Business Making Progress

Got Brand Loyalty?

Brand loyalty is derived from winning the hearts and minds of your customers. It is won by invoking a sense of dedication, passion, and excitement that other products simply can’t provide. You have to turn your customers into brand advocates. When you’ve got brand advocates, they form communities, organize events, and ultimately promote your products and brand for you.

Sometimes, they even get a tattoo of your logo. Just ask any of nearly one million Harley-Davidson motorcycle owners around the world and he or she will tell you all about it. Now THAT is brand loyalty!

While we don’t have customers with our logo tattooed on their arms (that we know of… although that gives me an idea for a marketing campaign…), Progress Software is actually quite similar to H-D in one very important aspect: long-term customers who are loyal to the OpenEdge application development platform.

During recent customer road show events, we met with hundreds of customers all around the world. We’re honored by their loyalty and commitment, as demonstrated in the following recent quotes:

”Progress has served us well for the past 22 years and we don’t expect that to change.”

-Maria Z., VP of IT in Retail

“The performance is second to none. I’ve been using the platform and database for 19 years.”

-Andre W., DBA in Logistic Management

“We have had a relationship with Progress for almost 25 years, and Progress is always available to listen to our feedback and help us achieve our goals…we aren’t just a number. We recommend Progress because of a track record of innovation and product quality that is second to none.”

-Rob F., Operations Manager in Financial Services

How many application development platforms can claim an average of 20 years of developer loyalty? No other platform can make such a claim. If you are not sure, just ask any of our long-term, successful customers building and managing world-class, mission critical business applications - he or she can tell you all about it.

Thanks and as always, please feel free to drop me a line and let me know what you think.

QAD Technology Partner of the Year

Progress Software has been recognized as QAD’s Technology Partner of the Year, so we sat down to chat with them about why Progress was picked, what makes a good partnership and how the industry is changing.

Progress Guys (PG): In your words, why was Progress selected for this prestigious award?

Progress was selected to be Partner of the Year because of the company's strong working relationship with QAD, wich continues to evolve in strength and profitibility. With OpenEdge 11, Progress is providing QAD a leading-edge development and deployment platform that strengthens their Cloud and on-demand offerings. This year QAD will be delivering two new solutions based on Progress technology:

1. QAD BPM, which leverages both the OpenEdge BPM technology and experience of Progress Software into a leading edge solution
2. OpenEdge ReplicationPlus, a Disaster Recovery solution for QAD clients

PG:  Tell us a little more about the QAD relationship, and what makes the ties so strong?

Progress and QAD have been partners for more than twenty-five years, and we continue to innovate together. When our companies collaborate on creating and executing strategies that improve the technology, marketing and revenue between our companies, several things happen. The collaboration strengthens the partnership and each company individually, but more importantly it’s our customers who receive the ultimate benefit from the partnership.

PG: QAD’s obviously seen the benefits of a strong relationship with Progress… what should other application partners to know about us?  

Building and maintaining an active technology and business relationship with application partners is critical.  The industry is changing, and the techniques for building, deploying and generating revenue are also changing.  Progress Software has always offered technology to assist partners to adapt to these changes and to deliver competitive solutions that attract more customers, reduce costs and generate more revenue.  

Progress also has the business, sales and marketing experience to help application partners achieve their business goals. By engaging with Progress as QAD has on both a technical and business level, partners can achieve greater market success.

Tony Winter, CTO of QAD (left) and Carlos Atehortua, Regional Sales Director of Latin America for Progress Software (right)

 

Resisting the race to zero: mobile telcos becoming center-stage again

Part 2

Last time, I wrote about the challenges mobile telcos are facing - how they are in danger of becoming utility bitpipes to the Internet and how some are responding by ensuring subscribers receive high quality, proactive customer service.

Having high customer service ambitions is one thing, but how do companies take it further? How do they go beyond their conventional role and become more center-stage and increase their value in people's day-to-day lives? Sensitive, real-time analysis giving insight into customers behaviour is one answer.

Consider social media, which continues to be one the of the most influential tech trends. By understanding your social connections, your "likes" etc., social media companies attempt to monetize their services by providing channels for other companies to reach you, through targeted advertising and product placement. Now consider the information that a mobile telco has about you. It knows the numbers (and often identities) of the people you call (perhaps evidence of a vastly more meaningful social interaction than simply commenting on a social media status update, it knows whom you text and where you travel to). By doing analysis the telco knows when you're at home, when you're abroad, when you're together with your friends or colleagues. Mobile telcos have, in short, information that social networking companies would die for.

Some organizations are already taking advantage of this information: Turkcell, the leading mobile telco in Turkey with 34M subscribers, is using Apama to analyze customers' usage patterns on the network. It sends highly targeted offers when certain usage patterns occur. These offers could include a top-up to a pay-as-you-go subscriber running low on credit or information about a restaurant promotion if the subscriber is located nearby and it's approaching lunchtime. By sending these promotions in real-time Turkcell reports a ten-fold increase in positive responses compared to previous methods of sending customers offers where they were delivered end of week, end of month etc. The key aspects are relevancy, and timeliness. Deliver something of interest to the subscriber at a time that ensures the context of the offer is retained. Sending a restaurant promotion hours after the subscriber has left the shopping mall will be perceived negatively.

Technically, this is truly a "big data" problem. A typical mid-sized mobile telco with a few tens of millions of subscribers will need to analyze tens of thousands of call data records per second. At very busy times this can peak to hundreds of thousands per second. 

Turkcell has become far more relevant to its customers because it is able to respond to customers' usage patterns effectively. With interest, location and time-sensitive promotions subscribers are receiving something that can't be provided by other telcos. Money can be saved, promotions taken advantage of. Customer service is enhanced, churn is reduced and the company has an important market differentiator with which to attract new customers.

As Turkcell has learned, organizations no longer have to be faceless entities. Real-time analysis of social media, and other preferences and patterns, make location-based promotions core to customer engagement.

 

Cracking the High Frequency Trading Nut

By Richard Bentley, Vice President, Capital Markets, Progress Software 

When cracking a nut, would you normally use a sledgehammer or a more precise tool? It may sound like a daft question, but it’s nonetheless one that occurred to me at the European Trading Technology Conference, TradeTech, in London earlier this week.

Much of the conference’s agenda was focused on two topics (often at the same time): Regulation, and
HFT. Many of the speakers and participants were concerned with understanding how the new guidelines from the European Securities and Markets Authority (ESMA), aimed at regulating the systems and controls required in an automated trading environment for trading platforms, investment firms and authorities, will work. As a result, much of the TradeTech conversation I heard came from attendees asking whether or not the regulations were, to employ my earlier analogy, a sledgehammer when perhaps a nutcracker was required.

To my mind, it’s worth having a look at what’s going on with the decline in trading volumes to find the answer. Last week the Chicago Mercantile Exchange (CME) announced they were cutting staff partly as a result of reduced market activity, while NYSE Euronext today announced that its net income fell 43.9 percent in the first quarter to $87 million, from $155 million a year ago, reflecting the situation seen across other venues, Brokers and Investment Banks around the world. It is clear that high-frequency traders are being driven out of the market by what they see as an incessant drive towards over-regulation of their activities. 

Although nobody is suggesting that ESMA is paving the way towards a blanket ban on high-frequency trading, it seems clear that an environment of contempt and, in some cases, hostility is being cultivated towards those who operate in this space. No-one likes being labeled a pariah; without a change in tack, this environment could lead to an even sharper decrease in trading volumes, as well as more lay-offs in the industry in the long-term.

Perhaps then, instead of the sledgehammer, what’s needed is a more precise real-time surveillance nutcracker, which will target specific issues with HFT – i.e. those that unfairly disadvantage other market participants. Clearly, any such solution would need to work across multiple markets and asset classes, to capture the full picture of traders’ activity, but it does seem that the greater transparency this would provide could go a long way towards resolving the issue without driving liquidity from the market. 

In my view, the real-time technology is available today, and ready to deploy, but there needs to be a widespread agreement that the best way to regulate automated trading is to monitor everything that’s taking place and reduce the risk of abuse. The alternative is we carry on with the sledgehammer; whilst we might crack the nut, when we’re done we might find we’ve destroyed the kernel in the process.

BRICS Win by Coming in Second

By Richard Bentley, Vice President, Capital Markets, Progress Software 

In 1963, Avis owned up to being only the second largest car rental company in the U.S. (after Hertz). "We try harder because we have to" was the catch phrase. The advertising campaign was a massive success; it gave Avis more business and a new brand identity.

Sometimes being second is the best place to be. In the case of high frequency trading, the emerging markets coming to HFT behind more 'developed' markets are benefitting from being second. Brazil, in particular, has benefited from this 'second mover' advantage, by paying close attention to the lessons learned in the U.S. and Europe.

Being first to HFT had some distinct disadvantages. The U.S. jumped into HFT with both feet after Regulation National Market System (Reg NMS) came into effect in 2007. In Europe, after the Markets in Financial Instruments Directive (MiFID) opened up its markets in a similar vein, HFT participants moved in quickly. Both markets grew at a rapid-fire pace with new trading destinations popping up; the resultant fragmentation presented opportunities for HFT and algorithmic trading that few regulators were prepared for.

The May 2010 Flash Crash brought a screeching halt to HFT's proliferation in the U.S. as the SEC determined to get a grip on the potential dangers of HFT. Naked access, stub quotes, flash orders and other practices deemed unsafe were banned. In Europe, alarm over the U.S's experience created a rush to control high order-to-trade ratios and the EU is mulling more draconian regulation to come.

Brazil looks less like a cowboy's paradise for HFT (like the U.S. and Europe) and more like the nation where the Sheriffs (regulators) are in charge. BM&F Bovespa - the national Equities and Derivatives exchange - has never allowed naked access, nor does it have a maker-taker fee model to encourage volume through rebates. There are no flash orders, and no NBBO , which was a consequence of fragmentation in the U.S.  Brazil has always insisted on pre-trade credit controls and never allowed dark pools.

When HFT was in its infancy in Brazil the government instituted a tax to discourage too much foreign market participation. Although designed to  rein in currency speculation and domestic inflation, a side effect was that it also slowed the growth of HFT while procedures were being be put into place, and gave regulators a chance to watch and see its development. In December 2011 Brazil lifted the financial transaction tax for foreign investors.

Bovespa has also been investing heavily in its trading platform to improve speed and processing capabilities. And it has tweaked its direct market access rules and there are now four categories of DMA, enabling complete flexibility along with safety nets. Its policies have worked and it has become the go-to destination for HFT with volumes climbing steadily. (In the U.S., on the other hand, volumes have been dropping of late as exchanges get ready to adopt policies to penalise traders for excess quotes)

High frequency trading is a relatively new phenomenon and as such has a lot of growing up to do. Its evolution will take place naturally, as we have seen in Brazil. The lesson here is that, while regulators should be alert to the issues created by new trading methodologies, they should also realise that HFT is not synonymous with market abuse. There are certain forms of market manipulation - like quote stuffing - that HFT makes possible and these rightly need to be outlawed and policed. However, HFT per se is not abuse. In the old days before electronic trading no one tried to ban the guys who could shout loudest or run across the pit faster than others.

The debate around HFT in the U.S. and Europe has become politicised and HFT has been grabbed onto as a scapegoat, but HFT didn't bring down Lehman Brothers or cause the EU sovereign debt crisis. Many of the issues with HFT will sort themselves out without overt intervention. Markets have a habit of evolving naturally by weeding out the bad and unworkable elements. Brazil, as second mover, shows this.

Continue this debate with us at TradeTech, London - The World's Largest Trading Technology Event.  We're exhibiting at stand 341. 

 

How BPM is Evolving to Help Banks Improve Top-line

Earlier this week, I spoke at IQPC’s Business Process Excellence for Financial Services conference in New York. As a chairperson for the event, I took great pride in bringing together a community of experts and thought leaders to discuss the burgeoning technology issues facing financial institutions. By working together we are able to mitigate operational risk. 

In my presentation, How BPM is Evolving to Help You Improve Your Top-line, I discussed the need for banks to respond first, fast and best to their customers and how they can achieve this. Today, institutions must respond to increasing customer demands while meeting costs and requirements associated with regulation. Many banks have shown that they can meet these demands and improve the quality of their operations by using business process management (BPM).  However, these institutions are still trying to conduct business and grow their top line and market share. So how do they do both? By differentiating themselves from other financial institutions and engaging with their customers to offer something different and better. 

In my view, there are three goals banks must set out to achieve in order to reach the nirvana of customer engagement: 

1.   Respond quickly to regulatory change

2.   Manage risk and compliance

3.   Promote the right offer, at the right time, through the right channel

This requires exploring the next frontier of BPM through solutions that combine BPM with business events, real-time analytics, and business rules.  While the majority of technology investments have historically focused on operation automation, back office processes and cost reduction, the next wave will see a greater focus on situation-aware, customer facing and revenue generating solutions. How can banks achieve a level of customer engagement that will both increase process efficiencies and top-line revenue?

• Respond quickly to regulatory changes. As we’ve seen through Dodd-Frank and Basel III, the pressure is on for banks to conform to these regulations. Through proactive, customer-facing technologies, banks can refine their processes to meet regulatory requirements without having to change them completely. This ultimately saves money and prevents delays and downtime for customers. 

• Mitigate risk and manage compliance. By standardizing processes and applying business event and rules capabilities across existing systems, banks can adhere to risk and compliance standards without increasing the cost of IT or ripping and replacing their existing systems. This extends to other challenges banks face including fraud and reputational risks. 

• Promote the right offer, at the right time, though the right channel. Ultimately a bank’s task is to better understand a customer’s wants and needs. Through real-time visibility into customer interactions and the use of a rules-based decision support system, they can offer a more customized, situation-aware approach to customers and reach them at the right time through the channel most convenient to them. Customers are more apt to consider new products and services when they can interact with their bank in a personalized way. This ultimately improves customer loyalty while also growing revenue and wallet share. 

Every organization should get in shape with “responsive business training” - striving to spend fewer resources solving problems and more time delivering value-add services to customers. This approach is one exercise in the training program – what others are you considering?  

 

 

Environmental Progress

We typically use this blog to talk about the importance of integrated development environments or operationally responsive environments. But just in time for Earth Day, today I want to focus on another type of environment.

Our global headquarters in Bedford, MA recently earned LEED certification for Existing Buildings Operations and Maintenance (LEED EB O&M) from the United States Green Building Council (USGBC).

Just 1% of existing buildings have accomplished this level of environmental leadership, according to the USGBC. In Massachusetts, only 11 buildings have achieved this level of LEED certification; Progress owns two of them.

Buildings account for 40% of primary energy use and 39% of CO2 emissions.  So, the performance of existing buildings everywhere is an important step toward corporate environmental stewardship.

Congratulations to our facilities team, and thanks for helping us make environmental progress.  If you have time, please take a minute to read our sustainability initiatives report which outlines how we lowered our energy & water consumption and reduced GhG emissions.

We’re all pitching in to celebrate Earth Day with a slew of activities around the globe – from hosting locally-made sustainable products at Earth Day fairs, to getting our bikes tuned up and clearing bike paths, to displaying the artistic earth inspirations of employees’ children.

How are you celebrating Mother Earth?