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"Dr Robertson, I keep asking for information and IT tell me it will take nn years and yy million to provide the answers, BUT the transactions are already being processed"
I regularly encounter this statement when interviewing Executives at the start of a "Pulse Measurement" diagnostic investigation
One CEO said to me "I have spent 27 million, I have one tunnel and they cannot tell me how much it is costing per meter to develop that tunnel, in one years time I will have 50 tunnels, what should I do? Surely I have bought the wrong ERP?"
The answer was devastatingly simple, the configuration of their BIG Brand ERP was shockingly poor, so poor that a woman with a Bachelor of Commerce degree and five years Post Graduate experience could NOT get the Income Statement to Balance and they were running the business off Excel Spreadsheets
Yet the Big Brand ERP Vendors claimed there was nothing wrong with the implementation
Ultimately they chose to go with one of the Big Five implementers with a strong accounting alliance who claimed to have an "out of the box" solution -- after all, "nobody ever got fired for hiring ..."
Three years later the client is in liquidation because business operating costs went out of control because someone thought that ERP was the domain of Accountants and NOT Engineers
The lack of business logic and structure in data is the single biggest reason for ERP non-performance and failure and the single biggest opportunity facing just about every enterprise on the planet be they private sector for profit, not for profit or Government
Sloppy configuration is at epidemic levels and is probably one of the reasons you are taking the time to read this website today
The following diagram depicts the contrast between sloppy Credit Note Reason Codes on the left and precision codes on the right
The impact of precision configuration on value delivery is huge
This gives rise to the exponential increase in Business Value unlocked by making use of our services and methods in configuring, reconfiguring or remediating your ERP
The benefits of Precision Configuration using taxonomies is HUGE
Please contact us to find out how we can be of assistance James@JamesARobertson.com
For many years I have encountered executives who when interviewed with regard to their sub-optimal ERP or IT investments say something to the tune of "Dr Robertson, I do not understand IT, I may be wasting your time."
Over the years I have gained insight into this statement AND how to rectify the problem.
1. "I do not understand – maybe I am stupid"
Many times when undertaking a pulse measurement (diagnostic assessment of an ERP or other IT implementation that is not meeting management expectations) I find in conducting executive interviews that executives make a statement to the effect that they do not understand IT.
This time I was sitting with the Chief Financial Officer of one of my clients and he made the statement about some work that I had done in the preceding weeks.
I had facilitated a series of workshops with him and his team and then undertaken one on one working sessions with team members.
The goal was a Chart of Accounts that would work for all divisions across the business.
I thought we were making good progress.
The Chart of Accounts did not make sense to him and he was almost embarrassed to admit it.
I wonder how many times this has happened before, work for days or weeks, think you have a good solution and the executive sponsor is too embarrassed to admit that the work done does not make sense – after all, IT is magic and he might expose his ignorance if he said anything!?
2. We stop here until this makes sense to you
This time though, I did something different – I said something to the effect of "that is important, I need to understand why you say that and we are not doing anything until I understand what is concerning you and we have a solution you are entirely satisfied with".
I actually had to talk quite hard to get him to agree with me.
He was convinced he was missing something and that if we continued it would eventually all make sense.
Problem is, I have learned that if it does not make sense today it is not likely to make sense tomorrow and, if the person it does not make sense to happens to be an executive, a solution that does not make sense is a recipe for executive opt-out (as opposed to executive custody) and that is a recipe for disaster.
So, I suggested we start with a clean spreadsheet and start from scratch.
3. The power of an executive with a blank sheet of paper
It was an interesting experience.
He pushed back hard, he was concerned he was wasting time and, by implication, money,
I pointed out that the work that had been done served as a brainstorm list and that we would go through the whole list in due course to make sure that all the information we had gathered was retained in the final design.
But I managed to persuade him to start with a clean slate.
I explained the principles of taxonomy design, the emphasis on strategic (thrive) decision support, putting the most strategically important information at the top of the list, aiming for about seven items at any level in the hierarchy and we got going.
In one day we captured the entire high level structure of the key elements of the Chart of Accounts design and, most importantly, the client was enthusiastic about what we were creating.
He could now see how what we were creating would impact executive information and decision making long term going forward. His view of the business and strategic priorities were being accurately reflected.
He was excited!
4. What is a taxonomy? And why is it important?
We were creating a taxonomy, in this case a General Ledger Chart of Accounts, but the same principles apply to any classification scheme in your ERP or other IT system.
Examples of taxonomies would include your Product Class, Item Master, Customer Class, Supplier Class and all other drop down lists and validation lists in your system.
What IS a taxonomy?
It is a logical semantic (word) structure which provides a precision vocabulary of preferred terms which conveys understanding between human beings with relevant knowledge and experience.
An example of a taxonomy would be:
-- Domestic Cats
· Persian Cats
We take taxonomies for granted when we visit a library or use a product catalogue or similar but, for the most part, taxonomies are weak or entirely absent when it comes to the classification of information in ERP systems and other business information systems.
Once a taxonomy is linked to a precision code scheme it becomes the most important means of communication between a business information system or ERP and people. The creation of taxonomies is both an art and a science and at some level it is quite obscure.
But once a well designed taxonomy has been created it is obviously right.
With the correct facilitation it does not take long to create a high value taxonomy but that requires that the right people are in the room.
5. Executives are the custodians of the thrive (strategic) view of the business
Increasingly I am realizing that in defining the taxonomies for your ERP system implementation, it is the executives of the business who should be primarily involved -- assisted by the staff who report directly to them.
It is the executives who are the custodians of the strategic executive (thrive) view of the business and therefore they are the most important people when it comes to defining how the business is modeled strategically through the taxonomies.
Executives hold the integrated holistic view of the business, its customers and markets, its suppliers, its personnel, its future direction.
They are the people who know best how they want these items segmented in terms of the three, five or ten year view of where the business is going.
Accordingly they are the most important people to consult when it comes to developing taxonomies.
The MOST important output of an ERP or any business system is information that enables executives to make better strategic (thrive) decisions.
It is not difficult today to get technology to facilitate processes, enforce policies, etc but that is not enough for the organization to thrive. An organization will thrive if the correct decisions are taken by those at the top. So an ERP must facilitate the supply of the information that is required for such thrive decisions to be taken.
6. The most important requirement – answer the questions I have not thought of
By extension this means that the ERP must be able to answer the questions that executives have not yet thought of.
That sounds crazy, doesn't it?
After all, traditional ERP and other business systems implementations spend days, weeks or even months on user requirements workshops specifying all the reports that are required and now I am saying that is not required or not enough or both?
Well, at the start of an ERP project what matters is what the outcome will be in five or ten years time, NOT what the outcome will be at go-live.
The issue of answering questions executives and managers have not thought to ask.
How do you do that?
Firstly, ASK, what the business will look like in five or ten years' time – what expansion, what acquisitions, etc – executives do not necessarily have all the answers but at a headline level they have CLEAR views of where the business is going WHEN you ask them and WHEN they think about it.
But most of the time IT and ERP implementers never ask the question. They ask lots of operational and tactical questions but they seldom ask the really important questions and so they start off the journey going in the wrong direction based on the right answers to the wrong questions.
And then, what questions will you ask that you have not thought of yet?
No, I don't think you will find the answer that way!!
7. Model the business accurately – large numbers of small bins
In order to answer that question there is something else you must do.
Ask them to identify ALL the possible attributes of the components of the business, the products, the customers, the suppliers, the staff members, a widget, etc.
You goal is to classify every attribute that can realistically be identified because, IF you have all the attributes that they use consciously AND unconsciously to define a product or whatever you have the information that is required to answer most, if not all, of the questions they might ask in the future.
And, if you configure or customize the software in such a way that all these attributes are available, with drop down lists configured with carefully thought out taxonomies AND you make provision for additional fields to be added, you are likely to have a lot of the building blocks in place to answer those difficult questions sometime in the future.
Then, in addition to this, make sure that the level of detail in your taxonomies is sufficiently fine that the taxonomy divides your products or whatever into a large number of small bins (categories). This means that the data can be added up just about any way you want.
And, if you do this at the design stage it costs almost nothing to make provision for this.
The relevant metaphor is screws in a hardware store – if you go to a hardware store to purchase screws you expect to find them stored in little plastic sleeves or bins neatly organized by length, diameter, head type, etc – in other words, you expect to find a taxonomy.
If the screws were all dumped in one large bin that you had to scratch in you would go to another hardware store.
This is often why companies replace their ERP systems, they are frequently configured with large haphazard bins with little or no taxonomic logic with the result that the systems are clumsy to use and do not package the data in such a way that intelligent analysis is possible.
So, the obvious conclusion is that we have bought the wrong ERP when the problem is simply that it is wrongly configured. Not so?
No, when we are considering commercial software with established user bases the problem is almost NEVER the software, it is the way the software is implemented!
In such a case there is frequently an opportunity to reconfigure and in some cases re-implement the software.
8. Use the technology appropriately to its full potential appropriate to the business
Reimplementing your ERP is frequently a major consideration in achieving the full potential of the software.
Another aspect of getting the full potential of the software AND of ensuring that the scope of an ERP project is correct is to apply the same principle – a blank sheet of paper – to the specification of the requirements for an ERP project.
In simple terms a key element of the requirement for an ERP project should be "implement this software in a manner that fully exploits the capabilities of the software to add real value to the business in a practical manner" – in other words, do not expect the business to tell you what it wants, other than that a highly effective and efficient (thriving) business, understand the business, understand the software and then identify ALL possible synergies that will enable the tool properly used in the business to add value.
Rather than expending massive amounts of time trying to understand the "as is" condition of the business, understand the essence of the business and what causes the business to thrive (the strategy), understand the full potential of the software and then facilitate the EXECUTIVES of the business to define the high level requirement based on how can the software best be utilized to assist the business to thrive.
This could give rise to a three year or five year implementation plan during which the functionality of the software is progressively mobilized to support the business in achieving its strategic objectives.
Do NOT constrain the executives or the business by spending detailed time on what they currently do, they KNOW THAT, focus on where they are going and what they need to get there.
The most important aspect of all of this is to capture this information in strategically aligned (thrive) taxonomies throughout ALL components of the ERP.
Build all taxonomies according to the blank sheet of paper principle using the fundamental principles of ERP taxonomy design in terms of number of levels, spacing of levels, etc.
Within constraints you can progressively apply these principles across the board.
If you do, you will unlock huge value.
If you cut corners you will achieve a major loss of value.
Do it right first time.
I would be happy to discuss how we can assist you to implement effective taxonomies and give a new lease of life to your existing ERP or create a platform for unlocking exceptional value from your new ERP -- James@James-A-Robertson-and-Associates.com
The principal or fundamental components of Precision Configuration are:
1. Software settings
The basic software configuration settings that cause the software to behave in potentially very different ways and which can turn on or turn off large chunks of functionality or simply change small defaults or micro detail
2. Cubic Business Model™ in the General Ledger
The Cubic Business Model™ in the General Ledger is the component of Precision Configuration that will be common to every implementation where full Precision Configuration is applied
The full multi-dimensional cube logic must be carried through absolutely consistently into the Assets Module, the Human Resources Module, the Production Module, etc, etc
3. Asset classification
Asset classification occurs in most installations, the classification here must correlate with the summary headings in the Chart of Accounts, the plant classification logic in the Fixed and Mobile Plant modules, the spares classifications in the Product / Material / Item master files, etc
Typically there are some challenges In harmonizing the hierarchy and coding of assets across all the other modules that reference assets in some fashion
4. Product / Material / Item classification / catalogue
The Product Master / Material Master / Item Master Master Files contain by far the largest and most complex taxonomy in any ERP installation in the form of a catalogue. The logic of this catalogue can be very different depending on the nature of the business such as mining, manufacturing, distribution, services, etc
In order to achieve a high value precision configuration it is vital that this element receives considerable attention – in many cases this will be by far the most time consuming and onerous taxonomy to develop and the one that can have the biggest impact on the effective or non-effective operation of the ERP
5. Classification of Personnel
The classification of personnel, not just in terms of employment categorization and grades but also in terms of knowledge and experience (competence) classifications is generally overlooked and under estimated in terms of its ability to add value to the business, for this reason this aspect is generally hacked and gets in the way of adding value
A comprehensive precision configuration should address all facets of Human Resource categorization and particularly competence classification
6. Other specific classifications
All ERP systems contain other classifications such as the Customer Class, Supplier Class, etc and in industry specialist modules like the Mine Resource Management module, specialist manufacturing module, advanced warehouse management module, etc there will be any number of classifications, drop down lists, etc
These must all be carefully analyzed and structured in a comprehensive Precision Configuration
7. Unique attributes on Products and other classification master data
A special aspect of Precision Configuration that is little understood is the development of client specific attributes as user defined fields on the master tables, particularly on tables such as the Product Master, Customer Master, etc
These attribute lists can be quite detailed but in many cases can have a limited number of values but they describe, for example the product, more precisely relative to the operation of the specific client business under consideration
It is vital to engage with executives, managers and staff in the client organization in order to understand ALL the possible attributes that apply
It costs very little to add these user defined fields and it costs very little to acquire the extra data and maintain that data in the average organization but these custom fields can make the difference between an ERP or other system implementation that can answer obscure little asked questions and one that cannot
Clever use of these attributes also allows small clever custom functionality to be added to the configuration that allows the values of these custom attribute fields to be used to drive data acquisition logic and data processing logic
A significant investment in this area is particularly important and typically falls into the category of items that form part of the 20% of the effort that will deliver 80% of the investment value
8. General record level attribute settings
Every record of every master file contains some number of standard attribute and other settings and values. The standard fields on a large international ERP Item Master or Materials master file can run to hundreds of fields ranging from item mass through to general ledger integration account codes
With a well-designed hierarchical Item / Materials / Product catalogue it is possible to build custom functionality that will add considerable intelligence onto the maintenance of these master file records and the addition of records which will result in the entire operation of the system becoming more effective and efficient with benefits rippling through to the business, sometimes in dramatic ways
This precision in turn opens the door for other bits of limited scope clever customization to add considerable value, even to the point of creating a framework to create pseudo integration between two otherwise completely unrelated modules like modeling the product logic in the projects module so that product marketing costs can be managed using the project module in a way that it seems that the projects module is a seamless extension of the product master
In one case this type of pseudo integration opened the door for a client organization to grow their business substantially by gaining the distribution and marketing account of a major international manufacturer because they were able to do things in terms of brand management that no one else could do
9. Other configuration settings
This last category includes the vast array of other configuration at the operational level including things like workflow / business process automation, bill of materials, etc, etc
Note that many of the above items are frequently configured and set by business staff at an operational level who do not have a strategic view and who see retention of comfort with legacy data as first priority. These personnel are frequently facilitated by mid-level or even junior implementer staff who do not really understand the business or the software. Both of these are completely the WRONG things to do.
The high level design of these taxonomies should be developed by an executive level facilitator working closely with the executives of the business and even the full detail of these lists should be reviewed and approved by these same executives and executive level facilitator
I hope that this catalogue of the different components of Precision Configuration facilitates a better understanding of the full complexity of the concept -- please contact us for more information James@James-A-Robertson-and-Associates.com
In understanding what was required for precision, reliable, sustainable HIGH VALUE ERP operation James very early on applied taxonomies to his work and configured the software to very high standards of precision
This was a reflection of experience he had gained throughout his career with regard to precision in engineering and classifications of animals at school, classification of the results of his PhD research and classification of documents in the Military Filing System -- all of this came together with his first ERP and business information system projects and delivered exceptional results
For many years James did not recognize the importance of taxonomies because he assumed that everybody understood their significance and applied them and also because he did not fully recognize the extent to which taxonomies had contributed to some of his early success stories which were characterized by exceptional quantities of management information and dramatically reduced operating costs including reduction in audit time and cost
In the last few years James has become increasingly aware that it seems that few people, if any, have understood the importance of ERP and BI Taxonomies at the level of precision and rigour that he has developed and that this lack of taxonomies and precision is giving rise to MASSIVELY sub-optimal ERP operation in particular and IT investments in general
It has taken several years to unpack what is in James' head to a point that he is now starting to teach others and has written a Taxonomy Handbook of over 200 pages detailing his understanding
Part of the Taxonomy Handbook is available to download off the Box on the LinkedIn profile at http://za.linkedin.com/in/drjamesarobertsonerpdoctor and the full handbook can be obtained by emailing us
We are certain that Strategic Engineered Precision Taxonomies (SEPT) and Precision Configuration are the single biggest opportunity in the business information space, not only in ERP's but also in Data Warehouses and Business Intelligence environments as well as in CRM and other information areas -- watch this space for more information or contact James
A rigorous (engineering approach) to strategic planning using critical issues based analysis techniques and structured gap analysis techniques to develop a comprehensive and rigorous multi-year plan that is measurable and actionable and traceable back to the original analysis in order to produced high value outcomes, requires effective strategic facilitation
Business Systems NOT delivering?
Call the Business Systems Specialist
Dr James A Robertson -- has been involved in the effective application of Business Information Systems, including but NOT limited to ERP, since 1987 and in the profitable and effective use of computers in Business since 1981.
Drawing on a diversity of experience, including formal military training in Quick Attack techniques at the Regimental Commander level, Dr Robertson has developed highly effective methods of investigating any sub-optimal Business Information Systems situation -- be it an established system or a stalled project or any other source of Executive frustration -- quickly and concisely diagnosing the root cause of the problem and prescribing concise practical actions that Business Executives can effectively act on see the Pulse Measurement page and also the Sample Reports page for redacted real reports.
He has also developed highly effective methods of strategically enriching systems to unlock the full potential of existing investments, see the Precision Configuration page and couples this to architecting small pieces of clever software that harness the full potential of your investment, see the Software page.
If you are having problems with your systems, your project or your IT Department, call The Business Systems Specialist
Business System Failure is RIFE -- we offer insight into why this happens AND WHAT is required to prevent it.
Failure is at epidemic levels with massive damage done to client companies -- if you are NOT aware of the extent of the problem please visit the About Failure page for a catalog of major failures running to billions of Pounds and Dollars.
All evidence indicates that the established players do NOT know how to deliver stable, reliable high value solutions that WORK.
There HAS to be a better way!
This website provides information relating to that way with a large collection of white papers, presentations, standards documents, etc that you can use to start bringing the situation under control
We also offer high level advisory services with regard to the application of the principles advocated on this website
We offer an ENGINEERING APPROACH to addressing these issues
By Engineering I mean the formal, structured, highly disciplined, highly systematic, highly practical approach that consistently delivers results in ALL areas of human endeavor where formally trained and certified engineers are the ONLY practitioners permitted to operate -- think large buildings, factories, motor vehicles, aircraft -- highly complex systems that work at a level that we take it for granted that they WILL work and where failure is all but unthinkable and, when it happens, attracts immediate public attention and rigorous investigation directed at ensuring that such failures are prevented in the future -- in fact, everything that the management consulting industry that implements complex software systems is NOT
This approach is discussed further on the Engineering Approach page.
In 2003 I undertook an in-depth analysis of all the information and experience that I had gathered with regard to the factors giving rise to Business Information System failure including ERP and general IT and classified this information into a number of categories including "The Factors Causing Failure" and "The Critical Factors for Success" based on this I developed a two day Course "The Critical Factors for Information Technology Investment Success" which is still offered today.
Based on this I wrote the book of the same name, which is available in electronic form here for download:
James has a very detailed profile on LinkedIn should you require further information about him.
You can also connect with him on LinkedIn at http://www.linkedin.com/in/DrJamesARobertsonERPDoctor
James has an open networking profile -- click on "Connect" and use email address James@LinkedIn-at-JARA.com.
Click here to send us an email subscribing to our free newsletter -- all articles posted by James Robertson will be emailed to you
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There is a large body of white papers, articles and other content produced by Dr James Robertson available on this website
Please click here to visit the detailed listing of articles
About Dr James A Robertson PrEng -- The Business Systems Doctor -- and Other Topics
Catalogue of Major Business Information System Failures
About the Engineering Approach
James Robertson's Value Add
Attributes of a HIGH VALUE solution
Recognizing Business System Failure
The Critical Human Foundation
Old Software IS Viable
From South Africa
Competencies of Dr James A Robertson PrEng
About Professor Malcolm McDonald
Table of Contents
About my relationship with the Almighty Creator, Yah the Eternally Self-Existing
Comments relating to the Business Systems Industry and other topics
Testimonials and other positive material regarding James Robertson
List of Articles
Achieving High Value Business Information System outcomes
Executive Custody -- What is it and HOW do you get it?
The REAL Issues in Integrated Business Information System Success
Part 1: Introduction
Part 2 -- Mythology and Lack of Executive Custody
Part 3 – Strategic Alignment and Precision Configuration
Why your ERP is NOT delivering and HOW to FIX it
IT Project Management
CEO Anthony Lee Comments on his experience of the Pulse Measurement
No Charge Guarantee on the Pulse Measurement Service
Examples of Pulse Measurement Outcomes
Critical questions regarding the Pulse Measurement™
The Pulse Measurement Workflow
The Critical Factors for Business System (ERP+) Investment Success in the Pulse Measurement
Indicative Pulse Measurement Durations
What is a JAR&A Pulse Measurement?
Survival of the fittest – why it makes sense to measure the pulse of your business
Examples of Pulse Measurement Outcomes over 24 years
Sample Pulse Measurement Reports
Strategic Essence: The Missing Link in Business Information Systems
Strategic Essence: Overview
Strategic Essence: Part 1 -- Strategy Defined
Strategic Essence: Part 2 -- Differentiation
Strategic Essence: Part 3 -- The Essence IS Different
Strategic Essence: Part 4 -- The Essence should be the Point of Departure
Strategic Essence: Part 5 -- Discovering Strategic Essence
Strategy -- the Essence of the Business: What is it and how do you develop actionable strategic plans?
Simple Steps to Increase the Strategic Value of your ERP Investment
Free Strategic Snapshot Toolset and Manual
A strategy focused planning system beyond traditional budgeting
Tough IT and ERP Procurement and Contracting that Works
Robust Business Systems Procurement
Part 1 -- Introduction
Part 2 -- Bill of Services, Laboratory, Go-live Certificate, etc
Part 3 -- Executive Engagement, Bid Compliance, Adjudication and other matters
Guidance and Advisory Services
The Art of Project Leadership
Why Regular Communication with the CEO is Vital
The Business Simulation Laboratory
Precision Configuration and Strategic Business Information Architecture
Precision Configuration based on Strategic Engineered Precision Taxonomies
The JAR&A Cubic Business Model
Highly Structured Strategic Chart of Accounts -- a Vital Element of your Corporate Information Arsenal
The Product Catalogue -- an Essential Element of any Precision Configuration
Attributes -- answers to the questions you have NOT yet thought to ask
Case Studies of Notably Successful Projects with high value Precision Configuration
092 Doing things differently and better -- ASCO Case Study 2-- BPM Summit 2013
088 Strategic ERP Invesment -- ASCO Case Study -- Service Management Conference and Exhibition Africa
026 Information Architecture and Design of FIS for Rennies Group -- Financial Information Systems Conf
018 CRM Risk Control: Designing and Implementing an Integrated Risk Mgmt Sys -- Integrated Risk Mgmt Conf
011 V3 Consulting Eng: Benefits of MIS to Professional Practice -- SAICE 15th Ann Conf on Computers in Civil Eng
Strategically Enriching your Business Information Systems
Part 2 -- Principles of Data Engineering
Part 3 -- Steps in applying these recommendations
Simple Steps to increase the strategic information value yield from your Business Systems Investment
The Full JAR&A Taxonomy Manual
Part 1: Introduction, Problem Statement, Definitions and Examples
Part 2: Why Use JAR&A, Required Knowledge and Experience, Cubic Business Model and Chart of Accounts and Taxonomy Software
Part 3: How to do it, Case Studies and White Papers and other References
Example General Ledger Manual
Business Process -- Irrelevant, Distracting and Dangerous
The RIGHT Approach
Custom Strategic Software Design and Oversight of Construction
Standards for Custom Software Specification
What IS Software?
Critical Factors for I.T. Success
A Moral and Ethical Dilemma -- Systems that Fail
Case Studies examining Business Information System failures
The BBC Digital Media Initiative Debacle
The Bridgestone -- IBM Conflict
Speaking and Training
Showcase of Conference Presentations
Most Viewed Presentations
Briefings and Seminars
Why your ERP/BIS is NOT delivering and HOW to FIX it
ERP and IT Procurement that Delivers Results
The Critical Factors for IT and ERP Investment Success
Conferences and Public Presentations
Conferences 80 to 99 -- 2009 to Present
Conferences 60 to 79 -- 2005 to 2009
Conferences 40 to 59 -- 1996 to 2005
Conferences 20 to 39 -- 1994 to 1996
Conferences 01 to 19 -- 1989 to 1994
On-Line Seminars (Webinars)
Webinar on Preparing and Presenting Webinars
Contacting James A Robertson and Associates Limited