Or maybe I should say more magic than science.  After spending the day at some amazing Napa Valley wineries and being in the presence of Craig Underhill, a partner at Brotemarkle, Davis & Company, I have a tremendous amount of appreciation for the skill, expertise, and pure faith of any winery owner and their team. I marvel at the impact of nature on their annual results and at the lack of control they have over many aspects of the finished product.  It was also fascinating to be able to relate the wine business to accounting concepts like Uniform Capitalization, LIFO inventory, and Revenue Recognition (did I mention that I am a nerd?)  thanks to Craig and his firm's expertise in this unique industry. 

I wonder how many accountants would have the stamina to run a business that is impacted by temperature, rainfall, by soil quality, plant spacing, insect infestation, disease, not only in their local area but in other areas that might provide grapes for their finished product.  There are so many factors that are totally outside of the winery's control. 

And to think about all the advanced decisions that have to be made based on an assumption of future crop yield.  These same issues plague every business that involves agriculture,  but it is certainly clear to me why wine is so highly prized as a magic elixir. 

We are coming upon the end of a month, the end of a quarter, and in some camps the end of the fiscal year.  That means it is open season for sales discounts in many companies.

So the question I have is this.  Do sales discounts really work?  Aren't we just messing with the timing of sales across every year - bunching up deals so that they fall at the end of those magic discount cycles?  And setting up the next two periods for a vast dry cycle, only to be reversed by another round of discounts?  How do you break the cycle?  Don't customers get tired of the constant pricing games?

I have to admit that I have been involved in my share of discounting approaches over the years (and often looked for a new spin on an old offer).  It is the way most of us have learned to do business and in fact most of the re-selling community expects a certain number of discounts.  In most cases, customers and distributors can predict when they will occur and have learned to hold sales to wait for a better deal. 

Am I the only one who gets sick of the constant specials and sales offered at many retail establishments? Doesn't it just make you wonder how much the prices were marked up before they were reduced by 50% ?  Haven't many of us become no better than Used Car salesmen willing to fool around with pricing in order to close a deal?  What if we all went the way of Saturn, setting a base price and then sticking to it. 

Is this short-sighted discount mentality a function of  corporate ownership which drives us to meet the short term expectations of the trading public?  Aren't our investors better off if we eliminate discounts, and sell our products based on the value of the solution? 

And what about the service industry?  You don't see many accountants offering summer sales in which they reduce their hourly rates to drive more business.  

Note:  this article was 30% larger than my original article at no additional charge.

On a recent visit to the Los Angeles area, I chanced upon the La Brea Tar Pits.  It is an amazing thing to suddenly arrive at a lovely grass-filled park dotted with fenced-in pools of tar,  plus a bubbling tar lake complete with life-sized statues of prehistoric animals. 

It occurred to me that the tar pits at the Rancho La Brea site are much like information systems :  
¨     You have to dig through buckets of  sticky black stuff to uncover anything of value.

¨      Often what you uncover is the fossilized remains of something that used to be important. 

¨      Sometimes the information doesn’t pass the smell test. (The tar pits reek of sulfur. Here's hoping your data isn't quite as pungent.) 

¨      You know there is valuable information in there, but you have to get dirty to uncover it.

¨       Sometimes your job is the pits.

¨      The tar pits are surrounded by a fence, only authorized employees who have the right keys are allowed access to the secrets buried within.

¨        At the top of the park there is a clean white building (Ivory Tower) that is totally separate from the black pits.  That is where all of the data fragments get assembled into “the big picture.”

¨      Sometimes creatures (projects, ideas, systems) get mired in the ooze, never to be seen again. 

If you find too many similarities between this list and your business, it might be time to look for a better solution.