Tuesday, 1 August 2017

Digital Darwinism: it’s still adapt or die

Charles Darwin was right about survival depending on our ability to adapt. And never has this been more true than in the face of the digital revolution we are living through in the twenty-first century. While Darwin might have been speaking about adapting from generation to generation, today it feels like you need to adapt from month to month and day to day.  

Look at the taxi industry and Uber. Retail and Amazon. Publishing and Facebook. Hotels and Airbnb. 

Frighteningly, even these examples are dating. Amazon has already gone full circle and is expanding its bricks and mortar presence, armed with everything it has learnt about consumer behaviour in the digital world. Uber and its drivers are still figuring out their working relationship, but Dubai has announced it is launching driverless drone taxis this year. 

So where does that leave us, the accountants? We’re typically the conservative bastions of caution and risk-aversion in any company. Wielding the double-entry bookkeeping system for the last several centuries, we have, for the most part, kept businesses honest and solvent. But now even the double-entry system is being questioned in the world of blockchain and other decentralised, shared digital ledger systems.

The same thing applies to us, I’m afraid. Adapt or die. But bear in mind that adapting doesn't mean throwing out the baby with the bathwater. Adapting means understanding what needs to change in order to continue delivering value to your clients and your organisation. Look at Darwin’s finches on the Galapagos Islands, which, within one generation evolved larger and stronger beaks to find food during a prolonged drought. The birds adapted fast to their current reality, by optimising a function rather than replacing it all together. 

Likewise accountants need to look down the line and start shifting their position today — we are already seeing the impact of some of the changes brought about by digitalisation. Just like with the introduction of the internal combustion engine at the start of the previous century, there will be winners and losers. The “horseless cart” put an ecosystem built up around horse-drawn vehicles out of business, but enabled the growth of entirely new industries to support the automobile.  

The same is happening today. 

My advice? Step away from the spreadsheets, literally and figuratively. Step out of the shadows and reconnect with your colleagues at the coal face — they are the ones who know where the changes are coming from, can see the impact of these changes, especially the opportunities.  Open up the accounting process and empower your colleagues to collaborate with you. By doing so you’ll ensure that they have access to the numbers that impact their view of reality and in turn provide real input and value to your analysis of the numbers. This gives you an accurate picture, and creates buy-in and mutual benefit whether in the planning process or understanding the variances, when looking at actuals. You’ll stay connected and relevant, and by decentralising some of the accounting functions, you’ll free up your own time to be more strategic and adaptable. 

With the world changing so fast, the old rules no longer work but the new rules haven’t yet been developed!  This makes finance’s custodial role more difficult but even more important than ever before. Stay adaptable and you’ll be able to guide your clients and organisation ethically and prosperously through these opaque days; don’t and you will be one of Darwin’s casualties.

As published in Accountingweb – 27th July 2017

Wednesday, 12 July 2017

Lockdown Time Thieves


In my May article I suggested that one of the biggest challenges to innovation and business progress is simply finding the time to think, research, experiment and develop new ideas.
The notion of carving out 20% time, à la Google, is a pipe dream for most. So I thought it would be interesting to figure out what is keeping finance people so busy. 
To do this we held a snap survey of finance managers and administrators across a range of industries to find out what takes up their time, preventing them creating space for strategic review thinking.
The top three time thieves at budget/forecast time were investigations or enquiries from source, incomplete or incorrect data, and manual processes, while the top three time thieves at month-end reporting time were report compilation, manual processes, and investigations or enquiries from source. The top three time thieves at other times were ad hoc reporting requests, firefighting, and other ad hoc information requests. 
Interestingly, but perhaps unsurprisingly, there was no single time thief, which perhaps points to the complexity of the real world today, plus shows that there is not a silver bullet solution – companies need a fix that comprehensively tackles a web of challenges. 
Alarmingly, manual processes ranked in the top three for both budget/forecast time and during month-end reporting. Automation of these processes is the key not only to freeing up time in its own right, but it also results in timely, accurate data that you can confidently use for decision-making. In addition automation is the cornerstone for further innovation and new ways of working. 
What’s more, it looks like too much time is being spent on report compilation. This is a red flag because if you are spending your time compiling reports, you are not spending it analysing the information therein! 
Ad hoc reporting, information requests and firefighting also rank highly, though probably more understandably and, unfortunately, this is not an easy challenge to master. However, ad hoc reporting requests, in particular, are indicative of an un-empowered business that relies too heavily on finance to deliver and explain anything with a number in it. Consider how much time would be created by empowering the non-financial user through removing the frivolous queries, and freeing time for review and analysis.
The survey, though brief, did re-iterate that the key challenges we all face have not changed over the years. However, if we continue the status quo and fail to innovate, our relevance to the business will reduce and the spectre of robot replacement will become a reality. 
We are the principal architects of our own reality so it is time to start shaping our future! 
Unbusy your days
  • There’s no silver bullet for a complex challenge.
  • Automate, automate, automate – the tools to do so are out there.
  • If reports are taking up too much time, how can the data be timely?
  • Empowering the business will redefine our function from bean counting to strategic analyst.
  • The pace of change is only going to speed up, so start today.
  • We are the principal architects of our own reality, so it’s time to start shaping our future! 
As published ASA Magazine - July 2017

Monday, 3 July 2017

The storm on the horizon for cloud computing

Like the wheel or the printing press, cloud computing is more exciting because of what it enables, rather than for its own sake. Much has already been written about what the cloud allows us to do: from launching new economy businesses such as Netflix and Airbnb, to saving money through processing elasticity, to gaining access to new services and capabilities.

And, despite security still being the number one concern when implementing cloud, we’ve recently been very starkly reminded how cloud-based infrastructure can be more secure than on-premise, thanks to the WannaCry ransomware attack and the unrelated catastrophic systems failure at British Airways. Both of these affected on-premise data.

For us, data security is just one of the many issues we deal with in running our varied businesses. A cloud provider’s business is data and its protection, so they should be better at it than you or me.

Too often we forget that, although the name sounds fluffy and intangible, cloud computing is based on some very real infrastructure, housed in complex, highly secure, and some might say, black box-esque, buildings very possibly located in a different country to you, your customers, and even your cloud provider.

This is where the red flag goes up. Not because sensitive private and personal data is being moved offshore though. Frankly, in terms of access, thanks to increasing bandwidth it is irrelevant whether your data is housed next door or on the opposite side of the planet.
Rather, a perfect storm is brewing as legislation attempts to catch up with technology and the globalisation of digital communications. In the balance is the protection of private and personal data, weighed up against a growing reliance on data, especially encrypted information, to predict and prevent acts of terror, and arrest those responsible.

The cloud spreads data around the globe, creating concerns around the protection of personal information, and as a result, a number of countries are legislating around this issue. In South African, for example, companies are required to comply with the newly legislated Protection of Personal Information (POPI) Act. This law brings us in line with global best practice when it comes to how private data is collected, processed, stored and shared by setting the conditions for how companies can legally handle information. The new law prohibits businesses from transferring personal information to a third party in a foreign country, unless they get consent at the time of gathering the information. So far, so good, if a bit of an administrative headache, especially in time of such rapid change.

However, in response to the recent atrocities and the use made of internet communications by terrorist organisations, there are moves afoot in the US to legislate that data stored by an American company — wherever it is stored in the world — is accessible, unencrypted, by US law enforcement. Or the discussion of reciprocal agreements that allow countries to gain access to information stored in each other’s geographies, or indeed, the newly passed “Snooper’s Charter” in the UK, which mandates onerous and illogical demands for hosting providers to leave backdoors in their encryption for government access. All of these step on or over the line of privacy of one’s data.

Hosting companies that aren’t US or UK organisations will simply move their operations to other countries where these agreements are not in place. But the reality is that the hosting giants are US companies, not to mention that the country contains much of the world’s internet infrastructure.

So where does this leave businesses around the world, wanting to realise the benefits of cloud computing, but also needing to comply with locally legislated laws such as the POPI Act? Are they and their customers simply excluded from the benefits, growth and innovation opportunities presented by the cloud? What is certain is that they will be looking very closely at the implications of their cloud decisions, and where and how their data is stored.

To be sure, the fight against terrorism is vital, but let's not also, in the process, destroy the cloud’s silver lining.

Thursday, 22 June 2017

Gartner selects IDU as one of the top 25 Corporate Planning Applications in the 2017 Gartner Market Guide.

Gartner, the world's leading research and advisory company recently published their Market Guide for Corporate Planning Applications.  IDU is very proud to have our award-winning Budgeting and Reporting Software idu-Concept recognized amongst the best in the world for providing innovative financial management solutions.

The Gartner Market Guide is independent and insightful, it highlights the rapid development of financial analytics technology, and the considerable opportunities that exists for finance professionals to take advantage of these developments.

IDU has over 300 clients in an ever-increasing global footprint with users across 33 different countries, we are constantly innovating and are rapidly becoming a globally recognised brand.  Our Corporate Performance management (CPM) solutions are also available via the cloud using Microsoft Azure as well as Amazon Web Services, the latter has opened the door for smaller and medium sized organisations across the world to access our cutting edge financial management solutions. 

IDU streamlines the budgeting and reporting process, frees up financial managers to be more strategic and business to be more agile and responsive, which is essential in a disrupting market.

About IDU

IDU makes budgeting, forecasting, performance management and reporting tools to simplify financial management. Our flagship product, idu-Concept, provides easy, effective budgeting and financial reporting for medium-sized to large businesses. It is the most widely deployed dedicated budgeting system in South Africa. idu-Concept integrates easily with ERP software, but unlike more cumbersome offerings, idu-Concept can be implemented quickly, requires little or no ongoing consulting fees and reduces budgeting cycles from months to weeks. idu-Concept addresses this establishing a platform of ownership and empowerment that inevitably leads to radical improvement in the effective management control of every business. 

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Gartner “Market Guide for Corporate Planning Applications” by Christopher Iervolino and John E. Van Decker. Published 24 May 2017.

Tuesday, 6 June 2017

Financial system migrations: Beware the pitfalls and enjoy the upsides

The Apple iPad is only seven years old this year. Believe it or not, the first one was launched in April 2010, and if you dig a first generation iPad out of the storage cupboard you’ll find it’s probably more useful as a paperweight than anything else – it doesn’t even have a camera! Frighteningly it, and second and third generation iPads, are also unsupported by Apple.

Leaving aside Apple’s rabid upgrade tactics and the notoriously short lifespan of its devices, this is just one indication of how fast technology is changing. Therefore, it’s likely that the decision on whether or not to upgrade your financial system, for instance, is pretty much a done deal. Any argument for a “wait and see” approach has been crushed by the reality that the longer you stay with a legacy system, the further you fall behind your competitors, your customers and your employees.
In the event of a disaster your clapped out old iPad 1 equivalent is going to be harder and more expensive to fix, and the risk of data loss is greater. But you need to go into any systems migration with your eyes wide open. Here are some of the things to watch for.

End User Resistance
End users are typically attached to familiar experiences of systems, and this colours their expectations of any upgrades. Plus, they expect systems to be as easy-to-use and intuitive as the consumer apps they use every day. A disconnect here can manifest as resistance to the new system and a loss of time and money for the business.

User Requirements
It is also vital to understand your users’ requirements and deliver on that. In other words, give them what they need to do their jobs well; don’t give them everything merely because it is there in the new ERP system.

Chart of Accounts Opportunity
Now consider that a financial systems migration is a great opportunity to restructure your company’s chart of accounts (COA). Your business has almost definitely changed to such an extent that your current COA is no longer suitable to today’s reporting requirements.
However, when implementing an updated COA you need to get two things right. You need to create an environment whereby you can provide reasonable comparative information when the account codes are different. And, secondly, you need to figure out how to reproduce historical numbers when the accounts, as well as how they are aggregated, differ to the legacy system.
When mapping historical codes to new ones it is unlikely that there will be a one-to-one relationship from old to new. And when you have a one-to-many or many-to-one relationship, comparative reporting becomes a challenge.

Data Migration
And what about data migration? Decisions need to be made about which data is migrated and how many years to go back. The simple decision is normally to migrate immediate history and maintain a minimum license on the old system to be able to access historical information. But do you really think your old system is going to be a key priority for your previous service provider, especially after you have slashed your contract with them?

Major system migration is never easy and the pitfalls are many, despite what the salesman tells you! However, if you approach challenges with eyes wide open you are better prepared to identify the potential pitfalls and navigate around them.

Article published on Accountingweb May 2017

Tuesday, 30 May 2017

How running to standstill won't get you ahead of the pack

Image result for busy
Ask anyone how they are nowadays, and the answer is likely to be ‘crazy busy’ or something along those lines. Today’s world, designed around convenience and speed, seems to have had the exact opposite effect. We’re trying to cram more and more into the same 24 hours and wearing our ‘busy-ness’ like a badge of honour. Part self-imposed, part a reality of modern life, we’re a bit like the Red Queen in Lewis Carroll’s Through the Looking Glass — we’ve got to do all the running we can just to stay in one place.

This delivers businesses a massive catch-22. Although we are running as fast as we can, keeping up is no longer good enough. We need to be fundamentally and exponentially change the way we work in order to succeed in the digital economy. For instance: transitioning to cloud computing is critical to enable the services, features, and capabilities demanded by the market today and tomorrow. Things like collaboration, mobility, self-service, real-time data analytics, omni-channel retail and so on. Not to mention the long-term cost savings and efficiencies cloud economics can bring.
But, how are companies supposed to find the time to take a step back and re-engineer their infrastructure and processes to make the shift to the cloud?

The same applies to wider innovation: fundamentally changing how you do things, from small, incremental enhancements to new business models and existential shifts in your organisation. Innovation is a product of a few things: time, money, and being open to failing fast and often. Organisations don’t innovate though, people do, and to do so they need time to think, research, experiment and develop their ideas.

Google’s 20% time is probably the most well-known initiative where companies try to carve out time for employees to innovate away from their day-to-day tasks. The search giant gives staff around a day a week to work on side projects, and the outcomes have included commercial successes such as AdSense and Gmail.

This is not some harebrained internet start-up window dressing, though – like beanbags, hammocks and foosball tables. 3M, the inventor of Scotch Tape and Post-it notes, and the holder of almost 23 000 patents, has offered its employees 15% time to work on passion projects since 1948.
Indeed, the invention of Post-it notes is an illustration of just how long innovation can take: an employee invented the adhesive in 1968 but it was only in 1974 that another 3M employee joined the dots and realised it could be used to create a reusable sticky note. Ditto the development of Gmail. The Google engineer who invented this worked on it for two and a half years before convincing management that it should be launched.

All very well, as are innovation competitions, hackathons and other tactics companies use to foster new ideas. But reality bites. And the reality is that if we are running to standstill, we can’t currently carve 15–20% out of our business day, no matter how vital strategic innovation is.

It reminds me of that cartoon doing the rounds: two cavemen are energetically but not very effectively pushing and pulling a barrow with square wheels. Their friend offers them a set of round wheels. ‘No thanks,’ they say with a wave, ‘we are too busy’.

Something’s got to give. Somehow tired, ineffective and antiquated processes need to be sped up and automated, freeing people to be more strategic and perhaps to come up with the enhancements your company needs to survive.

Take the typical CPM (corporate performance management) processes, for example. In today’s real-time world, it can’t and shouldn’t take more than four weeks to complete a budget, or hours to complete month-end reviews. Bloated timeframes are compounded by manual processes resulting in errors and unnecessary admin. Plus, lack of transparency and collaboration between departments causes confusion and reduced accountability.

Fixing this single process can have a series of positive knock-ons. First, it can save you time. The vital time you need to spend innovating and thinking strategically about your business. But it will also improve the timeliness of your data – giving you and your senior management the real-time financial data to base decisions on. And if, as part of the fix, you have effectively included those at the coalface in the process, your data will be more accurate and relevant. Inclusive management also increases transparency and accountability, resulting in an aligned organisation that manages itself better.

So the flipside to the catch-22 mentioned above – that to keep up effectively, organisations need to slow down to change gear – is that once you have done this, the outcome is not only winning the time you need to innovate, but also gaining the data and other capabilities you need to succeed in a digital world.

Article published in Accountacy SA Magaine May 2017

Monday, 8 May 2017

CRAN highly recommends idu-Concept for Budgeting, Reporting and Analytics.

CRAN is the Communications Regulatory Authority of Namibia and regulates telecommunication services and networks, broadcasting services, postal services and the use and allocation of radio spectrum.
CRAN uses the Financial Budgeting, Financial Reporting and Analytics Modules of IDU. They purchased the system in April 2014, after looking for a cost effective, online financial management solution, that would allow them to easily administer the system with little ongoing IT support.
“IDU is a user-friendly system with amazing functionalities. The software has really made our work processes more efficient.” Says Maria Moses Manager: Management Accounting at CRAN.
CRAN has found idu-Concept Administrator simple to manage and use, there has been no need for IT or system development skills and very little need for ongoing support. Managing their own system has meant a huge cost saving to their business. 
“The IDU helpdesk is very efficient and any user queries are addressed as soon as possible”
CRAN have been particularly impressed with the Recodes and Accruals functionality within the IDU Reporting modules.
IDU's Recode functionality allows users to request the reallocation of journal entries posted to the general ledger directly from the Financial Reporting Module and the Accruals functionality allows the user to have the ability to create accrual entries at a cost centre level for items that they feel have not been accounted for.
“I would highly recommend IDU, the system offers functionalities that meet the needs of businesses, it is highly responsive and also very cost effective”