Alan Radding SOFTWARE & SYSTEMS: Blogger Alan Radding supplies the Business Finance community with reporting…more

Alan Radding July 18th, 2012

Procurement generally is not considered strategic. Its primary mission is to acquire needed goods at the best price and terms. It can save money, for sure, and it can secure necessary goods and materials that may be in short supply, which might be considered strategic but in general it provides an operations function, a cost-center to be minimized to whatever extent possible.

But that mindset is changing according to a recent study; Reaching New Heights: Dividends of Collaboration between Finance and Procurement, by CFO Research Services in junction with Ariba. Click here to see the study.

Compared to three years ago, the study reports, the procurement function has grown more strategic in the minds of respondents. Nearly 75% see it as becoming more strategic to one degree or another. Overall, the study results suggest

Alan Radding SOFTWARE & SYSTEMS: Blogger Alan Radding supplies the Business Finance community with reporting…more

Alan Radding August 2nd, 2012

You hear a lot these days about Big Data and analytics. What follows is an example of it in action. This goes well beyond retail; almost every industry, including yours, can capitalize on this kind of capability.

The IBM Retail Online Index, a cloud-based analysis of the online retail sector, reported that retailers experienced 15 percent growth in sales from mobile devices but saw a 20 percent decline in sales traced to social media over the most recent three-month period.

Big Data analytics is not magic. But when done right, and a number of vendors

Alan Radding SOFTWARE & SYSTEMS: Blogger Alan Radding supplies the Business Finance community with reporting…more

Alan Radding August 10th, 2012

You hear a lot about the success of big consumer product companies are having with social networking. P&G, for example, discovered that Facebook could pump new life into a stable but decidedly staid product, Pepto-Bismol. Business Week wrote about it here in March.

Small and midsize businesses (SMBs) and those not so explicitly consumer oriented have found social success a bit more elusive. Among midsize businesses, for instance, 38% have a company Facebook page, but less than a quarter uses it to generate new leads and sales and less than one-fifth use it for internal collaboration or customer retention, according to a recent study by the SMB Group.

The 2012 study shows overall use of social media is up from 44% to 53% among small businesses (1-99 employees) and up from 52% to 63% among medium businesses (100-999 employees) year-over-year, but it also reveals a widening gap between SMBs that are using social media in an informal, ad hoc manner and those taking a more planned, strategic approach. Here is how can you make social strategic in your organization and avoid common pitfalls.

Start by making a commitment to use social media strategically and link it to goals for revenue growth. Strategic users, the study found, also were more likely to have already integrated social media with existing business applications and processes. CRM, customer support, and product development are the three that most quickly come to mind.

After that, you want to avoid five social media pitfalls SMBs trip on. Kevin Casey, writing for Information Week, elaborated on them. To summarize what he found:

1. Not enough time. A lack of time was the clear number-one issue for small businesses, with 62% citing it as a roadblock to effective social engagement. Midsize businesses are similarly pressed.

2. Too many social networks. The time issue compounds as the number of social platforms grows. Facebook still leads the pack of social sites used by SMBs but its lead is dwindling as more companies add Pinterest, LinkedIn, and others to their social networks. That also complicates strategy development and execution.

3. Hard to measure. Nearly half of midsize firms report being unable to accurately measure the value of their social media. Small businesses voice similar concerns. Why define and execute a strategy if there is no effective way to evaluate progress?

4. Ill-fitting tools and services. Yes, social monitoring and management tools are emerging but many are not designed for SMBs. They don’t want a comprehensive command center but something easily deployed that covers all of their social activities in one simple toolset, including metrics.

5. Confusing social sentiment. SMBs experience a whirlwind of social information, some of it contradictory, emanating from these social networks, which makes it hard to figure out what it all means. Social analysis tools are emerging for this.

Maybe the first challenge of social networking is getting your organization to adopt it at all. Corinne Sklar, marketing director at Bluewolf Group, a leading social consulting firm, has this to say on adoption: Long emails with links to how-to spreadsheets tend to fall victim to the I’ll-get-to-it-later email black hole. Instead, innovate with new forms of communication, the more streamlined and concise the better. As attention spans wane providing a mix of communication tools helps your people get the info they need in the kind of short, bite-sized chunks they can use immediately. When going social, instant gratification counts.

Alan Radding SOFTWARE & SYSTEMS: Blogger Alan Radding supplies the Business Finance community with reporting…more

Alan Radding August 17th, 2012

In the summer of 2010 IBM introduced a new mainframe computer that delivered on the promise of hybrid computing. Hybrid computing is the ability to run multiple computing platforms within a single system and manage it as one. The payoff

Alan Radding SOFTWARE & SYSTEMS: Blogger Alan Radding supplies the Business Finance community with reporting…more

Alan Radding August 24th, 2012

Do you know what your people are doing on social networking sites? Could you document what they are doing and saying if you had to? It is time to include social networking in your GRC strategy.

A recent Symantec poll found enterprises typically experienced nine social media incidents, such as employees posting confidential information publicly, over the past year, with 94% suffering negative consequences including damage to their reputations, loss of customer trust, data loss and lost revenue.

There are things you can do short of banning participation in social networking, which would be doomed to fail anyway. For example, Symantec found that 82% of enterprises are at least discussing implementing archiving technology to collect and preserve the business information transmitted through social media. Archiving, however, is just one piece of a multi-step technology-supported strategy to capture, preserve, control, enforce, monitor, and produce your business information used in social networks.

You certainly don’t want to constrain the use of social networking. When used right

Gary Cokins Gary Cokins is the founder and CEO of Analytics-Based Performance Management LLC at…more

The CFO’s Expanding Role â

Robert M. Gordon Robert M. Gordon joined True Partners Consulting as a Managing Director in September…more

Robert M. Gordon August 27th, 2012

The Federal Tax Code is riddled with landmines. These “traps for the unwary” are a major source of the complexity about which American businesses complain. One such trap is illustrated by a recent case involving the timing of Federal tax deductions for California state income taxes paid by Wells Fargo bank.

Accrual method taxpayers normally deduct a liability (such as a state income tax) in the year in which the “all-events test” is met. That test requires that (1) all the events that establish the fact of a liability have occurred, and (2) the amount of that liability is determinable with reasonable accuracy. In most cases, actual payment meets the all-events test.

California’s income tax is actually a tax on the privilege of conducting business in the state. The tax must be paid on Year 1 income for the privilege of conducting business in the state in Year 2. Under current law, the event that fixes the Year 1 tax liability is the actual Year 1 tax liability and the payment of the tax. So a corporation could reasonably conclude that the Year 1 taxes would accrue and would, therefore, be deductible for Federal income tax purposes in Year 1.

Before 1972, however, California law provided that the Year 1 tax could be reduced if and to the extent that the taxpayer did not conduct business in California in Year 2, so the event that fixed the liability and determined its amount was the conduct of business in Year 2. This is important because an arcane provision in the Federal Tax Code

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Alan Radding August 30th, 2012
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Alan Radding SOFTWARE & SYSTEMS: Blogger Alan Radding supplies the Business Finance community with reporting…more

Hyperversity–How Many Hypervisors and At What CostAlan Radding September 7th, 2012

A respected IT analyst firm, Gabriel Consulting Group came up with the term hyperversity to describe the situation that results from the proliferation of hypervisors from different vendors. Their recent paper, Hyperversity Rages On for the moment seems to be the definitive word on the subject.

Most CFOs would not know a hypervisor if it bit them, and rightly so. They do, however, send increasingly large checks to VMware, the 900-pound gorilla in the hypervisor market. And those checks threaten to get bigger and bigger as more of the enterprise gets virtualized.

As virtualization expands to encompass ever more of the enterprise, hypervisors will be found in all manner of devices; not just servers but storage, switches, mobile, and more. Before this spirals completely out of control, the CFO needs to talk with the CIO about how to rein in hypervisor proliferation.

Organizations are adopting virtualization for the benefits it delivers in terms of improved IT utilization and greater agility. Higher utilization boosts ROI while greater agility enables organizations to capitalize on opportunities faster.

Virtualization also forms the foundation of cloud computing. Public and private clouds rely on virtualization to deliver their benefits, which again involves hypervisors.

The hypervisor in simplest terms is a piece of software that acts as a traffic cop and a juggler directing the sharing of IT resources among all the processes being virtualized. This process needs a little slice of memory here, another needs a slice of CPU there, yet another needs a bit of storage or networking. This can get very complicated very fast. A traffic jam or a dropped process can slow things down and hurt business. So, the hypervisor is important.

Some hypervisors are free, a few actually are open source, but the predominant hypervisor by far, VMware, comes with hefty charges (the free version amounts to training wheels). Since hypervisors are essential for virtualization, the challenge becomes how to rein in the costs even as you need more and more hypervisor capabilities.

One way to control hypervisor costs is to run a mix of hypervisors. Your organization is not likely to replace VMware with another hypervisor, even a free one. Too much time and effort has been spent deploying VMware and tuning it to work the way you want. The cost of switching would be too great, and the risk of a problem that impacts business operations too high. If you have applications happily running on VMware, just let them keep running and pay the license fees.

But now virtualization is penetrating into more areas and systems. Here VMware isn’t necessarily entrenched. It is a small risk to try a different hypervisor, maybe a free hypervisor like KVM, which is backed by IBM, Red Hat, and other major players. You can deploy these newly virtualized systems with the new hypervisor, tune them whatever way you like, and avoid VMware license fees.

The savings can be considerable but there are some tradeoffs. The new hypervisor will need to be administered and managed differently. It won’t fall under the VMware management umbrella. Also, there is a cost in tools and training.

ESG, a leading IT research firm, estimates that 70% of enterprises use multiple virtualization technologies. In its most recent study, Gabriel found nearly half of the companies it surveyed used 2-3 hypervisors. Just under a fifth used 4-6 hypervisors.

This is not to suggest that a company satisfied with VMware should replace it. Given the increasingly broad deployment of hypervisors throughout the IT infrastructure and the breadth of hypervisor choices, however, it is possible to augment your reliance on more costly VMware with less costly options, effectively slowing the growth of hypervisor costs.

Steve Player BUDGETING & REPORTING: Finance expert Steve Player supplies the Business Finance community with…more

Finance’s New Tools for Helping Your Organization Overcome UncertaintySteve Player September 5th, 2012

Finance professionals, particularly those responsible for planning, forecasting and analysis, face a great paradox. On one hand, we live in a dynamic economy that seems to change at a dizzying pace. On the other hand, our organizations seem to be paralyzed by the tremendous uncertainties being faced.

If you lead FP&A efforts or run a business supported by finance, there is good news: New innovative technologies are creating better ways to plan and control your organizations. These new tools enable planning processes that help overcome uncertainty and drive your organization to higher results.

In the last 13 weeks I have spoken with hundreds of CFOs, controllers and planning directors across four continents. From Boston to Buenos Aires, from London to Lima, Peru, planning departments find a crazy world out there. Everyone must do more with less.

The need for efficiency is challenged by a need to embed planners within the lines of business to better partner with the business to provide faster responses. Executive demand for planning data is also expanding as the consumerization of IT takes hold — they expect information to have the look and feel of consumer apps on their iPads and simply will not wait. To meet these objectives, finance instantly needs information at their fingertips. Multiple means are needed to reach information anywhere.

Once reached, that information must be converted into fact-based decision making. This enables the agility the organization needs to rapidly course correct and adjust plans to achieve better results. The goal is not merely survival, but to thrive on better decisions and faster actions.

This introduces a blog series covering how new innovative technologies expand planning, forecasting and reporting best practices. It focuses on in-memory processing, mobility and cloud computing.

In-memory processing has evolved to address managers’ needs for the right information at the right time. It enables vast quantities of information to be rapidly analyzed. Some refer to this area as Big Data, but I note that large quantities of data have been available for many years. In-memory processing dramatically increases Big Data’s potential by lowering its cost and increasing the speed in delivering new insights.

While managers want information at their fingertips, innovations in mobility have made that a literal reality. This series examines how the FP&A role changes as devices such as the iPad become pervasive.

We will also examine how cloud computing underlies all these developments acting as a technology accelerant. By reducing both the cost and time needed to deploy these innovations, significant total costs of ownership advantages are achieved. Benefits include elimination of infrastructure costs, the speed of deployment, replacing capital costs with operating expenses, and in many cases the ability to leverage existing on premise investments. We will also discuss the very real but harder to quantify nonfinancial benefits such as flexibility in shifting activities which is a great aid in dealing with uncertainty.

Next week we will examine how “Finance Leverages the Cloud.” I look forward to your comments and questions.