IN THIS ISSUEFEATURES

Technology AssessmentSupplement

Technology Assessment in Today’s Ever-Changing Market . . . . . . S•1

Effective Technology SelectionThrough the Use of aTechnology Roadmap . . . S•2

Implementation of the ASCMember Cards Program . . S•2

A Structured Approach toTechnology Assessment . . S•3

SOAP—A Viable Option? . . . . . .S•4

Executive Roundtables: An Opportunity to Learn and Build Relationships . . 10

Why Implement a B-to-B e-Loyalty Program? . . . . . 18

DEPARTMENTS

A Note on This Issue . . . . . 2

Sponsors . . . . . . . . . . . . . . 3

Executive Director’s Report . . . . . . . . . . . . . . . . 3

General Counsel’s Comments . . . . . . . . . . . . . 4

Workforce Development . . 5

Export Control Considerationsfor the Software Business . . 6

Austin’s InternationalDevelopment GainingCritical Mass . . . . . . . . . . .8

Monthly Meetings in Review:March: Final Jeopardy—Are You Betting Your Businesson Your Sales Force? . . . . 14

April: E-Care—The Conver-gence of Software, InternetServices and Call Centers . . 15

May: Funding Sources . . . 16

Membership Gallery . . . . . 19

New and Renewing Corporate Members . . . . 21

Upcoming Events . . . . . . 24

Supporting Our Technology Community, 2Q01

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Re-Careering in a Changing EconomyJamie King Belinne, Associate Director for MBA Career Services, University of Texas at Austin

It’s Hard (and Dangerous) to Say Goodbye... Tips on staying out of court with former employeesLaura M. Merritt, Bracewell & Patterson, LLP

In Austin’s rapidly changing market, many peo-ple are dusting off old resumes and exploring theiroptions should they decide to make a career move.For those who have always conducted job searches ina “seller’s market,” exploring the “hidden job mar-ket” can be overwhelming. To make this processboth manageable and rewarding, you must first over-come the questions that paralyze most job seekers inturbulent economic times.

1. Whom do I know that can help? A surveylast month by Techies.com of more than 1,600 tech-nical professionals named one’s personal network asthe most effective means of finding satisfying em-ployment. Your network includes your current co-workers, peers in other companies, friends, andacquaintances. Make sure everyone you know under-stands your core skills and career interests. Also,make sure to pass along information or contacts ofinterest to people in your network whenever possible.

Networking has to be a two-wayexchange to work effectively.

2. What do Isay to them? Tonetwork well, youneed to be able to“sell” yourself inless than a minute. Very few networking contactswant to hear your life story, and at a professionalorganization meeting, you don’t have more than aminute to get your message across. Spend time devel-oping and practicing your pitch so it comes out natu-rally and can easily be tailored to meet the needs ofyour audience. For example, “Hi. I’m Dustin King.I’m working at WidgetsRUs managing vendor rela-tionships to make sure our new product launches run

In a hot econo-my, employment liti-gation declines.Unhappy workerssimply move on togreener pastures,and terminatedemployees find alter-native work easily,often before theirfinal paycheck isprocessed. However,when corporatebelts collectivelybegin to tighten, it

becomes increasingly difficult for individuals to changejobs. The result? More employment lawsuits are filedagainst former employers.

Sexual harassment, breach of contract, nonpay-ment of wages, race/national origin discrimination, dis-ability discrimination, workers’ compensation retalia-tion, defamation…the list of potential causes seemsendless. Although the only way to guarantee you willnever be sued by employees is to not have employees at

all (hardly a workable solution!), the following strate-gies will help prevent employment lawsuits andenhance the probability of courtroom success if yourcompany does become a litigation target.

1. Carefully review each individual termina-tion before finalizing the decision. Does theemployee have a contract for a specific period ofemployment? Has the employee recently filed a dis-crimination complaint or workers’ compensationclaim? Has the company followed policy? Does thecompany’s documentation support the termination?

The company’s human resources executive, legalcounsel, or other high level decision-maker shouldcarefully consider these and similar issues as well asthe specific, individualized facts and circumstances ofeach termination. Requiring more than one executiveto approve the decision will prevent “heat of themoment” terminations and help ensure that the com-pany’s action will be well reasoned and legally sound.

2. Understand and follow wage payment lawsand regulations. The Texas Payday Act requires finalwage payments to be made by specific deadlines (bythe sixth day after termination if involuntary, by the

Continued on page 11

Continued on page 24

Economic Times Spur Advice forEmployees and EmployersEconomic Times Spur Advice forEmployees and Employers

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Board of DirectorsChair Robin Lea Curle, CEO Partnerships

Les Belady, ConsultantBill Bock, Verity Ventures

John Dirvin, Austin Ventures Neil Iscoe, e-Certain

Dick Moeller, Verity VenturesTBD, Tivoli Systems

Betty Otter-Nickerson, ElegiantLauren Peters, Peters Group Public Relations

Juan Sanchez, University of Texas at AustinEd Taylor, Collective Technologies

Paul Toprac, ASC Executive Director

StaffMain Number 305-0023

Executive DirectorPaul Toprac, 305-0032

paul@austinsoftwarecouncil.org

Director of Member RelationsCatherine Bartlett, 305-0010

catherine@austinsoftwarecouncil.org

Business Development ManagerRon Miller, 305-0014

ron@austinsoftwarecouncil.org

Office ManagerSandra Kaso, 305-0043

sandra@austinsoftwarecouncil.org

Events CoordinatorSusan Snow, 305-0042

susan@austinsoftwarecouncil.org

X-TeamX-Team Chairs

ASC “University” Chris John, 478-8779 x13Chancellor cjohn@benefits.com

Community/Civic Vacant

Conferences Vacant

International Deirdre Mendez, 338-1177Development dlb-fbmc@worldnet.att.net

Legislative Jeff Heckler, 477-7342heckler@pedetech.com

Legal Counsel Tom Adkins, 494-3640tadkins@bracepatt.com

Marketing Steve Farrer, 418-9059steve.farrer@proteanmarketing.com

Membership Vacant

Mixers Vacant

Programs Charlie Jackson, 491-2625charliej@ki-soft.com

Publicity Lauren Peters, 794-8600lauren@petersgrouppr.com

ASC Communities Keith Zimmermanzimmerman@equiscorp.com

Sponsorship Vacant

Website Judith Manriquez, 930-4286jmanriquez@graphxcreative.com

Workforce Craig Eissler, 912-9694Development craig2@sig.net

Council members, both employees andemployers, should be able to glean need-to-know advice from contributors Jamie King Belinne (University of Texas) and Laura Merritt (Bracewell and Patterson, LLP) that is useful in both good and tepideconomic eras.

Then, too, Executive Director Toprac hassome suggestions about how Council mem-bership is useful regardless of the economictimes. Workforce Development Chair CraigEissler focuses on the market for IT workers.

Check out the new supplement onTechnology Assessment. As outsourcing andpartnering become more and more importantto the viability of the corporate structure andincome, the rigors of assessing technology are even more important. Consultant Coleapproaches the subject favoring flexibility,redundancy and monitoring the market con-stantly. Pat Flanagan of Athens Group givesus the framework for a solid technologyroadmap. Embrace Software’s Raj Sundradescribes the Council’s new member cardprogram and the technology assessmentinvolved in implementing this benefit.ConnectTel CEO Kannan Kaliyur writesabout SOAP, a new protocol for web-enabled integration of services. He invites you to explore this technology and do yourown assessment.

A Note on This IssueEmily Sopensky, The Iris Company

We are in the process of improving the content and design of the newsletter so please let us know what you think—good and not so good. The design will be altered slightly and we will have a new set of department articles focusing on the membership.

As always, we look forward to contri-butions from members. We’re interested in both timeless articles that are of interestand use to our membership as well as thosethat address the times. Next quarter we’refocusing on New Beginnings. Rememberthis is a newsletter FOR and BY members,so please join the Council first if you want to submit an article. Contact me atemily@iriscompany.com. I look forward to hearing from you.

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SponsorsCommunity Investors

Bracewell & Patterson L.L.P.IBM developerWorks TeamKPMG LLPMcKinsey & CompanyMicrosoft Technology CenterStax ResearchTrilogy Software

Annual Underwriters

Supporting Sponsors

Platinum

Arthur Andersen

Bracewell & Patterson L.L.P.

GraphX Creative

PetersGroup Public Relations

Protéan Marketing

Gold

Copy Craft Printers, Inc.

PricewaterhouseCoopers

Silver

Rockford Business Interiors

Sigma Information Group, Inc.

Bronze

Jump.net

Thompson & Knight, LLP

“When times are hard, the last thing you shoulddo is panic. When you panic, your brain shutsdown; you stop listening and learning.”

William F. Miller, professor emeritus of computer science,Stanford University School of Engineering

This quote says it all. Austin’s technologycommunity has begun a difficult transition, but wecannot panic. Instead, let’s weather the storm andemerge stronger than before. The companies thatsurvive will flourish by creating and reaping valuefor their customers and investors. Those workerswhose jobs have vanished will create new ideasand find meaningful work in new endeavors. Themost dangerous thing we can do is to allow panicto stop the listening and learning because throughlearning we can overcome the current obstaclesand uncover greater success.

How can the Council help you to succeed inthese difficult times? We have programs that willhelp your companyl Find new business opportunitiesl Increase intellectual capitall Reduce cost and risk

In the coming year, we plan to model futureinitiatives on our past successes. For example, wehave offered several ways to connect to interna-tional business opportunies. The most significanthave been our International B2B Trade Missionsand the International Trade Fair. We will continueto offer international business interchanges, alongwith the opportunity to learn new ideas, masteremerging technologies, locate market opportuni-ties, and obtain new skills. Future conferences,including “Funding in 2001, Part II” and“Partnering,” will help your company find newfunding and partnerships. The “ContentManagement” eBusiness Forum and the “LinuxInvades” Internet Appliance SIG will focus onmanaging new markets and technologies. Finally,programs such as the “Alliance and Partnerships”marketing forum and the “Testing Software” sem-inar at ASC “University” will offer additional newskills. Each of these ongoing programs representsa community for technology executives and work-ers to connect and learn from each other, creatingbusiness relationships that help companies grow.

We have launched a program to give execu-tives the critical information and support they

cannot find elsewhere. Access to this informationwill provide tools for successfully overcoming hostile business conditions. The ExecutiveRoundtables consist of top executives fromAustin’s high-tech companies. Each group isdesigned to match executives with the non-competing peers who can help them the most.The goal is to provide targeted advice to giveexecutives a competitive advantage. Twelve peerswill meet on a monthly basis to confidentially dis-cuss highly relevant issues. If every executive’stime is worth $150 per hour, then the ExecutiveRoundtables provide over $3,000 worth of ad-vice each session and nearly $40,000 of counsel-ing in one year. This is a great opportunity tomake valuable contacts and help yourself whilehelping others. For more information, see the article in this issue of The Leader and email me at paul@austinsoftwarecouncil.org or call 512-305-0032.

The Council offers benefits to reduce thecost and risk of operations. Our Member Servicesprogram provides reduced payroll costs throughADP, online employee benefits services from benefits.com, discounted long-distance servicewith SmartPrice.com, discounted business furni-ture from Rockford Business Furniture, andrecruiting programs through KLBJ and theAustin Chronicle. You can also reduce your busi-ness risks through an insurance program withInsureHiTech. To find out more, contact CatherineBartlett at catherine@austinsoftwarecouncil.org orat 512-305-0010.

Additionally, we have responded to the needsof displaced workers with career opportunities thatkeep valuable talent in Austin. Modeled after the highly successful JobConnect in March, theCouncil again partnered with the Greater AustinChamber of Commerce and the Capital AreaWorkforce Commission to hold a bigger and bet-ter JobConnect in June. More than 30 companiescame together to recruit from several thousandprospective employees. This successful event bene-fited the community, companies, and candidates.

The Council continues to focus on helpingcompanies Sell, Save, and Survive, but we can domore. If you have any ideas about how we canbetter serve companies in the Austin area, con-tact me at paul@austinsoftwarecouncil.org or 512-305-0032. See you at our next meeting!

Report from theExecutive DirectorPaul Toprac, Executive Director

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developerWorks Team

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It’s difficult to open a newspaper or mag-azine these days without reading about anoth-er lawsuit alleging improper use of privateinformation obtained through the Internet.Perhaps the most well known of these is theDoubleClick litigation. DoubleClick usedcookies (tracking software) to monitor users at each of the websites where advertising forDoubleClick’s clients was displayed. Many ofthese websites required disclosure of users’personal information. Last year, DoubleClickunveiled plans to merge data-bases with Abacus Direct, acompany that maintains amarketing database gatheredfrom catalog retailers’ cus-tomer information. Thismerger announcement result-ed in a number of lawsuitsagainst DoubleClick alleginginvasion of privacy (based on informationgathered through the cookies) and a requestfor a Federal Trade Commission (FTC) inves-tigation of DoubleClick’s practices. Many ofus also recall the Toysmart.com fiasco, wherethe crumbling toy vendor attempted to sell itsdatabase of 200,000 customers as it slippedinto bankruptcy. These lawsuits are not isolat-ed incidents; in the last few years, over 30well known companies have been named asparties in privacy-related lawsuits, and the fre-quency of such suits is increasing rapidly.

The rise in Internet privacy litigation ismerely a symptom of growing concern overthe use of consumer data obtained over theInternet. In a 1998 Harris poll, 88% of therespondents stated that they were “concernedabout general threats to their privacy” and82% felt that they had “lost all control overhow companies collect and use their personalinformation.” Almost 78% believed that com-panies ask for too much information on theInternet. In a May 2000 report to Congress,the FTC stated that 92% of consumers areconcerned (67% very concerned) about themisuse of their personal information online.This study also estimated that by 2002 priva-cy concerns might result in potential losses ofonline retail sales of up to $18 billion.

Companies have responded to thisincreasing public concern over Internet pri-vacy in a number of ways. Web-based busi-nesses have long recognized four widelyaccepted fair information practice principles:Notice (clearly and conspicuously state infor-mation practices); Choice (offer choices onhow personal information is used); Access(grant users access to their own information);and Security (take reasonable steps to protectthe security of user information). However,

the FTC reported last year thatonly about 20% of the websitessampled in its 2000 survey haveimplemented, even in part, theseprinciples (although 42% of the 100busiest commercial sites in the U.S.have implemented them). Likewise,the FTC survey determined thatless than 10% of the sampled sites

are enrolled in online privacy seal programsand conspicuously display privacy seals.

Many companies—including IBM,DoubleClick, AT&T, ExciteAtHome, andEarthLink—have also responded to concernsover online privacy by creating the position ofChief Privacy Officer. CPOs are given a vari-ety of responsibilities, ranging from soothingcustomer concerns about the use of their per-sonal information to lobbying lawmakers overproposed technology-related legislation. AllenWeston, President of Privacy in AmericanBusiness, estimates that 75 to 100 U.S. com-panies have employed privacy officers and that“there will be hundreds or thousands in theUnited States over the next few years.” (Incontrast, the Bush administration has optednot to appoint a “chief counselor for privacy,”a position created by the Clinton administra-tion, instead placing responsibility for privacyissues in the hands of the White House Officeof Management and Budget.)

Nevertheless, there is a general sense thatweb-based businesses have done too little toolate to protect users’ private online informa-tion. As a result, both the Texas Legislatureand the U.S. Congress are currently consider-ing several proposed bills and legislation gov-erning the use and dissemination of online

information and protecting the privacy rightsof Internet users. Seventy bills relating to pri-vacy issues were introduced in the mostrecent session of the Texas Legislature. Manyrelate specifically to the health care and finan-cial services industries, but some have broaderapplications. For example, the Legislature wasconsidering an amendment (as of press time)to Article One of the Texas Constitution torecognize a personal right of privacy. Also,noting the lack of “a consistent or compre-hensive personal information privacy policy,”the Texas Legislature was considering estab-lishing a Task Force on Personal Privacy toassess the effect of Texas laws on individuals,commerce, and government operation in rela-tion to personal information privacy concerns.Additionally, the Task Force would addresswhether existing or proposed laws contravenecommonly held expectations of individual pri-vacy and affect commerce by creating an envi-ronment in which individuals will become lesslikely to divulge information. “Personal infor-mation,” as defined in the bill, includes anindividual’s address, telephone number, SocialSecurity number, date of birth, marital status,family member information, financial history,and consumer history (presumably, sales, pur-chases, and other commercial activity).

The U.S. Congress is also considering anumber of privacy-related bills:l Online Privacy Protection Act of 2001—

requiring the FTC to create regulations toprotect the privacy of personal informationcollected from and about individuals whoare not covered by the Childrens’ OnlinePrivacy Protection Act.

l Electronic Privacy Protection Act—prohibit-ing the manufacture, sale, and use of aninformation collection device withoutnotice and consent.

l Consumer Internet Privacy EnhancementAct—protecting the privacy of consumerswho use the Internet.

l Consumer Online Privacy and DisclosureAct—requiring the FTC to create regula-tions to protect the privacy of personalinformation collected from and about indi-viduals on the Internet.

General Counsel’s Comments

All Eyes Focus on Online PrivacyW. Stephen Benesh, Bracewell & Patterson, LLP

...less than 10%of the sampledsites are enrolledin online privacyseal programs...

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l Privacy Commission Act—establishing acommission for the comprehensive studyof privacy protection.

l Spyware Control and Privacy ControlProtection Act of 2001—providing for thedisclosure of the collection of informationthrough computer software.

As concerns over Internet privacy grow,companies must alleviate customer and userconcern over the confidentiality of privateinformation. Companies should pay closeattention to the manner in which such infor-mation is gathered, stored, and disseminatedand also take specific steps to assure useranonymity. As evidenced by DoubleClick’sdifficulties, many privacy disputes are trig-gered by partnerships and joint venturesbetween web-based businesses contemplat-ing shared ownership of user information.Companies contemplating such situationsshould take steps to ensure that proposedjoint marketing and joint venture arrange-ments do not violate either company’s pri-vacy policies.

W. Stephen Benesh is a partner in the trial section of Bracewell & Patterson, LLP’s Austin office, which serves as General Counselto the Austin Software Council. Mr. Beneshengages in commercial and technology litiga-tion and is a member of the law firm’sInformation Technology & E-Commerce(ITEC) Group. Mr. Benesh may be reached at sbenesh@bracepatt.com.

Workforce Development

IT Workforce: How Has the EconomyChanged Demand?Craig Eissler, Workforce Development Chair

Like the rest of the U.S., Austin’s IT jobmarket is undergoing significant change.While demand for workers remains strong,the numbers and nature have changed sub-stantially in the past 12 months.

This past April, the InformationTechnology Association of America (ITAA)released one of the most comprehensive stud-ies of the IT workforce ever conducted. Thestudy indicates that despite the experience ofindividual companies, a steady supply of newIT workers is still needed. In the U.S.,approximately 425,000 positions will gounfilled because of insufficient applicants withthe requisite skills. Last year, ITAA collecteddata indicating a shortfall of 850,000 posi-tions. The new study suggests that while theemployment picture has changed, demand isstill very high.

“The downswing in the U.S. economyhas undoubtedly affected the demand for ITworkers this year,” said ITAA President HarrisN. Miller. “Skilled technology workers—still ahighly desirable commodity to IT and non-ITcompanies—are facing more cautious hiringpractices than the “irrational exuberance” thatsome say described 2000. However, our 2001numbers suggest that hiring has by no meanshalted for IT workers, rather demand still farexceeds supply in this market.”

Other top findings are thatnon-IT companies, in aggregateterms, employ 10 times more ITworkers than do IT companies.On a per-company basis, however, the hiringneeds of IT companies are greater than non-IT companies. ITAA defines IT companies asfirms that create and sell commercial IT solu-tions. Non-IT companies use IT solutions toassist in business operations. The typical ITcompany will attempt to fill almost 19 slots inthe next 12 months compared to just two fornon-IT companies.

Technical support people remain most indemand by IT and non-IT companies alike—one-fourth of all new positions over the next12 months. Even so, this report finds demandfor these professionals is down 65%.

The emphasis this year is on traditionalinformation technology skills: programming,software engineering, and network design andadministration. Demand for candidates inenterprise systems climbed to 62%.

Four-year college degrees proved the bestpre-hire means of attaining needed skills andknowledge in four of the eight IT job clustersdeveloped by the NorthWest Center forEmerging Technologies (NWCET): databasedevelopment/administration, enterprise sys-tems, programming/software development,and technical writing. The other four IT jobclusters are network systems specialist, webadministrator, interactive digital media spe-cialist, and customer systems support.

Certification through a vendor or indus-try certification program remains of moderateimportance. IT companies viewed certifica-tions as at least as important as a bachelor’sdegree; non-IT companies placed certifica-tions slightly below a bachelor’s degree inimportance.

The Austin regional manager of therecruiting firm PDS Technical Services, DanFrey, says “I am seeing more resumes andwith more variety than in months past. Thehighly skilled A-players are always in highdemand, and though the less technically

skilled workers will experiencemore competition, they willstill fare better on the averagethan the non-IT worker.”

CEO of the executiveAustin-based recruiting firm Pedley-Richard& Associates, Sally Pedley, says, “We haveseen a dramatic reduction in the number ofcontract recruiters we place, but IT-skilledworkers are being absorbed relatively quickly.Due to the recent massive layoffs, I expect tosee more individuals moving into the inde-pendent consulting business, particularly themore senior non-IT skilled professionals.”

The complete ITAA study, “When CanYou Start? Building Better IT Skills andCareers,” is available for $50 to ITAA mem-bers and for $75 to non-members. To order,visit www. itaa.org.

…demand still farexceeds supply…

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If your company is licensing software out-side the United States, you need to be awareof U.S. export controls, just as any otherexporter should. For most companies, anexport control program need not be complex,and many compliance activities can be out-sourced. But responsibility for compliancecannot be delegated, and the penalties for vio-lations of export controls can be severe.Consequently, you need to understand howexport controls affect your business and im-plement an appropriate compliance program.

The U.S. government controls interna-tional trade in goods and services, financialtransactions, and disclosure of technical data.Depending on the characteristics of a transac-tion and the goods or technology involved, atransaction may require no license, mayrequire a license that is published and grantedgenerally for all qualifying transactions, mayrequire application to the government for aspecific license, or may be prohibited alto-gether. Controls may be imposed for a num-ber of reasons, including proliferation of mis-sile technology; nuclear, chemical or biologi-cal weapons; national security; terrorism; andpotential for dual military/civilian use.

Export controls include many differentlaws and regulations, as well as internationalagreements, and are administered by variousdifferent government departments, principallythe Commerce, Treasury, and StateDepartments. It can get quite complicated.But once you identify the particular regula-tions that apply to your business activity, com-pliance is often a routine and simple process.

The compliance program should be peri-odically updated. Export controls are politi-cally sensitive, and, as a result, they are sub-ject to constant change. Each year significantchanges may bring trade to a halt in one areaor open previously forbidden markets.Further, as your business grows and evolves,the new activities may involve additional regu-latory requirements.

Software may be many things, and defin-ing it may be difficult and subject to longdebate. But for purposes of export control,the definition is straightforward: software istechnical data. Accordingly, exports and re-exports of software need not necessarilyinvolve shipment of physical media (i.e., CD-ROM) or even a cross border transmission(i.e., downloading) to be subject to exportcontrols. Software may also be subject insome cases to “deemed” export rules. Underthese rules, disclosure of data to a foreignnational may be “deemed” to be an export tothat person’s home country, even though thedisclosure takes place within the U.S.

Even if your company is licensing busi-ness or consumer software of types commonlyavailable and exporting only torelatively unregulated trade desti-nations like Canada, Mexico, andthe EC, you need to examine howexport controls affect your busi-ness. Commonly available applications in theU.S. may be subject to strict export control,as has been the case for many years withencryption applications. The technology andproducts subject to controls are not alwaysobvious. For example, unless you know howto build missiles or make mustard gas, theproducts and processes involved will not beobvious, and you cannot be sure that yoursoftware is not a potentially integral part ofsuch activities. And you will never find outunless you go through the exercise of classify-ing your software. Even where the productclassification and destination controls areknown, there may be procedures that youneed to implement to qualify for the applica-ble license, such as screening customersagainst the TDO list (a list of persons andcompanies that have been identified withembargoed governments, terrorist organiza-

Export Control Considerations for the Software BusinessJohn Symington, attorney-at-law

tions, etc.). Because many aspects of exportcontrol are not obvious, you simply cannotknow how you are affected until you lookinto the matter.

So where do you start? For general infor-mation, the relevant government web pagesare a good place:l Department of Commerce (Bureau of

Export Administration) www.bxa.doc.govl Department of Treasury (Office of

Foreign Assets Control)www.treas.gov/ofac/index.html

l Department of State (Office of DefenseTrade Controls) www.pmdtc.org

For simple compliance requirements,freight forwarders and other export profes-sionals can be very helpful, particularly when

implementing the procedures nec-essary for your company to com-ply. For more complicated require-ments, specialists can advise onhow to design and implement a

good compliance program. And at any levelof complexity, it helps to consult a lawyerfamiliar with the law in this area.

Export controls are complicated and canbe intimidating, but they are not normally areason to avoid international trade. Be aware.Adopt a reasonable compliance program.Update the program periodically. In this way,you can achieve and maintain compliance andavoid the potentially serious sanctions for vio-lation of export control laws.

John Symington is an attorney in Austin. His practice focuses on general business legal matters and international business transactions. He can be reached at jsymington@symingtonlaw.com.

Software istechnical data.

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Austin’s International Development Gaining Critical MassDeirdre Mendez

Things are sizzling in Austin’s interna-tional arena—international opportunity forAustin companies has never been greater. TheCouncil is sending out a regular e-mailnewsletter to keep you informed; if you’d liketo receive the monthly International Update,let me know.

Some Of The Signs That We’reGaining Global Ground

At the Greater Austin InternationalCoalition’s annual conference in May, morethan 100 members of the 300-member audi-ence signed up to work on international pro-jects. GAIC’s new stakeholder program willallow volunteers to propose and participate incommunity projects, such as the followingthat have been proposed:l International Protocol Network to host

international visitors and maximize theirexposure to the community and vice versa

l ABIA Support Group to increase the international services at Austin-BergstromInternational Airport

l Promotion of an international trade centerfor Austin

l An initiative to create international opportunities for Austin’s film and music industries

l An international labor and workforce devel-opment initiative

l Advocacy of international policies to stategovernment

l Education Peer Group to network and cre-ate joint international programs among theregion’s academic institutions

l A project to educate government officialsabout international issues

l An initiative to create internationalexchange in the fine and performing arts

Participation is open to anyone; contactme if you’d like to work with this group.

More good news: John Brier, the newVP of Economic Development at theChamber of Commerce, has expressed hiscommitment to serving Austin’s businesscommunity through international initiatives.It’s great to see the Chamber returning to aninternational focus.

The Mayor’s International InfrastructureTask Force has recommended that the citycreate a public/private partnership to pro-mote international expansion in the region.The development of an international tradeorganization will be part of this initiative.Mayor Watson has appointed 12 people toserve on an interim board to get this projectup and running.

International investors are showinginterest in Austin. At a time when U.S. com-panies are having difficulty attracting late-round investment, foreign investors are anideal solution. International organizationsdon’t follow a U.S. venture capital model.They’re more interested in connecting with aparticular technology than realizing short-term capital gain; take longer to conduct duediligence and process paperwork; and typical-ly prefer to invest in solid companies with ahistory of prudent management, a product,and some customers. This profile makes thema great match for Austin’s investment com-munity, whose portfolios are heavy with late-round companies.

The best thing about foreign investors isthat they can open up other markets to thecompanies they invest in. So internationalcapital isn’t just money—it’s smart money.Within the local venture capital community,we’re seeing increased interest in overseasinvestment, a sign that Austin is maturing andtaking a long-term approach to managinglocal companies.

The Council is as committed as ever toproviding international opportunity for Austintechnology companies. We have an IT soft-ware mission to Japan scheduled for earlyOctober and a European mission planned forspring 2002. Contact me for details.

If your company’s products have a glob-al market, you need to think about interna-tional business. The good news is thatAustin’s business community is mobilizing to meet your needs.

For more information, contact Deirdre Mendez,Foreign Business Management Consultants,512-338-1177 or dlb-fbmc@worldnet.att.net.

Spice up your technical content

Sure pictures often stave off the need for words. But they don’t replace them! Your technical differentiator still needs textual explanation.

Editors and journalists urge you to eliminate the following buzzwords from your marcom lexicon and your next press releases:

Best-of-breed ■ Leading ■ Seamless ■ Customer-centric ■ Leading provider ■ Solutions ■ Cutting edge ■ Mission critical ■ State-of-the-art ■ End-to-end ■ Robust■ Value-added ■ First-mover ■ Scalable ■ Web-enabled

So either pull out the thesaurus or find a pen to hire.

Press releases

Success Stories

The Iris Companyfacts with flair

Emily Sopensky

512.452.2448

emily@iriscompany.com

512.452.8950 fax

Case Studies

Presentations

Technical Documentation

Ad Copy

Brochures

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The Leader

just one search. But think carefully beforereleasing your resume and personal contactinformation to strangers.

4. Where do I find “hidden” jobs?Some estimate as many as three out of everyfive professional jobs are never advertisedbefore they are filled. While your personalnetwork is by far the best place to tap intothese opportunities, there are other resourcesas well. Websites for local incubators and venture funds are a good place to see who’sdoing what with what kind of funding andwho is most likely in a growth mode. Readthe Austin Business Journal to see who is buy-ing new offices, another good indicator ofgrowth. After all, they have to put someonein those offices; why not you? And don’t for-get about the Austin Software Council’sevents and activities!

Why should they hire me? You mustknow the answer before you can approach acompany to request a job. And your resumeand cover letter should clearly state these rea-sons up front. Keep in mind that vague gen-eralizations such as “self-starter” or “peopleperson” don’t sell as well as accomplishments.

well. The last product I helped launch,GoGoGadget, has been extremely profitable.Because I enjoyed the product managementaspects of that project so much, I’ve decided I’dlike to work toward a more product manage-ment type role….” Then tailor the ending toyour audience. For instance, at a meeting ofthe American Marketing Association, you’dprobably end with “Right now I’m trying tolearn more about the product managementfield; I’d appreciate any insights or advice youcould give me on pursuing opportunities in thisarea.” Stay away from vague titles or irrele-vant details. Use language and referencepoints your audience understands. As one ofmy peers once told a more technical friend,“explain your job to me as though you wereexplaining it to your mother.”

3. How many and what resourcesshould I use? The Techies.com survey alsonoted that technology workers use an averageof nearly seven different employmentresources, including professional associations,online job boards, headhunters, contract posi-tions, newsgroups, and want ads. Most of thesurvey respondents posted their resumes to anaverage of 3.5 online sites. Many web services,such as AustinatWork.com or CruelWorld.comuse “agent” technology—you submit a profileand they contact you with relevant jobs forwhich you have the option to apply. Also,major search engines such as the job databaseon Hoovers.com are a great way to searchmost of the major online job posting sites with

Re-Careering in a Changing EconomyContinued from page 1

ASC Communities

Executive Roundtables Keith Zimmerman

zimmerman@equiscorp.com

HR Peer Group Susan Sandberg ssandberg@pointserve.com

International ForumDeirdre Mendez dlb-fbmc@worldnet.att.net

Sales & Marketing ForumJean Anne Booth jabooth@austin.rr.com

eBusiness Forum partnered with Central Texas eCommerce Users Group

Information Systems Forum partnered with AITP

Product Management SIGKaren Wilson

karenkwilson @hotmail.comDan Barsness dan.barsness@hand.com

Internet Appliance SIGJeff Michalski mich@app-lab.com

ASC NetworkingMonthly Meetings

Charlie Jackson charliej@ki-soft.com

Take some time to list all of your professionalaccomplishments over the past few years.Then, for each accomplishment, list all of the skills you used to reach that goal. Lastly,decide which of these skills you most want touse in your next job. Your cover letter, “salespitch,” and resume should all highlight theseaccomplishments and skills. Whenever possi-ble, attach numbers to your accomplishmentsto show just how effective you were. Forexample, you can either say “Created a web-based order form for an existing product line” or you can say, “Increased orders for existingproduct by 25% by creating a web-basedorder form.” Which person would you hire?The clearer you are on what you have to offerand what you want to do, the more likely youare to get what you want.

Jamie King Belinne is Associate Director forMBA Career Services at the McCombs School ofBusiness at the University of Texas at Austin.She has worked in work services and job place-ment for more than 12 years. She can bereached at Jamie.KingBelinne@bus.utexas.edu.

11

2Q01

ASC“U” DeansLed by Chancellor Chris John, the Austin

Software Council “University” deans are thepeople who plan the seminars their depart-ments present. ASC“U” deans welcome yourideas for future programs. You can reach themat the addresses listed below.

Vice ChancellorTony Thompson tonyt@us.ibm.com

FinanceDale Cox dale.cox@us.pwcglobal.comBrad Keller brad.g.keller@us.pwcglobal.com

Human ResourcesChris John cjohn@benefits.comNancy McIntire

nancy.mcintire@healthanswersinc.com

InternationalizationDeirdre Mendez dlb-fbmc@worldnet.att.netBrenda Hall brenda.hall@mobileum.com

LeadershipNeal Kocurek Nkocurek@sdsys.orgCharles Leadford charles@primusnet.comJim Ronay jeronay@jump.net

LegalGail Taylor Russell gail@russell-law.com

MarketingCheryl Seeman cseeman@echips.comSteve Farrer

steve.farrer@proteanmarketing.com

Software DevelopmentKent Hemingson hemings@us.ibm.com

Watch the Council’s website for details about upcoming seminars.

We are looking for more volunteers.

www.austinsoftwarecouncil.org

It can be lonely at the top. When thebuck stops here, a CEO cannot afford tomake a wrong decision for fear of losing tothe competition. The same applies to a CFO,COO, CTO, CIO, and executives through-out the high ranks of sales, marketing, andhuman resources. To help executives avoiddisastrous missteps, the Austin SoftwareCouncil is revamping the Executive PeerGroups into the Executive Roundtables.

The Council has created ExecutiveRoundtables to allow members of the topmanagement teams in Austin’s high techcompanies to consult and strategize with theirpeers. These Executive Roundtables providemembers with confidential, highly targetedideas and advice from a group of successfulpeers. Participants of the roundtables arerewarded with competitive advantages derivedthrough discussion and interaction.

Groups were created to target membersof established companies, fast growing ven-ture-backed firms, and highpotential start-ups. Each round-table consists of 12 individuals(all members of the AustinSoftware Council) in similarpositions from non-competing companies. Anemphasis has been placed onmixing groups to create a combination ofdiverse experiences as well as to provide edu-cational opportunities and competitive advan-tages for all group members.

The Executive Roundtables are heldmonthly with a different member of theroundtable hosting the meeting. The hostchooses at least one topic for the group todiscuss. This allows each member to receivesome specific advice and support for prob-

Executive Roundtables: An Opportunity to Learn and Build RelationshipsPaul Toprac, Executive Director, Austin Software Council

lems or ideas that pertain to that persondirectly. In addition to providing advice to

the host, the remainder of themeeting is devoted to the mostimportant topics identified by thegroup as a whole. These discus-sions can prove invaluable as theinformation comes from success-ful peers with proven trackrecords. If each person’s time is

worth $150 per hour, then every session pro-vides a participant with more than $3,000worth of advice for a total of nearly $40,000of counseling throughout the year. Eachroundtable also includes a professional facili-tator who is trained to keep the sessions ontime and the discussions on target.Therefore, every meeting is sure to be bothefficient and beneficial to all. This uniqueopportunity offers its members tremendousvalue by allowing executives to learn andconsult while building their relationships withpeers in the Austin technology community.

For more information or to receive an application, contact Paul Toprac by email at paul@austinsoftwarecouncil.org or at 512-305-0032.

every sessionprovides…morethan $3,000worth of advice

S•1

The Leader

Selecting the “right” technology has neverbeen as important as it is today. No longer rel-egated to support functions, technology nowplays a critical role in a company’s success orfailure. However, the growing myriad of inno-vative solutions and business models makeschoosing increasingly difficult. Not only mustIT solution providers and their customersunderstand the technology, they must alsounderstand how it will impact their businesses.The bottom line: following a comprehensive,fact-based technology assessment process is astrategic imperative.

To succeed, vendors, strategic partners,and customers must understand and followthe three-phase process involved in tech-nology assessment:l Phase I: Internal Needs Assessmentl Phase II: Vendor Analysisl Phase III: Negotiation and Selection

Phase I: Internal Needs Assessment.The process begins by assessing internal needsand defining requirements, thereby identifyingwhat specific problems need to be solved.Often the needs and corresponding require-ments are then prioritized into categories suchas “must haves, nice to haves, and futureitems.” Depending on the project’s size andscope, the initial phase can be fairly time-consuming. It can be performed either by ateam from a customer’s IT and business unitsor with an outside professional services firm.Although many net-savvy companies prefer togo it alone, other high-tech heavies such asDell rely on third-party experts. Still, no mat-ter who is involved, this phase is vital to layingthe foundation for the ultimate success or fail-ure of the project—the implementation of thechosen software solution.

By aggressively keeping up with markettrends and individual customer needs, solutionproviders can stay ahead of the competitionand win market share by carefully choosingstrategic partnerships. For example, leadingbroadband solutions provider, BroadJump,relies on its customers to help identify gaps inits current products. Says Jon Green,BroadJump’s director of partner marketing,“What is really critical is that we try to bringsolutions to market that fit the needs of ourcustomers. We can’t do it alone.”

Phase II: Vendor Analysis. Based onbusiness needs and software requirements, theproject team can then identify potential soft-ware candidates. John Christ, VP of ClientServices for divine, Inc., a leading professionalservices firm whose clients include AmericanAirlines, Walgreens, and others, says that to

save time divine will often recommend thatthis phase be performed in parallel with theneeds assessment. They first come up with a“big list” of possible candidates and narrow itdown based on specific requirements as theyare identified and prioritized.

According to Gartner, many of theirclients spend six to 15 months debating overwhich product or vendor to use. Much of thistime is devoted to determining which criteriaare more important for the evaluation and incollecting data on the alternatives. In fact,clients spend upwards of 60% of their decisioneffort attempting to achieve management buy-in. To shorten the process, corporations oftenrely on outside support from consultants suchas Devine as well as reports from leading ana-lysts such as Forrester, Gartner, and IDC.

Key criteria for any technology assessmentshould include both product attributes (func-tion, technical architecture, cost) and vendorcapabilities (services, viability, vision). To suc-cessfully market to savvy enterprise customers,software companies must score high marksacross the board. According to John Christ, inaddition to function and performance, compa-ny viability plays a major role in evaluations.Christ adds that his team wants a softwarecompany to demonstrate success and be ableto point to having implementation experiencethat has led to superior levels of production fora client’s web site. Scalability is also a criticalissue for large-scale customers. For example,website clients will want to know that a solu-tion can handle “x number” of transactionswithout affecting site performance.

Likewise, when it comes to choosing astrategic partner, both “hard” and “soft”issues must also be examined. At BroadJump,once the need for an outsidepartner is identified, thecompany then investigateswho offers a given solutionand narrows the field to“best-of-breed” candidates—an important consideration in keeping withBroadJump’s reputation as a market leader. Infact, BroadJump devotes an entire CTO teamto assess each candidate’s technology as theyperform their evaluations. Still, technologyleadership is not the sole criterion. BroadJump’sGreen also stresses the importance of culturalfit: “We need to be able to work with ourpartners, to be able to move forward, and notget hung up on any particular issue.”

Cost is also an important factor. Toreflect the total cost of ownership (TCO), thebuyer, with the help of a consultant and/or

software vendor(s), must determine how wella given solution maps to the existing skill setsof its user and support base and current infra-structure. If there is any shortfall, the actualcost can be much higher as the company mayneed a lot of consulting support as well asnew equipment.

Based on the above criteria, a “short list”of two to four alternatives is then selected.Now either the buyer or its consultant can per-form technical analysis on the various solu-tions. This may include onsite product demos,scripted scenarios, or limited-time trials (espe-cially useful when it comes to prototyping).

Phase III: Negotiation and Selection.After selecting one or two software vendors,the product selection team can then proceed to contract negotiation and product selection.During this phase, the team establishes itsnegotiation strategy, develops contract termsand conditions, and enters into negotiationswith the selected vendor(s). Consultant sup-port can be extremely valuable in providinginsight into deal structures and vendors’ agree-ments with clients. Occasionally, the selectionprocess can break down at this stage, forcingthe project team to review their previous stepsand make any necessary revisions. However,according to Gartner, in 90% of all selections,the negotiation phase leads to a contract andthe customer can move onto the next phase—implementation. One key to success, notesdivine’s Christ, is the consultant working close-ly with the client to ensure an equal ownershipof critical decisions throughout the entireassessment process.

Another important consideration iswhether to buy or build. Today, with thegrowing number of proven alternatives, buying

is clearly the industry trend.Customers understand there ismore implementation risk witha custom-built solution.However, notes Christ, “youcan’t buy competitive advan-

tage.” Either a customer must achieve itthrough a unique business process or the soft-ware selected must somehow be customized.One way to gain this advantage is throughpartnerships. Not only can they relieve cus-tomers from having to build a piecemeal solu-tion, they can ease the inevitable tweaking toprovide a unique offering for each client.

Charles Cole provides brand strategy, strategicmarketing, and business development advisoryservices to high-tech companies based in Austinand throughout the Southwest. He can be reached at charcole@austin.rr.com.

…include both productattributes…andvendor capabilities

…include both productattributes…andvendor capabilities

Austin Software Council S p e c i a l S u p p l e m e n t

TechnologyAssessmentTechnology Assessment in

Today’s Ever-Changing MarketTechnology Assessment in Today’s Ever-Changing MarketCharles Cole

S•2

The Leader

TechnoAsses

IntroductionA downturn in the economy often cre-

ates additional challenges as businesses bal-ance the use of new technologies to gain efficiencies or market share with tighterinvestment budgets. Whether choosing a new software package to help run the busi-ness, investing in manufacturing capability,training people to develop new capabilities,or revamping your website, having a clearunderstanding of how each initiative fits into your overall technology strategy is vitalto achieving a return on your investment(ROI). One proven technique is theTechnology Roadmap.

What Is A Technology Roadmap?A Technology Roadmap is a structured

method of describ-ing your currentstate in terms oftechnology and thegoal state or whatyou want yourcapabilities to be. Moreover, it is a set ofinstructions on how to get from one to theother and a schedule to help you do it.

The process of developing a roadmapforces you to spend time assessing the currentstate of your organization. This step can bedifficult. In fact, it is not uncommon for executives to have heated discussions abouttheir organization’s technology, processes,people, products, etc. However, workingthrough the process results in a commonvision about what will happen and when. It facilitates coordination and cooperationacross departments and allows people to prepare for their role in the transition.

When you build the roadmap, you createa series of planned improvements. With thedescription of your current capabilities andthose required for the future, you highlightthe differences between what you have andwhat you need in each of the key categories.Based on these differences, you can definespecific initiatives to close the gaps. The finaloutput of the roadmap is the schedule bywhich the projects get accomplished.

In working out the schedule, somesequence issues will be easily resolved. Forexample, if your network is a bottleneckbecause of reliability or capacity, it needs tobe upgraded before additional loads areplaced on it by new applications. Barringother dependencies, the ROI expected fromthe change is often used to define thesequence in which projects are done.

Keep in mind, however, that no plan isever complete or remains unchanged duringexecution. Changes in the organization’svision, the business environment, technologydevelopments, and the organization itself arejust a few of the factors that will trigger aneed to update the plan. Periodically reviewthe roadmap and modify it accordingly.Overall, though, creating a TechnologyRoadmap can maximize your competitivenessnow and convert the stress of uncertainty intoa clear blueprint for competitive advantage.

Pat Flanagan is a senior consultant withAthens Group, an employee-owned consultingfirm integrating technology strategy and soft-ware solutions. His expertise is in strategicbusiness planning, systems implementation,process analysis and improvement, and infor-mation systems design. His email address ispatrick.flanagan@athensgroup.com.

S p e c i a l S u p p l e m e n t Austin Software Council

card system for the Austin Software Council.The Council wanted to implement a

member ID card system in an effort tol Reduce registration times and streamline

the events registration processl Improve fee collection efforts by authenti-

cating members vs. non-membersl Adopt an innovative solution that would

differentiate them from other associationsThe Council contracted with Embrace

Software1 to develop and implement this sys-

tem. Embrace explored smartcards first andthen decided it was too expensive and cumber-some to implement a smartcard-based solution.Also smartcards were somewhat slow due to 1to 2-second latency in recognizing cards pre-sented to the reader. Embrace decided toexplore barcodes instead and found that it wasnot only more cost effective (since no personal-ization, etc. is needed and the barcodes can beprinted directly from a standard printer ontocardstock, which could then be laminated), butit was contactless and faster than smartcards.

Each of the more than 2500 members1Embrace (formerly Keycash) and Microsoft Corp. are co-sponsors of the Member Card program.

Effective Technology Selection Through the Use of a Technology RoadmapEffective Technology Selection Through the Use of a Technology RoadmapPatrick R. Flanagan, Athens Group, Inc.

Implementation ofthe ASC MemberCards Program

Implementation ofthe ASC MemberCards ProgramRaj Sundra, Embrace Software

In the last issue of The Leader, we talkedabout customer relationship managementusing employee cards for companies. In thisissue, we present the issues involved indesigning and implementing a member ID

a…roadmap canmaximize yourcompetitiveness…

a…roadmap canmaximize yourcompetitiveness…

Developing a Technology Roadmap

Like any set of directions, theTechnology Roadmap helps you plan yourjourney from “here” to “there.” First, definethe key criteria by which you will describeyour organization. At Athens Group, forexample, we have found it useful to considerthe following: people, leadership, organiza-tional structure, processes, applications, net-works, computing, and information technolo-gy. Second, describe your current organiza-tion in terms of the key criteria to create acapabilities profile. Third, describe your visionof your company or future capabilities profile.(A good reference point is your existing busi-ness plan.) Create a future capabilities profileusing the key criteria to describe whatresources—technical and human—your orga-nization will need to be able to support yourvision. Finally, build the roadmap that willenable you to transition from your currentcapabilities profile to the future.

There are a variety of benefits to choos-ing a facilitator for your roadmap develop-ment. As others who have gone through simi-lar processes will agree, a facilitator can helpwith both defining technology requirementsand reaching agreement.

Products of a RoadmapAction Output Define Criteria Roadmap FrameworkDescribe Current State Current Capabilities Profile Review Business Plan Gap AnalysisDescribe Future State Future Capabilities Profile Build the Roadmap The Technology Roadmap

S•3

The Leader

ologyssment

So you’ve just created a new advancedtechnology that is superior to anything elseyou’ve seen. But will people pay enough tojustify its commercialization? What is the bestcourse of action to take advantage of thisnew technology?

These questions need to be answered in a structured manner to avoid inaction and/or wheel spinning on the way to market. In working with its clients to assess a technology, Technology Futures uses anapproach it calls Technology AdvantageManagement (TAM).

TAM is not a fixed process, but a guideline to be adapted to the culture, structure, and abilities of the business. It has evolved out of numerous technologyassessment engagements with organizationsin industries ranging from beauty products to semiconductors to telecommunications to national security.

An assessment project starts with a list of the salient features of the target technolo-gy. These are non-generic but high level, for example “the ability to provide re-movable data storage at 5 times the densityof then current DVD technology.” The goal of this list is to give assessment partici-pants an idea of the technology without limiting their creativity.

A knowledge-gathering phase followsthat looks at the changing environment—geopolitical, economic, social, and regulato-ry—surrounding the technology. It includesthe evaluation of three important areas: market pull, technology push, and com-petitive clash.

A rich toolbox of methodologies is avail-able to enable a future vision. One’s selection

of the most appropriate methodology needsto be based on the five ways people view thefuture: quantitative extrapolation, fitted pat-terns, personal interplays, a series of events tobe prepared to react to, and asubconscious (intuitive) vision.By selecting methodologies thathave an affinity to each of theseviews, the quality of the assess-ment will be improved. Also different managers view thefuture in each of these ways, thusmaking your findings more likely be acceptedby management.

The societal, market, competitive, andtechnology findings are used to create a fore-cast of the potential markets for the technol-ogy. This forecast, along with the supportingevidence from the assessment, is used to cre-ate a Technology Advantage Opportunitydocument. In companies that deal in multipletechnologies, several such documents may beprepared simultaneously.

At this point, you have defined and cap-tured in a document the overall opportunityfor your organization. This documentationcan be referred to in later steps and used asthe basis for modification when newer knowl-edge is acquired.

You are now ready for strategic plan-ning. Using the documentation from the pre-vious steps, you look at your organization’sability to address the opportunity. Thisincludes your vision/goals/mission; yourcapabilities; and your current focus in R&D,finance, and marketing. From this activitycomes the Technology Advantage Strategythat documents the strategy that will bestserve your organization. This will provide a

Austin Software Council S p e c i a l S u p p l e m e n t

from nearly 400 companies in the Councildatabase are expected to carry the membercards and use them to register at the meet-ings. The cards will also simplify and speed upthe registration process for Council membersat events. The cards also offer the opportunityfor members to get discounts on productsand services in the future.

In designing and implementing themember cards, we had to obtain and test laptop-compatible barcode scanners; insertCouncil and sponsor logos; print barcodesusing merged data; and finally have the cards

laminated. The pilot implementation is nowunderway. Once the pilot program is com-pleted, the Council plans to implement stur-dier ID cards with affixed barcodes in lieu ofthe laminated cards.

Barcoding is a rugged technology that ischeap, yet incredibly effective. Examples ofbarcoding applications are ubiquitous. UPSand Fedex could not conduct their operationswithout barcoded package tracking, and theairline industry could not track passenger bag-gage without barcoding. While materials han-dling is a natural application for barcoding,

barcodes can also be used for employeeadministration and network security as well asdocument management. The biggest advan-tage of barcodes are that practically every pro-gram on any OS is barcode-compatible, sincethere are no special drivers needed to inte-grate barcodes into software. This is a tech-nology that can provide a very real return oninvestment and holds significant promise forsoftware and hardware companies.

Raj Sundra can be reached atrsundra@yahoo.com.

A Structured Approach to Technology AssessmentA Structured Approach to Technology AssessmentBill Kleinebecker, Technology Futures, Inc.

firm foundation for your technology imple-mentation planning.

The TAM approach has been adapted toorganizations of various types, business size,

and maturity. It helps to identifyemerging advances in technology; itprovides methodologies to analyzethe importance, implications, andtiming of these advances; and ithelps match these advances with themission, objectives, and capabilitiesof the organization and determines

the actions to ensure that competitive advan-tage is achieved.

Bill Kleinebecker is senior consultant atTechnology Futures, Inc., a technology manage-ment, forecasting, and planning consultancyheadquartered in Austin. Kleinebecker is alongtime Council volunteer. He can be reachedat akleineb@tfi.com.

…create aforecast ofthe potentialmarkets…

…create aforecast ofthe potentialmarkets…

S•4

The Leader

SOAP, one of the hottest new technolo-gies, has been gaining a lot of momentum inthe web software development community.Let’s take a look at what it is and how it canhelp you.

What is SOAP?SOAP—Simple Object Access

Protocol—is an open standard that allowsapplications over different platforms to sharedata. Its goal is to provide a seamless, web-enabled integration of services across tradi-tional hardware and software barriers.

What’s so great about SOAP? Briefly,l Simplicityl Flexibilityl Compatibility with

existing infrastructurel ExtensibilityThe biggest advantages of SOAP, which

is completely platform-independent, are itssimplicity and extensibility. SOAP can theo-retically be used in combination with differ-ent protocols. Let’s take an example of SOAPused with HTTP.

Currently, HyperText Transfer Protocol(HTTP) is the most prevalent applicationprotocol. Firewalls block most non-HTTPrequests, which has caused enormous prob-lems for executing remote procedures. Yet,

HTTP is limited in its ability to handle com-plex processing needs. SOAP, on the otherhand, is built on top of HTTP and addressessome of the protocol’s limitations. By addinga set of HTTP headers and an XML payloadto allow for complex communication needs,SOAP uses HTTP for transport and XML fordata encoding. This allows SOAP to workwith the current existing Internet infrastruc-ture. Firewalls and proxy servers that havebeen a limiting factor for a lot of technolo-gies do not affect SOAP.

The simplicity of SOAP coupled with itsinteroperability is itself a tremendous advan-tage. Because SOAP-compliant applicationsrunning on different platforms can communi-cate with each other, very powerful systemscan be developed. Imagine that a point-of-sale system written in Visual Basic and run-ning on a Windows NT platform can talk toSOAP-compliant UNIX boxes or mainframesfor credit card validations. The ease withwhich this can be done can actually savemonths of development time. Similarly, coderunning on Linux platforms can make calls to services on NT boxes, and so on.

How will SOAP help?SOAP allows for the easy interaction

among different systems irrespective of thehardware and software platforms. Since it canpotentially be built in conjunction with dif-

ferent protocols, SOAP does not require anychanges in the communication mechanism.

The other alternatives to SOAP, such asDCOM, are more complex and closed intheir implementation. They are more dif-ficult to implement, and the resourcedemands are significantly higher.

Where can you use SOAP?SOAP can be used for both specialized

and generic applications. It is especially use-ful for systems requiring interaction with several external third-party tools and ser-vices. ConnectTel, Inc. and TechnopointInternational have jointly developed a SOAPtoolkit geared towards embedded systems.This toolkit allows embedded devices to have a seamless web-enabled interface.

More details needed?For an evaluation of your system to

make it SOAP-compliant, contact us at kannank@connecttel.com.

Kannan Kaliyur is president, CEO, and co-founder of ConnectTel, an outsourcing partner to companies such as Wayne Dresser,Sears, Motorola, and EMC Automation. Hecan be reached at kannank@connettel.com or512-338-1111.

S p e c i a l S u p p l e m e n t Austin Software Council

TechnologyAssessment

SOAP—A Viable Option?SOAP—A Viable Option?Kannan Kaliyur, President and CEO, ConnectTel

14

The Leader

March Meeting Summary

Final Jeopardy—Are You Betting Your Business on Your Sales Force?Howard Nirken, Jenkens & Gilchrist, PC

Sell, Sell, Sell—such was the topic of the March meeting of the Austin SoftwareCouncil. The panel featured Randy Watson,Vice President of Corporate Development for Confiniti; Joyce Scott, Senior SalesRepresentative for Vitessa; Marc Lurie, ChiefExecutive Officer of @hand; Steve Basile,Director of Sales and Marketing forWorks.com; and Mike Phelan and WendyChoate of Deloitte & Touche.

Phelan, the panel’s moderator, asked theaudience to consider recent changes in thesoftware sales industry: l The transition from a product-oriented

sales force model to a solutions-oriented system

l The rapid emergence of strategic alliancesand partnerships and their profound andunanticipated effects on a company’s sales force

l Changes in recruiting tactics given thatsome companies are now cash poor andstock options are no longer incentives

l The failure of CRM technology to “wraparound a company’s old processes for doing business”

To address the question of how you sell asolution when all you really have is a product,Choate reminded that it is important to knowyour own skill set and not be everything toeverybody. You should help the client under-stand what the solution is and how yourproduct can help and then think about whatstrategic alliance you can make with othercompanies to help your client reach a solu-tion. Lurie echoed these comments by noting@hand’s success at providing a quality prod-uct to its customers and then aligning thecustomer with one of its bigger name strate-gic partners. Lurie stressed the importance ofhaving a big name company, such as an IBM,

as a partner, because it not only gives youcredibility, it also allows you to find the totalsolution in the most cost-effective manner.

Scott stated that the notion of “coopiti-tion”—don’t provide the entire solution to aclient, use your competitors to help—wasstarted by the founder of IBM, T. J. Watson,Sr. She instructed the audience to use whatshe called the “logical selling process”—understand the customer’s business andunderstand what they need to keep their job,do their job, and advance in their company.Gain this knowledge by talking to them andnot at them, and win their trust with honestyand integrity. Watson wholeheartedly agreed,adding that “until you have a sales forcefocused on the buyer side of a transaction, itis really hard to do solution-selling.” Basilecited the three reasons why people buy in thesoftware industry: “it saves them time, it savesthem money, and eventually it will make themmore money.”

The next question concerned the bestway a company could leverage a sales person’sskill set. Scott emphasized the importance ofallowing a junior sales person the opportunityto mirror or shadow a more senior salesemployee. She stated that practice runs and“ruthless role plays” in front of the entiresales team were instrumental in gaining confi-dence to do a sales pitch. She further notedthat junior sales representatives gain a lot bynot only watching a practice pitch by a seniorsales rep, but understanding that even themore senior people get nervous and that mak-ing a mistake in a presentation is not uncom-mon. Being able to accept criticism, being“totally egoless” is the make-up of a goodsales person.

Basile reiterated the success of the “ruth-less role play.” Such forums have allowed his

company to figure out which sales people aregoing to “cut it” because they have the requi-site leadership skills and which lack the foun-dational skills to succeed. As restated byChoate, it allows the company to assesswhether the employee is “the right fit” forthe job. Finally, Scott concluded that in lever-aging a sales person’s skill set, the companyitself needs to ensure that it has provided anenvironment for the sales representative tosucceed. As a threshold, she noted the impor-tance of having all employees of the compa-ny—from the receptionist to the accountmanager—understand the process of makingthe sale and the presentation necessary toaccomplish that task.

An audience member asked why the vicepresident of sales is targeted when sales aredown, not the vice president of marketing.Watson answered that sales and marketinghave to work as a unit. With a strategic salesprocess, sales becomes the responsibility ofthe company and not just one individual.Throughout the company, everyone mustunderstand what the company is selling, why the company solves a particular problemfor its potential customers, and how you market what the company is selling to thecustomer who needs it. In identifying where aproblem lies, Basile advised asking whetherthe message about what the company is sell-ing is clear. Marketing is the unit that enables the sales team to sell. As Lurieobserved, if the message is clear and sales are down, the CEO can quickly figure outwhere the problem lies.

The final question from the audiencefocused on how to provide incentives if youare a cash poor company in today’s market.Scott suggested that while cash is king, thereare plenty of incentives to offer young andtalented sales people. One is the opportunityto learn and be challenged. Basile agreed thata company’s environment and the manner inwhich it treats its employees can also substi-tute for cash. Companies should not underes-timate how little things, like providing snacksin the break rooms, go a long way. Finally,Phelan ended the meeting by cautioning thatwhen providing non-cash incentives, it isalways important to consult with counsel toensure compliance with rules and regulationsgoverning employee compensation.

Howard Nirken, is a corporate/securitieslawyer with an emphasis on representing emerging high growth companies in M&Atransactions, venture capital transactions, soft-ware licensing agreements, and other Internetand e-commerce issues at Jenkens & Gilchrist,PC. He can be reached at hnirken@jenkens.com.

Ron Miller, Business DevelopmentManager, ASC

The panel: Randy Watson, Vice President of Corporate Developmentfor Cofiniti; Joyce Scott, Senior Sales Representative for Vitessa; MarcLurie, Chief Executive Officer of @hand; Steve Basile, Director ofSales and Marketing for Works.com; and Mike Phelan and WendyChoate of Deloitte & Touche

15

2Q01

April Meeting Summary

E-Care—The Convergence of Software, Internet Services and Call CentersJohn A. Menchaca, Jenkens & Gilchrist, PC

The Council’s April meeting was a paneldiscussion among leading e-care specialists onleveraging technology and e-business solutionsfor Internet-based clients. In a departure fromthe usual monthly meeting, it was held atIBM’s north Austin facility. The meetingkicked off with a presentation to IBM for itsyears of service to the Austin Software Counciland the Austin technology community. Thepanelists—Anna Clepper, Motive Labs, VP-Marketing; Mike Betzer, Ineto, President; Tim Kalbas, Trilogy, Business DevelopmentManager; and John Wolpert, IBM ExtremeBlue Team, Senior Manager—explained theirrespective businesses and e-care solutions.

Motive builds “customer care” into theservice, which allows for a proactive relationshipwith customers. The company provides “a high-touch [solution] that leverages the Internet.”

Ineto, on the other hand, bundles hard-ware and software. The Ineto solution is mid-dleware that sits above email, etc., to provide a world class customer service platform for itsclients. Because multiple channels touch thecustomers, it is necessary to provide this solu-tion to mid-market companies using the web.Ineto has built an e-care service solutionthrough a data center, allowing Ineto’s cus-tomers, without expensive hardware or soft-ware, to select a channel and use the servicethrough the infrastructure Ineto provides.

Trilogy’s mission is to solve very difficultproblems for Fortune 500 companies. It cap-tures data at the various touch points andallows its clients to conduct transactions by

averaging this data. The Trilogy solution putsthe right product and service data in the handsof the client to touch its customers.

Lastly, Wolpert described his “ExtremeBlue” section of IBM as an incubator lab(which is one of three within IBM) that focusestalent and product to provide e-care solutionsfor customers. Said Wolpert, “It takes arethinking of how we get to market with thenew technologies that are currently in develop-ment and the merging of various technologiesto provide a single e-care solution.”

Moderator Farouk Hadeed, from the“Alphaworks” division of IBM in California,asked the panelists how e-care solutions applyto companies. Hadeed cited that in the past 18months the application service provider (ASP)model, particularly in the customer relation-ship management (CRM) space, has generateda lot of interest. Based on this interest, howhas this ASP delivery model changed or modi-fied the delivery mechanism for technology?

Betzer noted that the model has notchanged much. In fact, migration to ASP onthe Internet has been slow. Siebel, the fore-most CRM software provider, is a large imple-mentation that can be, at times, difficult tomanage. A significant change will be necessaryto migrate to such a model. Said Betzer, weare “5% in to the way of fixing it.” The ASPdelivery mechanism must be much more thana hosting software in a data center, and e-caresolutions must be very broad, encompassing email, messaging, voice, and other forms ofdata in various media.

Mike Betzer, Ineto Anna Clepper, Motive Labs Farouk Hadeed, Alphaworks (moderator)

According to Clepper, until ASPs offer a full spectrum solution, the company needscontracts with two or three ASPs with dataintegrity issues that naturally flow from such a relationship. We still have a ways to go inpulling these disparate technologies togetherfor one integrated solution.

Hadeed next asked about the “ultimate”e-care solution—using a broad roadmap. Asan initial answer, Betzer observed that we arenot very far in the evolution of e-care solu-tions. According to Betzer, “e-care is all aboutcommunication.” This includes phone, email,etc. Most companies are not answering emailswithin five days or using chat because it is solabor-intensive. He believes it will probably beabout three years before we have significantprogress in this area.

Clepper seconded this opinion. Everycustomer might want to switch among thevarious methods of e-care such as wireless,home PCs, email, etc., and it will take time for this solution to respond to the differentdelivery solutions. Every e-care solutionprovider must be proactive to build the func-tionality to help the customer. Additionally, itis necessary to know the drivers for each ofthese customers.

Kalbas cited an example with Lands End,which has various divisions within its corporatestructure, including a catalog division, a cor-porate sales division, online company sales,and others. In this environment, customerdata are developed among these various divi-sions at different times and in different formats,

Continued on page 19

16

The Leader

The May meeting of the Austin SoftwareCouncil highlighted a challenging issue fornumerous companies in 2001—raising capital.The panel, moderated by Chad Huston ofThompson & Knight, P.C., featured JohnThompson, Director of Marketing for DellVentures; Mickie Wright, Director ofCorporate Development for CompaqComputer Corporation; Richard Sorenson,Chairman of Point One Telecommunications,Inc.; and Jay Shreiner of Tmanage. They wereasked for their unique perspectives on whatcompanies should look for in a corporateinvestor and what a corporate investor looksfor in a company.

Representing the company’s perspective,Sorenson commented that a company shouldlook for a corporate partner that it can “workexceedingly well with.” In addition, that cor-porate investor should also be one that vali-dates a company’s business model, thusincreasing its credibility, as well as one thatprovides a potential exit strategy. Shreiner sim-ilarly noted that assessing the strategic rela-tionship of a corporate investor cannot beoverstated. Looking for the corporate investorthat fits within a company’s business modelprovides the opportunity for not only a greatinvestor relationship, but also numerous cus-tomer relationships, including the actual cor-porate investor.

From the investor’s side, Thompsonoffered three reasons why corporations enterinto venture finance: 1) strategic desire orneed, 2) financial return, and 3) commercialopportunity. For Dell, strategic desire is gen-erally what brings Dell Ventures to the tableto invest. In fact, important factors in a Dell

Venture investment are 1) the potential of thetechnology, 2) its ability to make money, and3) the value it brings to a Dell customer. Dell Ventures, like other corporate investors,tends to be sector-focused. He noted thatDell Ventures is currently concentrating itsinvestments in service and storage and wire-less communication.

Compaq takes a different approach in itsinvestment strategy. Compaq does not have a“fund”; instead, it uses its corporate develop-ment group to look for potential investments.As such, Compaq looks for companies withproducts and/or solutions that it may want touse or sell. If a company has such a productor solution, the corporate development groupputs the company in front ofthe business unit that “fits” theparticular product. The businessunit then recommends whetheror not an investment is advanta-geous to Compaq. Currently,Compaq is focused on streaming media, con-tent delivery, wireless privacy, enterprise secu-rity, and enterprise software integration.Moreover, because of Compaq’s recentinvolvement with the human genome project, Compaq has increased its attention to bio-technology.

The first question from the audience

asked how corporate investors view the valua-tion process of a start-up and whether theysimply piggy-back off a venture capitalist’s val-uation of a company. Thompson respondedthat Dell Ventures does not always piggy-backoff a valuation; he cautioned entrepreneurs inthe audience to seriously consider valuation ingoing forward with their companies. Henoted that Dell Ventures has passed on anumber of good companies because their cur-rent valuations were out of sync with reality ortheir previous valuations in earlier rounds havemade the transaction too difficult to structure.

The second question dealt with thedegree of control corporate investors seekwhen investing in companies. Sorenson

quickly pointed out that acompany must keep in mindthat when it takes moneyfrom a corporate investor, itusually precludes itself fromother potential players in the

market. He noted that although difficult, dis-cussing the accompanying restrictions with acorporate investment should be a priority.Wright agreed, acknowledging that somerestrictions generally accompany a Compaqinvestment. Thompson noted, however, thatwhile there might be restrictions, corporateinvestors do want their portfolio companies

May Meeting Summary

Funding SourcesHoward Nirken, Jenkens & Gilchrist, PC

[assess] the strategicrelationship of acorporate investor

Mickie Wright, Compaq Computer Corp. with Robin Curle, CEO Partnerships

Above: Jay Shreiner, Tmanage, Richard Sorenson, Point One Telecommunications, Inc., and Chad Huston of Thompson & Knight (moderator)

17

2Q01

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to succeed; therefore, the restrictions aregenerally reasonable.

The third question sought advice on how to deal with managing a situation inwhich the business unit for which a corporateinvestor made an investment later fails.Thompson underscored the importance ofcommunicating each party’s respective goalsand expectations before the investment tominimize misunderstandings and surprises ifsuch an event occurs. Compaq, for example,has begun structuring milestones into theirinvestments. Such milestones are not onlygeared to the company’s production, butsome trigger obligations by Compaq. Wrightobserved that the milestones have been a suc-cessful way of keeping both parties engagedand focused on productivity.

The final question asked how a companyshould go about determining due diligence of a corporate investor. Besides collecting references from people inside the corporateinvestor or from people who work for compa-nies that have received an investment from the

investor, Shreiner suggestedthat a company discuss inter-nally why they actually wantthat particular investor; thatis, find out about the corpo-rate investor’s culture andmap out how that investorcan help be a “value add” toone’s own company.

Howard Nirken, is a corpo-rate/securities lawyer with an emphasis on representingemerging high growth com-panies in M&A transactions,venture capital transactions,software licensing agreements,and other Internet and e-commerce issues at Jenkens & Gilchrist, PC. He can be reached athnirken@jenkens.com.

Richard Sorenson, Point One Telecommunications, Inc., John Thompson,Dell Ventures, and Mickie Wright, Compaq Computer Corp.

18

The Leader

Why Implement a B-to-B e-Loyalty Program?Ellen Reid Smith, Reid Smith & Associates

e-loyalty programs can build relationshipseasily and cost effectively. Following are nine reasons to implement a B-to-B e-loyalty program:

1. The web is always OPEN! The weboffers a virtual sales and training room 24hours a day. Without physical limitations, itcan be much more accessible than sales repsor your company conferences. And customerscan train on their own time, even at home (a trend that’s increasing).

2. An e-loyalty program offers train-ing in multiple formats. Customers’ productor industry knowledge and preferred learningstyles differ dramatically.But an e-loyalty programcan take the guessworkout of choosing a stylethat best persuades ortrains customers by lettingthem navigate to their pre-ferred format. For a more targeted sales mes-sage, positioning a product can be tailored byindustry or product use. While your best salesstaff won’t choose the right approach withyour customers 100% of the time, a good e-loyalty program may.

3. The web allows better feedback.Typically if it doesn’t help their commissions,sales people will not put customer feedbackon the top of their to-do list. An e-loyaltyprogram, however, provides realtime feedbackthrough web logs, tracking software, and cus-tomer feedback prompts. This can help youidentify problems faster as well as better com-pare feedback across industries.

4. An e-loyalty program can be moreinteractive than a sales rep. Because the web is interactive, it can more closely mimic ahuman relationship through intelligent, two-way dialogs. Customers can conduct researchrather than wait for the product rep’s returncall and or use creative product demos for a

more real life experience. Your website can actlike a human or even be a human throughemail or instant messaging. The fact is, salesreps aren’t as interactive as you might think.They normally spend little time with cus-tomers, relying instead on sales “leavebehinds.” And while sales reps can’t beknowledgeable on all aspects of a product, the web can.

5. Brand advertising doesn’t buildrelationships. Branding is about awareness,but loyalty goes much deeper, forging anemotional bond to your product that willstand the test of time, price, and competition.Branding can be accomplished by advertising,

but loyalty is a two-way street andrequires a relationship of interac-tion, trust, and mutual respect.

6. More bang for your buck.At any given time, a companyprobably has multiple promotionshosted by multiple product divi-

sions, customer support centers, and salesteams. A loyalty program centralizes all cus-tomer communications into “one voice” thatremembers and recognizes their needs. Thismeans that only promotions that directly meeta customer’s needs are sent and where multiplepromotions, benefits, or rewards are appropri-ate, they are combined into one concise mes-sage that is more effectively communicated.

7. High value customers are targeted.An e-loyalty program helps you identify eachcustomer’s value by giving customers a rea-son to be profiled and tracked. This allowsyou to treat best customers better as well asidentify potentially high value customers andprovide them with incentives that increasetheir spending. Not only will you reward cus-tomers based on value, your thank-you’s willbe more effective.

8. The web saves money. Web relation-ships can be started and maintained at a frac-tion of the cost of offline relationships. Thisdoesn’t mean companies will never use salesreps, the phone, or postal system again, but itmeans they can use the web to start relation-ships and reserve more expensive offline tac-tics for only high value customers where thepayback is more sure.

9. If you don’t do it, your competi-tion will. The web makes building and main-taining relationships affordable, even for yoursmallest competitor. In fact, they might evenbe better at building relationships onlinebecause they are closer to the customers theyserve. NOT building an e-loyalty programwon’t be an option much longer for prof-itable companies.

Ellen Reid Smith is CEO of Reid Smith &Associates, a consulting firm specializing in loyalty marketing strategies. She can be reached at 512-342-1768 or via email at ereidsmith@reidsmith.com.

Loyalty…requires…interaction, trust,and mutual respect.

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2Q01

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Panelists also were asked about the utopiafor e-care solutions. According to Kalbas,every customer touch point will share thesame data in a utopian e-care solution. Betzerresponded that you have to “know thy cus-tomer,” a common theme throughout the dis-cussion. Wolpert explained that the solutionmust empower individuals within the corpo-rate structure to solve these customer issuesand to integrate all the solutions. Clepper con-cluded that the e-care customer solution must

encompass the concept of a five-star hotel—you don’t necessarily see the service providers,but you feel them. In other words, you mustempower the customer to provide a solutionfor all of the customer’s problems.

In this market, the panelists noted thatmost technology purchases of this magnituderequire CFO approval. The e-care solution,therefore, must be tied to “value” and aresulting return on investment for the currentfiscal year (not many years down the line).

John A. Menchaca is a corporate/technologylawyer with an emphasis on representing emerg-ing high growth companies in venture capitaltransactions, M&A transactions, softwarelicensing agreements, and other Internet and e-commerce issues at Jenkens & Gilchrist, PC.He can be reached at 512-404-3587 or jmenchaca@jenkens.com.

April Meeting Summary: E-CareContinued from page 15

20

The Leader

next regularly scheduled payday if voluntary).Deductions may not be taken from employeepaychecks without written authorization by theemployee or where required or authorized bylaw. Overtime, minimum wage, and commis-sion payments are also regulated by both stateand federal law. Paying employees according tospecific legal requirements is a basic, but criti-cal step that is often overlooked at the end ofan employment relationship. Take the time toregularly review your payroll procedures.

3. Know the difference between areduction in force and a performance-relatedtermination. Companies often attempt to dis-guise a termination of an employee who is notperforming to company standards as a “layoff” or a “reduction in force.” Although thiseuphemism may be applied out of sensitivityto the employee, it is not advisable to mischar-acterize terminations. True reductions in forcetypically eliminate positions or departments,not individuals. If an individual is “laid off”and his former position is subsequentlyrefilled, he will likely be able to prove that theemployer’s stated reason for the terminationwas false, a crucial part of an employmentplaintiff’s case. If an employee has perfor-mance problems and termination is inevitable,the company may employ softening strategiessuch as offering the opportunity to resigninstead. Hiding behind the all-too-commonlayoff label will only cause greater problemsfor the company.

4. Review benefits issues and employ-ment agreement obligations. Before any ter-mination decision (group or individual) iscommunicated to employees, the companyshould review any applicable benefits andstock issues. Make sure that insurance benefitcontinuance (COBRA) forms are preparedand provided on time and that no other retire-ment or other benefit issues lurk in the back-ground. Additionally, terminating an employeeshortly before her stock options vest can beproblematic. If unfortunate timing is unavoid-able, make sure that the company’s actions arejustifiable and will appear so to an outsider.Employment juries often base their decisionson a perception of fairness. If a companyappears to be acting in bad faith, the jury willgo out of its way to find liability and/or awardpunitive damages.

It’s Hard (and Dangerous) to Say Goodbye... Continued from page 1

Before any employee termination meet-ing, company executives should review the status and enforceability of any employmentagreement by which the employee will bebound after the end of the employment rela-tionship. Determine how the employee will bereminded of continuing obligations. Considerproviding a copy of any pertinent confidential-ity, non-disclosure, non-solicitation, or otheragreement to the employee at or near the timeof termination.

5. Handle terminations with sensitivity.Employment lawsuits may be triggered by aterminated employee’s desire to punish a for-mer employer. A sensitive approach to termina-tions will help diffuse some of the inevitableemotions involved in losing one’s job andreduce anger-based lawsuits. Conduct termina-tion conferences behind closed doors, remaincalm, provide clear and concise reasons for thetermination decision, and use good judgment.

Decide how to handle references inadvance. Your company may have policies gov-erning the provision of information to a for-mer employee’s potential employers. Reviewthese policies and practices before any termina-tion conference and determine how you willrespond to an employee’s request for a refer-ence. Particularly where the termination deci-sion was performance-based, an employeeshould be informed that the company has aneutral reference policy (if this is the case) andwill provide only certain information inresponse to inquiries from potential employers.

6. Give a little, get a release. The bestinsurance against post-termination employ-ment lawsuits is an enforceable release of allclaims. Consider offering the terminatedemployee(s) additional consideration beyondwhat the employee would be entitled toreceive according to contract or policy inexchange for a release of all claims against thecompany. Keep in mind that claims relating tothe administration of retirement plans may notbe waived and that federal law mandates cer-tain release elements and waiting periods whenthe individual is age 40 or above, and/orwhere the consideration is being offered aspart of a “group” termination (i.e., a reduc-tion in force).

7. Think twice before contestingunemployment claims. Terminated employ-ees are more likely to file lawsuits if they havebeen denied unemployment benefits by theTexas Workforce Commission (TWC) or ifthey perceive their former employer isattempting to prevent them from receivingbenefits to which they believe they are enti-tled. While you may be legally justified inresisting a particular unemployment claim,consider the specific circumstances of each sit-uation. Providing honest answers to theTWC’s inquiries is a must, but how hard yourcompany fights to deny benefits is a matter ofdegree and discretion.

8. Pay attention to current/remainingemployee concerns. Former employees arenot the only individuals who bring employ-ment lawsuits against companies. For exam-ple, a current employee whose sexual harass-ment complaint is not investigated could havea cause of action against the company.Employees who are not being paid overtimeto which they are entitled may also bring aclaim before the Department of Labor or filea lawsuit. An employee who resigns as a resultof egregious actions by the employer may beable to bring a variety of claims based on theconcept of “constructive discharge.” Regularemployment practice audits will help ensurecompliance and will reduce the likelihood ofsuch lawsuits.

Laura Merritt is an attorney in the Austinoffice of Bracewell & Patterson, LLP, where sheprovides labor & employment law representa-tion, counseling, and training exclusively toemployers. Merritt is board-certified in Laborand Employment Law by the Texas Board ofLegal Specialization. She can be reached atlmerritt@bracepatt.com.

21

2Q01

212 Studios

2ndWave Inc.

2Uplift Inc.

Advent Networks Inc.

AFK Strategies Inc.

Alliant IT-Group

ALPNET Inc.

Andersen

Austin Community College

Austin PMPro Inc.

Austin Usability Inc.

B2G Source Inc.

Baker Botts LLP

BigLever Software Inc.

Blanc & Otus

Bracewell & Patterson LLP

Catapult Systems Corporation

Commercial Texas LLC

Commtouch Inc.

Corporate Technology Communications

David Powell Inc.

Dazel An HP Software Company

Diginis Internet Solutions

Docent Inc.

EG & G Technical Services

Elibrium Software

Embrace Software

EPSM LLC

EriQa Labs

ExpertEyes Inc.

FG Squared

Flanders Foreign Investment Office

Fort Knox Escrow Services Inc.

G51 Capital Management LLC

GKMB Investments

Gray Cary Ware & Freidenrich

Growth Partners Inc.

Haynes & Boone LLP

Hoak Breedlove Wesneski & Company

Imperial Bank

Inflow Inc.

Interactive Clarity

Jenkens & Gilchrist P.C.

JumpStart Revenue

Kaemark Inc.

Knowledge Beam Inc.

Liaison Technology Inc.

Lynx Consulting

Mahindra Consulting Inc.

Market Reach International Inc.

MasterWord Services Inc.

MaterialNetwork

Maxwell Locke & Ritter LLP

McKinsey & Company Inc.

Merinta Inc.

Miller and Demyan Bruetsch LLC

Namestormers

NeTraverse

NetSpend Corporation

Neurosurgery Associates of Austin

OfficeDomain Inc.

One Realm Inc.

Oridian Inc.

Partnerware Inc.

PDS Technical Services

PlanView Inc.

PR 21

PricewaterhouseCoopers LLP

Primus Associates L.C.

Purple Mountain Software

Q-Media Services

Quidditas

Reactivity

Reciprocal Software

Reid Smith & Associates

Scrutable Systems Inc.

SDL International

Shapiro Consulting Group Inc.

SiberLink Inc.

Sigma Information Group Inc.

Soaring Eagle Solutions

Socket Public Relations

SRM Systems Software

Storage Networks

Storage Provider

Technology Futures Inc.

Techxas Ventures

The Adea Group

The Barcode Exchange

The Business Advantage

The Kernel Group

TiPS Inc.

Tokyo Electron America Inc.

Vapor Werks Inc.

VCON Inc.

Vibrant Internet Solutions Inc.

VTEL Corporation

WCM Solutions Inc.

Woodruff-Sawyer & Company California

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New and Renewing Corporate Members

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