If your business is looking for a better way to communicate, Session Initiation Protocol (SIP) may be the answer. SIP, a signaling protocol, can improve voice and video over Internet Protocol, video conferencing and file transfers. And best of all, it can spell substantial savings for a business compared to traditional phone lines, says Anton Loon, director of enterprise sales at PowerNet Global.
“When a company uses SIP technology instead of traditional phone lines, it can move much more quickly and at a lower cost,” Loon says. “SIP solutions are available for businesses of all sizes, from a small company that needs only one line with local and long distance for about $20 per month, all the way to corporations that have large call centers that operate 24/7.”
Smart Business spoke with Loon about how companies might benefit from implementing a SIP solution.
What is the primary difference between a SIP solution and traditional call routing?
A traditional time-division multiplexing (TDM) system uses physical switches to route calls. SIP uses IP routing, which provides a company’s employees with a much easier way to connect with each other, as well as the outside world.
SIP is not a new technology, so why have companies only recently begun to adopt it?
In 1994, IT managers knew that ‘AT&T worked’ in the telecom industry. If a business switched to another company and there were mistakes as a result, that IT manager’s head was on the line.
It’s been the same with SIP over the last few years. IT directors and managers have been leery about making the switch to this technology because, as with most things in life, change is scary. However, the technology has now progressed to the point that the cost savings are just too good for a business to pass up.
How can SIP improve a corporation’s flexibility and efficiency?
In terms of flexibility, a business can have the service up and running within 24 hours of requesting it. For example, a construction company can add trailers to various job sites and have phone service at those sites within a day.
The same holds true if a business moves to a new location. With a traditional system, you would typically have to wait 30 to 45 days for the new phone lines to be operational.
With a SIP solution, you can move around and operate anywhere in the world. SIP also provides flexibility for call center operations, because you can launch a new operation within days. For businesses like telemarketing centers, this means you can start selling more quickly.
In terms of efficiency, choosing a SIP solution will eliminate the 30- to 45-day waiting period required to implement a TDM system, as well as all the time that is required to coordinate the effort between all parties.
What are the three most important things that companies need to know about SIP technology?
First, that it works. There is no reason to fear this technology.
Second, it’s scalable. This is important because it allows you to start small to test the waters in order to get comfortable with the technology. It also allows you to ramp up for a larger call volume at any given time without having to add equipment to handle the increase. For example, if you want to launch a new outbound calling campaign tomorrow, you can do that. It also goes the other way, in that you can cut back on the number of phone lines servicing your company if business slows down. There’s a misperception that SIP is fraught with quality issues, but that is not the case. In our experience, there are no more service tickets with SIP than there are with traditional TDM systems.
Finally, the technology is here to stay, and it will only get better and more robust as time goes on. Another common misconception about SIP is that it’s the future, but it’s not. It’s here now, and it’s not going anywhere.
How is SIP being used practically in businesses?
A good example is a company in the health care industry. Their patients have to call in to confirm appointments and get verification of their medications. Obviously, this is a critical operation. One company had a TDM system and was dealing with high costs and quality issues. Then it switched to a more cost-effective SIP solution with a redundant platform. Now if it has problems with one of its carriers, it can signal to another platform. In total, it can toggle back and forth among three platforms to avoid outages.
How can a SIP solution help companies better manage remote employees?
Remote employees have become more commonplace today — not just salespeople, but call center employees, as well. SIP solutions improve productivity by enabling remote workers to quickly and easily access the company network.
In addition, sophisticated reporting tools such as hosted PBX solutions are available that can help managers monitor the number of sales calls being made, to whom they are being made, when and at what cost per call.
Anton Loon is director of enterprise sales at PowerNet Global. Reach him at (866) 764-7329.
Insights Technology is brought to you by PowerNet Global
If you’re seeking a business loan, chances are you’re going to have some covenants written into the loan agreement.
“Covenants are basically additional terms in a loan agreement, usually to set financial guidelines for a company,” says Mike Dalton, vice president of commercial lending at National Bank and Trust. “I would expect that more than 99 percent of all loan agreements have covenants of some sort. You can pretty much count on a loan having covenants about collecting financial information.”
Smart Business spoke to Dalton about loan agreements and what business owners need to know about covenants.
What are some typical covenants?
Probably the most common are financial statements — requiring that the borrower provide annual tax returns, monthly operating statements in the form of balance sheets and income statements. A covenant that the borrower provides the lender with up-to-date financial information is very commonplace and put on virtually every loan.
Beyond that, a cash flow covenant of some sort is common. This can be measured in a number of different ways, but the covenant basically says that the company needs to maintain, whatever its debt service is, a certain percentage of that debt service over and above through profits and/or after distributions. Outside of the financials, common covenants involve current ratios and leverage ratios, whether debt to asset or debt to equity.
Are covenants solely to protect a bank’s interests, or do they provide any benefits for borrowers, as well?
It’s really mutually beneficial. From a bank’s standpoint, it is risk management, and loaning money is managing the risk of getting that money back. But covenants are certainly guidelines that are going to make a company healthier and are going to help a company potentially weather a down economy or a bad contract it took a loss on. If covenants make sure the business is maintaining appropriate liquidity ratios, they will help the company get through a bad situation. While the bank sets them, covenants are certainly a benefit to the borrower, as well. These are elements that can keep a company healthy and viable through a potential downturn.
Do business owners usually negotiate covenants, or do they use consultants?
It’s probably 50/50, depending on the size of the business. With a smaller, mom-and-pop operation, it’s likely going to be strictly a conversation between the bank and the business owners. When you get into larger companies, it’s not uncommon to have a CPA involved. Potential borrowers are always encouraged to consult with their CPAs.
Are banks dictating terms, or is there a give and take?
I would say they’re somewhat negotiated items. Ninety-plus percent of the time, it’s just a normal conversation sitting across the desk from a business owner and discussing a loan request, identifying strengths and weaknesses, and coming to a mutual agreement on rates, terms, etc., that are acceptable to both parties.
What happens if a covenant is not met?
There is some kind of penalty. It could be a one-time fee or a higher interest rate until that covenant is corrected.
Typically, it’s an interest rate bump — if a business has missed the covenant, the interest rate goes up by 1 percent, 2 percent or 3 percent until the business gets back into compliance with the covenant. If the borrower drops below its current ratio covenant, you’ve got a company that doesn’t have the appropriate amount of liquidity, so the bank’s risk goes up. Therefore, the rates are raised an appropriate amount. Loan rates, especially in commercial lending, are priced based on risk — the lower the risk, the lower the rate. Another way it’s done is a one-time fee where the bank says, ‘We’re going to measure this covenant at year-end, and if you miss it, we’re going to assess a penalty of a certain amount of dollars.’
If the interest rate can go up, is there anything a borrower can do that would lower its rate?
Anything that lessens the bank’s risk is going to lessen the rate. The borrower could provide additional collateral. If it has an acceptable current ratio now, could it ask, ‘If I increase my current ratio above this, can I get a lower rate?’ Sure.
Other than covenants, is there anything else business owners need to understand about loan agreements?
A loan note itself, other than the covenant section, is 90 percent boilerplate. The bank fills in a few blanks as far as loan amount, interest rate and payment amount, but the overwhelming percentage of a loan agreement is boilerplate legalities. They’re pretty standard; most banks use one particular software system. It’s a two-page note and the second page of the note is identical on every loan and goes over definitions of how the bank calculates interest, what makes a default and what remedies the bank has to collect on the loan in the event of a default. That’s the boilerplate section.
Mike Dalton is vice president of commercial lending at National Bank and Trust. Reach him at (937) 382-1441 or firstname.lastname@example.org.
Insights Banking & Finance is brought to you by National Bank & Trust
Throughout Ohio, there are companies and organizations that are developing a wide range of innovative solutions to meet energy challenges. In turn, the state has many great assets that lend themselves to the energy industry and help create ways to improve energy resources or provide ideas on how to develop new ones.
As a way to bring together companies, researchers and supply chain manufacturers across Ohio to share ideas for developing innovative, advanced energy technologies and capitalize on common synergies for future business opportunities, NorTech held its Advanced Energy B2B 2012 Conference & Expo Oct. 30 and 31.
“The whole reason that we’re interested in holding this event is to promote the idea of building collaborations and partnerships among our cluster companies,” says Dave Karpinski, vice president of NorTech and director of NorTech Energy Enterprise. “That guides our programming, the design of our event and our target audience.”
The event last year was a mix of discussions on energy sectors and potential growth areas within Ohio such as solar, energy storage and fuel cells, smart grid, biomass, waste streams and energy efficiency, as well as trade show exhibit space.
One of the things new this year was a panel of some of the major projects going on in Ohio from a renewable, advanced energy standpoint.
“The purpose was to give the attendees a sense for the breadth of projects that are going on and where they’re being deployed in different parts of the state,” Karpinski says. “It was a good lesson about matching the technologies with the resources in our state to be able to generate renewable and advanced energy based on our renewable portfolio standard.”
What provided an even more exciting opportunity for economic development are all the products and solutions that can be generated, developed, manufactured here and not only used in Ohio but also exported around the country and around the world.
“If you think about energy and advanced energy, all of these systems are massive, large-scale, durable, good processes with lots of manufacturing, materials and components,” he says. “That’s what we are strong at in Ohio.
“We’re coupling our research and development strengths with our ability to make these things and produce these processes, systems, battery solutions, fuel cells, etc., to have an impact here.”
NorTech also tries to generate local demand for these products in the state so the companies developing these solutions have local customers to work with as they develop and perfect them.
“It’s much more productive if your developing, manufacturing and deploying systems are close by,” he says. “That will make you more competitive as you scale up and export around the world.”
This work surrounding collaboration and partnerships with energy companies is part of what NorTech calls road mapping.
“That process helps us identify where we think we have strengths in the region, what the companies are in these clusters and what the competitive picture looks like against other regions,” Karpinski says. “Then we work with these companies to come up with a game plan for cluster growth.”
One cluster NorTech is excited about surrounds two companies that convert waste plastics or waste polymers back into crude oil. The technology, as oil prices have increased over the years, has become more attractive and viable.
“They’re relatively small output … so there is a little bit of a challenge to get the attention from buyers of oil for really small sources like this,” he says.
NorTech is working with a couple of its companies in the cluster on federal advocacy efforts to open up this waste stream to qualify as renewable fuel for the country’s federal renewable fuel standard.
NorTech is also working with Quasar Energy Group, which produces a technology called anaerobic digesters that take biomass waste and, through a biological process, generate methane.
The methane can be compressed, cleaned and used as compressed natural gas for transportation applications as an alternative to gasoline or diesel fuel.
“One of the challenges that they had was getting equipment for these dispensing stations,” Karpinski says.
Because Quasar didn’t want to be experts in CNG dispensing systems but wanted somebody that could work with them that could develop that, NorTech partnered the company with South Shore Controls.
“We identified that need and have a project ongoing with Quasar and South Shore Controls and are working with our partner Magnet to help design the appropriate piece of equipment such that South Shore could be the manufacturer for Quasar,” he says.
Through these kinds of efforts and the information being shared during events such as the Advanced Energy B2B 2012 Conference & Expo, companies are getting help to achieve their growth targets.
“We hope it will stimulate some interest in working in some of these companies and provide chances for collaboration,” Karpinski says. ?
It was late 2008 when Ross Bushman and his team had just finished a new strategy for the next five years of business at Cast-Fab Technologies Inc. Bushman, who is president and CEO, along with his team were excited about the new strategy that was put in place and what it could mean for the company.
However, just a few months later, 2009 began and the castings and fabrication industry was hit hard by the recession. Cast-Fab Technologies, a 280-employee, $50 million gray and ductile iron foundry that supplies castings, patterns, steel-welded fabrications and precision sheet metal components, lost nearly half its business virtually overnight.
“We went through some hellacious turmoil in our industry, to say the least, back in that 2009 time frame,” Bushman says. “It was a period of about five or six months where a lot of that drop occurred. It wasn’t that we just lost 30 or 40 percent of the business in one day. We didn’t lose any customers. What we lost was our customers weren’t buying anything and that was different.”
With its customers taking a break from business, Bushman and Cast-Fab had to look elsewhere to keep business going.
“We knew we had to stay strong, make some painful choices early on, and we didn’t procrastinate on them,” he says. “We knew there would be opportunities to pounce on.”
To take advantage of those potential opportunities, Bushman stuck to the company’s plan, reassured employees that things would be all right with hard work and new customers would be found through diversifying the business.
Here is how he carried Cast-Fab Technologies through the downturn.
Involve employees in your strategy
The recession caused panic in a number of businesses as individual industries began to see the effects of the economy. Bushman, however, wasn’t going to let panic set in at Cast-Fab — he communicated what the organization was going to do.
“Our people were going home every night and the news was not good,” Bushman says. “Everybody had a friend, a neighbor or a family member affected somehow by the economy.
“People need clarity and every day we were out there trying to talk about those things and we kept talking to them about reaffirming America’s manufacturing excellence. That was what we were after.”
To achieve manufacturing excellence Cast-Fab aimed to diversify the customer base, establish new customer relationships and continue to grow with current accounts. To put that plan in motion Bushman involved many people in the strategic planning process.
“You have to involve a lot of folks in the organization,” he says. “People are usually pretty surprised at how much different kind of numbers and things we are sharing even down to key shop-floor personnel. Team members need clarity. They need the ‘what’ and the ‘how.’”
Deciding who to include in the strategic planning process can be a difficult decision. A good strategy group involves people from different levels and experience.
“We certainly have the key managers involved, but we’re also looking out for those up-and-coming associates who are going to be the key folks five or 10 years from now and getting them to be part of the process,” Bushman says. “At the end of the day, these folks own the plan — the strategy map and the numbers on the scorecard and what specific metrics we are doing — they are intimately involved in developing those things with us.”
You want to pull in folks who are on a track to do some bigger and better things for your company down the road.
“That just helps with the breadth of opinion,” he says. “In the C-suite, we all can get blinders on at times and forget that information isn’t assimilated through the organization as much as it comes to you. That’s why your players need clarity — the ‘what’ and the ‘how’ — and you have to communicate those things.
“The toughest part that any organization has is getting an outside force’s perspective of what’s coming at you and trying to look at where things are going to be five or 10 years from now and what you need to be doing today to get there. That’s where some of those outside folks can help challenge you.”
People are usually surprised at how many folks Cast-Fab involves in its strategic planning process.
“We have around 280 folks today and we’ll take 25 or 30 people off-site to really be part of this process and really help map the future of the organization,” Bushman says. “They then own the plan and they believe in the words and the numbers that are on the page. It’s not just me or my brother sitting up there talking about those things and that’s really worked well.”
Having all of those people in the room to help form a plan is extremely beneficial when it comes to gaining buy-in for a new direction.
“I talk to our folks and tell them, ‘This is your chance to write the script for the next four or five years for the organization,’” Bushman says. “It’s not just me standing up there going over the same old charts and numbers. We’ve really created some good alignment within the organization as far as goals. We’re getting people pulling in the same direction.”
To get your company on the same page and moving together, it takes patience and persistence. Bushman has identified the five dysfunctions of team training to get his employees in line.
“You have to be willing to get better and not just go through the motions,” he says. “Sometimes to get better you’ve got to have some conflict and some change. So we’ve used the five dysfunctions of a team training, which talks about dealing with issues in a professional way. Sometimes it’s not fun, but we’ve spent a lot of time getting the right people that fit together.”
When you’re trying to get buy-in for a new strategy or direction for the company, it is rare that you will please everyone, but it is critical that you get a majority on board with you.
“You have to keep working your strategy so it becomes ingrained in what you do,” Bushman says. “My dad told me years ago that if you got even 70 percent of your workforce on board, buying in to what you were doing, that’s probably world class. You’re probably not going to have everybody, you just have to keep getting some converts each day, each week, each year to what you’re trying to do and you’ll slowly move the needle.
“An 80 percent solution executed on time is better than a 100 percent solution executed late. It may not be perfect, but start the plan and start it working and work on the implementation phase. It’s about getting a little bit better each day as opposed to giant leaps.”
To move forward with a plan each day and each week, you have to put emphasis on the implementation of your strategy.
“Too often people go through a huge strategic planning process, they come out with a great plan, but they spent months and months doing it, and at that point, people are exhausted,” he says. “When the work needs to begin on the implementation side, it fizzles out a little bit.
“We really shortened the time on the strategic planning side and we really focused on the implementation. On the implementation side is really where plans are won or lost and strategies are won or lost.”
Following Cast-Fab’s strategic planning process in 2008, the economy tanked and implementing a plan and sticking to it became more important than ever.
“One of the principles and beliefs that I use is that decisions in crisis demand calm leadership,” Bushman says. “We really knew that and really communicated as best we could with the organization.”
Bushman used that calm, yet determined demeanor to steer the company in a positive direction. With current customers putting business on hold, Cast-Fab looked to gain new business. It brought on new clients and diversified its offerings.
“We knew there would be some opportunities in the marketplace and there were,” he says. “We continued to use our strategy, and we continued to look at where we wanted to go and that’s how we made our decisions. We made some painful cuts at the time, there’s no doubt about it, but we were proactive with those. We didn’t wait too long.
“We really saw where things were heading pretty quickly and that allowed us to stay strong in many ways.”
The opportunities Bushman communicated to his employees came up in time. Cast-Fab made an acquisition and gained business from competitor demise.
“We had our most successful year that year of new customer generation,” he says. “We really needed to, because our current customers weren’t buying anything. I knew if we could get some more spokes into the fold once the current markets came back we’d be in pretty good shape.”
Throughout this period, Bushman made it a point to stay as positive as possible and celebrate any small wins the company made.
“You have to spend a lot of time talking about the positives, not just the negatives,” he says. “People think you have your plan and you come in and talk about the stuff that’s not going very well.
“We try to celebrate success, because how boring would that be to just come in and talk about the problems all the time. We try to spend three times the amount of time on the positives as we do on the opportunities for improvement.”
Some of those positives have come from the new product offerings that Cast-Fab has created over the years in order to diversify.
“Part of the strategy that has been working really well for us is we have developed a couple of product lines of our own to help us diversify,” Bushman says. “We have a line of bank equipment products that’s sold under the business and brand Security Systems Equipment. We do safes, vaults, safety deposit boxes, pneumatic tubing systems and anything that a credit union or financial institution may need that’s metal-based.
“We have another smaller division that does products for water and waste water treatment. That business is sold under the name Coldwall Wilcox Technologies. These are subsidiaries of Cast-Fab that are a smaller piece of what we do, but they do help us diversify.”
The key to diversifying to help grow your business is to not leave the core competency of your business behind.
“You can’t stray from your core competencies,” he says. “Ten years ago, we didn’t know anything about bank equipment, but we knew how to make fabricated product. An opportunity came up to make an acquisition there, and we did that.
“Eight years ago, we didn’t know much about the products in water and waste water treatment other than they used a lot of castings and fabrications, machining and assembly. We had to learn how to sell some of those products and establish ourselves in those markets, but at the end of the day, we know what we do here in this building pretty well, and we’ve never strayed far from that.”
By sticking to a strategy of following core values and diversifying the business, Bushman has led Cast-Fab into new realms of business. He plans to continue that growth.
“As a family business, we don’t want to be doing this just for one or two more years; we want to be doing this for 30 years and beyond and get it over at some point maybe to a third generation,” he says. “So we’re trying to do those things and make those decisions now for the long haul.” <<
How to reach: Cast-Fab Technologies Inc., (513) 758-1000 or www.cast-fab.com
Utilize employees from different levels in your strategic planning.
Continue to work your plan as you gain buy-in.
Diversify by using core competencies.
The Bushman File
President and CEO
Cast-Fab Technologies Inc.
Education: Attended Miami University in Oxford, Ohio and received a productions and operations management degree. He also received an MBA from the University of Cincinnati.
What was your first job and what did you learn from that experience?
My very first job was at Carlisle Construction. It was a heavy equipment construction company that rented cranes, dump trucks, etc. I was the guy who swept the gas pumps, worked in the truck wash and steam-cleaned the engines so the maintenance group could work on them. It was a pretty good experience for a 14-year-old learning different stuff. I learned how different people dealt with conflict.
What is some of the best advice you have received?
My dad taught me years ago that pigs get fat and hogs get slaughtered. We use that a lot here when we’re talking about relationships with OEMs that we’re trying to establish for the long term. So when we’re in negotiations or doing pricing we’re talking about getting a fair return for what we’re doing to be able to sustain and grow the business, but at the same time we’re not looking for just one sale or a home run. We want to be able to do this for the long haul with them.
Whom do you admire most in business?
My dad taught me most of what I know. He’s been my hero in life. I was also part of a mentoring group here in town several years back with a fairly famous local business guy, Bob Kohlhepp. He is the chairman of the board over at Cintas and has been a great mentor to me and taught me a lot as well.
What are you most proud of at Cast-Fab?
I would have to say it was some of the work we did for the military. We did things on both sides of our business, ranging from ductile iron bomb bodies to some of the fabrications for the MRAP vehicles. A lot of our stuff isn’t necessarily seen when it is in use somewhere. It’s part of a machine or inside the guts of a machine, but when you can point to something that our folks are doing to help out our troops overseas, that’s pretty special to us.
Do you have to start your company in that “trendy” city, or is your hometown just fine?
When Cincom was founded in 1968 in Cincinnati, there was no Silicon Valley. No one questioned why we founded the company in an area that might not be considered “trendy” for the software industry because it was just beginning.
As I was deciding to leave IBM, Tom Richley and Claude Bogardus and I looked around at the landscape of the city and found that there wasn’t a software presence in Cincinnati. I’m a Cincinnati boy. I grew up here. I have an undergraduate and graduate degree from the University of Cincinnati. This is a great city — so we decided to focus our efforts on serving clients here.
Looking back from a logistics and marketing opportunity standpoint, we probably could not have picked a better city to be in than Cincinnati.
Since there weren’t many alternative software employers nearby, Cincom was able to get the best and brightest employees who wanted to work in the industry and remain local. It was easier to recruit top graduates from local universities, and we were able to invest heavily in our people because we knew we were all dedicated and committed to our company.
And the cost of living is tremendously favorable compared with places such as New York or Silicon Valley.
It also made sense in terms of geographical location. We could be in Detroit, St. Louis, Pittsburgh and Cleveland within an hour and Atlanta in an hour and a half by flight. We could easily drive to Lexington, Louisville, Columbus and Indianapolis.
This so-called “rust belt” had a heavy concentration of early clients. We were no more than an hour and a half away from maybe 70 to 80 percent of the manufacturing industry.
Even when we expanded to Europe, the Concorde allowed us the opportunity of express travel to our offices and clients abroad.
Of course, there were some disadvantages to being located in Cincinnati, too. Early on, a lot of marketing and promotion of the software industry began to centralize around Boston with some magazines and consulting and industry adviser groups located there — a lot of them still have a presence in the city. It seemed, to us, that these groups heavily promoted the Northeastern-based software firms.
The same thing happened when software companies sprang up in Silicon Valley as the media, consultancy groups and attention concentrated on covering the firms in that area.
Cincinnati has never received that same kind of attention for software, which has been a liability for us in the past. However, this became less of an issue as more work began to happen online.
With today’s technologies, it is not as important to be located in the trendy city for your industry. Companies can compete from anywhere because they can connect with customers from anywhere.
Location, location, location
If you’re thinking of founding a company or expanding a business, it’s important to think of three things. Where will you be happy? What are the unseen advantages of this location? And are the perceived disadvantages surmountable?
As I said before, I’m a Cincinnati boy, and I know that this is a great city to raise a family so I knew we would be happy here. Even today, the advantages of being headquartered in the Midwest are great for our customers and prospects for reasons that a lot of people might not think about.
We’ve found that we can counteract the disadvantages of not being as exposed to traditional media and analysts by having a dedicated team of professionals focused on self-publishing and getting our name out there even though we aren’t located in the trendy area.
So is Cincinnati perfect for Cincom? Not quite, but it’s close and I know that in my opinion, and the opinion of many who work for Cincom, it is the right city to be in. <<
Thomas M. Nies is the founder and CEO of Cincom Systems, Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, healthcare and insurance. Visit tomnies.cincom.com/about/.
Across the country, every business continues to look for ways to save money and reduce operational expenses in order to reinvest in their people, technology and other business practices. Workers’ compensation premiums are one operational expense that may be reduced if your organization has implemented safe work practices and adopted claims management best practice techniques.
“If you are an employer in Ohio, there are many solutions available to you for discounted workers’ compensation premium. Group Rating remains one of the best programs available as a solution for your company with high discounts and program compatibility options,” says John Logue, vice president at CompManagement, Inc.
Smart Business spoke with Logue about why every employer in Ohio should review options for workers’ compensation discounts regardless of size.
What is Group Rating and why should my organization participate?
The Ohio Bureau of Workers’ Compensation (BWC) designed Group Rating in the early 1990s as an incentive program for those employers who establish and maintain safe working conditions. Employers with a better-than-average safety record and little if any claim costs pay at or below the base premium rates established by the BWC. The BWC looks at the group of employers and adjusts the rates as if the group was one big company, thus potentially giving employers much lower premium rates than they could attain on their own. Discounts typically range between 15 percent and the maximum discount available from BWC, which for policy year 2013 is 53 percent for private employers.
How are groups formed?
Third-party administrators (TPAs) that represent sponsoring organizations, such as trade associations and chambers of commerce, review an employer’s experience (current year and past four years). Once the employer has signed a Temporary Authorization to review their information, the TPA will review both the employer’s claim costs and payroll. Group participation is a year-to-year enrollment. If the employer’s experience meets the sponsor’s guidelines for the policy year, then they are invited to participate in the program. Many employers are already members of trade associations or chambers of commerce in their community, so it is worthwhile to investigate whether or not it includes this member benefit.
If eligible for Group Rating, what other programs should my organization consider?
While participating in Group Rating, an employer may also earn additional discounts through Destination Excellence, Drug Free Safety Program and Safety Council, to name a few. Some of these programs include elements of things companies are already doing today, such as making payments online, paying on time, being active in local safety councils and reducing the frequency/severity of claims, and establishing drug-free workplace policies. An employer should contact the group sponsor’s program administrator to evaluate the multiple options and discount percentages allowed, as well as be informed of the different eligibility requirements and expectations to be met for continued participation in the programs.
How is the group savings projection calculated?
Group savings will differ between sponsor programs with those with larger groups offering more stability and accuracy in projected savings. It is very important to make sure that your organization provides the most current payroll information and any future budget impacts when comparing quotes between sponsoring organizations, as payroll, claim costs and industry are major factors in determining the premium for your organization.
An example of the potential savings for a mid-sized service company:
• Payroll — $3,990,000
• Individual discount — 16 percent
• Individual premium — $14,683
• Group discount — 53 percent
• Group premium — $9,632
• Group savings — $5,051
John Logue is vice president at CompManagement, Inc. Reach him at (800) 825-6755, ext 6574 or John.Logue@sedgwickcms.com.
Save the date: Group Rating enrollment for private employers ends Feb. 28 for the 2013 policy year
Insights Workers’ Compensation is brought to you by CompManagement
Businesses give back to the community for many reasons: social responsibility, brand enhancement or just because it feels good. For Clark-Theders Insurance Agency, community involvement is all these things, but it’s also a key to attracting star employees and keeping them engaged.
“For me and my predecessors, doing community service as a teenager was something you usually did when you were in trouble,” says Jonathan Theders, president of Clark-Theders Insurance Agency Inc. “Now, community service hours are often part of the high school curriculum. It’s much more societal. I was just talking to a recruiter of the younger generation — Generation Y and younger, the millennials — and how a company interacts with the community and its presence on social media are the two top criteria for how they choose an employer.”
Smart Business spoke with Theders about how to set up a community outreach program.
How do you decide what kind of community service program to create?
When we started our CTIA Cares program, we looked at it from two perspectives. First, you have to determine what to give. You can give time or money, or both. Your company may be so lean that you can’t give time to your employees, so you just write the check. Other people can’t write the check, but they can give the time to their employees to volunteer once a week, or once a month or once a year.
From there, there are two ways to go. Do you want your program to have one mission, focused on one initiative like The United Way or American Cancer Society? If you put all your resources toward one initiative you can have a big financial or physical impact on that organization.
Or, do you want each employee to have the opportunity to give to something that is personal to him or her? For instance, if you love the arts, you may want to pour your energy into the arts. The person sitting next to you may want to pour his or her heart into animal rescue. You won’t have as grand an impact, but it will be a more personalized impact.
At Clark-Theders, we chose the individual route, but neither is right nor wrong. Using our example, the CTIA Cares program gives each employee 30 hours a year to donate to nonprofits of his or her choice. Then, we focus our efforts on quarterly service projects in four different service areas to help the community, in addition to the hours given individually.
How do you make that work with your business?
If they do their volunteering on the weekends, we comp them time during the week. If they do it during the week, we allow them that time off. Realizing we still have a business to run, employees must fill out a document stating how many hours they will work and when. Human Resources then has to sign off on it because our company has to be staffed appropriately, and the charity signs off that they worked the time. Also, it is a great way to gauge your community impact. For us, our only criterion is that their chosen charity organization must be a 501(c)(3) nonprofit.
What are the benefits from a business perspective?
You can gain increased revenue and customer loyalty. The company’s involvement in the community drives brand awareness. People who see you as good stewards of the community are more likely to do business with you.
There are also personal gains for your employees, from improved interpersonal skills and self-esteem to better knowledge of social issues. I have seen the positive experiences it has had on our team over the years, which has also impacted our workplace culture. Our clients, co-workers and the community are very appreciative and take notice of our program. It was a great business decision that continues to reap rewards.
Jonathan Theders is president at Clark-Theders Insurance Agency Inc. Reach him at (513) 779-2800 or email@example.com. Connect with him on LinkedIn at www.linkedin.com/in/theders/.
Insights Business Insurance is brought to you by Clark-Theders Insurance Agency Inc.
Empathy is the ability to experience and relate to the thoughts, emotions or experience of others. Empathy is more than simple sympathy, which is being able to understand and support others with compassion or sensitivity.
Simply put, empathy is the ability to step into someone else's shoes, be aware of their feelings and understand their needs.
In the workplace, empathy can show a deep respect for co-workers and show that you care, as opposed to just going by rules and regulations. An empathic leadership style can make everyone feel like a team and increase productivity, morale and loyalty. Empathy is a powerful tool in the leadership belt of a well-liked and respected executive.
We could all take a lesson from nurses about being empathetic. Time and again, nurses rate as the most trusted profession. Why? Because they use proper empathy to make patients feel cared for and safe.
Over the years I have discovered that most people who score high on assessments for empathy have no idea why. They do not completely understand what it is they actually do that makes others see them as empathetic. They can only express that they:
- Like people.
- Enjoy working with and helping others.
- Value people as individuals.
In order to facilitate a deeper understanding of the importance of empathy in the workplace, I will pose four questions regarding the nature, role and benefits of empathy.
1. Why does it matter for us to understand the needs of others?
By understanding others we develop closer relationships.
The radar of every good executive just went off when they read the word “relationships.” This is not a bad thing since most people understand the problems that happen when improper relationships are developed in the workplace.
This being said, the baby cannot be thrown out with the bath water. In order for a team of workers and their leaders to work powerfully together, proper relationships must be built and deepened.
When this happens through empathy, trust is built in the team. When trust is built, good things begin to happen.
2. What traits/behaviors distinguish someone as empathetic?
Empathy requires three things: listening, openness and understanding.
Empathetic people listen attentively to what you’re telling them, putting their complete focus on the person in front of them and not getting easily distracted. They spend more time listening than talking because they want to understand the difficulties others face, all of which helps to give those around them the feeling of being heard and recognized.
Empathetic executives and managers realize that the bottom line of any business is only reached through and with people. Therefore, they have an attitude of openness towards and understanding of the feelings and emotions of their team members.
3. What role does empathy play in the workplace? Why does it matter?
When we understand our team, we have a better idea of the challenges ahead of us.
To drive home the above point, further consider these:
- Empathy allows us to feel safe with our failures because we won’t simply be blamed for them.
- It encourages leaders to understand the root cause behind poor performance.
- Being empathetic allows leaders to help struggling employees improve and excel.
Empathy plays a major role in the workplace for every organization that will deal with failures, poor performance and employees who truly want to succeed. As leaders, our role is simple—deal empathetically with our team and watch them build a strong and prosperous organization.
4. So why aren’t we being more empathetic at work?
Empathy takes work.
- Demonstrating empathy takes time and effort to show awareness and understanding.
- It’s not always easy to understand why an employee thinks or feels the way they do about a situation.
- It means putting others ahead of yourself, which can be a challenge in today’s competitive workplace.
- Many organizations are focused on achieving goals no matter what the cost to employees.
Each of these reasons can be seen as true.
Let me ask a question though: What distinguishes average to mediocre leaders from those who excel?
In my opinion, the distinction comes through the ability of the leader who actively works against all the so-called “reasons” and incorporates an attitude of empathy throughout his or her organization. That type of leader will excel.
By spending more time learning about the needs of their employees, leaders can set the tone and approach taken by their employees to achieve their organization’s goals.
When writing about empathy I am reminded of the famous quote from Theodore Roosevelt:
“Nobody cares how much you know until they know how much you care.”
This is a truth that has long stood the test of time. It is true for our relationships in and out of the workplace.
DeLores Pressley, motivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She helps individuals utilize personal power, increase confidence and live a life of significance. Her story has been touted in The Washington Post, Black Enterprise, First for Women, Essence, New York Daily News, Ebony and Marie Claire. She is a frequent media guest and has been interviewed on every major network – ABC, NBC, CBS and FOX – including America’s top rated shows OPRAH and Entertainment Tonight.
She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” To book her as a speaker or coach, contact her office at 330.649.9809 or via email firstname.lastname@example.org or visit her website at www.delorespressley.com.
Roadblocks abound in business. Most business owners have been told, “No, we won’t fund your great invention.” Most executives have been told, “We’re not ready yet” to enter that wide-open, new market. But how they respond to those obstacles, the “no”s that are inevitable, is often a good indicator of who will ultimately succeed.
The first step is to step back and assess the causes of the opposition. That likely requires asking probing questions to get insight about the reasons and reasoning behind the rejection. The banker who rejected your idea may have valuable insight into your industry sector, information that could affect how you choose to proceed.
While data gathering, also probe for guidance on how to make your proposal stronger, when to re-pitch your proposal and who else may have decision-making or decision-influencing authority. The goal should be to identify possible avenues for future appeals.
Armed with the new information, it’s useful to then take a look back at where you are in relation to your goals for the project. Review and celebrate your successes. It will give you the energy to continue onward. But measuring your results, as well as who helped you accomplish the past results, also may shed light on who may be able to guide or assist you in your next steps.
Now, modify your strategy. Every rejection should be viewed as an opportunity to improve. Your planned adjustments should be listed and scheduled. Then, as you progress in making changes, you will be able to see your accomplishments and have a record of how you responded to different scenarios for future reference. It also will give you a clear return on investment in time and energy spent and keep you centered on progress.
Patricia Adams is the CEO of Zeitgeist Expressions and the author of “ABCs of Change: Three Building Blocks to Happy Relationships.” In 2011, she was named one of Ernst & Young LLP’s Entrepreneurial Winning Women, one of Enterprising Women Magazine’s Enterprising Women of the Year Award and the SBA’s Small Business Person of the Year for Region VI. Her company, Zeitgeist Wellness Group, offers a full-service Employee Assistance Program to businesses in the San Antonio region. For more information, visit www.zwgroup.net.
There are many pressures on organizations to make the most out of every customer interaction and maximize the return on investment on marketing and sales spend. However, businesses often don’t have the work force necessary to handle these functions as timely and effectively as they would like or the tools and processes in place to measure and track success. Companies that are able to track interaction, engagement, investments and customer patterns and behaviors often enlist the help of a customer relationship management (CRM) tool.
“A CRM tool helps businesses manage sales, marketing and customer service operations without significantly expanding their work force,” says Gina Rosen, a consultant at Columbus. “CRM, in the past, may have been nice to have — a luxury technology, but in today’s marketplace, it’s a must have to stay competitive.”
Smart Business spoke with Rosen about CRM, its applications and how it has helped businesses improve processes to better engage customers, target sales and gauge marketing effectiveness.
What are the typical features offered by a CRM system?
The features offered by CRM are very diverse. It’s primary applications are contact management; marketing automation; sales force automation; sales and lead management; reporting and analytics; call center and case management, particularly with respect to customer inquiries or complaints; workflow automation, or automating manual processes; and social media integrations. Businesses have the option for on-premise solutions where the software is hosted at the business on its servers, or they can utilize a Web-based or cloud option, which involves less initial financial investment. The software can also be customized to meet the particular needs of a business.
Is CRM cost prohibitive for businesses?
No it is not, however, had this question been asked six or seven years ago the answer would have been yes. Previously, enterprise-ready CRM software required significant funds to get the software and hardware in place. But with the advent of cloud-based solutions, even businesses run by a sole proprietor can afford CRM and leverage its applications to optimize processes. The cloud-based model allows business owners to pay through subscriptions that charge per user. The pay per user cloud-based model offers a low-cost opportunity to implement CRM, experience the value and see the return on investment (ROI).
What are the most compelling reasons an organization would implement CRM technology?
A recent survey of 200 top-performing small and medium-sized businesses showed that the number one reason businesses implement CRM software is to establish data-based metrics for sales and marketing. It also provides the ability to show ROI and quantitative key marketing metrics that mean a lot to businesses.
The second reason CRM is implemented is to proactively communicate with customers. Customers expect a lot these days, and one of those expectations is that businesses, whether small or large, interact with them. To stay in front of your customers and offer personal interaction is critical.
Within that same vein, the third reason companies take advantage of this software is for custom-targeted sales and marketing. With CRM you can customize that end user experience, which makes your sales force more effective. Customers can interact directly with your CRM custom solution through your existing website and experience a tailored visit based on previous interactions, or your sales force can utilize the standard feature when interacting with customers and have all of a customer’s history available in one spot.
What are the most important value drivers for CRM?
The top value for a business is the software’s ability to help manage marketing and sales campaigns. CRM can help businesses test marketing and distribution strategies and gauge customer reactions. This information can be applied to future marketing efforts.
Another important value driver is that the software serves as a customer data repository, allowing you to consolidate customer knowledge within the organization in CRM. This includes far more than just contact details, but also customer behaviors and attitudes and price sensitivity. This, combined with personal data, can allow businesses to build more effective and predictive sales models and marketing campaigns that result in higher sales.
Further, CRM systems can help demonstrate ROI. With CRM you can quantitatively show increases in sales, customer referrals and participation in promotions.
What is the most common challenge a business faces when implementing CRM?
Typically the challenge is user adoption — getting your sales force and front line users to embrace CRM. They often see populating the fields as double entry, an extra step, or another way for management to check in on them. But once the sales force sees that using the software results in more sales, they can easily overcome that hurdle.
What are the most common performance metrics?
The top one, hands down, is revenue growth. The faster you can show ROI the better.
Second is growth in a business’s customer base, which means adding new customers or converting leads into paying customers.
The third most common performance metric is aggregating customer data. Many companies have customer data spread out over disparate systems. CRM gives businesses a one-stop shop for their records.
Can you give us some examples of companies that have benefited from implementing CRM?
The Toledo Mud Hens baseball team, which works within the media and entertainment industry, had ticket sales go up 88 percent in one year and their internal operations couldn’t keep up with demand. Adopting CRM allowed them to automate and streamline inefficient processes, which translated into more ticket sales. A customer testimonial is available with more information.
Another example is the human resources consulting firm Findley Davies. Implementing CRM in their call center has given them the ability to manage daily responsibilities and track productivity. It has dramatically changed and improved day-to-day operations within their Benefits Administration department.
Gina Rosen is a consultant at Columbus. Contact her at (248) 850-2195 or email@example.com.
With more than 20 years in the market and 6,000 successful business implementations, Columbus is a preferred Microsoft Dynamics business partner for ambitious companies. Columbus’ key deliverables include flexible and future-safe ERP, CRM, BI and related business applications that deliver competitive advantage and immediate impact.