Thursday, 19 April 2018

In Google we trust

Image result for AI ethics and morality
There is a Tesla Roadster broadcasting David Bowie on repeat while travelling through space. What a time to be alive! And, I’d argue, the perfect time to rethink what it means to be human. But, we need to do it very carefully.
We’re welcoming robots into our homes, cars and workplaces. And they are enabling things that were impossible, or very hard, or very expensive to do. Doesn’t it blow your mind that every day you can use satellites orbiting the planet to find out if there is traffic on your route home?
There is also an understandable moral panic that we are in the process of losing our humanity. This is it: we’ve opened Pandora’s Box and the inevitable result is subjugation by our cyber-overlords. While I agree we’ve reached the point of no return and a digital future is a certainty, I think we should take this chance to re-examine what it means to be human, and code this into the software that is part of our lives. This will, hopefully, ensure technology delivers on its promise to be an equaliser, and not per-petuate the divisions in society.
Unfortunately we’ve already seen a few instances where the latter has happened. Take Google’s facial recognition system that only recognised white faces. Or Google Translate, that translated the gender-neutral pronoun in Turkish in a decidedly 1950s way: ‘He is a doctor, she is a nurse.’ Or LinkedIn, that, when you enter a typically female name, suggests that you might be looking for the male equivalent, but not the other way around.
But this is hardly surprising, as the AI field is new, and we are still learning. On the other hand, it does seem that the less pleasant side of humanity is rising to the surface, thanks to lack of diversity in development and testing teams, and lack of repre-sentative data in samples. Or, as in the case of the Google Translate example, which was based on existing common word combinations, the machines are simply reflecting our shortcomings back at us.
Nevertheless, it is time for some serious thought. Trust, ethics and morality need to be coded into our software now – consider the decisions self-driving cars are going to start making on our behalf. Who will define these rules and algorithms, and what choices will they make? Because at the moment it is corporates that are making them (or not making them), and the last time I checked, increasing profit and shareholder value still ride very high on corporates’ priority list.
In summary
Trust, ethics and morality need to be front of mind as we enter the digital age. This is how we’ll unlock all the benefits of AI and other technologies, and hopefully limit the downsides.
I leave you with the words of Steve Wozniak, co-founder of Apple: ‘You used to ask a smart person a question. Now, who do you ask? It starts with g-o, and it’s not God …’



Tuesday, 10 April 2018

APIs: enabling best-of-breed solutions for your business


 Image result for what is an API?

Think about your smartphone and the apps you have loaded onto it. Sure, it arrived with some pre-loaded, but most you have probably chosen yourself. In fact, you’ve no doubt swapped a few out as well, say when you discovered a weather app that had better wind information when you took up sailing. Or a news app that that aggregates all your favourite newspapers so you don’t have to clutter up your phone with multiple apps, all sending you duplicate breaking news apps. Or selecting the mail service of your choice, be it Microsoft Outlook, Gmail or Apple Mail, depending on your personal preferences and specific requirements. 

In fact, most of us can barely remember dumb phones. It was exciting enough having the Snake game come pre-loaded on our old Nokia 3310s, and the thought of customising what was on the phone wasn’t even a pipe dream. (OK, maybe we could change the phone’s cover.) And I’m pretty sure that some of the AccountingWEB readers don’t even remember life before smartphones. 

But why is it, that when it comes to something as mission critical as our companies’ enterprise resource programming (ERP) systems, we keep getting sold on a black box approach, akin to those dumb phones from the last century, when this is no longer necessary thanks to the magic of  application program interfaces (APIs) — basically windows and doorways onto software that allows you to tap into their capabilities, typically over the internet. 

Sure, in their day ERP systems made life easier for companies, offering a single platform and database with all business requirements being met from one application. This was revolutionary in its time, avoiding the need for huge effort spent on getting a range of incompatible standalone services to work together. Of course there were niggles: including a lack of flexibility and user-friendliness, plus a one-size-fits-all approach to business requirements. Because, despite what the vendors said about their integrated systems offering all the business applications you might need, it was impossible for all of these applications to be best-of-breed for every unique niche across the broad range of business requirements. 

Instead, it was often a case of jack of all trades, master of none. But still, far better than the myriad of incompatible legacy systems you previously had to navigate. And the reason for the myriad of incompatible legacy systems? There was no effective API environment to knit these disparate systems together. 

Fast forward to today, though, the one-stop-shop myth is even more inappropriate in an API powered world. You don’t need to hack your Nokia 3310 to replace Snake with a game you’d prefer. Which is what is happening to those black box ERP systems in an attempt to help them limp into the future. Their source code is so huge that any upgrade, or integration with new third party capabilities, requires an extensive, expensive and extended re-write. Not to mention that the systems no longer leverage the latest technology, such as in-memory processing, which is an essential part of getting the most out of future technologies.  

Thanks to APIs, today you can build your utopian ERP solution. It should be as easy as selecting your general ledger functionality and then adding to it stock, budgeting, accounts payable, reporting, procurement, and so on. All components can now be best suited to your business requirements and accessed via the cloud if you prefer. This will deliver a best-of-breed solution with no sacrifice of quality, which is so prevalent in a one-size-fits-all paradigm. Thanks to APIs, now prevalent across software applications, this is not only possible but indeed standard, as is having your preferred, best-of-breed software work seamlessly with all the other systems in your business, ensuring optimum effectiveness and efficiency.

As published in AccountinWeb - 4th April 2018.
https://www.accountingweb.co.uk/community/blogs/kevin-philips/apis-enabling-best-of-breed-solutions-for-your-business

Wednesday, 28 March 2018

Unlocking An Agile Accounting House

Image result for agile
With technology hurtling headlong into all aspects of life, from our homes, cars and workplaces, to banks, schools and hospitals, it’s no surprise that business looks to the IT world for inspiration on how to adapt and thrive. An example of this is Agile, a method of developing software that is spilling over into all aspects of business, including the finance department
Agile, and being an agile organisation, is coming to the attention of the business world as a plausible way to navigate the disruption all businesses face today. This disruption is thanks to the transition to a digital economy and from the unpredictable nature of the world at large.
Agile software development, as opposed to the Waterfall method inherited from the hardware world, uses collaboration between self-organising, cross-functional teams to set requirements and figure out how to achieve them. And, according to the Agile manifesto, the key to this way of working is embracing changing requirements at any stage, delivering work frequently and continuously improving. As important as the work that is done is the work that is not done: simplicity and speedy time to market is paramount.
It is clear that the old way of working and a top-down, regimented approach will not cut it anymore. Take annual reviews, for instance. In the past they used to make sense to plot the future based on past experience and benchmarks. Today, though, we know that seismic shifts that are impossible to plan for are in fact a reality. Look at Trump, Brexit, the Cape Town drought and the astonishing rise of crypto currencies in the last year. Not only were these events unexpected, their impact has yet to play out, and can’t be guessed at. Expect the unexpected is the only thing that anyone can say with any certainty.
As a side note, I believe that in South Africa we do have an advantage over the Northern Hemisphere. We’re used to absorbing a level of uncertainty as part of our day-to-day lives, and this has made us resilient and entrepreneurial, hustling to find the advantage and opportunity, even in tough circumstances. Possibly to a fault South Africans tend to adapt rather than complain, protest or debate. For instance, look at electricity and water shortages: the delivery of both should be inalienable, and the failure to do so speaks volumes about our leaders. So yes, we are all unhappy about the state of affairs, but we make plans to adapt to the new reality, and we do it immediately rather than waiting to realise our complaints have borne no fruit.
Nevertheless, it sounds like we are all going to have to be nimble going forward. Long-term planning needs to factor in that things might change dramatically, and that people and companies need to be prepared to weather and maximise these shifts. To do this, the ability to change needs to be built into any plan.
Sounds like we are going to have to be pretty agile, right? And especially the finance department as it ensures the right amount of money is invested in the right places, that innovation is both enabled, and culled, as necessary. That the business continues to optimise in ways that build up to significant change. And that, above all, the bottom line is stewarded into the future.
So far, so good. But how do you go about making finance more agile?
Well, I’d argue that tapping into business process management (BPM) principles might be the key that unlocks an agile finance department. While BPM has its origins in the 1990s, much of its philosophy resonates with the Agile movement. Practices such as having a well-defined strategy and understanding how core processes underpin it; consulting the coal face about better ways of doing things; of breaking down silos and getting different teams into the same room together to collaborate and feedback to the business; driving a culture of ownership, buy-in and continuous improvement; favouring iterative, time-based activities over slam dunk delivery. Change and improvement is considered a journey, not a destination. Documentation and system adoption is key to getting IP out of people’s heads (like complex standalone spreadsheets), as well as standardising and automating processes.
Once you have created a strategy, you need to translate it into a delivery model, and this is effectively the budget or forecast at a financial level. But how do you pull all these strands together though, to allow BPM to unlock your agile culture? You don’t get there with spreadsheets, that is for sure. Fortunately, as so often is the case, the very technology that has opened Pandora’s Box has also enabled a new generation of business tools that will facilitate this agile shift.
Budgeting and forecasting can generally be viewed as the ground zero of a financial cycle, so let’s start there. A web-based interface rather than a spreadsheet can make financial data input and review accessible to anyone in your organisation. Now, non-financial managers can easily give you the figures you need, in a standardised format that can be rolled-up into a single version of the truth. You bypass the ineffective, time-consuming, and soul-destroying spreadsheet go-round, shaving weeks and months off the budget cycle in the process. And, importantly, by providing increased visibility and transparency, especially of business strategy, you foster buy-in to, and ownership of, the budget.
This way of working also opens the door to considering zero-based budgeting (ZBB). This bottom-up budget approach, where instead of adjusting the previous year’s numbers you start from a greenfield site and build your budget around what your strategic objectives are, has traditionally been dismissed as a pipe dream. Nice in theory, especially as it has been proven to save money, but too difficult and time consuming to implement in real life … Really? If we accept that the world is rapidly changing across the board how relevant is trend analysis for the past five years as a basis for projecting the future? Or even the relevance of basing this year’s budget on last year’s numbers?
So, considering the arguments above, is ZBB not only doable but also a practical way to empower your new, agile, future-proofed finance culture? It ties the budget directly to corporate strategic plans and allows for rethinking of the way things have always been done.
Empowerment, transparency and ownership in and of themselves, whether you adopt ZBB or not, will lead to better budgeting and budget management. As the actual numbers become available for comparison with the budgets, the same transparency drives the empowered user at the coal face to be more invested in delivering against that budget. Compare this to a manager that is handed a budget that they have had little or no involvement in, and yet are still expected to deliver against.
So, a hat trick of agile, business process management and zero-based budgeting can transform your financial processes from drudgery and frustration, into a user-friendly, creative process that drives innovation in your organisation. Ultimately, if your budgeting and forecasting process is more effective and responsive, this will impact your bottom line positively.
As published in Accountancy SA - March 2018 https://www.accountancysa.org.za/viewpoint-unlocking-an-agile-accounting-house/

Wednesday, 14 March 2018

The modern day alchemist: Turning busy into time


Image result for time as a scarce resource

Peter Drucker, the management consultant that coined the phrase “knowledge worker” back in 1959, nailed it when he said: “Time is the scarcest resource and unless it is managed nothing else can be managed.”

This is the catch-22 companies face today. There is no doubt that companies need to innovate to ensure their future success, but to do this their people need to find the time to think, research, experiment and develop new ideas.
Because we’re in the business of saving people time, last year we ran an informal survey of some finance team members working in a range of industries to find out what takes up their time, and what else we could do to create time in their days.

The results were interesting, to say the least.

Top three 'time blackholes' at budget/forecast time:

1.      Investigations or enquiries from source

2.      Incomplete or incorrect data

3.      Manual processes

Top three time blackholes at month-end reporting time:

1.      Report compilation

2.      Manual processes

3.      Investigations or enquiries from source

The top three time blackholes at other times:

1.      Ad hoc reporting requests

2.      Firefighting

3.      Ad hoc information requests

It’s astonishing that today, with all the technology we have at our disposal, manual processes are still taking up so much of our time. This is a triple whammy: the time taken by highly skilled staff to do the work in the first place; the knock-on effect of errors or incomplete data; plus, very often automation is the first step towards, and prerequisite for, further innovation. So the fact that lack of automation crops up twice in our survey as a drain on time is very worrying.

Ad hoc reporting requests are an indication of an unempowered workforce needing to defer all finance related matters to the accounts team. As well as the drag on time, this means the people at the coalface of the organisation aren’t engaged with the budgets they are responsible for implementing. This can be seen, unfortunately, as a proxy for a wider lack of transparency, ownership, trust and decentralisation of power in an organisation. Time and time again, these factors very factors are the keys that promote an innovative and entrepreneurial culture, while a command-and-control management style is an effective way to shut innovation down.

So where does this leave companies caught in this catch-22?

The companies that feel like they are running just to stay in the same place, but know they need to make fundamental, exponential changes to survive into the digital future.

The range of time blackholes revealed by the survey shows that there is no single culprit, and so no single solution. It’s a complex world, after all. What is clear, however, is that tired, ineffective, dated processes need to be sped up and automated. Your people need to be spending less time compiling the report, and more time analysing and thinking about the outcomes.

Automation will also improve the timeliness of your data for real-time decision making. And if, as part of the fix, you have included those at the coal-face in the process, your data will be more accurate, relevant and timely. Inclusive management also increases transparency and accountability, resulting in an aligned organisation that manages itself better.

So by resolving the catch-22, the outcome is not only winning the time you need to innovate, but also gaining the data, culture and other capabilities you need to succeed in a digital world.

As published in AccountingWeb 22nd February 2018 https://www.accountingweb.co.uk/community/blogs/kevin-philips/the-modern-day-alchemist-turning-busy-into-time

Tuesday, 27 February 2018

Building an entrepreneurial culture

Image result for entrepreneurship
Last year this time I wrote that you should take an entrepreneurial view of your organisation and start experimenting and breaking stuff. Why? Because if you don’t foster a culture of entrepreneurship and innovation, you’re going to get left behind.
If you thought 2017 was fast-paced and disruptive, hold onto your seats as we enter 2018. Virtually every major industry is going to be shaken up by technology and what it enables. Not for its own sake, though, but because customers demand it.
Start-ups know this and are building their businesses from the ground up to harness things such as cloud computing, automation, artificial intelligence and mobility.
They’re also not asking their people to do stupid, mundane tasks, and are instead freeing them up to be more strategic, creative and customer-focused.
So how do you build a culture of entrepreneurship and innovation? Well, first, you don’t have to be an entrepreneur yourself. Nor does everyone in your business. But what you do need to do is enable a culture that is open to ideas. From anyone. Even ideas that, at first glance, seem to be wild, because you never know where they can lead you.
Take the invention of Post-it notes by 3M employees. In 1968 an employee invented the adhesive, but didn’t really have a use for glue that wasn’t very sticky. It was six years later, in 1974, that another employee made the connection and realised the glue could be used to create a reusable sticky note.
Compare this to Kodak, who sat on its employee’s invention of the digital camera and, according to some versions of the story, the foundation technology of the mobile phone, to avoid cannibalising its existing business. This squashing of ideas ended up in Chapter 11 bankruptcy protection by 2012.
I often write about compiling your budgets with input from the coalface. Getting the input from the people at the sharp end of the spending and making money builds transparency, buy-in and alignment. Of course it also allows you to tap into insights on the ground that you simply would not have access to from behind your desk.
Think of building your entrepreneurial culture in the same way. Ideas can come from anywhere: the new hire who brings a fresh pair of eyes, the junior who lives the same millennial culture your clients do, the receptionist who sees how irritated people get with paper-based processes, and the call centre agent who actually speaks to your customers every day.
TIPS
The only stupid questions or ideas are the ones that don’t get asked or shared.
It doesn’t have to be perfect at first. Ideas in progress are valuable too, especially if others can make them stronger.
Go wide, and get people talking to each other. You never know when and where the lightbulb insight that saves you money, makes you money, or helps you work better is going to come from.
As published in ASA Magazine February 2018 https://www.accountancysa.org.za/building-an-entrepreneurial-culture/ 

Tuesday, 13 February 2018

In 2018, consider the cost of doing nothing





Depending on your outlook, my column last month would either have exhilarated or terrified you. And whether you are champing at the bit, wanting to embrace the new, digital future of your business or terrified at the thought of robots taking all our jobs, you will need to start making some pretty significant decisions this year. These will need to move your organisation forward, but also give you space to be nimble in the face of future seismic shifts, and finally, should avoid painting you into a digital corner you can’t reverse out of. (Betamax video, anyone?)

It’s a decision minefield, and, my suggestion, which I hinted at previously, is don’t avoid the cost of doing nothing jobs. Those are the maintenance, upgrade and incremental innovation projects that don’t deliver an immediate ROI, but are essential for saving you money and ensuring your survival in the longer term. 

Counter-intuitively, cost of doing nothing jobs probably won’t deliver you an immediate return on investment. What they will do is maintain and optimise systems and processes, and also help you take the incremental steps that make up innovation to take your company into the future. Yes, they divert time and resources away from other activities today, but they avoid catastrophic failures, future-proof your business, and will save you money in the long-run. 

For instance, on a trip last year, soon after I landed in New Zealand, the Auckland Airport was shut down thanks to a fuel line being damaged. As a result, hundreds of planes were delayed at a critical regional hub, and time and money was spent trucking in fuel until the pipeline was repaired 10 days later. A spokesperson explained that the cost of an additional pipeline hadn’t been justified as it would seldom be used. Wait a minute, surely this exactly how you define a backup system?  

Unfortunately, it is hard to quantify the cost of not doing these jobs at the outset. You only know the real price tag if disaster strikes, as Auckland Airport found out. This means it is easy to let these jobs slide to the bottom of the priority list.  

Let’s look at things from another perspective though, and consider the future-proofing role of cost of doing nothing jobs. These projects that can shift the paradigm for your organisation for innovation, growth and success in the future. Hence the danger of not doing them today. For instance, if you are not thinking about or embarking on a project to move your operations into the cloud, you may find yourself left behind tomorrow when your competitors are offering cloud-enabled services and innovations, and you simply can’t. 

Apart from a fixation on short term ROI concerns, there are a number of reasons organisations neglect the cost of doing nothing jobs. In today’s fast-paced world, where we're all running to stand still, it might seem like there is no time to optimise or review your course. Keep your head down and roll with the digital punches. Unfortunately the pace is only going to speed up, so rather consider these projects now.  

Some companies are simply risk averse and would prefer to defer a decision and stick with what they know. Indeed, playing it safe is often rewarded in these organisations as short term improvement in the bottom line tends to focus the eye. Unfortunately, in the 1980s it might have been the case that “nobody ever gets fired for choosing IBM”, but today, this thinking could result in your company not being around tomorrow.  

Finally, many organisations lack the skills and experience to navigate this new, digital industrial era. Today, you need to hire people that have the skills to adapt, and thrive at doing things that automation can’t, and also have the ability to work with robots. An example is accountants being freed up from crunching data, and instead using their abilities to spot patterns, analyse the data and think strategically about how this informs business decisions and then providing strategic counsel for their clients.  

So now what? Firstly, start quantifying the high cost of maintaining the status quo by putting the cost of doing nothing on the agenda. Then, move away from waterfall thinking and learn from agile philosophies and their continuous iteration. This takes the pressure away from being sure you are making the right decision at the outset, to making the decision right for you, through constant improvements and vigilance. Finally, simply decide. Choose a lighthouse project, you may fail but then fail fast, learn and improve.


As published on Accountingweb - January 2018 
https://www.accountingweb.co.uk/community/blogs/kevin-philips/in-2018-consider-the-cost-of-doing-nothing 


Wednesday, 24 January 2018

A Heavy Price Tag on Doing Nothing – Part 2





Today, doing nothing is going to cost you in the long run. Fight inertia by learning its tell-tale signs and what to do about them

‘The cost of being wrong is less than the cost of doing nothing’   – Seth Godin
Last month I looked at the impact that ignoring cost of doing nothing jobs can have on a business. The type of hunkering down that resulted in the Auckland Airport having its single aircraft fuel line fail, grounding aeroplanes and costing money. But I also acknowledged there were some understandable, if rapidly expiring, reasons for this baked-in resistance to change.

This month I want to look at the forms this corporate inertia can take and some ways you can inoculate yourself against this, and by doing so ensure your organisation’s survival and success in the future.

Let’s start with how doing nothing manifests in an organisation.

Neglecting to optimise
In his book 7 Habits of Highly Effective People Steven Covey says continuous improvement, ‘sharpening the axe’, is the essential habit that allows you to effectively carry out the other six. He illustrates this with the story of a master woodcutter, who starts to fell fewer and fewer trees. When asked when last he sharpened his axe, he says he doesn’t have time for that, he’s too busy trying to chop down as many trees as he used to be able to. Steven’s book may date back a while now, but many of the messages are still relevant today, especially this one. In fact, this advice has probably grown in relevance and continues to grow week by week.
This lesson applies as much to creating highly effective businesses as it does to people. Too many businesses are needing to run just to stand still. And this perceived ‘busyness’ provides a convenient smokescreen for not taking the time to sharpen the axe by throwing out old, tired and inappropriate processes, activities and technology and replacing them with something more future-ready. Or even challenging existing systems that are currently working and looking for ways to improve them.

Short-termism
Understandably, during tough economic times, finance’s focus shifts to surviving the next quarter, and then the one after that. This is a sound policy, but not when the world is changing so fast that you won’t recognise it in a year’s time, and will be entirely unprepared for what your customers want. In the past one thought of short term as this year, medium term as the next three, and long term as five years and beyond. Today I would suggest this has shortened dramatically: short term is almost tomorrow, the medium term is next quarter, and long term is by year-end. Perhaps a slight exaggeration, but not too far from the truth. And for some industries even that is too long!

Business needs to balance being adaptive and responsive when direction needs to be changed with avoiding making short-term decisions that paint them into a corner in the future.

Risk aversion
In the 1980s, it might have been the case that nobody ever got fired for choosing IBM, but today playing it safe could result in your company not being around tomorrow. Unfortunately we still run the risk of clinging to this thinking and rewarding play-ing it safe. What’s more, too often we also fall into the trap of questioning cost, but if you can’t afford to do it right you best make sure you have the resources to fix it! And this applies to not doing anything at all, as well.

Lack of the right skills and experience to navigate the digital future
If all you have is a hammer, it stands to reason that all your solutions are going to involve hammering, whether it’s effective or not. This is the challenge businesses face today. They can’t solve new challenges with old skillsets.
Back in the day, succession planning meant having a pipeline of skills in the wings ready to take over when people moved up and eventually out. Today, though, this is not enough, and is yet another form that corporate inertia can take. Without new skillsets, businesses are going to keep using old ways of thinking and problem-solving, resulting in old solutions for new problems.
So, succession planning today is about hiring people that have the skills to adapt, and, crucially, thrive at doing things that automation can’t, while having the ability to work with robots. An example is accountants being freed up from crunching data rather using their abilities to spot patterns, analyse the data and think strategically about how this informs business decisions.

There are other ways that corporate inertia plays out. Look around your company and think about whether things make sense, or are simply done that way because that is how they have always been done.
So how do you go about inoculating yourself and your organisation against falling into the trap of doing nothing, especially at this crucial moment in time in the history of business?
Here are my three top tips:
·         Quantify the high cost of maintaining the status quo. Turn quantifying the cost of doing nothing into a habit. It won’t be a perfect calculation, but it should be on the agenda and front of mind during the decision-making process.
·         Iterate. Shift away from waterfall thinking where everything is planned, built and delivered sequentially and rather learn from agile software developers and their continuous feedback loop. This takes the pressure away from being sure you are making the right decision at the outset, to making the decision right for you, through constant improvements and vigilance. Or, failing fast and learning from the experience.
·         Check your ROI mindset. This is an example that is close to home for us. One of the challenges any new technology or process which changes the status quo needs to surmount has nothing to do with the ability of the solution but, in many cases the need to convince the powers that be that shifting to a better way to do something is worth the initial effort. This resistance to change and inability to calculate the cost of doing nothing today results in a real risk of missing out on long-term ROI. Don’t let your company fall into this trap.

Now, where to from here? What can you do today? Simply decide! Choose a lighthouse project that gives you a toe in the water, then learn and improve. The cost of doing nothing jobs are often also the small steps needed to innovate. Innovation is too often painted as a wide-ranging, paradigm-shifting, big bang event. But it includes the incremental improvements to products, services and processes.

So, this summer, once you have recharged your mind and body, why not take a look at recharging your organisation by fixing metaphorical dripping taps, automating manual tasks, overhauling legacy software that is chugging along, not broken, but not actually fixed either.
As published ASA Magazine - December 2017
https://www.accountancysa.org.za/thought-leadership-a-heavy-price-tag-on-doing-nothing-part-2/