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Walden Miller's advice seems to be right on when discussing
actions/directions he would take/has taken since becoming a VP...
However, I am curious:
Among the points he lists was this:
>6. Spent a lot of time ensuring that tech docs and training were profit
centers.
Walden, how did you do this specifically?
****************
Funny you should ask. I was just talking to the VP of Bus Dev about
Training as a profit center. This is our first year providing training.
The startup costs are somewhat large, although not bad for starting a
department:
1. Staff + overhead (depending on whether you want to count intangible
staff costs, such as the marketing department working on training
strategies, this is training staff or more)
2. VCR
3. Camera
4. 2 projectors
5. Cost of advertisement for courses (print, e-costs)
6. Cost of printing the course workbook
7. Cost of renting a training space
8. Entertainment costs: such as food for all day seminars, taking the
students out for dinner on a 5-day course, etc.
All of these costs are balanced against gross receipts to provide a net
profit/loss.
For the first year, I would be happy with a loss of less than 50K. For the
second year, I will cancel the program if we do not break even. I have
faith that we will break even this year and be very profitable next year.
The way to ensure profitability is to not go overboard during the initial
phases:
1. print only what you need.
2. lease instead of buy.
3. rent a space instead of building out a space.
4. track your advertising to see what is effective. Cancel what is not.
Etc.
For docs, Vidiom is a services company with 11 writers. I set the billing
rates and know the costs of my department. This is a simple billing vs.
costs spreadsheet. Ensuring the profit means keeping rates high enough to
earn enough that it pays for those writers "sitting on the bench," when no
contracts are available. BUT keeping rates low enough that we can put
writers to work.
In a previous job, I had to get marketing to value the cost of printed
documentation. We printed 15000-25000 doc sets per year. We sold them
separately and as part of products/contracts. Once a value has been set, it
becomes fairly simple economics. If you can't price it, it can't be a
profit center.
A by-product of that effort to turn docs into a profit center was to get
sales aware of how much our nice docs meant to the customers. We began
tracking how our customers chose are product of the competition. Docs rated
highly on all sales. Very interesting.
*************************
This also begs two additional questions:
1) What did the previous VP(s) do concerning tech docs/training, if
anything, to make them profit centers instead of cost centers? That is,
how did your self-described approach differ from the then-status-quo?
********************
I have been the only VP of "services" at Vidiom. However, my prior
companies I have never been more than a tech docs manager. I have always
pushed for viewing docs/training/support as profit centers. This was advice
I received from an STC meeting. My experience was that as long as docs are
considered a necessary evil, then they are not funded. Training was viewed
as necessary, but no one tracked costs, so you could not talk about profits.
This has been a very frustrating argument for a few decades.
***********************
2) What did you do while the manager of tech docs to get the company
leadership to understand that tech docs and training to believe in your
team's work and consider it as valuable as another productization
service?
***************
I lobbied for re-organizing the company at my last two jobs: I wanted a
three department political structure: mkg/sales, services, engineering. My
direct supervisor was VP of engineering (I was docs manager). I talked to
him for 4 years about the pros and cons. We were laid off in a massive
Philips lay-off in 1996. We created Vidiom the same year and he allowed me
to try out my philosophy. Because he believes in productization and
services as equal to engineering, we are thriving. I have to be on my toes
and keep reiterating my philosophy to new hires and current management that
want to retrench to what is historically comfortable. It is my task as an
executive. But I love that aspect of the job.
Today for example, I spent a few hours defending the idea that QA should not
be in the engineering department, although it is totally staffed by
engineers. My feeling is that all software companies need checks and
balances (how democratic). I try to create them.
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