City Extra: New York City lesson on how not to manage performance.


I know it is often said that figures can lie, but lies cannot figure. Or can they?

The trouble is suspended disbelief conditioning starts when we are small with fairytale stories.

This week I got a report from NYC Parking Ticket with the full set of New York City accounts for 2010 attached .

As I read them it seemed no wonder they are losing money.  I you want to know how not to do a set of accounts take a look art theirs .

When I checked on fairytale definitions I found the phrase refers to either; an interesting but highly implausible story, often and excuse; Or a story about fairies, told to amuse children. Either way the selective use or all-time favorite character, being money in the NYC report makes a good fairy story.

I also wrote back to my friend Larry Berizen, who with his partner Dan Giacomarro runs a legal practice in New York that focuses solely on helping customers resolve their parking issues in an aggressive money hungry monopoly worth over 600 million smakaroos to the New York City. In his unique practice he publishes a regular blog with tips and advice on how to handle what he refers to as the NYC parking warriors and the legal system that supports them. He finds their often cowboy style antics are frequently suspect when it comes to getting their their quota of scalps. (They call them KPI’s) This seems clear something is not right when the success rate on defending parking violations notices exceed a massage 30% of all issues.

Here is an edited copy of my note that I shared on his blog reply section.

Hi Larry,

I took a look under the covers at the NYC report for 2010. I spotted a few things as I did come counting.

The first was this set of confusing financial reports has a lot of numbers with very little that is easy to really understand; save the bottom line that says the city had lost a lot more money. The significantly large document of 377 pages to many may seem impressive, especially when you find sets of 10 year trends. But I could find no sensible performance based segmental or consolidation at all and it seemed to have repetitive and what seemed to be unrelated data with little or no performance context.

There is a great deal of detail on revenue by, what I would call products and services, but no service delivery costs are associated. Hence you cannot determine the service activity performance. Parking Meter Revenues of 147 million in the Transport Category plus $604 million in Fines in the Finance revenue together with scatted other agency parking contributed significantly to the 2010 total of 62 Billion

When I added up all the parking related revenues in all the agencies it was pushing 1 billion. Excluded grants and taxes this number that make up the majority of the total $62,813,314,759 to be exact. the parking business fell into the top 10% highest single contributors.

Interesting that such a large business has no bottom line e.g a gross contribution as all costs are lumped together under separated general activity headings with outgoings for all NYC programs .

On the subject of parking my count saw it featured 25 times in the report As such a cash cow and one of the top 10 numbers having a discrete set of incomes and direct costs would let us see how is it performing as a business. I bet they don’t know themselves so it is no wonder that are losing money if they don’t know how to account for their business. Anti-pellucidity is a word that springs to mind for most. Mushroom accounting is another.

Another related set of numbers I looked at were performance ratio across a 10 year span showing the % ratio of working meters. The health of the assets can be a good indicator of how well a business is running. (Would you get on a bus with bald tires? )

Here is the 10 history from their report and especially the last 5 reflects the total malaise.


Incidentally the Aussies have an an approach that has worked in the Gold Coast for 50 years. image

There Business savvy traders understand the idea is of giving customers a good experience to keep them happy and keep them coming back.

But I wondered how NYC can run a legitimate parking business to make $146,784,983 in parking meter fees without enough working meters, let alone be entrepreneurial to provide such a value added service.

Jacking up prices is one way to achieve the 15% year on year lift in revenue to make budget so why bother incurring costs to fix the kit. Obviously the 100% revenue loss on 6% of the meters that went our of service in 2010 meant they somehow had to get the unit price up by over 25% or more Why not I say. recession or not, that seems fare doesn’t it, especially when they have a monopoly.

On the other had clearly service was not the budgetary aim as Fines were budgeted to increase 15% as well. But the rouge warrior strategy for that was clearly thwarted by theimage “Who Ya Gonna Call” warrior busters team of NYC Parking Ticket fame who kept it to $604,050,097. Obviously the extra speed Cameras noted in the statistical pages of the report, weren’t enough to boost the city coffers to expectations.

Another interesting chestnut that showed up was, of 24,369 City and State Disability parking permits issued during fiscal year 2008, an inventory check of seals on hand showed at least 22,000 were unaccounted for. Since anyone can create fraudulent permits using these seals it would seem an astute recipient who saw them fall of the back of the armored truck now has a license to print money? The audit report did not say someone’s head in the Department of Transport will roll, But before they do that I suggest NYC send out a ferret to check the parking places around town to find all the new Ferraris and Lamborghini’s. I bet they will find a few new ones parked by people who previously rode push bikes. Find them and the city could have its money back 10 fold from the black market traders.

Another proud boast on page XV of the cover letter to the People of New York said that improving both manual and automated City systems saw NYC collect outstanding parking tickets from claimants who received settlements from the City. Go get ‘em" team… It seems anyone who is lucky enough to get a settlement sure won’t be keeping it long with the NYC agency now commissioning ferrets to go out on the job to get their money back. Maybe they should do over the homeless as their next KPI

So, on balance it seems there is no balance in NYC books. To fix it needs some clearer and more transparent accounting and public servants who can balance business acumen to deliver on the city needs. Only then can they reverse the continued hemorrhaging that saw 2010 add another 10 million to make 108 million greenbacks down the tubes.

imageI know every fairy tale we read to our kids teaches them lessons we want them to learn. I love reading your stories Larry if not only for that reason. But the NYC city accounts looked like an implausible excuse. Getting to understand their cash cow parking business could actually be being managed as financial fiasco, could just the tip of the iceberg.

That’s Grimm for sure.

Cheers Gordon

Sherwood Group Consulting


Who You Gonna Call – Performance Busters !!!


When should businesses upgrade systems to pull together the taxing tasks to plan ahead, maintain control & efficiently close the books?


Many people don’t realize the simplicity that comes when they have a reporting database to pull all their information together in a workflow based system. This lets everyone see and believe all their relevant data from anywhere at anytime.

Being in the industry of helping businesses measure their performance always keeps me busy. Helping clients who call to talk about ways to resolve consolidation and upcoming budget pain is actually nothing new.

But in the end it is these fundamentals that are always questioned by businesses. As they grow and best practices evolve with technology, it is important to have scalable and extensible control systems in place to manage their information.

Having a good performance reporting system even in small and medium sized business is vital. To stay in business we always need to find better ways to sped up and simplify things. That includes management planning and control processes too. Hence planning reporting system upgrades get especially critical as a company grows and adds more tenants to expand their markets and reach. Equally important is a getting scalable well maintained solution that can handle more as they grow more.

These days good integration is also an important consideration. But now even the small and mid-range ERP systems fit well into web database centric reporting systems that can pull it together fast. That means all businesses, big and small can now have the agility to plan and close the books fast.

Good database reporting systems are also now are much cheaper and easier to implement. Even so upgrades are disruptive so businesses worry they may have to go thru it all again in a just a few years as their new system age. To answer that, these days even maintenance and keeping up to date is done well by the solution providers whose survival depends on it. And in those eco-system, advisors like my firm are around in the middle to maintain watchful vigils for clients and stay current and keep the software providers on track. That means business always had somewhere to go to get help.

When an incumbent financial control function in a growing business it often find their legacy are quickly outdated and typically that is when they go looking for a new system. They then see the the risk of losing control and the need to remove the constraint for meeting their goals. Conversely when it comes to investing in cycle downturn times we are seeing a change of attitude. In the past slowdown meant change programs were put on hold as cash got tight. But we are seeing a change there now too with cloud based services going in to enable tactical and competitive rapid respond to downturn changes. This is allowing business to keep their cash while also being able to update to get change done quickly for their vital pin point decisions.

At the sharp end now typically this month also sees the flurry of year end closes around the world for all the June 30 companies. In the next month or so it will be hard to get the attention of CFO’s they deal with all their compliance reporting for the past year. For them it is too late this year to put in a Consolidation system as they continue to rely on their legacy systems with late nights and a lot of skill to bridge often cobbled systems with spreadsheets.

But for them it is too late to change this year. Simplifying the tasks will now have to wait to improve how they add it all up and sort out and eliminate intergroup trading, shareholders’ interests. Streamlining year end reconciliations, making adjustment journaling and responding to board audit committee demands are just a few of the issues they face where a new system will help. Complying with the imposing IFRS is also able to be handled well in updated reporting systems. And many know well spreadsheets are hard work when wrestling with things like with currency translations and the like to get the numbers all added up and in order. It also becomes quite nightmare that over time becomes unworkable unless a reporting database is added to allow data to be maintained in and ordered way with repotting able to be added and reformatted as needed

For the many closing the books now it is also a time to sort out who get what when it comes to income tax. We all know that one of our largest expenses in our businesses is tax. And the IRS across the globe universally get first dibs its share on any money a business makes make before the shareholders get a penny. It is not coincidence when you put those two words together namely ‘The ‘ and ‘IRS’, it spells ‘THEIRS’? With is the game over for last year to minimize tax, The scorekeeper can do no more than pay, as it is way too late to look at a planning system to get more efficient to reduce the taxes we need to pay.

So it is actually a really good time for all those companies out there who are really busy closing now to get their IT people to start looking around and do some homework to feedback on what’s possible. And as they do CFO teams should make notes on the issues and be ready to go forward when they can lift their heads.

Later in the year they can be ready to use the half year reporting cycle which is always a good time to test a change iron out the bugs for the next year end. And having a system for doing the budgets for their next year will then be quickly quickly upon them as is tax planning for the year in progress.

As advisors our firm, Sherwood Group Consulting works with and promotes Infor PM which is one of the leaders and meets all the criteria. Hence I am obliged to give them a plug or suggest you to call or contact us if you want some advice as to where to start.

To answer the question I am so often asked about where and when to start this video actually says it so well. Getting controls can start anywhere in the cycle and you can even start small then take it from there.


This video is excellent summary that makes the point well for CFOs’ and key business Executives to watch.

But plugs aside, if you are in business I urge you to get your CFO’s to take a look around and see how others are doing things and what systems are about that can help.

Turning Slurry to Gold.

imageSometimes precious metals are not where we expect them. The slurry pump, used in fine mineral extraction to sift thru residual mud to find metallic gold, is akin to an analytics based reporting systems used to finding information gold in residual data. Some also call this data mining.

But equipment and system that do the job well may be redundant without the skill to use them. This watch-word comment I saved by Ralph Eastman says it well:

It seems Business Intelligence is actually not about systems, but about getting an edge by finding a way look thru the slurry to find the gold.

An information approach may be about managing data to getting it all on one place. But without a plan on to use it, that can be worse than leaving it all over the place in the organization. An intelligent approach sees people using the informational value of data to manage performance.

Value also differs: For example Insurance and Credit card companies use Business Intelligence to manage risk; Retailers use Business Intelligence to predict customer behavior and Phone companies use Business Intelligence for loyalty management. In many cases these mature Business Intelligence users also still call it data mining.

It seems business Intelligence as it is evolving now is it not just about having a single source of data all stored in one place. but more about having a continued ability to create reliable access to mine lots of information that many be stored once in more than place.

Source “BI: Is it about the tools or managers who use them?” March 2010