SEO, What Is It?

I am sure the acronym such as CEO and CFO would be familiar to most business people. However, lately, I have been reading about SEO being discussed, particularly in business magazines. What does a SEO do?

From my understanding, SEO stands for Search Engine Optimiser, a person who is responsible to ensure the website of a business is visited by its intended customers or users by tailoring the website to the ways search engines operate.

Among other roles of the SEO are:

• Reviewing and providing recommendations on your site content or structure


• Technical advice on website development: for example, hosting, redirects, error pages, use of JavaScript


• Content development


• Managing online business development campaigns


• Keyword research

As businesses integrate their business processes further with the world wide web, their websites are becoming more and more important in securing business.

AirAsia and Malaysian Airlines are two Malaysian companies which use the web to sell their tickets and do business with their customers. Not only such platform enables them to extend their reach, it also reduces cost as well as making it more convenient for their customers to transact with them. Opportunity to cross-sell products and services would be enhanced to the features of the Net.

Websites are no longer function just as billboards, to inform the world about a business but have became the shopfront for a lot of businesses. How far has your business leverages of the web to expend your horizon?

This is where a SEO would be helpful. I suppose a SEO may not necessarily be a technician, but the person should be able to appreciate how technology works and how to use them in making your web presence the key source of your business wealth. Whether or not this position is created officially, my view is that all business should have a SEO, somebody who as a matter of cause explores the potential of expending your web based business.

As the world becomes more connected and when 3 billion people are expected to be on the Net by 2012 or around that period, I am sure ignoring business on the web would deprive your business of a channel that has great potential.

Would you create a SEO position in the next 12 months if you have not done so?

Business Process Outsourcing, How Alien Is It?

When Business Process Outsourcing (BPO) is mentioned, the first image that would come to most of our mind would be ladies working in call centres, probably somewhere in India. This simplistic perception has caused many entrepreneurs to view BPO with much skepticism.

BPO is simply when a business contracts out its internal processes to a third party. For example, when an accounting firm is engaged to provide accounting services to your company, you are entering into a BPO arrangement. When you hire a headhunter to recruit new staff, you are outsourcing your recruitment process. Therefore, BPO is not something that a business is not familiar with and most enterprises have been involved with BPO, one way or another.

In a competitive business environment, the challenge for any business is to enhance value proposition while at the same time attaining more efficiency. This is where BPO could be one of the choices to be considered.

For example, to improve the distribution of a particular product, companies with wide distribution network could be used as outsourced distribution channels instead of investing in in-house business outlets. Not only capital expenditure could be reduced, access to market could be speed up while economic of scale attained in a short period.

When a company intends to offer e-learning services, it could consider working with a partner with ready platform and contents instead of investing to build its own platform. If a reliable partner is secured, it could focus on business development and market creation initiatives. The two entities could split the revenue depending on the investment and resources involved. In such an arrangement, assets utilisation are maximised, capital requirements reduced and cost of services minimised.

If a business enters into the BPO business by leveraging on low cost, such value proposition may not last long as cost would go up with growth and other players will scale and efficiency could be a substitute when competition becomes more intense. BPO in more strategic areas or arrangements at the higher stage in the value chain such as in research and development would be more difficult to be broken as both the consuming and processing companies are relying on each other to enhance their competitiveness.

As a general rule, the following consideration could be make as guidance when BPO is considered:

• Identify the desired value proposition and competitive edge;


• Break up your business processes leading to the desired position into smaller components;


• Consider processes where your company has edge over competitors and consider improving on that strength;


• For other processes, consider to contract out the processes to more efficient and competitive outsiders;

• Develop a strategic relationship with the BPO contractors so that both sides would understand the significant of the business arrangement, setting performance standards, identify and manage risks and develop a win-win value appropriation model.


• Periodically review the arrangement to cater for changing business environment and changes in the industry.

If an enterprise has multiple products and services, BPO could go to the level of outsourcing the whole business in a particular market. While certain elements of the business such as branding and quality assurance could be retained, such arrangement could free commitment of capital and resources and provides more opportunity to focus on higher value business.

For enterprises which choose to compete via a network of like minded companies, BPO is one of the ways to remain lean but able to provide wider value proposition to the targeted market. As proposed above, BPO is not focused on the processes but includes strategic elements which are shared among the BPO partners.

BPO is not necessarily simple to venture into. However, with changing business landscape, it should not be ruled out without due consideration either. Who knows BPO could allow your business to survive the perfect storm experienced by most companies today.

Pricing on Perception

I had the opportunity to shop at the Silk Market, Beijing. It's a one-stop market for tourists which offer varieties of goods from apparels, shoes, handicrafts, silk, watches, electrical products and a lot more stuff. The Chinese government sort of "guarantee" the quality of the products sold, although it does not mean all products are original. Hey, I was in China, the global producer of many things, genuine or otherwise.

What was interesting is the way the goods were offered. Most of the vendors were ladies who could speak descent English, enough to close a sale. They would always start by offering you at quite high prices, around 300 to 400 Yuan for a piece of cloth. You are supposed to bargain, sometimes at 25% of the price. And if you just move on if you could not get the price that you offered, they would grab you and close the deal. Such a practice maximises the price that they could get out of you. Since there were people from many parts of the world, everybody would have different ideas about how much, for example, a t-shirt is worth. By quoting high prices and getting the customers to counter offer, they could gauge the value that the customers attach to the t-shirt and would conclude the sale if the prices were good enough for them.
The customers, on the other hand, felt good since they were "successful" to get bargains, although the chances are they could have paid much higher prices. The comfort of Silk Market provides additional "good" feeling to the customers. Given the size of Beijing, customers tend to buy most of what they wanted at the market as it would not be convenient to go to another market, which may be 40 minutes to an hour away, under normal traffic conditions.
The whole case study demonstrate that price is not the function of the cost, but is more influenced by the perception of value attached to the goods and other physiological factors such as time, convenient and purchasing power.
By understanding the driver behind the perception of value towards a particular product, vendor could position the product in the way that stimulates the perception which attract highest value, hence price. Off course, by having lower product cost, the flexibility of pricing would provide the vendor with greater edge over competitors with higher production cost.
How do you price your goods and services?