The Price of Everything

The Japanese car companies began to run circles around Detroit in the 1970s.  They didn’t outspend us or apply better technology - they focused on continual improvement.

They worried about more than improved quality.  The Japanese engineers thought about how to make it easier to improve quality. 

One typical example was a focus on switching out dies - massive hunks of metal that bash sheet steel into doors, hoods, and fenders.  Want to fix a problem caused by a bad die?  That will cost you three days in assembly line down time.  Of course, dies were rarely switched out.

Toyota concentrated on switching out dies quickly - an activity that has no direct benefit for the consumer.  They tried many ideas and eventually brought change times down to a minute (it’s now called Single Minute Exchange of Die). 

Then the customer started getting benefits.  Fixing problems was no longer painful, and quality shot up.

It’s the same in software or in banking.  Process matters.  Make it easy to fix problems and quality moves up. Read more »

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The Soup to Nuts principle makes sense for every business, not just deposit rate optimization software.  It even applies to banking.

My bank recently sent me an offer to increase the limit on my Home Equity Line of Credit (HELOC) by $69,000.  They worked hard to make this painless, but didn’t cover the entire process.  Read more »

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Great companies take charge of the entire problem, soup to nuts. 

Our payroll provider takes care of a thousand little details, from making the right deductions to filing reports with the government to direct deposit.  And we’re happy to pay for this - they solve our entire payroll problem.

Customers pay for the simplest, best method to get results.  They look at their total problem, not just the piece we happen to cover.  If you want happy customers, look at the whole problem too. Read more »

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SmartRate was first cobbled together in Microsoft Access and Excel.  When I demonstrated SmartRate was good enough to move forward, I developed in a slightly archaic language - Visual Basic 6. 

By almost any measure, .NET is a superior language to VB6.  Development is faster, cleaner, and the third party tools for .NET are far better.

VB6 has one feature to recommend it.  Its bad reputation among architecture astronauts repels the people we really don’t want.  Many geeks care more about gaining experience in the latest hot technology than shipping good product.  Code that works and can be modified without a PhD is just too boring for some people.  Read more »

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I used to be a banker.  Now, I make software for banks.  This weblog covers both worlds, banking and software. 

Software, good software, the kind of software that makes you stronger at your job, is not easy to build.  The software industry has wasted billions, accidentally shot a spacecraft into the surface of Mars, and killed patients with lethal doses of radiation.  And then there’s Windows Vista (currently at 5 years and $6 BN in development costs).

Banking is well past the bad old days of the 1980s S&L crisis.  There were 534 bank failures in 1989; these days you can count the year’s failures on one hand.  Plus, we bankers are no longer famous for supplying credit cards to US senators.  But, banking is still more bureaucratic than it could be.  And bankers know it.

Finance and software are the twin foundations of a modern economy.  America thrives in both.  Google, swaptions, RSS feeds, FICO scores - the level of innovation in either industry is staggering. 

I’m wowed by it all.  But I’ll try to show some of the hidden flaws in each industry as well.  The mistakes are almost as valuable as the successes.

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