What would you do first? What would you change?When time starts running again, what difference would the changes you made make to the future operation of your business? Would you make more profit or less? Would your business life be more or less stressful? “

You Should Always be Grooming Your Business for Sale Even When it is not “FOR SALE”
However, the reality is that none of us has the magic ability to stop time, allowing ourselves the freedom to operate in a time vacuum whilst we “sort out” the business.

The difference between knowledge and wisdom: The first is ‘knowing’ or ‘being aware’, the second, WISDOM, is doing something about what you know! By the way, those same changes you planned to make while time stood still, will probably be those that make the business easier to manage, more efficient and potentially, more profitable as well.

Many of us have the “Knowledge” to know what needs changing but it is action that counts. Knowledge is great, but action is greater. Sounding smart will never be an effective substitute for doing something smart within your company to make it stronger, more effective and valuable.
Fast decisive ACTION. Not “SMART” talk, meetings and reports! To make changes in your business you need to work quickly and only measure progress through actions taken; not just talk and decisions. Simply making a decision will not change anything. Meetings and reports should not be defined as action.

You need leaders who have previous, hands on experience of this type of work and the credibility to take the lead. Having such people on the payroll is not always an option for SME’s. The highly experienced executives will not necessarily be attracted to your company. Those that you need most will probably not find you attractive as a full-time employer. However, working for a few days alongside an internal executive so that their hands on experience can be passed on, could be an option in a “Rent a Talent” scheme.

You need to CHANGE what you do to get different RESULTS!
To create a more valuable business than you have done historically, will not only require different actions but may require you to have a different mindset. Doing what you have always done will give you what you have always got! In order to build the value of your business you need to:

• Attract TALENT (Full-time. Part-time and Interim)
• Have ACTIVE partners Be CONNECTED to Centres of INFLUENCE
• Have a CLEAR USP and VALUE Proposition
• Have DEFINED, Internal Business Processes that MEASURE ONLY what really MATTERS
• Have ACCESS to COST EFFECTIVE KNOW-HOW and KNOWLEDGE that RESULTS in tangible ACTION
• Have a STRATEGY to DELIVER value to your Shareholders
• Have an END GAME GOAL that points your whole TEAM in the SAME Direction
• Finally, and most importantly, have a strategy and mechanism for MAXIMISING your trade sale value

To get the above, don’t fall into the trap of expensive consultant “Smart Talk”, Fancy Presentations and Complex Diagrams from pure analyst academics, who have never been on the front line, which result in little effective ACTION and even fewer results. You need to see action and results and you need to move quickly, taking the simplest route. To maximise your chance of success you need real world, front line, hands on experience from executives who are doers and not just talkers who you know will get the job done.

How would you like a whole team of such people waiting in the wings for when you need them most? How would you like this team to have specific experience from the same sector as you? Would the prospect of "Renting a Talent" to manage a specific project or quickly solve a problem within your organisation be attractive and useful to you?

If you have an area of your business that you know requires strengthening I would be eager to discuss some possible solutions.

The Captain of any ship knows the danger of seeing just “The Tip of the Iceberg”

So Open Text have bagged Vignette and the last large, independent ECM player is about to melt away!

Is that good news or bad news for the industry?

For the industry analysts it is probably bad news, since the small visible tip of the industry that they viewed (and most other industry "experts") has just got smaller.

Is that good news or bad news?

If you’re a senior executive in this industry, managing an ECM, EDM, BPM or document centric BPO company and you have previously used these "experts" to keep you informed, perhaps setting your future strategy by their analysis, I suppose that could give you some cause for concern. Their analysis will now be even more skewed and extrapolated.

Is that good news or bad news?

Actually, I think the fact that the pontificating, crystal ball gazers will now be rightly exposed as talking eloquently out of their "hulls" for the past few years is actually a very good thing! There are many good executives in this industry who don't need the "Mystic Megs" to create a profitable company. They especially do not need experts who see just the tip of the iceberg and, based upon such a limited overview, extrapolate theories for where this industry is heading.

In the same way that the Captain of the Titanic got his bearings wrong, it is just as likely that the crystal ball gazers have too. The most annoying thing is that they are selling something based on what will happen in the future and is consequently, hard to challenge. How many analysts are held to account for their reports of five or ten years ago?

“It says here in your report that this industry would be worth $450 billion by now. Well where is it? Can I have my money back please? By the way, don’t let the door hit your backside on your way out!”

There is a lot more life left in this industry and I suspect that we are about to enter probably one of the most exciting stages for this technology sector. New companies are now free to emerge above the waterline as the new shining vessels of success. There will be a lot more acquisitions but not of the size we have seen in the past, until we start to see some multiple acquisition roll-ups.

What is evident to just a few, is the real size of this industry, globally. What has been seen by the many is just the tip of the iceberg. The few big players, sitting proud above the waves, attracting the attention of the analysts and the media. That tip has now melted away to just a few now!
What has previously only been appreciated by just the few, is what lies beneath the glare of the bright sun of publicity. Innovation is there and thriving. Technology, talent and passion that, with the right nurturing, will make it into the sunlight.

The time has come for the entrepreneurs from the SME's to make their way to the surface. (Note to self: I may be carrying this analogy too far now) There is a lot of talent, innovation, value and not an inconsequential amount of profit, hidden away in the companies that have been lurking in the shadows below. This is where the new stars of the industry will arise from. The business world has changed and it will continue to change at an every increasing pace. The big boys can disappear quickly in one brief storm and new players can quickly rise to prominence, due to increased access to information and better communication.

The ECM iceberg has not melted away as the crystal ball gazers had predicted, it has just disappeared from THEIR view. The weight is below the waterline.

Is that a good thing or a bad thing? Who knows? Personally, I can't wait to find out! Good Bye Mystic Meg and let's bring on the party. This is when the fun really starts for those that can see below the Plimsoll line.

If you would like to come diving below the waves and find out what potential treasures are hidden below for your company, please get in contact.

Open Text to Acquire Vignette

It was announced today that Open Text will acquire Vignette. They have entered into a definitive agreement pursuant to which Vignette will become a wholly owned subsidiary of Open Text. Vignette shareholders will receive US $8.00 in cash plus 0.1447 of an Open Text common share for every Vignette common share which equates to approximately US $12.70 at close of market on May 5, 2009. This represents a premium of approximately 74% above the 30 trading day average closing price of Vignette's shares and approximately 41% above the most recent closing price. This values the transaction at approximately US $310 million.

John Shackleton, President and Chief Executive Officer of Open Text, stated, "The combination of Vignette with Open Text will extend the breadth of our offerings and further Open Text's positioning as the leading independent ECM vendor in the marketplace."

"Vignette's customers represent some of the world's most powerful online brands and we are excited about the opportunity to expand the relationship with these customers and partners," said Shackleton.

"After a thorough evaluation of strategic and financial alternatives, the Vignette Board of Directors believes that today's announcement provides attractive value for our shareholders," said Mike Aviles, President and Chief Executive Officer of Vignette. "Our shareholders, customers, partners and employees will all benefit as Vignette combines with Open Text."
"Joining Open Text builds on our commitment to deliver the most innovative solutions for our customers and partners. Vignette has an enviable customer base, deep expertise in Web Content Management (WCM) and global distribution capabilities. Vignette customers will benefit from Open Text's expanded ECM solutions portfolio as well as their Vignette products being supported by the world's largest independent ECM solutions provider," said Aviles.

Vignette is based in Austin, Texas, and has approximately 700 employees. The transaction is expected to close in the second half of calendar 2009 and is subject to customary closing conditions, including approval by Vignette's shareholders, Hart-Scott-Rodino anti-trust clearance, Securities and Exchange Commission clearance and stock exchange approvals.

First Comment:
Vignette’s bleeding stopped today when Open Text announced its intent to acquire the troubled company. The handwriting has been on the wall for a long time as Vignette’s 2008 results were very poor, down almost 30%. Several years ago Vignette did a reverse 1 for 10 stock split, which foreshadowed their doom.

This acquisition continued Open Text’s spending spree and intent to acquire some big players in the market. Open Text have paid approximately just 2X revenue, (1 X revenue if you substract the $150M cash Vignette were sitting on) which is low considering it's size and prominence, and is in part due to Vignettes lack of profitability. This is in comparison to a 9% operating margin for Open Text so they need to make some economies to avoid diluting their own profitability. This should be achievable once they have made some cost cuts. It does give Open Text access to Vignette's customer base but from a technology viewpoint there is a lot of overlap. They do however, gain a java based portal product which could value to their offering. Maybe they are also looking to improve their maintenance stream and at the same time create a $1 billion dollar ECM powerhouse. Being the biggest "specialist" fish in the pond has in the past shown a good return for companies.


The key question will be; can the whole be greater than the sum of its disparate parts? Can also these separate pieces build into a cohesive offering suite and can they make sufficient cuts to make the business profitable. My guess is that they will.

Flash, Burn & Crash!

Acquisitions, like moths to a naked flame!

Too much to do, too much information to absorb and so too little time in which to do it! How many senior managers have spare time and would relish yet another time absorbing project to be dumped on their desk?

The real answer is actually, quite a high percentage - if you mention the magic word “acquisition”. Talk of acquisitions will attract the attention of company managers like a moths to a flame. In the same way that a naked flame can be deadly for the moth so too, can time consuming, attention grabbing acquisitions prove to be just as deadly for senior executives.

Add on the extra work of an acquisition and many top managers will be spreading their time too thinly. Acquisitions have almost a magical quality to attract attention and use up management time which results in them neglecting their core business.

The problem of lack of time has never been so acute a problem as it is today; the business world and the rate of change, moves at an ever increasing pace. Senior managers must, more than ever, keep their eye firmly on the ball when it comes to managing their business. This is not a recessional issue and as a consequence it will not go away. In fact, it will become more and more of an issue. The old saying that, “The only thing that is constant is change”, is so true but, with the ever increasing pace of change, we now have a new dynamic. The business landscape now changes faster and more often than at any time in the history of mankind. If you don’t believe me then watch this video. http://tinyurl.com/ctlacf I am sure that, as I did, you will find it thought provoking.

If management is allowed to become defocused from the core business, it is, in effect, throttling back on the engine that drives a company forward. More than ever before this will have a negative effect on personal effectiveness and company results.

Buying the competition, adding new vertical expertise, market share, technology, expertise, global spread, increased revenue / profit or an established brand name could all pay dividends, especially when the recession cycle has ended and the economy picks up again, as it inevitably will. The real question is how do you make the acquisition work? Loss of revenue momentum is one reason why so many mergers fail to create value for shareholders. Just as importantly, how do you make the acquisition work, whilst battling current economic challenges and without harming your existing business?

In a time of global opportunities, fast paced technological developments and an ever faster-changing economic landscape, perhaps, if I may be so bold to suggest, you need an M&A partner who will not defocus your company management time and perhaps bring you the previously unknown and the pleasantly unexpected from what was previously the unattainable.

If you would like to discuss acquisition strategy or possible opportunities in this sector, please contact me direct for any of the regions we cover - North America, Continental Europe, United Kingdom or Asia Pac, via email mark at documentboss.com

SUN set or SUN rise for SUN Microsystems

Due to the media speculation about IBM acquiring Sun Microsystems many crystal ball gazers were surprised (even if they don't admit it) when it was announced that Oracle will acquire Sun later this summer. Oracle have agreed to pay $7.4B at $9.40 for each share which when subtract the cash and money owed to Sun means a true acquisition price of $5.6B. Enough money to bail out a few banks!

Many analysts said that Sun would fail to find another buyer after talks with IBM broke down. Then within days they were proved wrong. A few raised eyebrows at first as Oracle were not commonly predicted and then some nods of approval as the synergy was realised. Sun's Solaris operating system is the leading platform for Oracles database software. Sun also makes "middleware," which allows business computing applications to work together. Oracle's middleware is built on Sun's Java language and software, so there is a fit but many elements of Sun and Oracle’s businesses are quite different from each other.

Outside of IT the mergers and acquisitions the trend has been for large conglomerates to split up their products and services. To spin them off or sell so that they can focus upon their "core competencies" on the whole this has been reasonably successful. However, within IT the trend seems to moving generally the other way.

However, can the same management make a success of the future? Is this a rising or setting sun we see before us?