The sub-$1,000 desktop phenomenon, which initially affected the consumer market and is now affecting the commercial market, has resulted in increasing price pressure on notebook products.
"A collapse in notebook pricing is redefining the low-end notebook's image, design and features," says Katrina Dahlquist, senior analyst for mobile computing at International Data Corp. "Traditionally, notebooks priced under $2,000 were primarily end-of-life systems sold through retail and close-out channels such as price clubs and catalogs. Today, these products are priced under $1,500 and an increasing percentage of configurations are new designs at $1,499 price points."
Vendors in the portable arena are fighting to stay clear of the commoditization trap-the challenge of building differentiated products without getting too exotic. Buying criteria has made a significant shift away from seldom utilized technology advancements and more toward reliability, durability and service and support. As in the desktop arena, commercial PC penetration, especially in larger organizations, will be limited because of a reluctance to change; however, there is still strong demand among high-end users for the latest notebook design marvels.
Additional IDC findings:
- Intel dominates the portable PC market, although AMD and Cyrix are making progress.
- Notebook form factor gaining increased storage capacity-10 MB in 1998 and 15 MB in 1999.
- DVD will take hold in consumer desktops, but demand in corporate notebooks will remain low.
- The industry is migrating to 14-inch LCD displays.
- The PC card-based 56Kbps V.90 compatible modem will remain the mobile professional's modem of choice in 1999.
- Windows 98 will not have a major impact on the portable PC market.
While the total U.S. market for personal computers has been growing dramatically, the small business segment has been growing even faster. The latest research from International Data Corp. forecasts annual PC shipments to small business will top 8.8 million in 1998, up 20 percent from 1997. More than 24 percent of all PCs will go to small businesses in 1998, a percentage that will continue to grow this year.
Raymond Boggs, who directs IDC's Small Business Market research, notes that PC manufacturers are targeting small businesses as never before.
"Dell, Gateway, Hewlett-Packard, IBM and now Compaq are all refining product and promotional efforts to appeal to small businesses, with the Internet and direct contact playing an increasingly important role," says Boggs.
According to IDC, the PC makers with the most loyal customers are Gateway and Hewlett-Packard.
Percent of buyers planning to add same brand currently owned include:
- Gateway: 63.8 percent
- Hewlett-Packard: 53.3 percent
- Dell: 46.7 percent
- Compaq: 37.9 percent
- IBM: 36.2 percent
- Apple: 34.3 percent
- Packard Bell/NEC: 10.7 percent
Prepaid wireless was once the domain of people with bad credit, with providers using it to make bad credit risks pay for their services in advance. Many business owners have now discovered that its a great way to keep not only their own wireless bills under control, but those of their employees.
Instead of issuing a cell phone or pager to a salesperson, for example, then trying to figure out how many of the calls were actually business related, a prepaid card is issued. An employee might be budgeted $50 or $100 a month of cellular time to use as they see fit. This forces them to be responsible with the companys time, and eliminates fluctuating bills for the company. Accounting will know each month exactly what wireless expenses will be.
In addition to prepaid phone cards, there is prepaid paging.
When someone purchases a pager, they are given three months of service or 1,000 credits of usage, says Travis Lee, telecommunications marketing manager for Big Planet, a provider of communications and technology products and services. It allows the customer to manage the use of the pager. They will not have the surprise of an unexpected bill. The customer can manage how many pages they receive and when they receive them.
Prepaid wireless also allows for temporary or trial usage of a pager, because there is no long-term contract to sign. If you are going to be away from the office for an extended period, you could use a prepaid page product to stay in contact with the office. When the time is up, you simply dont renew.
When the time or credits are almost up, the company sends a page alerting you, along with a toll free number to call if you want to renew.
If you use a credit-based plan, one credit is deducted for a normal page, and for alphanumeric pages, one credit is deducted for every 10 characters. Some models of pagers display how many credits are remaining at all times.
Big Planet also offers the ability to send a message to someones pager via the Internet. Up to 255 characters can be entered for each message.
Prepaid paging fits well into our market of consumers and small businesses, says Richard King, president of Big Planet. Its a way to manage expenses and costs. Paging is still by far the least expensive way to maintain contact with employees on the road. Also, from the billing end of it, there really is none. Its a very simple and clean process.
Prepaid wireless at a glance
- A great way to control wireless costs for yourself or your employees.
- Contracts can be structured on time or credits.
- Good for temporary or short-term needs of wireless products.
- Prepaid is available for both cellular phones and pagers.
- Usually has no long-term contract.
When a potential customer calls your business and is put on hold, what are they listening to? A radio station that fades in and out? Scratchy music that sounds like its coming out of a phonograph? Or the ultimate nightmaresilence.
Maybe its time to consider an upgrade of your customers on-hold time from listening to bad music to listening to a professional message.
What a small business can gain by adding an on-hold product is credibility, says Michael Sakakeeny, president of San Diego-based On-Hold Plus, a manufacturer of computer-based hold services. When you make a call to a business, you may not think about it, but when you hear music on hold, you automatically think big business. If youre talking to someone and you hear call waiting, you think home office.
Thanks to technology, small businesses now have some of the same options once only available to large companies. A PC now handles the music and message that can project a big-company image.
Prior to the software Sakakeeny calls Holdware, anyone wanting a personalized or professional message would have to go to a production studio, decide on the music and the messages and then have them mixed. If you wanted to change it, or your message went out of date, you would incur the cost of having it completely redone.
The software now lets the user mix and match or change their messages at will, says Sakakeeny.
The product comes with eight thank you for holding messages, but businesses can also take the next step of customizing their system.
You can start adding things like your company name that makes you sound bigger and better, says Sakakeeny. You can also make it real targeted with a marketing message. It really takes the company beyond just the image issue. If you can actually communicate a marketing message to a holding customer, thats fantastic.
Some businesses even overlook the fact that they have callers on hold. When a call is transferred between extensions, or the receptionist is paging someone, what is the caller hearing? With a marketing message, even if the person isnt in, at least youve gotten a marketing message to them and made their time on hold seem shorter by giving them something to listen to and think about.
Companies can also use templates to add their name and information to take the hard part out of script writing. When finished, the user e-mails the message to On Hold Plus, which will professionally record the custom message and e-mail it back to you in two to three days. Once recorded, messages can be activated through the computer, so when a marketing message is no longer valid, it can easily be taken out. Users receive four personalized messages at no charge, with additional messages available at $25 each, or four for $60.
Holdware at a glance
- Holdware is software for your PC that plays music and custom messages.
- It helps give your business a big-company image.
- Hold times seem shorter when listening to a marketing message rather than music.
- If youre using a radio station for your on-hold time, your holding customer may hear an ad from a competitor.
- Messages can be as simple as thank you for holding to an announcement regarding a new product line.
- No studio or product work is needed.
- Holdware retails for $129.95, comes with 20 royalty-free music backgrounds, eight thank you for holding messages and four free custom messages.
For more information, call (800) 839-7277 or go to www.onholdplus.com.
A recent survey showed employer-provided health care benefit costs may rise as much as 13 percent this year, while prescription drug card benefits may rise up to 15 percent.
The results are from a nationwide survey of HMOs, third party administrators and health insurers conducted by Buck Consultants, a human resources consulting firm.
We found that the companies surveyed are all reporting you will see single- to double-digit increases, says Harvey Sobel, principal and consulting actuary for Buck Consultants. Also, if they undershot in 98, theyll add in some additional increases to catch up. The bottom line is, you will see some increases, and depending on how your carrier did its pricing last year, some may be far worse than others.
Health care prices have been relatively flat in recent years, with cutthroat competition keeping them down. But many insurers have squeezed the easy savings out and are now looking at price increases as the means to profitability.
I think theres still more fat in the system, but the nature of health care is such that you dont see the same technology gains like you do in the manufacturing sector, says Sobel.
In manufacturing, a new machine might be expensive when it first hits the market, but the price drops as manufacturers learn to make it better and cheaper. With health care, theres always a demand for newer, better machines, and a great deal of the costs are people costs. A one-hour office visit 10 years ago is still a one-hour office visit.
Drug costs are also on the rise, even in generic form. Some manufacturers have begun shadow pricing generic drugs, pushing them closer to the cost of the name brand product. For example, a name brand prescription might have been $150 with a generic alternative available for $50. The generic price might be pushed up to $100 still less than name brand, but a significant increase. There has also been increased utilization rates, higher R&D costs and drug manufacturers are keeping their healthy profit margins.
Consolidation in the health care market has also led to fewer players, so there is less pressure on price. Regulators are also more likely to approve larger rate increases to prevent lesser providers from becoming insolvent.
Carriers have less to fear from a market share standpoint, says Sobel. They are being a little more conservative in setting their rates.
According to the survey, health insurers are projecting average medical care cost increases ranging from 5.6 percent for HMOs to 12.6 percent for comprehensive major medical plans. Increases for Preferred Provider Organizations average 9.8 percent, while increases for Point-Of-Service plans average 7.3 percent. These percentages are weighted by each insurers number of covered lives.
At a glance
Health care prices are going up.
- Average increases are 5.6 percent for HMOs and 9.8 percent for PPOs.
- Stand alone prescription drug programs are expected to increase 15 percent.
- Increased utilization, less competition, government mandates and less cost-cutting are helping drive prices up.
- Insurance regulators are less likely to deny rate increases because of potential solvency problems with some insurers.
What is NCQA Accreditation?
NCQA accreditation is a nationally recognized evaluation that consumers, employers and policy makers can use to assess managed care plans. NCQA accreditation evaluates how well a health plan manages its clinical and administrative systems in order to continuously improve health care for its members.
NCQA surveys are rigorous on- and off-site evaluations conducted by a team of physicians and managed care experts. A national oversight committee of physicians analyzes the teams findings and assigns an accreditation level based on the plans performance compared to NCQA standards.
These standards (developed by a broad coalition representing consumers, employers, unions and health plans) are demanding. NCQA has purposely set high standards to encourage health plans to continuously enhance their quality. No comparable evaluation exists for fee-for-service health care.
What are NCQAs standards?
NCQAs standards for quality health plans fall into six categories:
- Quality improvement Does the plan fully examine the quality of care given to its members? How well does the plan coordinate all parts of its delivery system? What steps does it take to make sure members have access to care in a reasonable amount of time? What improvements in care and service can the plan demonstrate?
- Physician credentials Does the plan meet specific NCQA requirements for investigating the training and experience of all physicians in its network? Does it look for any history of malpractice or fraud? Does it keep track of all physicians performance and use that information for their periodic evaluations?
- Members rights and responsibilities How clearly does the plan inform members about how to access health services, choose a physician or change physicians, and make a complaint? How responsive is the plan to members satisfaction ratings and complaints?
- Preventive health services Does the plan encourage members to have preventive tests and immunizations? Does it encourage its physicians to deliver preventive services?
- Utilization management Does the plan use a reasonable and consistent process when deciding what health services are appropriate for individuals needs? When it denies payment for services, does it respond to member and physician appeals?
- Medical records How consistently do providers medical records meet NCQA standards for quality care? Do the records show that providers follow up on abnormal test findings?
What is the accreditation status list?
The list is in three parts, each organized alphabetically. Plans not on the list have not scheduled an NCQA accreditation survey.
The levels of accreditation decisions include:
- Full accreditation is granted for a period of three years to those plans that have excellent programs for continuous quality improvement and meet NCQAs rigorous standards.
- One-year accreditation is granted to plans that have well-established quality improvement programs and meet most NCQA standards. NCQA provides the plans with a specific list of recommendations, and reviews the plans again after a year to determine if they have progressed enough to move up to full accreditation.
- Provisional accreditation is granted for one year to plans that have adequate quality improvement programs and meet some NCQA standards. These plans need to demonstrate progress before they can qualify for higher levels of accreditation.
- Denial is given to plans that do not qualify for any of the categories above.
- Under review denotes plans for which an initial accreditation determination has been made but is under review at the plans request. The initial accreditation determination precedes the term under review.
- Expired denotes a health plan that has allowed its provisional, one-year or full accreditation status to lapse without scheduling another accreditation survey. Plans receiving a denial do not revert to expired.
- NCQA discretionary review denotes plans which NCQA has chosen to review to assess the appropriateness of an existing accreditation decision.
- Acquisition review pending denotes that NCQA is resurveying the plan following a major acquisition, to ensure the earlier decision is still valid.
- Merger/consolidation/acquisition review pending denotes that NCQA is resurveying the plan following a merger or consolidation, to ensure that the earlier decision is still valid.
- Initial decision pending listsplans that have been reviewed for the first time but have not yet received a decision.
- Future review scheduled shows the date of all initial reviews scheduled within the next 18 months.
How should consumers and purchasers use the list?
Accreditation status is not a guarantee of the quality of care that any individual patient will receive or that any individual physician or other provider delivers. However, plans that are accredited have demonstrated that they provide the consumer protections required by NCQA standards and that they closely monitor, and are continuously improving, the quality of care they deliver.
The National Committee for Quality Assurance, an independent non-profit organization in Washington, D.C., is the nations leader in assessing and reporting on the quality of the nations managed care plans. NCQA makes health plans accountable for the quality of care and service they deliver in two complementary ways: by evaluating health plans internal quality processes through accreditation reviews, and by developing measures to gauge health plan performance.
E-mail has revolutionized the way businesses communicate with employees, vendors and customers. Now it has the potential to change the way you do your corporate billing, too.
Electronic payments have been available for some time from third parties, but oftentimes the costs associated with using it for billing customers are more than those of using paper bills and the postal service because of transaction fees.
Brinkman Technologies Inc. has come up with a solution that allows medium-sized businesses with a large customer base to essentially create their own in-house solution. If you are a biller, you simply install this software on your Web site, says Mark Brinkman, president and CEO of the Dallas-based company. The Web site is updated from the billers accounting records. When a bill is due, an e-mail notice is sent to the customer, who can view the bill on the Web, make payment arrangements or set up automatic drafts to be taken out of a bank account.
The system handles the automated clearinghouse transactions the electronic transfer of funds through the Federal Reserve for you.
Customers have to agree to use the system, so to get a high enough percentage of users to justify the investment, a business will probably have to have approximately 10,000 customers. Smaller firms can access the service through banks and other institutions if they dont have the economies of scale.
Anybody that has recurring bills would be a candidate to use this technology, says Brinkman. The utility companies have been the first to pilot and run this system.
The base cost for a small business to set up the system in house is $35,000 for the software, not including the Web server and associated communication fees. There is a 20 percent maintenance fee based on the original cost, so a small business would pay $7,000 annually.
A business with 30,000 customers, sending out monthly bills, could expect to pay about 11 cents per bill for presentment and payment, a significant savings over postage and paper methods. A smaller business working through a bank or other provider could expect to pay between 15 to 25 cents per bill.
Were basically billing people the same way, were just handling all the paper electronically, says Brinkman. Were cutting out the United States Postal Service. You still receive a bill in the mail, its just in your e-mail, and youre still sending payment in, its just electronically transmitted through a bank.
Other links can be placed on the e-mail or Web site, allowing customers easy access to customer support, special offers or new products.
The business is in control of the site [where the bills are presented], so they can do any marketing they wish, notes Brinkman.
For a demo of electronic bill presentment and payment, go to www.nextbill.com.
Todd Shryock (firstname.lastname@example.org) is SBNs special reports editor.
Remember Windows 3.1? Some of you may still even be using it for mundane tasks, having never seen a reason to spend money on an upgrade. More than likely, to upgrade the operating system would require an investment in a more powerful and thus expensive computer to handle the higher demands of Windows 95 or 98.
Windows 3.1 is the version of the operating system that really propelled Microsoft to its position of complete dominance in the market, but if you look at its Web site (www.microsoft.com), its like it never existed. A few references exist, but everything is focused on the newer Windows 95/98 platform, and the networking Windows NT.
Microsoft essentially dropped support for it about a year ago, say John Ruley, senior technology editor at Windows Magazine (which is not affiliated with Microsoft). There is a certain minimal level of support provided indirectly, but the message they are sending is, if youre running 3.1, please upgrade. It is becoming increasingly difficult to get support.
Third-part support is getting harder to find as well, but as long as there is a market for it, help will be out there.
Another drawback of remaining on Windows 3.1 is that there is virtually no development being done for the platform. If you have a program thats meeting your needs, then its not a problem assuming your software is Y2K compliant.
You dont see Y2K patches for Windows 3.1, notes Ruley. When Microsoft moved to the 32-bit model for Windows 95, most vendors were forced to rewrite their software.
This means that any patches that work for Windows 95 will not work for Windows 3.1. And because the company is no longer generating revenue from 3.1, it probably will not commit the resources to create a separate patch.
The last few years, the support has really dried up, says Ruley. Its really coming down to crunch time, and theres not a lot of reason to continue using it. The systems required for Windows 95 are getting to be so cheap, there is not a lot of reason to hang onto 3.1.
Ruley says even if you have a 3.1 system that is Y2K compliant, fully tested and has everything is working well, you still may be better off upgrading now. The age of the system and the software will eventually lead to trouble, and when it does, there wont be anyone left to help. Its better to upgrade now on your terms than at later under the computers terms. If Y2K may be a problem, make the move sooner rather than later.
In January and February, there are going to be a lot of people upgrading, says Ruley. At that point, its going to be really expensive and consulting time is really going to be at a premium.
Just when you thought it was safe to sneak out of the health club, leaving your New Years resolution behind, technology has stepped in to block the exits.
FitLinxx has developed a system that monitors your overall progress as well as your form on individual weight machines. Users log in at a kiosk, where they can view their personal information and the days workout. They then goes to the first weight machine, which has a small monitor attached to it. After entering a password, the amount of weight and the number of repetitions is displayed.
The screen will alert the user if he or she is going too fast, has the wrong amount of weight or is not doing the proper range of motion all of which are personalized by the trainer.
It has the same impact as having a human trainer watching and giving instant feedback, says John Colbert, director of product marketing for FitLinxx. This system does not replace human trainers, it enhances their relationship with the customers.
New users go through the typical orientation process with the trainer. Instructions are given on how to use the computer system and the equipment, and a program is developed that will help achieve fitness goals. That information is entered into the computer and the person is ready to begin.
Trainers can spend more time explaining the benefits and nuances of each exercise, rather than counting reps a chore now handled by the computer. Exercisers have access to their information and can monitor their progress.
Most health clubs see a 50 percent dropout rate of new members each year. With FitLinxx, the computer will warn trainers when a person is skipping workouts or has stopped coming all together, allowing them to intervene to keep the person on track. For a club owner, a 1 percentage point difference in membership can result in $50,000 in revenues. How to reach: FitLinxx, at www.fitlinxx.com or (800) 410-1110
Three phases of exercise
0 to 3 months The person is new to exercise and probably not familiar with the equipment. He or she can be intimidated by the spandex and banging weight plates that fill the facility, needs a lot of attention and may be too embarrassed to ask questions.
3 to 6 months The program may need some fine tuning. A facility with FitLinxx would have the computer identifying members in danger of quitting their exercise programs. The trainer can intervene to get them back on track.
6 months and beyond If someone makes it this far, he or she is starting to change lifestyles. The person may need extra motivations to keep exercising and some form of competition to keep going.
In the old days, anyone suspected of abusing illegal drugs on the job would have been fired on the spot. In todays litigious times, things arent so simple.
Do you have a policy against illegal drugs? Without a policy, an employer doesnt have any guidelines that are communicated to the employee, says Paul Mastrangelo, assistant professor of industrial organizational psychology at the University of Baltimore. If the employee is terminated, and theres no policy, the employee can say they were never told they could be terminated for drug use.
While it may seem obvious that something illegal would be automatic grounds for dismissal, without a policy specifically stating that fact, the termination may not stand up, especially if it is a union shop.
If there is a specific incident that is causing you to develop a policy, make sure it is communicated to the employees, even in draft form, before following through with any action.
Forget about the drug use, focus on the related job performance issues. Firing someone for alleged drug abuse can be a legal nightmare. What proof do you have they were using? Were there witnesses? Many of the symptoms associated with drug or alcohol abuse are also symptoms of colds and flu. Without some sort of testing, theres no way to know whether the employee took two hits of speed with a whiskey chaser or two cold capsules and some cough syrup.
If you have a drug testing program, you have the evidence-gathering mechanism you need to prove that person was using drugs on the job. If you dont have drug testing, start documenting all the related unacceptable behavior: absenteeism, tardiness, poor productivity, leaving early, etc. Talk to the employee about these work-specific issues without bringing up the suspicion of drug use. Put the employee on notice that continued behavior of this type will result in termination.
If action is taken, make it because of the job performance issues.
Mastrangelo says there are three donts when it comes to addressing this problem:
- Dont jump to conclusions. The employees performance could be caused by cold, flu or other illness.
- Dont enable poor performance by covering for the employee. If an employee has a drug or alcohol problem, covering up for them is the worst thing you can do, says Mastrangelo. Even if they are a friend or valued worker. You are enabling the problem and hurting their chances of ever taking action.
- Dont ignore poor job performance. How to reach: Paul Mastrangelo, www.home.ubalt.edu/pmastrangelo or (410) 837-5352
Warning signsDoes someone who works for you have a drug or alcohol problem? Here are possible warning signs:
- Quality and quantity of work decreases.
- Morale problems exist.
- Absenteeism increases.
- Conflicts with other employees arise.
- Accident rate increases.
- Equipment is stolen.
One way to help prevent problems is to provide employees with not only work skills training, but life skills training. Teach conflict resolution and relaxation skills, allowing them to deal with two problems that correlate to drug abuse.