Performance Controller

"However beautiful the strategy, you should occasionally look at the results"...WC Print

Few things are as critical to CFO’s and finance professionals as our systems.  Core accounting and budgeting platforms to back office infrastructure and client relationship management systems are all moving online, into the "cloud", and an entirely new business model called “Software as a Service”. This represents the largest change in technology for the Finance profession since the internet began. (Sungard)

The responsibilities that come with this change are a paradigm shift as systems control moves more to the finance roles. Quite ready too are many of the new breed of finance executives who have emerged in the last decade. This has seen them develop from being passive Information Technology users, to being savvy technology thinkers and change agent leaders, who can relate Information management to the business process and understand how to exploit it to get business value.

As cloud benefits mature and become more and more obvious, the questions being asked now are not what is it but:

• How can finance people start understanding the dynamics and plan change?  
• How can they take advantage of Software as a Service to change the business model  and / or generate new revenue?
• Why are Finance Executives now in high demand to lead this change and why should they embrace it?

Some of the answers to these questions lie in understanding the provider models and how they will shake out.  A few weeks ago in this series I wrote about an internet cloud based shift in Information Technology with the focus on shrinking corporate IT management  From the market perspective, an excellent  “Greg Papadopoulos” post sent to me since, talks about controlling dynamics of the cloud which make this subject even more compelling when we consider who will be controlling our daily lives in the future.

It was written last year when he was at SUN, a platform and infrastructure services giant who were then being taken over by another giant database software services company, namely ORACLE. In his research he also provides good explanations of how the Internet Cloud is  emerging with distinctions on various layers being infrastructure, platform and software.

In summary, the Intercloud as Papadopoulos calls it has the words  “as a Service” as the key. With emphasis on the big “S” and not on the web infrastructure it is delivered across. Then, by adding prefixes such as “P” for platform, “S” for software “I” for infrastructure it starts to make sense. That is to say cloud services comprise more than one thing. Thus the abstraction layer cake of SaaS on PaaS on IaaS).

Make no mistake, he says, I have no doubt that cloud (nee network, grid) computing will become the organizing principle for public and private infrastructure. The production question is what the balance will be.  Which cloud approach will ultimately win?  Will it be big public utility-like things, or more purpose-built private enterprise ones?

The answer: yes. There will be no more of a consolidation to a single cloud than there is to a single network

And, yes, I know I’ve said that the there will be only about five gigantic public clouds I still think that is correct, but also as suggested by that post, it will look a lot like the energy business, with dozens, or hundreds, of national and regional companies.

Papadopoulos concluded on behalf of SUN last year,  “We should expect and work towards nothing less in cloud computing.”

“Platforms” to run the “Infrastructure” to run “Software” applications, all as a service are now being built into a totally services based managed web environment. This in turn is now seeing multiple third party service providers solutions being seamlessly delivered strategically and at much lower overall costs. Understanding the mix of how these all work and where the cost and value can be exploited is where the CFO needs to be getting involved.

For the Finance and other Business Executives and key operational end users, it is more critical  to understand what this move to market driven service models cover and how to exploit them. With zero latency now part of our business time to decision mindset, it is now much more than having more efficient end to end components that traditionally could only exist on a grid based system.

What some people don’t see as they struggle with the confusion of terms, is  what is actually driving all this. The X Factor here is the race to control of the cloud by the large vendors with cost benefit leadership being the uppermost prize. The value of this to the eventual winners will be infinite. Like energy companies who have controlled oil supply for so long, the stakes on information management control are equally huge. To get there and get a consumption based model established early is vital for the big guys.Equally so mid range players and well placed early adopter firms are now moving in to get a foothold too. This is the classic model that has made so many in past rich as they cashed in on exit strategies as acquisitions and consolidations come on down the track.

Even just two years ago it was all seemed so visionary,  but now cloud based solutions are a reality as they are fast replacing in-house managed network grids. The intense IT and business integration management that goes with this is destined to disappear too.  And as costs tumble and the value of supply and demand take on new meanings, Information Technology as we know it is being redefined  with developers also getting new life and opportunities.

Evidence of impetus that is building in the finance professionals community is also showing up in regularly surveys of CFO forums. One this week forums asked its members to consider how maturing cloud services can now provide options in strategic thinking and operational processes. In this there a list of vendors already offering these services including. Adaptive Planning, Amazon, Citrix, Google, Host Analytics, HP, Intacct, IBM, Microsoft, NetSuite.

The survey also asked questions about the lower-cost alternatives to “on-premise” systems such as:

• accounting / ERP
• applications to Consolidate accounting
• planning/CRM across borders, currencies, and offer improved collaboration,
• Reduce company’s IT CAPEX and operating expenses
• Provide scalability without infrastructure build-up
• Reduce company’s operating risk
• Reduce  company’s downtime
• facilitate compliance with  company’s internal policies or external regulation

Microsoft, Google and Amazon are perhaps the most well know household names with Salesforce.com perhaps one of the most well know long time providers with  its CRM services extensively used for nearly a decade.

This week INFOR another giant of the mid ranged accounting systems (ERP) and performance management (PM) software systems. announced plans to run its product as a service on Microsoft’s Azure cloud stack. This adds further momentum to the shift away from licensing on-premises ERP vendor software to a service based model.

So the bottom line for the finance and business strategists is to understand where the investment by vendors is heading and what changes are going on in the development world as the legacy systems become less important to them to support.

~000~

Unfortunately when we talk about Information Technology the language disintegrates quickly into acronym based tech talk .The issue then is we have trouble understanding it all. But for the technically savvy take a look at some rated posts here.

• Infor embrace Microsoft’s azure-cloud  – Author IT World Exchange

• The Intercloud – Author Greg Papadopoulos

• Proformative Member Survey on Cloud Computing & SaaS – Author Proformative

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Can you imagine the now indispensable fridge magnet that is so much a part of our lives, with your notes, kids pictures, shopping lists and other important odd and ends. being relegated to the rubbish to be replaced by a screen? 

Well, that is what the giant European supermarket chain, Tesco, have in mind for us with their Extending Ecommerce strategy.

The idea that digital photo frames, with integrated magnets would be attached to your fridge, not long ago seemed farfetched. But now the internet will be there soon too so your shopping choices can be made right at the fridge as you look to see what’s missing.

Nick Lansley, is Head of R&D at Tesco In this video he talks how about this and how Tesco recently released their  API to the developer market.

Like the IPhone where developers develop smart phone applications for the phone users, having access to Tesco’s backend product information will allow markets to develop demand based applications for households and more. Providing on tap such things as  product diet options availability and cost with such access to influence buyers choices in their home as it further extend to enhance the consumer buying experience.

With this type of wide reach, real time access to core business information means we will soon see the evolving value of business intelligence extended directly to the end consumer for practical use in their daily lives .

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Leveraging on “Are we better off leveraging experts?”, this is a question a US consulting firm caught my attention with this week when they followed me on Twitter  In their web site they asked “Why hire an employee when you can rent one?” Their message pitched to sell their value also just makes so much sense as it goes to the very heart of the issue.

This small firm, called Kettle River Consulting, with its unlikely yet instantly recognizable self branding name,  grabs readers well with some clever well placed business basics. One is a challenge they suggest you chew on to “Make Your Server Room Get Along with Your Board Room”.

In their offering on managed services, they present their  case to engage with a compelling argument that the cost is less than staff costs of full-time employees.

They expand this by saying,

Some companies hire one team to write their application and another to maintain it.

The latter team is instantly at a disadvantage, because all of the knowledge of the business processes and the application itself resides with the software developers.

A second drawback might also be personnel-related. To manage an enterprise application, a company needs the continual services of talented developers, database administrators and network operations staff.

If these were all full time employees, the cost of running the application could become burdensome.

When I looked more into Kettle River Consulting, also at twitter.com/KettleRiver, it seems it was founded on an opportunity to delver real customer service that so many others in reality only have in their mission.

According to their site KRC, as they also refer to themselves, was started when an a German marketing firm, who had previously acquired a US software business, then changed direction and decided to close it. This left stranded many long-time and loyal clients with an ongoing  need for the expertise they had relied on for many years.

Another perspective of this company shows up in the “Favorite Quotes the KRC Team have on their profiles; such as,

1. Whether you think you can or whether you think you can’t, you’re right.
2. Data outlives the application in nearly every business.
3. Don’t fear technology, use it to make your life better

I enjoyed reading the KRC site and learning from them on how to be humble and still look very professional. This very human looking company makes so much sense and one I would definitely feel I would like to deal with if I were a local to Minnesota.

This firm albeit small teaches by example some big and valuable lessons for doing business from its equally small yet famous area located in the southwest corner of Carlton County.These days of course with communications being so good even in the Asia Pacific regions, they could ofcourse be local and help others in need on that side of the world.

Here is something else i found out.  The Kettle River area of Carlton County Minnesota, was settled by a large concentration of Finnish Immigrants in the years leading up to the First World War and the influence of those immigrants is still noticeable even today.

Every August the town hosts Ma and Pa Kettle Days, an annual festival that includes a pancake breakfast, parade, a Miss Kettle River pageant, a mud bog on Saturday afternoon and street dances on Friday and Saturday night. . (if you want to learn more on Kettle River my source for this post was Wikipedia)

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On all new potential business engagements, one of the biggest blockers to communication is the ease of access to information.

A prospect will always baulk at giving confidential information, even when it is vital to allow a vendor or consultant to provide a solution. Time and valuable communication are often lost and many times even the opporunity when the simple solution may be to just sign a non disclosure agreement so you can keep talking.

In most cases when I suggest this things start to move along. But then there is the issue of whose NDA form do we use. As people head for the legal department it has the poterntial to stall again. So to make it easy,  I offer ours and often times it is enough and does the job well.

There are any number of forms around for this  For example  http://www.ndasforfree.com/ has some good formats to check for various scenarios Here is one we use that we find has quite simple language and works for us. Please feel free to give it a try or give me some feedback.

Read more…

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Incident reporting: static analysis is the first step normally used to identify losses. Summary statistics first display frequency and severity data by event type and by business line, according to the regulatory categories. This report is of certainly needed for compliance purposes, however it might be not the best tool for the risk management of a financial institution, which has a different structure or nature of activities.

An example of a more useful set of summary statistics would match the organization chart of the financial institution, bank, or company that uses its database. With a capability in viewing the reports in dimension splits by department, by people in charge, or by geographical zone of activity.

For a bank retail network for instance, the reporting may be split by bank branch, and, or by type of client. Even before detailing the frequency and the severity of each type of loss, incident reporting in an organization or in a department should first display the total loss amount caused by operational events.

Several simple measures, long neglected and sometimes never measured in financial institutions in the past, may provide a powerful tool to raise awareness on operational risk within an organization

Next, the analysis can identify the “low severity, high frequency” losses and the “high severity, low frequency” losses, with the remaining events. Both need further investigation, since they can be the symptoms of serious breaches in control within the organization. One of the key criteria in operational risk management is whether a possible loss is capped or not. That is, in case of an operational event, the potential loss amount is limited by any type of control. Capping potential losses is, and should be, a main concern for senior management. To that extent, rare events of large amounts are the first candidates in the identification of uncapped risks.

Likewise, recurrent minor losses require further investigation, at least once. They might also be the consequence of an effective cap of losses in an activity highly exposed to operational risks. Operational losses due to processing errors are frequent but limited due to effective control procedures and systems design. But recurrent losses could also be a more worrying symptom of a systematic breach in control or in process that lead to systematic or frequent losses, with possibly very large amounts at stake.

An incident database is a view of the operational losses in an organization that can provide, if interpreted correctly, a list of priority controls and investigations to be performed. Database analysis provides the facts, but does not identify the risks.

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A client of mine asked “.. will change the hard disk on the ERP server, so she is worried how [they] can check that the data is transferred correctly to the new disk?”

My response was:
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I’m not sure if the ERP Server HD’s are Raid/SAN or any platform. My comments are as follows;

- Strongly caution “Precisely everything has to be the same” — some programs/sw checks on HW indentity, be very careful
- Strongly recommend of doing a full clone of the HD instead of coping/moving
- A complete run through test with the user to check if the functions of the application are as normal as prior to change.
- A change management document from various related party of the change to for later audition.
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Nowadays, with storage technologies like SAN/RAIDS, it seems that ordinary HD swaping is completely out of normal operations.

A friend of mine had a very bad experience when he was informed that the Data were completely backed up – running to find out later that the backed up data couldn’t be restore because they were stored on the same hard drive!

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