A new magic formula - could it lead to the rebirth of software consulting

Daryl Mather of Consulting Pulse has appropriately pointed out the dealth of software consulting due the loss of the magic formula: scarcity and value (http://tinyurl.com/dj68pr). With the economy desperately seeking a stimulus, the industry is poised for an innovation that could be the rebirth of the industry.

While ERP solutions are abundant, they are using analytical methods developed in 1913 to minimize variable costs. Inventory is one of the largest investments made by most businesses yet the decision strategies utilized have gone unchanged for essently 95 years. An opportunity to make over the business models employed is beyond ripe.

Paul Brown of the New York Times recently stressed "in tough times, nothing is more important than making sure enough money is flowing in" (http://tinyurl.com/cgpazp) It is time to utilize a balanced strategy that weighs both cost and cash in today's ERP systems. "Economic profit, also known as Economic Value Added or EVA, is just the metric to weigh the complex decisions involved with inventory from an investment perspective", says John Krech, President ePhiphony Incorporated.

Dick Johnson of IR Cafe recently discussed EVA in his blog (http://tinyurl.com/atlfal ) and highlights that "other metrics like free cash flow and even return on capital can create perverse incentives for managers". While companies using EVA as a performance metric have outperformed their competition by an average of 49% (Stern, J.M. 2003. The EVA Challenge: Implementing Value-Added Change in an Organization. John Wiley & Sons), it has not been utilized as a metric to manage inventory. That is until 2008 - with the release of ePhiphony Incorporated's patent pending solution - Phitch OC 9.0.

Kathy Yakal of The Progressive Accountant recently covered Phitch OC 9.0 as a tool for consultants to help clients to optimize inventory (http://tinyurl.com/afjx5y). Kathy stresses that "there’s only one adjunct QuickBooks program that accomplishes such a feat ....in order to optimize your company's investment in inventory".

"Consultant's now have a unique tool that is the only one of it's kind that provides value by generating a report to demonstrate the change in economic profit" says Krech. At a time when only of 37% consumers consider software company claims to be very or even somewhat believable (Rosen, E. 2000. The Anatomy of Buzz. DoubleDay), ePhiphony delivers it's mantra to reveal hidden wealth.

In addition to providing a magic formula for the consumer, the formula must also apply to the consultant. The old ERP model is built on increasingly complex systems that take a huge effort to implement and are often over budget and fail to deliver expectations. The old formula has been motivated to reward extensive requirements for installation and training.

For example, Oliver Marks of Future Changes recently stressed that "when a software company sets up a consulting operation, it’s serving its own self-interest...." (http://tinyurl.com/cgpazp). In other words, vendors have been motivated to escalate service requirements and expenses. In another example, Gene Marks of Business Week highlights that "vendors seem to go out of their way to make learning to use their applications overcomplicated and expensive" http://tinyurl.com/crwnz2.

"What is needed is formula that is designed from a green perspective in that it leverages existing systems, that can be implemented quickly and effectively. ePhiphony Incorporated specializes in developing ERP compatible software. Phitch OC 9.0 is compatible with QuickBooks Premier and QuickBooks Enterprise and we are working on Versions MicroSoft Dynamics and SAP.", say Krech. "Our model is to design software that can be installed and implemented in a number of hours - not days, weeks, or months. We want consultants to implement their sales cycle quickly but return on an annual basis to implement continuous improvement and added features at an exception value".

Consultants for ePhiphony receive commission for each year that a license is active; however, each year is based on bringing continued value. $1,597 per user buys you the first year’s license, and year two costs $377 per user. A free trial is available, as is a weekly Webinar -- visit the site for details. A combination of a short sales cycle, continuous value, and continuous revenue is a formula for success for consultants.