New York


UoA Internet Access – To premium, or not to premium?

The University of Auckland gives free internet access to students, but its speed is capped.  You can purchase a premium package for $20 for the year to upgrade to “high speed” – but is it worth it?

Yes.  I bought my upgrade the first time I used the computers on campus, that’s how bad it is without upgrading.  It’s now well into the semester and I had forgotten how slow the capped, non-premium internet actually is, until I was in the Geography lab working with another student on their computer, wondering why Facebook was taking so long to load.  (Okay, so I wasn’t “working,” but you get the idea).

It only took me short while to realise it was because she didn’t have the premium upgrade.  But that got me thinking, why anyone wouldn’t pay the $20 for the year, to guarantee your first 200mb each month are delivered swiftly.

For me, it’s a no-brainer.  Once I became accustomed to fast internet (not that my home internet is even very fast by absolute standards!) I became addicted, and nothing less will suffice, especially when it only costs ~17c per day of semester.

Some people claim that unlimited internet access should be free for all students, and some qualify that by suggesting acceptable use policies.  But to have a day’s worth of high-speed, for less than the cost of a text message – surely you can’t complain about that?

Managing a Whale of a time

Are you making profits on all your customers?  If you listen to Kaplan and Narayanan (2001)¹ you might be wailing about your Whale Curve of customer profitability.

In last semester’s Accounting 321 paper “Strategic Management Accounting” the syllabus covered Activity Based Costing (ABC) and Customer Relationship Management (CRM) in relation to Customer Profitability Analysis, but something relating to all of these which I found quite interesting is the Whale Curve of customer profitability.

If your organisation implements ABC and CRM, not only will you be able to allocate your costs to your cost drivers, but also to each of your individual customers.  Kaplan and Narayanan (2001) bring the 20/80 rule to a new level, where they suggest that by performing a whale curve analysis, you may find the most profitable 20% of your customers bring in between 150% and 300% of your total profits.

Surely that can’t be, because your profits can never be more than your profits!  They continue that the middle 70% of customers are generally break-even, while you will lose money on the last 10% – the losses on these last customers bring profits back to the 100% level.  You can see this pattern on the graph below.

What now?  Well, if your CRM software can tell you which customers you are making the most money on, you can focus your efforts to retain them as customers.  You can also focus your efforts on the profit-losing customers, to find out why they are losing money.  Are they on the wrong products?  Do they pay late?  Are you charging them too little?  Knowing what makes them unprofitable allow you to make decisions to manage these unprofitable customers to profitability – and if this can’t be done, perhaps you need to consider dropping them as customers.

But bare in mind that CRM isn’t a one-stop-shop to making your customers profitable.  CRM is a tool in the Management Accountant’s toolset, which works alongside ABC, ABM, Activity Based Pricing, and a few other concepts, to help your organisation gain competitive advantage.

Anyone keen to update Wikipedia?

1. Kaplan, R.S., and V.G. Narayanan, 2001. “Measuring and managing customer profitability”, Journal of Cost Management, September/October: 5-15

Rapid Application Development… it’s rad!

This post on TechCrunch shows how a team of nine developed a small web 2.0 app in 4 days – author Ryan Carson points out this is a week’s worth of salary.  Hosting and other costs are negligible.

This application of RAD is quite cool, and also serves as a good example of a high-performance team producing results that are greater than the sum of its constituent parts – could a single person spend 36 days to achieve the same results?

Auckland Uni changes to Google Apps

Today I received an email to my University of Auckland email account (EC mail), one I use only for uni-based communications, that they are changing the provider from the unusual (assumedly) proprietary system to Google’s mail interface.

This is an exciting change, because the email web client is quite old, does not support html emails, has limited address book features, and is very poor at managing emails in folders.  Hopefully the new EC webmail will be much better than the last!

It goes live on 9 July 2008, and the FAQs are here.

It would be great if the university directory (e.g. Lecturer’s email addresses) was accessible directly from the webmail interface, and if there was support for calendar with your timetable and lecturer’s office hours, assignment due dates, readings for a week, etc.  All that information is put onto Cecil (Auckland’s enterprise learning tool) at some stage, so I it might as well be accessible from a tool that provides value.  Perhaps even implementing Google docs for use in group assignments would be useful.

It’s very nice to see progress in this space… so often your spirit for the adoption of new technologies in large organisations is crushed by the bureaucracy in that organisation.